Las Vegas Monorail

Report
Innovative Financing
of Transportation
“Megaprojects”
Center For Urban Infrastructure
Transportation Financing Conference
March 7, 2003
Barney A. Allison, Esq.
Nossaman Guthner Knox & Elliott LLP
A Case Study:
Las Vegas Monorail
 Project Overview
 Alignment
 Innovative Elements
 Farebox Revenue Bonds
 Subordinated TIFIA Loan
 FTA Grant Anticipation Notes
2
Project Overview

Driverless, state-of-the-art urban transit
grade system on Las Vegas Strip

Current 1-mile, two station system to
be expanded to 4 mile system for
Phase I and 2.3 mile, four station
extension for Phase II

Servicing 8 major resort properties,
27,000 hotel rooms and world’s largest
convention center

Phase I expected in-service date is
2003; Phase II expected to begin
construction by the end of 2003

Can serve as backbone for future
regional fixed guideway and bus
systems
3
Alignment—Phase I
Sahara
Circus/Circus
Convention Ctr Dr
Desert Inn Rd
Desert Inn
Golf
Club
Spring Mtn Rd
Treasure Island
Venetian
The Mirage
Sands Avenue
Harrah’s Imperial
Palace
Caesar's Palace
Flamingo Hilton
Bally's Paris
Koval Ln.
Bellagio
Aladdin
Monte Carlo
Las Vegas Hilton
Las Vegas
Convention Center
Convention Center
Station
MGM Grand
New York, New York
Tropicana Rd
Excalibur
Tropicana
Luxor
McCarran
International
Airport
4
Existing Alignment
Projected Alignment
Innovative Elements

Exclusive Private Franchise

Design-Build-Equip Contract

15 year Private Operations and
Maintenance Contract

Tax Exempt, Non-Recourse Financing
through Non-Profit Corporation

Farebox Revenue Bonds secured by
Net Pledge

Advertising and other Ancillary
Revenues

Contractor Subdebt

Adjacent Property Owner Subdebt,
ROW contributions and Construction

Subordinated TIFIA Loan and FTA Grant
Anticipation Notes Financing for
Phase II
5
Farebox Revenue Bonds

$600,650,000 Series 2000 Revenue
Bonds sold in September, 2000 for
Phase I

Anticipate another $83.5 million in
revenue bonds needed for Phase II

Standalone, net project revenue pledge

“Investment grade” ridership and
revenue study

Innovative fare collection techniques

Advertising revenues

15-year operation and maintenance
agreement includes capital replacement
and security costs; fixed cost contract;
parent guaranty
6
Subordinated TIFIA Loan

$105.5 million TIFIA Loan for Phase II

TIFIA credit assistance available for
projects of “regional significance” with
total capital costs in excess of $100
million; TIFIA financing may not exceed
33% of “eligible” project costs

$2.6 billion available for FY 2003

Project environmental approvals
required prior to funding

Senior debt must be “investment
grade”

Flexible repayment schedule

TIFIA repayment subordinate to senior
debt unless there is an “act of
bankruptcy”
7
FTA Grant
Anticipation Notes

Request for FTA Section 5309 “New
Starts” Discretionary grant in the
amount of $159.7 million for Phase II

FTA project “scoring” based on
financial rating, project justification,
cost-effectiveness, operating
efficiencies and environmental benefits

Execution of Full Funding Grant
Agreement; compliance with FTA
requirements

“Pay as you go” vs. GANS?

Reauthorization and Appropriation Risk

“Back-up” pledge
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