By MICHAEL KIMMELMAN
Published: July 4, 2013
LAS VEGAS — Tony Hsieh didn’t look much like a modern-day Bugsy Siegel.
Wearing backpack, T-shirt and jeans, standing outside a downtown bar, he
patrolled his future empire along East Fremont Street here one
sweltering morning.
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But the flamboyant Siegel changed this city for good when he built the
Flamingo Hotel, the first luxury casino on the Strip. Now Mr. Hsieh, a
soft-spoken 39-year-old Internet billionaire who runs Zappos, the online
clothing store, plans to do something as transformative. It’s a classic
American dream: a Western-scale roll of the dice in a city that
suddenly conjured up Belle Époque Paris and ancient Rome out of the
desert. The idea this time is to build a version of the Mission district
in San Francisco or the Williamsburg section of Brooklyn in downtown
Vegas.
Mr. Hsieh (pronounced shay) is relocating Zappos headquarters from
Henderson, Nev., about 16 miles away, and investing hundreds of millions
of his own dollars to retrofit downtown with, well, a downtown, in line
with the latest trends.
I came to check out the progress. There’s not much to see yet, but his $350 million Downtown Project
— a mix of investments, acquisitions and loans — envisions blocks and
blocks of community-based, pedestrian-friendly, small-business-oriented,
high-density, high-tech urbanism in long-depressed and troubled
neighborhoods. Zappos will take over the decrepit old City Hall. That
gesture alone, salvaging a local landmark, has endeared Mr. Hsieh to
many in Las Vegas.
We spoke briefly the other night in the Gold Spike, a former casino
near City Hall whose gambling room he stripped and converted into a chic
slots-free bar and chill space. He took me to the empty motel he bought
next-door, where, he speculated, a modeling agency and photography
studio could take over what used to be a few of the poolside guest
rooms.
On nearby blocks, which he has also gobbled up, the Downtown Project
would seed tech start-ups, boutiques, mom-and-pop restaurants and bars;
the world’s largest Airstream trailer park; a playground and geodesic
dome; a complex of recording studios; a charter school; a doggy day care; a bike share program, even a Tesla electric car share, along with theaters for TED Talk-like lecturers and music festivals.
There’s no designer-led master plan, no single billion-dollar
construction project, no star architect. The concept is top-down but
preaches piecemeal, bottom-up development and reuse. It exploits a
picturesque supply of abandoned flop houses, vacant offices and
collapsing warehouses, capitalizing on a growing desire among young
Americans for urban life: an anti-Strip vision of America.
Out on the Strip, MGM opened CityCenter
in 2009, a $7.8 billion luxury development and celebrity-architect
petting zoo, which in a sense is the same concept, but pegged as a theme
park for tourists. I got a peek the other day. It’s a smart and sleek
attraction; business has been improving. CityCenter and the Downtown
Project are both visions for evolving the same city.
But unlike MGM’s development, which opened in the midst of the housing
collapse, Mr. Hsieh’s timing could hardly have been better. The local
economy, devastated when the bubble burst, is limping back. The
population (increasingly young Asians and Hispanics) keeps rising, and
wealthy out-of-towners prop up the high end of the housing market. Most
properties are still under water, and the city is down 100,000
construction jobs from pre-recession highs, but the picture isn’t as
bleak, or straightforward, as four years ago.
At the same time, Las Vegas suffers the pitfalls of being a one-industry
town. Baked into its economy are minimal taxes and a state government
inclined to ship much of what Las Vegas contributes to the rest of
Nevada, which, among other consequences, insures the school system is
perennially poor. Casino moguls, needing a steady supply of parking
attendants, hotel maids and blackjack dealers, not college-educated
workers, were once fine with that. But times are changing. Now the lack
of good public schools and downtown amenities — demanded by those mobile
and educated young Americans other cities are competing to attract —
has become a liability.
On top of which, Las Vegans I spoke with, young and old, complained
about not having “enough authentic places,” which are “locally owned,
one of a kind, less corporate,” as Tyler Jones, a 35-year-old
architect-developer of luxury homes and third-generation Las Vegan, put
it to me. They wanted a Las Vegas for Las Vegans.
