Monday, July 17, 2000 | 11:06 a.m.
The state Department of Business and Industry recommended issuing $650 million in tax-free bonds today to fund the extension of a monorail system along the Las Vegas Strip.
The recommendation made by Business and Industry Director Sydney Wickliffe must be reviewed by the Clark County Commission in August and ultimately approved by the state Board of Finance.
Today's announcement is perhaps the most significant moment for MGM Grand-Bally's Monorail LLC, which has been working on extending its current monorail system for more than two years.
The new stretch would add five stations to the existing system and ultimately link the MGM Grand to the Sahara hotel-casino.
Wickliffe's recommendations come more than a month after she hosted a public hearing in which both sides delivered thorough presentations outlining their opposition or support for the monorail.
"This has been a lengthy process, which has lasted almost two years," Wickliffe said in a prepared statement. "I and my staff of advisers have studied a great deal of material. I appreciate the efforts on all sides to provide me with a full understanding of their views."
Wickliffe added that if the proposed bond issue is approved by the Board of Finance, she will add additional requirements to the project.
The monorail group, led by consultants Bob Broadbent and Cam Walker, have yet to secure all of the easements necessary to make way for the monorail. Opponents also have argued that fare-agreement plans with other properties have not been formalized and the bonds have not been rated.
"Contrary to the suggestion of some opponents, it is not necessary for these conditions to all be met in this step in the process, but they must be met before the financing is concluded," Wickliffe said.
Gov. Kenny Guinn, chairman of the state Board of Finance, said he has not seen the monorail report. He said he did not contact Wickliffe previously, because he wanted to ensure the recommendation was independent.
The $650 million tax-free bond issue would be the largest industrial development bond ever approved by Nevada. It would exceed the total amount of bonds issued by the Department of Business and Industry by nearly three times.
Wickliffe's decision process has been questioned by Venetian hotel-casino attorneys, who believe the monorail is a private endeavor and therefore should not be eligible for state bonds.
The lawyers are upset with a meeting Wickliffe held last Tuesday with Broadbent's team at the monorail group's law firm of Jones Vargas.
On Friday the attorneys delivered letters outlining their concerns to Attorney General Frankie Sue Del Papa and Deputy Attorney General Victoria Oldenberg.
Attorney Stephen Peek reminded the state that Wickliffe emphasized her decision process would remain open to the public and that no further evidence supporting or opposing the monorail would be accepted after June 12. He said while Wickliffe turned down invitations to meet with the Venetian, she met with the monorail group.
"Business & Industry does not function as an advocate for the monorail. Rather, Business & Industry is accountable to the State of Nevada and its citizens," Peek wrote to Oldenberg.
"Imagine my shock to find out that Business & Industry is applying a double standard by willingly participating in meetings with monorail proponents."
Wickliffe's office said the meeting was cleared with the attorney general's office. Neither Broadbent nor Walker could be reached for comment Monday.
During the June 8 public hearing, opponents produced a letter from the Washington D.C.-based law firm Patton Boggs that said the state should seek an advanced ruling on the status of the bonds from the Internal Revenue Service.
Attorneys warned if the IRS bonds investigation team later determines the monorail project is private and therefore not eligible for tax-free bonds, the state will be inundated with lawsuits.
Wickliffe does not address the bonds' status in her announcement, but mentions that the project is the foundation for long-range plans that include a public system linking McCarran International Airport to Cashman Center.
She also notes that neither county nor state dollars are involved in the project and therefore taxpayers cannot be held responsible.
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