The lack of public subsidy is unusual for a publicinfrastructure project and, in the case of the 3.9-mile monorailroute that has been servicing the Las Vegas Strip since 2004, lessthan successful. The monorail's rider- and revenue-per-milestatistics are the highest in the nation but the revenue—while 30%higher than operational costs—hasn't been enough to cover its debtservice obligations.

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Three tranches of debt were used to pay for 100% of the $650million project. Two-thirds of that total came in the form of bondsheld by Nevada's Department of Business and Industry, which has itinsured by Ambac Financial Group, a major financial guarantor.Earlier this year, Moody's said the bonds could default in as soonas two years and concurrently cut the monorail company's credit tofrom "B3" to "Caa3"—aka "junk bond territory"—but kept theinsurer's "AAA" credit intact even as it and other bond insurersface trouble form the subprime mortgage sector.

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Las Vegas Monorail Co. believes the solution to its problems isto extend a line to the busiest place in town by 2012. That havingbeen said, it isn't yet ready to discuss how its overall debtpicture would look afterward and how much ridership would need toincrease to cover it.

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The appropriate time for that may be November, which is when ittentatively expects to take the project before the Clark CountyBoard of Commissioners. Before that, in October, the company plansto meet with the Planning Commission.

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The Las Vegas monorail carried just over seven millionpassengers in 2006, generating $32 million in revenue. The twofigures translate to 1.79 million riders per mile and $8.25 millionper mile, both of which are the highest in the nation, according toone independent report.

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The proposed route for the airport monorail extension is eastfrom Las Vegas Boulevard along on the north side of TropicanaAvenue to Paradise Road, then south to Terminals 1 and 3.Previously, the route was slated to get to Paradise via HarmonAvenue, which runs between the Las Vegas Strip and the Hard RockHotel & Casino.

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While the new route won't service the Hard Rock Casino—or any ofthe projects planned between it and the Strip—there is plenty ofdevelopable land on Tropicana and the route is a full one mileshorter. A company official says the new alignment was determinedto be "the most optimum route into McCarran International Airportthat will have the least impact on everyone involved."

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