Nevada bond approval last roadblock in high-speed rail project
The Las Vegas-to-Southern California high-speed rail project many had given up on years ago has steadily gained momentum by achieving funding and permitting approvals necessary to get it on track.
Last week, California approved $600 million in tax-exempt bonds that Virgin Trains USA will use to market $2.4 billion in private equity bonds, marking the largest step. The project is on pace to break ground by the end of 2020, with operations beginning in the fourth quarter of 2023, pending approval of $200 million of bonds in Nevada. Virgin would be able to market those bonds from Nevada’s debt limit allocation for $800 million in bonds.
That is on the heels of last month’s approval by the U.S.Department of Transportation of $1 billion in bonds to go toward the project, which served as evidence that the Federal Railroad Association will provide a record of decision on the environmental impact favorable to the rail line. That record of decision isn’t expected until August.
Las Vegas will benefit initially from the proposed 180-mile rail line between Southern Nevada and Victorville, California, as the likely passengers are Southern Californians looking for an alternative way to get to Las Vegas and skip the miles-long backups that occur on Interstate 15 during high-volume weekends.
Virgin plans to have deals in place with Las Vegas resorts and convention centers to streamline a guest’s stay at a hotel or help a convention attendee complete the registration even before getting on the train to Las Vegas.
Virgin Trains estimates the service will generate $1.98 billion in direct economic impact for Nevada’s economy, creating $73 million in state and local tax revenue annually.
Also, the project is slated to take 4.5 million cars off I-15 annually, leading to 300,000 metric tons of carbon removed from the air each year, Virgin reports indicate. That would be a big factor for the region transportation-wise because though there is support on the Las Vegas side for widening I-15 between Nevada and Southern California, officials in the Golden State haven’t expressed much interest in the possibility.
Future expansion calls for taking the train route from Victorville to downtown Los Angeles, which would allow Las Vegans traveling to Southern California not to worry about their transportation options from the Victor Valley, where the line will end initially.
Trains will offer food and beverage service on board, allowing passengers to get their Vegas experience going as soon as they step foot on a train. Each train set is expected to carry up to 600 people and whisk passengers to Las Vegas in 90 minutes, traveling at speeds of up to 180 mph.
The project is expected to create an estimated 1,000 construction jobs in Clark County and around 400 permanent jobs in the Las Vegas station after it is complete, which could prove to be coveted positions as the state emerges from the economic effects of the coronavirus pandemic.
Nevada Treasurer Zach Conine, who sits on the state Board of Finance, the body that will decide on the bond request, said the state has been in contact with California Treasurer Fiona Ma. In the end, the state has a different process of approvals than California.
“We think it’s an interesting idea from the economic growth perspective here in Southern Nevada,” Conine said. “We’re working closely with Treasurer Ma in California going through the numbers and everything else, and we’re continuing to get smarter on that front.”
But aspects of the response to the new coronavirus are the state’s focus at this time, Conine said.
“We’re certainly monitoring it (Virgin Trains situation) and having conversations, and obviously there’s a lot of other stuff going on right now of critical importance as well,” Conine said.
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