Question of the Day - 31 October 2019

[Editor's Note: This question is answered by our own Stiffs & Georges columnist David McKee. It's epic and informed enough for us to want to give credit where credit is due.]

Your friend might or might not be right. Rail from Los Angeles to Las Vegas is a slow-rolling ball. At one time, three different plans were contending for dollars.

The obstacles to passenger rail are various: financing; the Union Pacific rail line, which enjoys primacy on the existing tracks; and the El Cajon Pass, an insuperable obstacle to high-speed rail.

Most of the ink has been devoted to Xpress West, née DesertXpress, initially a brainchild of casino developer Tony Marnell, then adopted by local and national mover and shaker Sig Rogich and godfathered by then-Sen. Harry Reid. Rogich eventually vanished from the project, which was purchased in September 2018 by Florida-based Brightline. “Brightline is changing transportation in our country by connecting heavily trafficked corridors that are too long to drive and too short to fly,” boasted co-founder Wes Edens. The concept remained the same: a train line running parallel to I-15 on dedicated track. 

Identical, too, was the central flaw. The route would begin not in Los Angeles, but in Victorville (thereby avoiding El Cajon Pass), requiring California passengers to drive all the way out to Victorville (85 miles or so) before boarding the choo-choo. The plan might be a bonanza for Victorville’s outlet malls and rental-car dealers hoping to score a buck off outbound Las Vegans, but has been a non-starter with financiers, given its $6.9 billion minimum price tag. For $1.5 billion more, plus a detour through Palmdale, XpressWest hoped to hook up with CalTrans and circuitously deliver passengers to and from L.A.

Actually, crazy as it seems, the Palmdale detour may be the project’s salvation. City fathers have voted to approve a bond issue that would underwrite track for XpressWest, which — thanks to an investment from Sir Richard Branson — would become Virgin Trains. “Both the executive director of the bank and the bond manager hearing officer commented that they couldn’t remember a hearing with such a large show of support,” said Mayor Steve Hofbauer. “Everyone realizes the magnitude and importance of this project to the long-term economic and quality of life future of our region.”

“I was very impressed with Virgin’s transformation of the existing ho-hum passenger-rail experience to one that is now cool and hip,” added California Treasurer Fiona Ma.

Virgin is applying to sell tax-exempt bonds in Nevada to raise some of the startup capital for a project that has been repriced at $4 billion. Those, in combination with $600 million in California activity bonds, would enable Virgin to leverage $3.6 million in debt. That’s the closest the train’s ever come to plausibility.

And, in fact, the latest news is optimistic, if you can believe the vice president of Virgin Trains USA, who announced in late August, "We're looking to start construction in 2020" and that the build-out will take three years. 

If XpressWest is showing signs of life, what about the X Train? This one started out with a lot of high hopes. Not only was it going to ferry passengers to Las Vegas, it was going to carry Rick Moonen’s seafood (some of which would be served onboard) as well. It was going to finesse the speed-of-travel issue by purchasing first dibs on those Union Pacific lines and there was going to be onboard gambling, too.

It didn’t take long for the wheels to start coming off. For instance, gambling would only be legal between Primm and Las Vegas. Vegas-bound passengers were to be dropped off at a custom-built station behind downtown’s Plaza Hotel (anything requiring a major capital commitment from Plaza owner Tamares Group was iffy), an idea that was abandoned in favor of a station in a very remote part of North Las Vegas.

Then the X Train discarded its plan to have priority over Union Pacific, forfeiting its $600,000 deposit. The concept devolved into reinstatement of Amtrak service to Las Vegas, with a couple of "party cars" tacked on. A May 15, 2015, rollout came and went without anything happening regarding the X Train, which might have been the penny stock in which your friend invested. 

However, just weeks ago, the Las Vegas Review-Journal reported that discussions were underway between Amtrak and Las Vegas Xpress Inc. “I am scheduling to run in July 2020 as an Amtrak train,” said Xpress CEO Michael Barron, while Amtrak spokeswoman Olivia Irvin confirmed that “Amtrak has had discussions with Las Vegas Xpress, formerly known as X Train, and is exploring an operations agreement between Amtrak and Las Vegas Xpress.” Anything further was blanketed by a nondisclosure agreement. 

Also, Union Pacific has been in talks with Barron about a new lease on its tracks. The passenger component has been upsized to 10 cars carrying 700 people, Friday through Sunday. Since the Plaza is turfing out Greyhound and long since converted the proposed train-station site to Core Arena, the X Train still has to find a stopping place in Las Vegas, although there’s been vague talk of a site near Mandalay Bay. Still, because he’d be using existing track instead of having to acquire rights of way, like XpressWest, Barron waxed confident, telling the R-J, “I’m set.”

Converts to conventional rail service include Rep. Dina Titus, formerly a booster of a maglev line proposed by American Magline Group from Anaheim to Sin City. This concept got brief national play when Louisiana Gov. Bobby Jindal (a casino opponent) threw a televised hissy fit about a federally funded train “from Disneyland to Las Vegas.” That died out quickly when it was found that Jindal was cadging for a similar train in New Orleans—which also has casinos. “I was very supportive of the maglev, but that’s proven to be very expensive,” said Titus of high-tech route, which also would have required dedicated tracks. 

Harry Reid also walked out on the project (taking $45 million in federal seed money with him), in favor of XpressWest, and that was pretty much the last we heard of it. Besides, at a $12 billion price (in 2009 dollars) it’s far by the costliest of the three choices. “We’ll continue on no matter what,” said American Magline Group President Neil Cumming but, absent federal funding, the project quietly faded away.