Las Vegas Monorail Co. has filed for protection under Chapter 11 of the U.S. Bankruptcy Code while it restructures its finances pending a sale to the Las Vegas Convention and Visitors Authority.
The company, whose 3.9-mile elevated train network along the Las Vegas Strip has been idle since the pandemic hit in March, is slated for takeover by the LVCVA for $24 million. The authority plans to hire a management company to run the line and will dissolve Las Vegas Monorail as part of the Chapter 11 filing, which was authorized by LVM’s board as part of the sales agreement.
“It is in the Las Vegas Monorail Company’s best interest to file for bankruptcy and effectuate a sale of the system assets to a party who intends to keep the system in operation and help ensure that the mobility benefits the Monorail provides continue during conventions, events and throughout the year,” President and CEO Curtis Myles said in the statement.
The monorail struggling with declining ridership well before the pandemic but is popular with visitors during events at the Las Vegas Convention Center, which is operated by the LVCVA and is undergoing a $900 million-plus expansion.
“We have a different mission than someone in the private sector who would invest in the monorail in order to make a profit,” LVCVA Chief Executive Steve Hill said in justifying the purchase. “There’s a real cost to this community for the congestion that’s out there. This system, when we’re not in a pandemic, would be responsible for carrying 5 million show attendees and tourists. To not have the monorail run for the next eight or 10 years, that would be bad for the city. With us owning it, it provides a transition.”
LVM said last year that it had acquired funding to expand the line north to Las Vegas Sands’ Sands Expo Center and its Venetian/Palazzo resort complex and south to MGM Resorts’ Mandalay Bay.
But with the sale to the LVCVA, Hill said those projects will be scrapped under an agreement with Clark County, which is responsible for transferring LVM’s franchise rights to the LVCVA, that prohibits the authority from spending more than 3 percent of its annual budgeted operating revenue on the line without first getting approval from the County Commission.
