Feature Stories - May 2003

Industry Focus: Transportation

Keeping Nevada Moving

by Kathleen Foley

As part of Nevada Business Journal’s monthly Industry Outlook series, we invited representatives of Nevada’s transportation industry to meet at the Four Seasons Hotel to update our readers on their field, which affects all of us in our daily travels. The executives discussed large-scale projects and new technologies that will change the nature of transportation in our state, as well as the impact they will have on our economy.

Connie Brennan, publisher of Nevada Business Journal, served as moderator for the meeting. Following is a condensed version of the discussion.

Dave Zanetell: I work for the Federal Lands Group of the Federal Highway Administration. I’m chief of our project management group, which has a $100 million to $120 million annual budget for design and construction. In addition to that, we have periodic special projects. The Hoover Dam bypass, which I personally manage, is one of them. The Hoover Dam bypass project has been long awaited, and Southern Nevada has an overwhelming need for it. The purpose is to eliminate the restriction caused by the two-lane highway over Hoover Dam, which is a bottleneck in the transportation and commerce corridor. It also has a purpose directly related to the security of our stored waters and our power generation capability. Coupled with that is the fact that the dam has over 1 million paying visitors a year and approximately 6 million non-paying tourist visitors. So we have a terrible mix of public traffic, through traffic and tourism. The bypass is under construction as we speak. The overall project cost is $234 million, and we will do it in phases. The first phase is the Arizona portion of the approach zone. That is under construction now. In the middle of the summer we will advertise the next phase – the Nevada roadway and approach bridges. Then late in the fall we will advertise the final phase, which is the Colorado River bridge. We will have all elements of the bypass under construction at one point in time. The job will be complete in the year 2007.

Connie Brennan: How many people are working on the project?

Zanetell: Over the course of the project, the job will have about 2,000 trade and craft workers participating for some portion of time – in fabrication plants, as operators and on-site management. In the development phase, we had about 300 to 400 professionals working on design or technical oversight and review.

Gus Michaels: I am the assistant district engineer in charge of construction for the Nevada Department of Transportation here in Las Vegas. We have about $200 million worth of work going on at any given time. Our main project right now is the widening of US 95 from the Spaghetti Bowl up to Craig Road. From the Rainbow curve to Craig Road right now, we’ve got six lanes. From the Rainbow curve into the Spaghetti Bowl we are building 10 lanes. It is a big undertaking. Right now, we are rebuilding the Decatur and Valley View interchanges, and this summer we will start building the Rainbow/Summerlin Parkway interchange and widening US 95 from the Spaghetti Bowl to Valley View. Another big project we will begin shortly is the construction of the 515/215 interchange in Henderson. This $90 million project will be the second largest project we’ve had in the state of Nevada. It starts this summer and will take a couple of years to build. The biggest challenge we have is trying to keep motorists moving through the construction. With 180,000 cars per day on Interstate 15, we have to keep them going. We keep about 8,500 people employed at any given time. Another project we’re about to finish is widening southbound I-15 to the California state line, and we are working on plans to widen northbound I-15 to three lanes coming into town.

