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Urban Innovation – Las Vegas Downtown Project

CEO Tony Hsieh is “gambling on downtown Las Vegas”, and betting that moving Zappos out of the suburbs will pay off in an urban revival.

Photo of Lei Niu
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Like most Southwest cities, the Las Vegas growth model was to expand out, creating sprawling suburbs and quiet gated communities.

But one trendsetting local business – the online shoe company, Zappos – thinks an urban setting would be a better fit for its employees and industry.

So these days, Hsieh is no longer just thinking about cubicle density. He is thinking about urban density. “It turns out that the same principles that work for improving company culture actually work for driving productivity and innovation in a city,” Hsieh said.

In 2013, Hsieh is leaving the suburbs and moving everything downtown. He is taking over the city hall building in historic downtown Las Vegas, a quirky, gritty neighborhood north of the Las Vegas strip. Right now, the area is mostly known for its aging casinos, government buildings and a smattering of pawnshops.

But downtown is also home to the city’s arts district and a few hipster friendly hangouts. The neighborhood is one of the only pedestrian-friendly parts of Las Vegas, and has been a focus of the city government’s revitalization efforts. It will welcome a new performance arts space and a few new museums next year. Hsieh is hoping to continue to build on that energy and help make downtown Las Vegas a vibrant, urban hub.

The idea is to build a community for the 2,000 Zappos employees who will be working downtown, as well as other hi-tech and Internet-based companies he hopes to draw to the area.

“Creating an interesting place to live and making this a fun place to be is obviously very good for our talent pipeline,” said Zach Ware, the Zappos employee who is heading the move downtown. “If this is a great place to live you don’t have trouble attracting people to live here.” Hsieh has pledged to personally invest around $300 million dollars to realize this vision, which he has dubbed the “Downtown Project.”

He’s also supporting tech start-ups to relocate here and wants more high rise housing so there will be a whole community of people who live, work and play downtown. Is it doable?

“You don’t change a neighborhood with a snap of a finger,” said Steven Pedigo, the director of research for the Creative Class Group, a consultancy that advised Zappos on the Downtown Project. “It’s challenging and there are some up and downs, and it will take some time.” Still, most urban revitalization projects don’t enjoy the support of a big company and an investor with deep pockets like Hsieh. “Because of the commitment from Zappos and Tony (Hsieh) himself, you have a real fighting chance to make this neighborhood transformation happen much faster,” Pedigo said.

Convincing people on the outside that Las Vegas can be something more than the casinos on the Strip or sprawling suburbs. Yet the goal of this unlikely endeavor goes beyond just Las Vegas. “We hope that other cities will be inspired to continue to invest in their downtown cores to help connect creative people, to help inspire entrepreneurs,” said Zappos’ Zach Ware. “To help create a sense of community that gated suburbs really killed.”

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Photo of Meena Kadri

Interesting, Lei. Tip: links will not be active if placed in the summary section. You might like to update your entry and move the opening link to the end of your post. Great to have you back up and at 'em on OpenIDEO!