The untimely death of the widely admired Tony Hsieh, former CEO of online shoe retailer Zappos, was a double loss, both of a business innovator and of an urban innovator. In business, he was a well-known serial entrepreneur who sold the tech company LinkExchange to Microsoft, then invested in and ultimately became CEO of the highly successful Zappos, which he sold to Amazon for $1.2 billion.
As an urbanist, he took on one of the most audacious urban transformations attempted outside of the public sector. He turned the former Las Vegas city hall into the Zappos headquarters, and launched a $350 million initiative called the Downtown Project designed to transform downtown Vegas into a thriving neighborhood and hub of entrepreneurship. He aspired to change the Zappos HQ environment from its previous suburban office-park setting to a New York City-style HQ, integrated into a city that offers amenities to lure and serve employees.
Hsieh set out to make downtown Vegas the world’s most community-oriented downtown, and its co-working and co-learning capital as well. The environment was not promising. Nothing about the Downtown Project should be judged without considering Vegas’s exceptionally depressing downtown—the most savagely bleak of any major American city. For all intents and purposes, there was no such thing as “downtown” Las Vegas, which consisted of some older casinos and government buildings and nothing else. There’s no traditional employment or commercial core, and only one large office building. The Downtown Project was starting essentially at zero, with practically no assets and numerous obstacles.
The Downtown Project undertook its challenge by absorbing all the conventional thinking about modern urbanism. Hsieh digested books by Edward Glaeser and Richard Florida; he consulted the gurus, from Elon Musk to Burning Man. And he attempted to implement a mashup of their ideas with car-share initiatives, creative “collisions” born of density and proximity, fashion, tech startups, co-working, art, music, coffeeshops, and restaurants. Everything was buzzword-compliant, right down to the PBR on tap in the local establishments. All the boxes were checked.
But underneath this layer of the ordinary, Hsieh implemented some unique and innovative ideas. He rented out a block of about 50 apartments in the one luxury tower in downtown Las Vegas and turned them into “crash pads”—free places to stay for visiting journalists and others (including me, once) whom Hsieh invited in. And Hsieh himself, a corporate CEO and very rich guy, would personally show people around and pitch his city. He understood that he needed sales as well as marketing to draw attention, and he spent a lot of his time making direct pitches to individuals and small groups. Never has a downtown more aggressively and impressively marketed itself. And never has a modern local business magnate so directly and extensively marketed his city.
Hsieh also tried to make the nature of Las Vegas itself work to his benefit. Everybody eventually comes to Las Vegas, whether for gambling or for a convention. So Hsieh tried to grab a slice of A-list people’s time while they were there, asking them to give a presentation at his downtown speaker series or otherwise make some small contribution to the community he was building when they were in town. He included this as part of what he branded as “Las Vegas Makes You Smarter.” He did something similar with a concept called “Subscribe to Las Vegas.” He understood that not everyone would want to live in Vegas full time, but lots of people might want to live there part time or visit regularly. He wanted to brand and institutionalize this affinity.
Hsieh did a lot with a little—$350 million sounds like a lot of money, but in real estate, it’s a pittance; he couldn’t make the kinds of investments in physical space that someone like Dan Gilbert was making in Detroit. Instead, Hsieh found ways to get creative in a capital-constrained environment. He created an Airstream trailer park, where he lived for a time. He wanted to make a retail complex out of shipping containers. He bought an old casino called the Gold Spike and did some basic sprucing up instead of trying to recreate it as a new Taj Mahal.
The Downtown Project was one of the most hyped urban initiatives in the United States but struggled to deliver on its outsize promises. After a round of layoffs and increasingly skeptical press, Hsieh himself ultimately stepped down from the effort. But the Downtown Project’s failure to achieve its lofty goal of transforming Las Vegas needs to be seen in light of the degree of difficulty there. Hsieh’s mission really was impossible, but his vision and the model he set for experimentation are more important than what he accomplished. Other cities have yet to learn from his innovations, which are relevant far outside the limits of downtown Las Vegas.
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