Bruce Aguilera: I am chairman of the California-Nevada Super Speed Train Commission. The commission was formed in the late 1980s, and is charged with the mission of developing a high-speed train between Southern Nevada and Southern California. These projects take awhile, and have a lot of ups and downs. I thought we would have this thing built by now. But with economies throughout the world struggling, we have had to keep a low profile. However, we have kept moving forward, making alliances with the cities along the way of the route. To give you an idea of the impact this project would have, your family could leave Las Vegas at 8:30 a.m. on Saturday, cruise at 300-plus miles an hour to Anaheim, and have your pictures taken with Mickey and Minnie at 10:30 a.m. The commission has formed a partnership with American Maglev Group, which is comprised of several major corporations. We have had several positive developments recently. The federal government has finally come forward and realized that maglev is a technology that should be explored and should be in service. Senator Harry Reid and Congressman Tom Young, who is chairman of the House Committee on Transportation Infrastructure, have both indicated that this project will get the bulk of the money [allocated for infrastructure projects]. We have been working very hard in getting support from California cities. We have signed cooperative agreements with the cities of Anaheim, Ontario, Victorville, Barstow and Las Vegas, as well as the Orange County Transportation Authority, the San Bernardino Association of Governments and the Mojave Desert Management Control District. More importantly, these cities and agencies have given us over $600,000 to support the project. Another very positive aspect has been signing an agreement with the Federal Railroad Administration to be the lead agency and the sponsor of our environmental impact study. NDOT has also signed to be a co-lead agency, as well as CalTrans. This is the first time a state agency in California has supported a project of this magnitude. That is very positive. If things go right, we’ll get $1.5 million that Sen. Reid has appropriated for us, and then we are looking to seek $1 billion for pre-construction and construction grant funding in connection with the reauthorization of TEA 21, the federal Transportation Equity Act for the 21st Century. We’re planning to build from Las Vegas to Primm first, but at the same time start from Anaheim to Ontario. It will be like the old transcontinental railroads, starting from both ends and meeting in the middle. Anaheim and Ontario have already started developing programs within their two cities to move that forward. A new center being built in Anaheim is going to be a regional transportation intermodal system with all sorts of transportation stopping there. At the Ontario airport there is space for a Maglev terminal. The situation in California is favorable for us now, because the mayor of Los Angeles has indicated that he is not going to expand LAX. John Wayne Airport is already at maximum capacity. The only major airport in that area that can have major expansions is Ontario.

Brennan: When will we be able to actually get on the train?

Aguilera: That’s the $64 million question. If all goes well, we will probably start construction within 24 months. We are starting in Nevada first because a lot of the environmental work has already been done.

Zanetell: Do you have the construction funds in hand for these advance pieces, or are you waiting for the $1 billion to do any construction?

Aguilera: We are waiting for the $1 billion to do the construction, but one of our partners, Solomon Smith Barney, is also looking for various other ways to raise some funds.

Brennan: Is it a 10-year project?

Aguilera: Yes, it is a 10- to 15-year project.

Brennan: So, my kids will be grown up when I take them for their pictures with Mickey Mouse.

Aguilera: I want to still be around. The whole project is 269 miles between here and Anaheim and will take about 86 minutes at an average speed of 310 miles an hour. I have been on the train at 282 miles an hour in Germany, and there is no perceptible movement, even when it’s banking. Another positive development is that Shang Hai Transrapid just opened between Shang Hai and another city in China, using this same technology. They completed the project in under three years. We are going to get some congressional people and some local transportation people here and in California to ride that. I can assure you that once people ride it, they will ask, "Why don’t we have it here?"

Greg Kruse: Clark County has been the fastest growing community in the country for several years, but what is not so well known is that if you separate out Clark County from the rest of Nevada, Northern Nevada would still be the third fastest-growing region in the country – first Clark County, then Arizona and then Reno/Sparks. We have basically the same growth problems, but on a smaller scale. I just wanted to address the item on the agenda about our single biggest challenge, and it is money. How do we fund all the things that need to be done? Funding is critical. This state and its RTC structure is special, because we do all the most important things within one agency. We do the long-range planning, acting as what the federal government calls a "metropolitan planning organization." That is very important, because it requires that we work together with the local governments. We address all the different modes [of transportation] together in one plan that is not disjointed. It is a great advantage for all of Nevada, because RTCs are county organizations. I think another major consideration is building roads, because most of our travel is by roads, but also addressing public transportation and making investments where it makes sense. We have the monorail under construction. In addition, the Southern Nevada RTC is working on a bus rapid transit facility, which is a really a very inexpensive way to get light rail quality service in your community. We have a short but very important corridor in Northern Nevada – the South Virginia corridor – that links the university to a major retail center in the south part of town. In the south, you have tremendous congestion on the roads. In Northern Nevada, our congestion is growing rapidly, but we have another problem, and that is maintaining the system. Finding the resources to keep up the system, by growing the capacity and also maintaining what you’ve got, is a key issue. There has been an under-investment in roadway infrastructure in terms of maintaining the pavement. If you don’t do the preventive maintenance on time, you spend four to five times as much to fix it later. So, having resources available in a timely manner plays into how efficient you can be in keeping the road system up. Tourism is a key part of our economy in the north. In certain ways; I think we are even more dependent on our highway link to California. I know you are experiencing congestion on I-15, but on I-80, I recently spent about six hours getting from Sacramento to Reno. Maybe 30 minutes of it was weather-related, but most of it was just peak congestion in that corridor. Because we have fewer of our travelers coming in via air, that I-80 corridor is perhaps even more important to us. Because that corridor is so old, it needs major work. We try to minimize the congestion for the tourists coming over the hill, to make sure there are some additional climbing lanes and other choke points are being addressed. The roadwork is going to be very expensive, but it is critical. There are some other things we are doing that don’t cost much money but help us get more done more quickly, more efficiently. We have a couple partnerships that are critical. One is that we have the development community paying for much of the cost of the new roads through the impact fee system. Our fees are fairly steep relative to those in the south. Our developers are actually paying about $2,000 per dwelling unit to help build the arterial system they need to allow the traffic to flow. They are creating these impacts and they are paying their proportionate share. Frankly, they have been great partners. The RTC in Southern Nevada has brought a similar solution forward and fees are going up there also. I think they’ll go up to about $1,000 [per dwelling unit] in five years, but that is a graduated increase. Some of our big projects in the north include a new interchange complex at Clearacre, which is at US395 coming into town. It addresses one of our less critical tourist corridors, but one that is very critical to circulation within our community. We have a major project to extend the terminus of our north/south US580 freeway at the Mt. Rose Highway and extend that down to Washoe Valley. It was planned over 20 years ago, and now we are getting close to starting construction.

