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Bay Area to Sin City? Las Vegas bullet train backers gamble on record loan

By Mike Rosenberg

mrosenberg@mercurynews.com

Posted: 07/29/2012 07:37:23 PM PDT

Call it the bachelor or bachelorette party of tomorrow: you and your friends sipping cocktails aboard a futuristic train as it whips travelers across the desert to Las Vegas.

You might have to wait awhile, but it's not such a long shot. Lost in the fractious debate over California high-speed rail is a separate, little-publicized plan for a second bullet train that would connect the Golden State with Sin City. Private developers are wagering on the Vegas train, hoping the Obama administration in coming weeks provides a record rail loan to kick-start construction on the $8 billion-plus train line that could someday connect to California's much-debated high-speed railroad near Los Angeles.

The vision for the 150 mph party train is as audacious as the gaudy casinos, shows and night life that attract 1.5 million visits to Vegas from the Bay Area each year. Partyers could pay the equivalent of a pricey plane ticket and step onto the Las Vegas Strip in less than 1 1/2 hours from Southern California.

"Consider the train an extension of Las Vegas," said project COO Andrew Mack. "We definitely want to create that type of environment where they can sit back and relax."

Renamed last month from DesertXpress to XpressWest, the private venture eight years in the making is bankrolled chiefly by Vegas hotel developer Tony Marnell and supported by Senate Majority Leader Harry Reid, D-Nev., and Southern California politicians. One day, they dream of extending the line to Phoenix, Salt Lake City and Denver.

It's at least a decade away for the Bay Area, however. First, California, which received $8 billion in tax funds Wednesday to begin construction on a separate, government-owned bullet train line, hopes to find the full $69 billion to send trains between San Francisco and Los Angeles by 2029. Meanwhile, the Vegas train developers must secure several billion dollars to build a rail line to connect to the state project at the desert city of Palmdale.

The entire trip from San Francisco to Las Vegas would cost about $140 in today's dollars and take about four hours traveling the two lines. Direct flights from the Bay Area to Vegas can cost as little as $80 -- plus baggage and other fees -- and take 1½ hours from gate to gate. The XpressWest train trip from outside Los Angeles to Vegas would cost about $45 and take 1 hour, 20 minutes.

"It's definitely a cool idea -- it's unique, it's different, and that alone makes it worthwhile" to try, said Newark resident Jennifer Kupferman, who often travels to Las Vegas with her husband. "But it's got to be cheaper than flying."

IT specialist Sharon Morris, of Pleasanton, agreed: "The train sounds like fun. But I don't think I'd pay a lot more than a flight."

Travelers like the idea of being able to use their phones on board, and skip such hassles as airport security, bag checks and flight delays.

"It allows you to relax a lot more," said 26-year-old San Jose law clerk Megan Powell. She joked that "celebrity-themed train rides would be ideal. A diamond-encrusted train car featuring (rapper) T-Pain as the entertainment," for instance.

Yet Californians have heard this story before: A cool, fast train is coming! -- only for the uncomfortable details like high construction cost and local opposition to slow the train to a crawl. So is the Vegas rail line a fantasy or reality?

Already, private companies responsible for the train, which also include North Dakota motel developer Gary Tharaldson, have spent more than $50 million to clear all the required bureaucratic and planning hurdles. If the federal government approves XpressWest's $5.5 billion loan application from December 2010, project officials claim that would trigger $1.4 billion in private financing.

While President Barack Obama is a huge high-speed rail backer, the XpressWest loan would be 10 times larger than any other loan given since the $30 billion-plus rail funding program was created a decade ago. The California project is not vying for the loans and is searching instead for federal grants.

Critics call the loan plan a super-sized version of Solyndra, the former Fremont solar company that shut down last year after receiving a $535 million federal energy loan. Still, the mostly-under-the-radar Vegas project hasn't had to endure the gantlet of political attacks levied on the high-profile California bullet train, which skeptics call a boondoggle for its historic price tag and potential to drain vital state resources.

Federal rail officials said they do not comment on pending loan applications.

XpressWest officials expect to hear back on the loan's fate later this summer. They confidently predict a groundbreaking on the initial $6.9 billion stretch from Vegas to Victorville later this year, with the first trains running by 2018, followed by a $1.5 billion extension west to the California-wide project at Palmdale.

But what if the loan falls through?

"Backup planning," XpressWest counsel Greg Gilbert said, "isn't necessarily at the top of (our) minds right now."