• The Star Staff

How Tony Hsieh tried to single-handedly transform downtown Las Vegas

By Nicholas Bogel-Burroughs and Karen Weise

It was his own personal sandbox, a real-life Sim City that he spent $350 million to build in a neglected corner of Las Vegas, just north of the flash and crowds of the Strip.

Tony Hsieh, who died at 46 on Friday from injuries suffered in a house fire earlier this month, was known for running Zappos, a giant online company that sold shoes. But the biggest imprint that Hsieh left behind is perhaps in downtown Las Vegas, which he transformed with the money he made selling Zappos to Amazon in 2009.

“How many opportunities in a lifetime do you have to help shape the future of a major city?” Hsieh asked in a 2013 speech, in which he vowed to turn downtown Las Vegas into “the most community-focused large city in the world.”

That year he moved Zappos’ headquarters into the old City Hall building. He tried to increase the number of what he called “collisions” between interesting people in streets and cafes by adding public art and making downtown more walkable. He pitched his friends on moving their startup ideas to his sandbox, luring hundreds of entrepreneurs.

He called his effort the Downtown Project, and it attracted glowing — if sometimes wary — reviews. As Hsieh’s transformation moved forward, though, more people began to question the tech executive’s charge into the city.

Several people quit the Downtown Project soon after it started, including one key employee who blasted the investment company’s management in an open letter in September 2014 as “a collage of decadence, greed, and missing leadership.” That month, Hsieh abruptly stepped down from the project as it laid off dozens of employees. He moved out of a luxury apartment and into an Airstream trailer in a trailer park he had built downtown where he kept alpacas as pets.

Critics argued that his project had made the city more expensive in a state where affordable housing is already difficult to find.

Hsieh said in 2016 that one of his biggest regrets with the project was not building housing quickly enough.

“We’re just now starting construction on an apartment building,” he told CNBC then.

Still, Hsieh’s investment spurred some success stories.

Natalie Young had quit her job as a chef on the Strip just a few months before she was introduced to Hsieh by a friend who ran a coffee shop in downtown Las Vegas. She recalled Saturday that he had once asked her, “What size restaurant do you want?” and had later offered her a $225,000 loan. With the money, she opened her first restaurant, Eat, in 2012, and it became a hit. As her own business grew, she also saw her downtown neighborhood change.

“I remember standing on the corner at Eat and looking both ways and seeing nothing — like, nothing,” she said of the time before she opened her restaurant. But after it opened, and as Hsieh’s investments attracted more businesses and people, downtown became a destination, she said, and suddenly parents and children were arriving on bicycles at her restaurant’s front door.

As much as she loves the new downtown, Young acknowledged that it had come with trade-offs; the coffee shop that her friend owned closed in 2016 and was replaced by a restaurant that is part of a California-based chain, exactly the kind of business Hsieh once said he wanted to avoid in favor of unique shops.

“That kind of stuff made you sad, but it’s also a part of growth,” Young said.

In recent years, as Hsieh became less involved in the Downtown Project, it was increasingly run “like a traditional urban planning project,” focusing on real estate and investing in more lucrative projects, Aimee Groth, who penned a book about Hsieh and the project, wrote for Quartz in 2017.

Leah Meisterlin, an assistant professor of urban planning at Columbia University, said Saturday that Hsieh’s project was an early attempt to bring a fast-moving Silicon Valley approach to city planning. Despite his generous investment, Meisterlin said, the project may have been slowed in its ambition because cities can benefit more from slower, careful changes.

“They didn’t have any experience in urban planning, but what he had was over $300 million of his own wealth that he was ready to invest,” Meisterlin said. “What he chose as his subject — a city — necessarily slowed him down, whereas many endeavors might not have, and I think that was ultimately for the best.”

Mayor Carolyn Goodman of Las Vegas, whose city boundaries do not include the Strip and its many landmarks, wrote on Twitter on Saturday that Hsieh had been a visionary for the city’s downtown. “He was always dreaming, working to inspire and leading others to create a new vision,” she said.

“Tony Hsieh played a pivotal role in helping transform Downtown Las Vegas,” Gov. Steve Sisolak of Nevada wrote on Twitter.

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