Turning Vegas into a hot spot for work
— -- LAS VEGAS -- It's 100 degrees in the shade, and Tony Hsieh is the coolest guy in the room. The Zappos.com co-founder and CEO is holding court at an outdoor festival on how he and a quilt of local business people intend to transform a 1.5-square-mile patch of land here into a model for communities of the future.
Even in Vegas, this qualifies as a big bet. Hsieh, whose e-commerce powerhouse Zappos is firmly planted here, has invested $350 million of his fortune into a grand plan to revitalize downtown into a pre-eminent location for technology start-ups, co-working space and the arts.
Like Detroit and other cities, Vegas is wrestling with the future of its downtown. The audacious vision, which Hsieh hopes to pull off in just a few years, would infuse the desolate downtown with sparkling new workplaces, housing and cultural destinations. "This isn't so different from what we built at Zappos," Hsieh says over lunch earlier this month. "We're just scaling it."
Hsieh has poured $200 million into Downtown Project for land and buildings.
On top of that, $50 million will go to tech start-ups that Hsieh plans to recruit to the area with seed investments of $100,000 to $500,000 each. Another $50 million will go toward luring local small businesses, such as grocery stores, bakeries, yoga studios and restaurants. An additional $50 million will go toward education and community projects.
STORY: Hsieh's inner circle is key part of project
By the time he's through, he hopes to help create the world's largest co-working space -- where fledgling companies, independent entrepreneurs and angel investors toil in an informal cooperative setting -- and a thriving tech ecosystem of young start-ups while burnishing downtown's downtrodden reputation.
"It is the revitalization of the city's core," says Las Vegas Mayor Carolyn Goodman. "We're seeing the fruits of a dream that started with my husband." (Oscar Goodman was mayor from 1999 to 2011.)
Like so many entrepreneurs, Hsieh and his team of advisers are pursuing tech companies to jump-start the regional economy. An influx of tech start-ups has proved to be a driver for local businesses and an impetus for cultural enrichment. In San Francisco, there are some 36,600 people who work in tech, up 13% from the dot-com peak in 2001, says real estate services firm CBRE. More than 500 start-ups have set up shop in Los Angeles and its environs.
There is competition from elsewhere in Nevada, too. In Reno, Apple plans to set up shop in a big way. In late June, Apple said it would build a $1 billion data center there. Just down the interstate from Reno in nearby Fernley, Amazon.com has a 322,000-square-foot fulfillment center. (Amazon acquired Zappos for $928 million in 2009.)
"This project could be insane," says Zappos co-founder Nick Swinmurn, who left the company in 2006 and now lives in Northern California. "(The project) could be the next Austin or just another sleepy couple of blocks in Vegas. I think it will take five years." But "Tony is in it for the long haul," he says. "He wants to live in a cool place, a utopia."
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