Which is where Tony Hsieh comes in.
Downtown began to decline by the 1960s. The casinos, department stores
and middle-class homeowners fled south to the Strip, seizing upon cheap
and plentiful land. During the 1990s, the Fremont Experience turned five
desperate blocks of what used to be the heart of the downtown gambling
scene into a pedestrian concourse beneath a lighted canopy that pulled
in low-end tourists but few jobs or residents. It’s now a blighted
attraction. Neonopolis arrived in 2002, a retail and entertainment mall,
which soon went belly up, leaving a fortress-size hole amid the pawn
shops and homeless shelters.
Since then, there has been progress. The Cleveland Clinic Lou Ruvo Center for Brain Health, designed by Frank Gehry,
opened downtown in 2010; the popular Smith Center for the Performing
Arts, a $485 million project, last year; along with a new City Hall. And
back in 2007, a small bohemian speakeasy called the Downtown Cocktail
Room opened on the corner of Fremont and Las Vegas Boulevard, once the
main intersection. Hanging out in the Cocktail Room a few years ago, Mr.
Hsieh began to picture a different vision for the neighborhood: as an
affordable locus for upscale young adults, having little or nothing to
do with gambling.
In some ways, the most fascinating aspect of this vision is the
relocation of Zappos. Moving its headquarters downtown represents a
pointed alternative to the multibillion-dollar suburban office parks
that Google and Apple are building in Silicon Valley, notwithstanding
that so many of their own employees want to live in, and commute from,
San Francisco. Mr. Hsieh has bought into the solid notion that chance
encounters on the street or at a club — urban collisions — spark
innovation: cities, inherently, nurture the economy and culture.
It’s a gentrifying idea that comes at the cost of displacing some
existing businesses whose owners say downtown Las Vegas wasn’t a blank
slate. Critics like Joel Kotkin, a fellow of Urban Futures at Chapman
University, have told The Las Vegas Review-Journal that Mr. Hsieh’s
project commits tax dollars (by, for instance, helping finance Zappos’s
purchase of the old City Hall) that might otherwise be spent on training
programs or buses.
But then there’s Eat. I stopped by at lunchtime. It’s the antithesis
of the celebrity chef chains on the Strip — more like some neighborhood
hot spot you’d stumble across in Austin, Tex. Natalie Young, the chef
and owner, having grown tired of her job on the Strip, opened the place
with a no-interest $225,000 loan from the Downtown Project. When she
fell behind on her apartment rent, according to The Review-Journal, she
called Michael Cornthwaite, a friend, who owns the Cocktail Room. His
wife showed up at Ms. Young’s door with a check. Eat has since been
hopping. That story encapsulates the sort of communal entrepreneurship
that Mr. Hsieh hopes to inspire.
I toured the East Fremont district with Don Welch, one of Mr. Hsieh’s
partners, who talked in the dreamy, assured way developers do about
filling blocks and blocks of vacant land in the next few years with a
bustle of businesses and people.
We’ll see. Short term, success depends on Mr. Hsieh’s running the table,
investment-wise. A range of business leaders, local converts to civic
diversification, not just from the gambling industry, hopes he does.
Long term, success will depend on a broader vision, which incorporates
downtown casinos that have reinvested in themselves like the El Cortez,
along with establishments that haven’t. And new development will need to
be integrated with existing schools, homeless shelters and convenience
stores, so the city doesn’t simply end up with an isolated hipster
office park.
That Caesars Entertainment on the Strip is also retrofitting urban-style
streetscapes for tourists suggests Mr. Hsieh’s project is making some
waves. It’s in contrast to the marooned, star-architect-driven
mega-developments like the Smith Center, which are, so far, poorly
knitted into the fabric of downtown streets. Mr. Hsieh isn’t himself
thinking in terms of new architecture yet; he’s repurposing vernacular
buildings, though the project, in its open-endedness, would seem to
present an opportunity for resourceful architects to pitch the virtues
of inventive new design.
Hard as it may be not to feel skeptical, the small-scale civic
principles are solid. And sometimes a single determined mogul is just
what a struggling city needs.
It wouldn’t be the first time that Las Vegas was remade by one.
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