Las Vegas monorail noticed by Bloomberg columnist for its failures
Joe Mysak writes that the Las Vegas Monorail should be carrying 56,000 passengers every day by now, according to the experts. In June, the train carried an average of 24,000 riders daily.
At this rate, the monorail will default on its bonds in three years, says Fitch Investors Service, which downgraded the securities to CC from CCC on July 10.
Things are deteriorating ``slightly more rapidly'' than the rating company calculated last October, when it lowered the monorail bonds to CCC from BB. The monorail is using up its reserves to help pay debt service.
The non-investment CCC grade means that default is a ``real possibility.'' CC means that default ``appears probable.''
And yet management is still talking about a plan to expand service beyond the Strip, right out to McCarran International Airport, which it says will cost $500 million and surely result in more riders.
"This reminds me of that song in the 1960 musical ``Oliver!,'' entitled ``Who Will Buy?'' I'm not sure who is going to buy another $500 million in bonds to pay for the roughly five-mile addition to the airport, or who might perhaps buy the whole train system itself.
If I had to bet, though, I would bet that the residents of Las Vegas or Clark County or Nevada will," says Mysak
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There are several solutions.
The casinos could, of course, buck up, and help the monorail to expand to the airport in a bid to increase the number of riders.
The city, or county, or even state could decide that as a matter of good public policy, the monorail needs to be expanded, and that the public should help subsidize those bond payments, when they come due.
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A columnist for the Las Vegas Review-Journal on July 12 had another idea: ``It's time for county transportation officials to admit the inevitable -- the little mass transit experiment has gone on long enough.'' Erin Neff suggested that the monorail shut down and use its remaining cash to tear down the tracks.
We know who will be paying for the monorail. For a state without a state income tax, it is still one of the most expensive to live in in the country and, if Nevada residents have to support corrupt politicians and developers, the gaming industry, and pay for disastrous mistakes, it will keep getting worse.
Plus just lately it was reported that 19,000 Las Vegas Valley homes entered foreclosure in 2006. No one in the state legislature or at the federal level have moved to protect the citizens and residents of the state from the bizarre banking practices which allowed so many to purchase homes they couldn't afford, but our legislators certainly leap at the opportunity to take bribes from unscrupolous developers, strip club owners, etc.--note that Erin Kenny was sentenced today, as several vans of news media awaited outside the federal courthouse in 108 degree heat.
Also in court today real estate consultant Donald Davidson was found guilty of only six of the 24 felony counts that federal authorities had charged him as jurors had trouble with the prosecutors' star witness, former Clark County Commissioner Erin Kenny.
But back to our foreclosed homes...any loss by mortgage companies and banks will most likely be covered by our wonderful government who loves to print more money for bailouts of the important people: Penn Central Railroad in the '70's, Chrysler, Lockheed, New York City, Chicago's Continental Illinois Bank, the savings & loans, etc. The savings & loan bailout may have run as high as 0ne Trillion Dollars. And who actually paid...THE TAXPAYER!
And for us in Clark County--add the monorail. Viva Las Vegas!