Derek Morse: As Greg pointed out, from our perspective the biggest problem is funding. In Washoe County and also the rest of the state, we are totally dependent on gas taxes for funding the transportation infrastructure on the highway side. Fuel taxes, as you are all aware, are flat taxes. It doesn’t matter whether gasoline is $2.00 a gallon or $5.00 a gallon. We collect the same amount for each gallon sold. Each year we lose anywhere from 2 percent to 5 percent of the purchasing power of the fuel tax through inflation. In Washoe County, when we look at state and local taxes, we collect 65 percent less today in real dollars per each mile driven in Washoe County than we did 50 years ago. We are in a deep hole. At the federal level, they are collecting about 50 percent less today per mile driven than they were 50 years ago. And everyone understands how difficult it is to raise taxes. Our last increase was nine years ago. The last federal increase I believe was nine or 10 years ago. The day you get an increase, you start to lose its purchasing power. We have been working for about four years now in our community to develop regional plans. The community comes together and says, "This is what we want 30 years from now in terms of transportation." Then you come to the questions of what it’s going to cost, and where are we going to get the money. In our last effort, we had an $800 million gap over the next 30 years between what the community wanted to spend and what we have coming in. So we began with that to put together a funding package. A significant element of this package is what we call indexing of fuel tax rates. That means they will be adjusted automatically to recover the purchasing power lost to inflation each year. Indexing local fuel taxes in our area would cover more than half of the $800 million gap over the next 30 years. NDOT is in a terrible hole, too. They will be $1.8 billion short over the next 10 years, according to their reports, just to maintain the current level of condition and service on the state highway system. We were successful with the vote of the people last November supporting indexing the fuel tax and some other funding measures. Now we’re in the Legislature fighting for it. If it gets through the Legislature, it’s going to give us a stable funding stream we can use to make the investments we need in our community. The bedrock for a good healthy economy is a good healthy transportation system. I don’t care where you are or what business you’re in, you are at a competitive disadvantage if your community doesn’t have good transportation. We have pretty good transportation in the state today. We need to maintain that.

