Bankruptcy hearings for the Las Vegas Monorail Company began this week, with nearly 50 creditors attending the remote discussion.
The bankruptcy filing is part of the Las Vegas Convention and Visitors Authority’s (LVCVA) agreement to buy the privately owned public transportation system that continues to pile up debt. The LVCVA is ready to spend upwards of $24 million to acquire the 3.9-mile monorail.
The tourism agency voted 12-1 last month — Las Vegas Mayor Carolyn Goodman the lone dissenter — to purchase the electric rail system that transports millions of riders annually up and down the Strip from Sahara to MGM Grand.
US Bankruptcy Court Judge Natalie Cox signed off on a series of motions Tuesday that allows the Las Vegas Monorail Company to proceed with its bankruptcy filing.
LVCVA President and CEO Steve Hill led the effort for the government agency to buy the monorail.
We think that the monorail is an important transportation option when the destination is at full strength,” Hill explained in July. “It moves nearly five million people per year, and a lot of those people are attendees here at the Convention Center. We want to make sure that the monorail system has the ability to continue to operate in the coming years.”
But that isn’t the only reason for the LVCVA opting to pay $24 million for a company that is bleeding cash. The primary purpose of acquiring the Monorail Company is to obtain its noncompete clause it holds on any other public transportation project being developed on the east side of the Strip.
The LVCVA recently spent $52.5 million on an underground tunnel system below the expanded Las Vegas Convention Center. Billionaire Elon Musk’s Boring Company built the network, which will transport Convention Center attendees at speeds up to 35 MPH in Tesla Model 3 or Model X vehicles.
The LVCVA wants to expand the Boring’s Las Vegas Convention Center Loop across the Strip. The tourism agency is preparing to file for permits to build the tunnel system citywide once the Monorail Company’s noncompete clause is no more.
Goodman’s opposition to the LVCVA purchasing the Monorail Company was largely because of the transportation system not connecting to the city’s airport, nor downtown. “It very much serves MGM properties, and they [MGM] were looking at purchasing it in order to take the monorail over to Mandalay Bay so it could service Allegiant Stadium,” Goodman opined during early discussions.
Musk’s Boring Company, however, might be the solution to some of the mayor’s opposition.
— Elon Musk (@elonmusk) June 15, 2020
The Las Vegas Monorail remains suspended. It stopped service on March 18.
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