Rolling dice on a train to Ve­gas

Bil­lions in loans a risky propo­si­tion

The Washington Times Daily - - Business - BY MICHAEL R. BLOOD

VIC­TORVILLE, CALIF. | On a dusty, rock-strewn ex­panse at the edge of the Mo­jave Desert, a com­pany linked to Se­nate Ma­jor­ity Leader Harry Reid wants to build a bul­let train that would rocket tourists from the mid­dle of nowhere to the gam­bling palaces of Las Ve­gas.

Pri­vately held De­sertx­press is on the verge of land­ing a $4.9 bil­lion loan from the Obama ad­min­is­tra­tion to build the 150 mph train, which could be a life­line for a re­gion dev­as­tated by the hous­ing crash or a crap shoot for tax­pay­ers weary of Washington spend­ing.

The vast park-and-ride project hinges on the untested idea that car-lov­ing Cal­i­for­ni­ans will drive about 100 miles from the Los An­ge­les area, pull off busy In­ter­state 15 and board a train for the final leg to the fa­mous Strip.

Plan­ners imag­ine that mil­lions of trav­el­ers a year will one day flock to a sta­tion out­side down-onits-luck Vic­torville, a small city where shut­tered store­fronts pock the his­toric down­town.

An al­liance of busi­ness and po­lit­i­cal rain­mak­ers from the Strip to Capi­tol Hill is back­ing the project that could be­come the first high­speed sys­tem to break ground un­der Pres­i­dent Obama’s push to mod­ern­ize the U.S. rail net­work — and give the Demo­cratic pres­i­dent’s re-elec­tion prospects a lift in bat­tle­ground Ne­vada.

Trans­porta­tion Sec­re­tary Ray Lahood has pub­licly blessed the train — it means jobs, he says — and it’s cleared sev­eral reg­u­la­tory hur­dles in Washington.

Yet even as the Fed­eral Rail­road Ad­min­is­tra­tion con­sid­ers award­ing what would be, by far, the largest loan of its type, its own re­search warns it’s dif­fi­cult to pre­dict how many peo­ple will ride the train, a crit­i­cal mea­sure of fi­nan­cial sur­vival, an As­so­ci­ated Press re­view found.

There are other skep­tics, as well.

“It’s in­san­ity,” says Thomas Finkbiner of the In­ter­modal Trans­porta­tion In­sti­tute at the Univer­sity of Den­ver. “Peo­ple won’t drive to a train to go some­place. If you are go­ing to drive, why not drive all the way and leave when you want?”

Con­struc­tion cost pro­jec­tions have soared to as much as $6.5 bil­lion, not in­clud­ing in­ter­est on the loan. Some fear tax­payer sub­si­dies are in­evitable.

Mr. Reid, Ne­vada Demo­crat, and other sup­port­ers point to re­search that shows 80,000 new jobs, but FRA doc­u­ments show vir­tu­ally all those would be tem­po­rary — no more than 722 would be per­ma­nent.

Vic­torville Mayor Ryan Mceachron en­vi­sions a bustling trans­porta­tion oa­sis with a ho­tel, restau­rants, maybe even homes, on the pro­posed sta­tion site. He be­lieves driv­ers can be en­ticed out of their cars, even in a re­gion where the no­tion of rail travel can seem as dis­tant as a New York sub­way.

The com­pany is “go­ing to have to mar­ket, and mar­ket hard, in or­der to get the rid­er­ship they need to sup­port pay­ing back the loan,” the mayor says. “I think you can change the think­ing.”

Along with Mr. Reid, the pres­i­dent’s most in­flu­en­tial ally in Congress, the plan is be­ing ad­vanced by casino de­vel­oper and contractor An­thony Mar­nell II, whose cred­its in­clude build­ing the Bel­la­gio and Wynn Las Ve­gas ho­tels and who heads Mar­nell Cos., the ma­jor­ity share­holder in De­sertx­press; project con­sul­tant Sig Rogich, a Re­pub­li­can ad­viser to two pres­i­den­tial cam­paigns who founded Ne­vada’s most in­flu­en­tial lob­by­ing and ad­ver­tis­ing com­pany; and Cana­dian trans­porta­tion gi­ant Bom­bardier, a De­sertx­press strate­gic ad­viser that wants to sup­ply its rail cars.

A decision on the loan is not ex­pected un­til midyear, but the com­pany has spent some $30 mil­lion sharp­en­ing its plan and re­fin­ing rid­er­ship pro­jec­tions. Ris­ing gas prices and in­creas­ing traf­fic con­ges­tion could help ticket sales, and the com­pany is tout­ing re­duced air pol­lu­tion from fewer cars on the road.

“It’s Vic­torville that makes the project work,” said chief ex­ec­u­tive An­drew Mack.

Far from be­ing a train from nowhere, com­pany plan­ners see the strug­gling city of 115,000, once a stop on sto­ried Route 66, as a col­lec­tion point for mil­lions of driv­ers head­ing north to Las Ve­gas. Bring­ing the line deeper into the pop­u­lous Los An­ge­les area would raise for­mi­da­ble chal­lenges, Mr. Mack said, from cross­ing nu­mer­ous free­ways to find­ing space for track.

The lot now stip­pled with spindly cre­osote bushes has room for 15,000 park­ing spa­ces. Bags would be checked through to ho­tel rooms. At peak hours, trains would de­part ev­ery 20 min­utes. Mr. Mack says an av­er­age round-trip fare could be as low as $75, though doc­u­ments es­ti­mate $100.

Round-trip flights from Los An­ge­les to Las Ve­gas can be booked for less than $100.

On clear roads, the 270-mile drive from down­town Los An­ge­les to Las Ve­gas takes about four hours. Plan­ners say the train ride from Vic­torville to Las Ve­gas would take about 80 min­utes, but it’s de­bat­able how much time would be saved af­ter driv­ing to Vic­torville, park­ing, wait­ing for and board­ing the train, and reach­ing a Las Ve­gas ho­tel.

The pro­posed sta­tion for the De­sertx­press high-speed rail line to Las Ve­gas would be lo­cated at the end of the Dale Evans Park­way exit from In­ter­state 15, on the far out­skirts of the Mo­jave Desert city of Vic­torville, Calif.

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