Jack Owens: We have a transportation company composed of three cab companies, Star limousine and Star Trans. Clark County is unique in that its taxis are governed by the state Taxicab Authority. The rest of the state is governed by the Regional Transportation Commission (RTC). As the largest cab company, we have 460 medallions issued by the state. Southern Nevada is highly regulated compared to any other part of the country. In most parts of the country, operations are either owner-operators, who can individually buy or sell their medallions, or leased operations where drivers lease vehicles for a certain period of time, with the host company providing maintenance, fueling and radio work, etc. We’re mandated by state law to provide taxi service with employee drivers and company-owned vehicles. That gives us a great advantage from the standpoint of being able to direct our resource to the proper place. It is difficult in many cities across the nation to serve the public adequately with taxicab service. The drivers naturally tend to migrate toward the airport and the high-volume areas that make them the most money. Consequently, the outside areas and local community suffer by virtue of that. So, regulation gives us an excellent product in Clark County. There are16 companies in Clark County. It is difficult to get a new certificate. You can’t trade individual certificates or medallions as you can in many other parts of the country. We average 22.5 hours a day on the street, 365 days a year. There are brief peaks and valleys, but for the most part, it is very stable here. We have a very defined geographical area and our airport is very close. Our average ride is three miles, where the national average is six miles. In our companies, we drive around 60 million miles a year. We’ve grown over 150 percent in the last 20 years, which is a direct barometer of the growth in the city. We are able to grow, with the state agency allocating additional medallions as the need arises. We feel the Super Speed Train is something that should have happened 20 years ago. We have suffered in our growth because of the problem of getting people here. Our whole economy lives and dies by visitor volume. The high-speed train and the I-15 corridor and the bridge over the dam are all very important to us in bringing people in. The more we can do to encourage these projects, the better for the economy of Las Vegas. During the Arab oil embargo, we should have addressed the need for more alternate fuels and clean fuels. We think it should be a mix. We know that hydrogen is going to be the ultimate fuel, but it’s going to be more than 10 years before it’s feasible and cost effective. In the meantime, we need to pursue all the alternates that are available. We use alternate fuels. We have all of our vehicles on propane. We used CNG (compressed natural gas) in the late ’70s when we were suffering from the Arab oil embargo. We’ve driven for the last 21 years on propane. After over a billion miles, we’ve had 10,000 accidents, mostly fender benders. We have had some rear enders that have completely demolished the back of a cab, and it just shears the valves off the steel propane tank, with no explosion or fire. We’re running 450 miles a day on a cab, and the 40-gallon tank of propane will last all day. That really helps our efficiency, being able to service the public without having to come back to the yard and fill up.

Brennan: How does the cost of propane compare with the cost of gasoline now that gasoline is around $2 a gallon?

Owens: It’s very similar if you factor everything in. We buy on a spot basis and are the largest transportation user west of the Mississippi, so we are able to buy in volume.

Morse: The transit industry has led a lot of the research in alternative fuels. In Southern Nevada, you see the CNG buses and biodiesel buses. In Northern Nevada, we are running an entire CNG fleet. We are one of the main areas in the country where the big engine manufacturers come to test new pollution control equipment. We have pitched to the federal government a demonstration project to build green hydrogen-fuel production facilities in Northern Nevada. By "green", we mean we would use either solar or wind or geothermal power to power the creation of hydrogen fuel. We would demonstrate those technologies, as well as the transmission and distribution of the fuel to the ultimate point where it’s dispensed to the vehicle. The research would be applicable to passenger cars or any other vehicles that could run on hydrogen fuel. We have put together a team with UNR and DRI (Desert Research Institute) and a number of private-sector folks to do the first phase of this, an engineering feasibility study we are funding.

Jim Laing: Reno ReTRAC is a project that has been a long time coming. Studies from the 1940s recommended grade-separating the street traffic from the railroad tracks. It finally came to fruition last year, and Granite Construction was successful in winning the $171 million design/build contract. Granite’s heavy division has partnered with our local Sparks branch to bring the project in at a price the city and the state can afford. We’re also involved with the Las Vegas monorail project.

Brennan: I know our Northern Nevada readers are very familiar with the ReTRAC project, but could you give us some details for readers in other parts of the state?

Jim Laing: It is a 2.1-mile grade separation that will eventually have 11 new grade crossing structures in the downtown corridor. From Evans Street down to Keystone, where each one of those streets crosses the tracks, there will be a bridge. The process of design/build includes the right-of-way acquisition. Since the city wasn’t able to initiate the acquisition until it had the funding and the contract in place, it is still finalizing the rights-of-way. So, we are in the process of a designing the project, doing some utility relocations and other things and we are not real visible in building the trench project yet. Beginning in January 2004, we will start the real impact in the downtown corridor. We will be tearing up the road section in front of Fitzgeralds and some other casinos to build the shoofly (temporary) track that will operate for a few years while we build the main trench. Starting in April next year, we will spend the next year and a half building the trench. It is a fast-track project. We will be employing between 300 and 400 people at the peak, and we already have about 100 design professionals, oversight staff and construction staff working in the office. Trying to keep downtown businesses open is a prime concern. There has been a lot of concern that businesses will fail because of the project impacting them. The streets are so close, it’s not more than a few blocks between them, so traffic can detour around. Yes, it will be an inconvenience, but we’ll be done with the majority of the project in 2005. After we are done, we will remove the shoofly track, and the train will be running in the trench by the end of 2005. We’ll re-landscape the area and repave the city streets by the spring of 2006.

