The Las Vegas Convention and Visitors Authority will spend up to $51.25 million in transportation amenities over the next three years to move conventioneers to and around the Las Vegas Convention Center.
The LVCVA board of directors on Tuesday approved a pair of agreements involving the Las Vegas Monorail and Elon Musk’s Boring Co.’s underground people-mover operations. The board also approved, at no cost, an agreement that eventually could link the Convention Center to Boring’s 15-mile citywide Vegas Loop system.
In three separate actions, the board authorized paying $45 million to Western Management Group for the operation of the Monorail from Feb. 7 through June 30, 2023; up to $6.25 million to Boring to operate the mile-long people-mover system from Feb. 1 through June 30, 2022; and, at no cost, authorized access to Boring to dig tunnels connecting the Convention Center with Encore beneath Convention Center land.
LVCVA President and CEO Steve Hill and Chief Financial Officer Ed Finger told board members the LVCVA would come out ahead with anticipated revenue from the Monorail exceeding the expense.
Finger said in a normal operating environment, the Monorail generates an estimated $21.5 million a year in fare box and advertising revenue. In the contract negotiated with Western, he said, operations would cost $19.25 million a year with $1.5 million in annual capital costs.
The LVCVA plans to pay Western $7.5 million for the rest of the 2021 fiscal year and $18.75 million for each of the 2022 and 2023 fiscal years.
Most of Western’s employees worked for the Las Vegas Monorail Co. before it filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Las Vegas. The LVCVA bought the 3.9-mile electric transit system out of bankruptcy for $25.2 million in December.
Las Vegas Mayor Carolyn Goodman cast the lone dissenting vote against the transaction with Western, citing how the Monorail was “doomed to failure” for not extending its route to McCarran International Airport and downtown Las Vegas.
In a second vote, the board agreed to pay Boring $1.25 million for the remainder of the 2021 fiscal year and $5 million for 2022 to operate the Convention Center Loop underground people-mover, a pair of mile-long tunnels using Tesla electric vehicles.
Boring will use differing rates based on whether there are conventions, meetings or trade shows using the building and how many attendees there are. The LVCVA will pay Boring $167,000 a month to maintain the system until shows return to the Convention Center, expected to be by June. A sliding scale based on show size would cost the LVCVA up to $30,000 a day, depending on how many people are attending shows.
The Convention Center Loop will not charge users for rides or show sponsors for the service. The LVCVA considers the people-mover a transportation amenity.
Until the end of 2021, the Teslas will be operated with drivers. At the end of the year, the LVCVA expects the system to run autonomously and at that time, the LVCVA would renegotiate terms of the operations deal with Boring.
Goodman also voted against the Boring payment because she is concerned that system, the first of its kind in the world, won’t operate properly. She said the transit system is too important for the LVCVA to be Boring’s first customer.
The third deal also involves Boring, has no fiscal impact and defines easements the company will have when constructing tunnels between the Convention Center’s Silver Parking Lot and the Encore resort.
Encore could be the location of a station that would be a part of the larger Vegas Loop system that would transport passengers between downtown, the resort corridor, McCarran and Allegiant Stadium.
Vice Chair Marilyn Spiegel, president of Wynn Las Vegas and Encore, abstained from the vote.
LVCVA board officers
The Las Vegas Convention and Visitors Authority board of directors has elected its new officers for 2021. The board elected Henderson Councilman John Marz chairman; Wynn Las Vegas and Encore President Marilyn Spiegel vice chair; Clark County Commissioner Jim Gibson secretary; and MGM Resorts International CityCenter president and chief operating officer Anton Nikodemus treasurer.
The Clark County Commission appointed Commissioners Michael Naft and Gibson to the board replacing Larry Brown and Lawrence Weekly.
A 14th board member will be added next month when the Mesquite City Council appoints its representative to the board.