Elon Musk’s Boring Co. Will Pay Fees of Up to 5% on Las Vegas Loop Sales
(Bloomberg) -- Las Vegas is getting a longer Loop transportation system from Elon Musk’s Boring Co., along with more lucrative fees on the Loop’s sales if ridership booms.
Clark County commissioners approved an agreement for Boring Co. to expand an existing Loop tunnel to more parts of Las Vegas, as far south as Allegiant Stadium, where the Raiders play. The bigger Loop could provide an alternative to clogged above-ground roads.
The proposal covers 51 stations at various hotels and casinos, connected by a network of twin tunnels running 14.5 miles apiece. The company plans to pay for the Loop, but not the individual stations, according to a spokeswoman for the Las Vegas Convention and Visitors Authority. Those will be paid for by each hotel or casino.
Rides on the Loop will cost about $5 to $20, depending on the distance, the spokeswoman said. Boring will pay the county a franchise fee of 0.5% on the first $17.5 million of quarterly revenue and 5% on additional revenue from the Loop.
That’s a little better than the original 1998 franchise agreement Clark County struck with the operators of its seven-station monorail, which is now owned by the LVCVA. Those terms had the unprofitable monorail service paying 0.5% of revenue, which totaled $22.7 million in 2019, before a pandemic-accelerated bankruptcy filing of that system last year.
Passengers in Musk’s Loop will be driven in Tesla vehicles, which for now have drivers but could eventually be driven autonomously.
The Clark County vote this week was on a special use permit and the franchise agreement, which lays the groundwork for the fee structure for the underground thoroughfare. The individual stations and tunnels need separate land use approvals and building permits. Ground could be broken on some of the routes next year, the LVCVA said.
The northern portion of the Loop, including proposed stops at the Stratosphere hotel and at Fremont Street, stretches into the city of Las Vegas. The city council approved the Loop’s special-use permit in an initial vote last December. A vote on the fee structure between the city and Boring is expected in November, a spokesman for the city said.
The airport is also marked on the proposed map, but an airport spokesman said no proposal had yet been received from the Boring Co. Federal oversight of the airport makes the process more complicated, the spokeswoman for the LVCVA said.
The first part of the Loop, a set of twin tunnels running almost a mile under the Las Vegas Convention Center, opened earlier this year, and is currently ferrying passengers to different areas of the sprawling conference venue. The funding for the convention center Loop came from hotel room taxes.
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