Kruse: To put the ReTRAC project into perspective, there are 11 crossings right now where there are gates, and traffic stops when the trains come. These streets carry 120,000 cars and 1,000 CityFare buses per day, right in the heart of our downtown. There is a huge benefit to the transportation system, but most importantly to safety. Pedestrians and vehicles will now be separated from those trains. There will be more trains and larger, longer trains as the Port of Oakland expansion occurs, because that is the main line connecting the West Coast ports with the rest of the country.

Brennan: How will this affect tourism? I know when I stay downtown, the noise of the train horn wakes me up in the middle of the night. Will this make downtown a better place to stay?

Laing: The effect is that the trains will be less visible and have less impact. The project also has the ability to allow for more landscaping and make it a more pedestrian-friendly city. I think the overall effect will be to clean up the downtown sector. The new mayor and city council are very concerned about that. There has been good support from the casino owners. We meet with them on a monthly basis. The city manager would like us to make it like an attraction that brings people to Reno to watch how we build the project. There will be a lot of cranes and lots of activity in a very small area, so it will be a sight to see.

Richann Johnson: Jack Owens’ comments are very encouraging to me. A lot of times over the years the media has tried to pit all these transportation projects against each other, asking questions like, "If the train comes, won’t it take business away from the taxis or the monorail?" The fact of the matter is, all these projects need to be developed. This intermodalism concept is nothing new. In Europe, it has been around forever. When we were in Germany on business, I was in a hurry to get to the airport. I jumped on a train, and when I got to the airport, I got to where I thought I had to transfer to a taxi, but the people there pointed up – the airport was right upstairs. This all makes sense, with the train pulling into the air terminal. We do need to support each other, and there is room for all modes of transportation. Nevada is very lucky because we are a small state, but the greatest technological advances are going on here. We’ve got the monorail system being built, and I think it is the best thing that has ever happened to Southern Nevada. They are doing an absolutely fabulous job on construction – I’ve never seen anything like it. Every day another section is built. It is just going to help our own case in Washington, D.C. We are going to be able to go to Washington and say, "Look – we’ve got all these options to take care of the passengers once they get off the train." That is very important. Even if we expanded the highways today, and had all of these alternate modes in place, we still would probably not be able to address the needs we will have 20 years from now. So, it is very good we are moving ahead like we are.

Brennan: I’m wondering why the monorail doesn’t go to the airport. I know that will impact your taxi and limo business when it does, Jack.

Owens: Somewhat, but I think there is plenty for everybody. We need the combination of facilities for the good of the city and the state. I don’t see that as a real problem. Probably what they are doing is getting the basic corridor built and then, as they have funds available, they will extend it to the airport and Cashman Field and other places. I would like to see us get more infrastructure to bring people in from the bedroom communities and to the hotels. We have thousands of people working in the hotels who are creating most of the congestion driving in to work. The bus system is moving a lot of people, but I think they could move a lot more. If they could bring people in from Anthem and Summerlin and places like that, rather than have them drive their own cars, it would be a great help.

Laing: On the monorail, because it is not publicly funded, it has to be funded by the ridership that supports the bonds, and studies have shown the ridership is greater in the resort corridor.

Brennan: But if you come into the airport late on a weekend night and have to wait an hour for a cab, that tells me there’s a tremendous need for this service.

Owens: Part of that congestion at the airport is because every business experiences peaks. If it is really busy – if we have COMDEX or another big convention in town – you are going to wait for service. If you unload two or three 747s, there is no way you can get that many people out of the airport that quickly. We can’t staff for peaks – we have to staff for the norm. It will take a combination of things to solve this problem: cabs, the shuttles we have out there and the monorail, when it’s completed. Everybody is still going to have to push all they can to accommodate the volume of passengers we get here.

Kathleen Foley
Kathleen Foley is a freelance writer based in Southern Nevada.