Las Vegas Monorail’s failure may drive down state’s credit

[marmar]

from the Las Vegas Sun:



Las Vegas Monorail’s failure may drive down state’s credit
Ratings agencies have taken notice of bankruptcy

By Steve Kanigher
Tuesday, Feb. 16, 2010 | 2 a.m.


When Nevada issued bonds to finance the Las Vegas Monorail 10 years ago, one of the objections was that the state was, in effect, putting its good credit rating at risk by banking on the success of the monorail.

Now that the monorail is in default on those bonds and has filed for bankruptcy protection, it could force Nevada taxpayers to pay higher interest rates on money that the state borrows through bond financing, an attorney for a major creditor in the bankruptcy case warns.

The state sells bonds to finance big-ticket projects such as highways. The state’s bond rating affects the interest rate it gets on those bonds. The increased amount of interest taxpayers would have to pay for state public works projects could easily add up to millions of dollars over the duration of a bond if Nevada’s rating dropped.

In 2000, the state issued $650 million in industrial development revenue bonds on behalf of the monorail. This type of bond is intended for nonprofit corporations that serve a public benefit — in this case, to relieve traffic congestion from the adjacent Strip — and are to be paid from revenue generated by those projects instead of from taxpayers. It is general obligation bonds — which are issued by the state to build roads, schools and other public works projects — that taxpayers are responsible for paying off. ............(more)

The complete piece is at: http://www.lasvegassun.com/news/2010/feb/16/monorails-failure-may-drive-down-states-credit/

[Liberal_in_LA]

1. What monorail? Is this something that goes from casino to casino

[marmar]

4. It's the one that goes from casino to casino, north strip to south strip....

nt

[enlightenment]

5. It's a joke.

It runs - in fits and starts - from the Luxor to the Convention Center. It is absurdly expensive to ride - and it breaks down a lot.

Originally, they planned on running it all the way up to Fremont Street (the 'old' Las Vegas), along Main Street and a bit of Las Vegas Blvd. A colleague and I did a massive historic buildings survey (over 260 structures) in anticipation of that project, which would have made sense both from the perspective of tourists and of locals. Eventually, they wanted to extend it to McCarren (although the taxi and limo companies were having kittens over that idea).

They had approval to do it - but it never happened and they wound up with just a tiny portion.

It is the very definition of 'boondoggle'.

meh.

[izquierdista]

7. But what great views!

How else are you going to see all the loading docks, dumpsters, HVAC plants, transformer yards, freight elevators, service entrances, and maintenance buildings?

[enlightenment]

9. Hah!

Isn't that the truth!!

Had they extended it to Fremont, the view wouldn't have been any better, but at least it would have been useful.

[Liberal_in_LA]

8. Ok. Thanks.

[SoCalDem]

2. It may have been the idea that gets kicked around from time to time... Vegas to LA

the article was vague

[Orrex]

3. They tried the same thing in Ogdenville and North Haverbrook.

Have we learned nothing?

[Codeine]

10. Go away, lady! There ain't no monorail here and there never was!

:rofl:

[Taverner]

6. They chose the WRONG people to pay for that

It should have been a joint effort from all of the casinos

After all, they're the ones who get the ROI (return on investment)