LAS VEGAS
Downtown revival
Dry ice is pouring out of the base of a stage that’s been set up in an empty car park, creating clouds of smoke in the late September sun. A crowd of people are casually hula hooping to Missy Elliott’s
One Minute Man, their gyrating bodies casting long lilac shadows across the tarmac. Down the road, the smell of weed wafts by from the High
Times Cannabis Village (marijuana is now legal in Nevada), girls pose for photos against day-glo murals and street bars mix up Fernet-Branca cocktails. Now in its fifth year, the Life is Beautiful festival, in Downtown, is in full swing.
Just one week later, tragedy strikes when a gunman opens fire on the Route 1 Harvest country music festival on the Las Vegas Strip, killing dozens and injuring hundreds (see page 36). It is later revealed that the assailant also booked a room over-looking Life is Beautiful but decided against attacking. Oblivious at the time, the event couldn’t have been more joyful and optimistic, but in hindsight it’s chilling.
Unlike California’s Coachella, which takes place at the Empire Polo Club near Palm Springs, or Nevada’s Burning Man, which sets up camp in the middle of the Black Rock desert, Life is Beautiful is an urban festival. It takes over 18 blocks of Las Vegas’s Downtown area, 9km from the Strip. This year’s line-up, which attracted more than 50,000 people each day, included Gorillaz, Muse, The xx and MGMT. With the help of 60 restaurants, bars and food trucks – and one giant firebreathing metal UFO from Burning Man – the 72-hour festival was expected to have generated US$125 million for the local economy.
The event was launched five years ago by local internet entrepreneur and venture capitalist Tony Hsieh, as a way of putting this run-down part of Sin City back on the map. It was all part of a vision he had for revitalising the district, which centres around Fremont Street – the old “Strip” (also known as the Glitter Gulch), which is home to 1950s-era casinos such as the Golden Nugget and Binion’s Horseshoe. Seeing the potential for reinvention, Hsieh put US$350 million of his own money into establishing the Downtown Project (DTP) – with US$50 million set aside for investing in tech start-ups, in the hope of creating a new Silicon Valley.
In 2013, he relocated the headquarters of his online shoe company, Zappos, in nearby Henderson, to Downtown’s former City Hall. With 500 employees (now 1,500) to look after it was a bold move, but he was determined to generate a sense of community and culture in what had, up until then, been a downtrodden outpost for deadbeats, gamblers, prostitutes and panhandlers. Tourists rarely ventured this far. Mark Carlson, vice-president of operations for the Downtown Project, says: “Ten years ago there was a lot of crime and homelessness – it was just left behind. When Zappos moved here it created a lot of discussion about what the HQ should look and feel like, and that spurred this idea of putting money into the community.”
On a tour of the campus, long-term Zappos employee Letha Myles says: “On my second day at work there was a cake waiting for me as it was my birthday and they covered me in Silly String. This place has become my family. We have lots of extra curricular activities that are organised by our ‘fungineers’ fun team. They are
The Life is Beautiful festival was launched five years ago by local internet entrepreneur Tony Hsieh, as a way of putting this run-down part of Sin City back on the map
‘When Zappos moved to Downtown it spurred this idea of putting money into the community’
responsible for cultural engagements – think company picnics and ‘wear flannel, bring pie’ days. Even our lowest paid employee can have a good quality of life – they aren’t just living on instant ramen.”
Hsieh soon began funding initiatives across the 18-hectare Downtown site – US$200 million was allocated for real-estate and development, US$50 million for small businesses and another US$50 million for arts, culture and entertainment. There have been challenges along the way, though. Designated venture capital firm VegasTechFund invested heavily in roughly 100 tech companies but, unfortunately, many of them failed. Things then became rocky for Hsieh when he became the target of criticism after three prominent entrepreneurs committed suicide and he evaded discussing why. His mission to “deliver happiness to everyone” was crumbling and, after a series of layoffs, he stepped away from the project towards the end of 2014. Last year, the VegasTechFund was rebranded VTF Capital, and its reach was expanded to cities across the US. It seemed the dream was over – or was it?
SPONTANEOUS COLLISIONS
Since Amazon bought Zappos for US$1.2 billion in 2009, Hsieh has amassed quite a fortune but still chooses to live in a trailer, which is part of Downtown’s “Airstream Living Experiment”, near the revamped Bunkhouse Saloon. The CEO has a strong
belief in creating an environment that is conducive to “spontaneous collisions” between people. Rather than isolating himself in a mansion in the suburbs, he prefers to be on the ground in the heart of the action. However, since distancing himself from the day-today running of the DTP, he declined an interview with Business Traveller.
I did get to visit the headquarters of the Downtown Project, though, and meet the people managing it. Far from defeated by its stunted tech scene (the hope of creating a new Silicon Valley never came to fruition), the initiative has pivoted towards food, drink, culture and creating a walkable neighbourhood. Not only does the DTP pay artists to paint giant eye-catching murals around the place, but it owns and operates a dozen thriving businesses, including the Oasis at Gold Spike hotel, Inspire conference venue and theatre, Corduroy rock bar and the Downtown Container Park, which is a trendy hotspot for independent restaurants such as Big Ern’s BBQ and Bin 702 wine bar, which have set up shop inside shipping containers.
Michael Downs, executive vice-president of the DTP, says: “Tony was a bit of a pioneer – he had the vision, he was the first one to open up his cheque book. He bought the Gold Spike four and a half years ago when it was a tired, smoke-filled casino and we gutted place, took out the gaming tables and slot machines, and created a co-working space by day, and nightclub by night. There are also hotel rooms and apartments. People thought we were kind of crazy for shutting down the casino but now it is super successful.” He adds: “There is not as much focus for us on tech – many of the start-ups have
‘Tony was a bit of a pioneer – he had the vision, he was the first to open up his cheque book’
gone back to California because I think they recognise that there is more infrastructure and support for them there. Over the last five years, though, we have found what is successful. We want to create a really dynamic entertainment corridor.”
Guarded by a giant fire-spewing praying mantis (a second Burning Man sculpture), the aforementioned Container Park is a highlight. Downs says: “The Container Park is super unique – it is a place where entrepreneurs have the chance to sell their goods in a really approachable space where they won’t have to sign a ten-year lease and put US$5,000 down. You can go in for six months and sell white T-shirts and if white T-shirts work you can do it for another six months. If not you can pack up. There are always new tenants coming and going.”
The Downtown Project has also been investing in small businesses such as marketing agency Catalyst Creativ, independent bookstore Writer’s Block, 24-hour dry cleaning firm Mint Locker, production company Rock Salt Music, styling salon Bombshell, vinyl store 11 Street Records, and hip restaurants La Comida, Eat and Carson Kitchen.
Downs says: “Now the hope is that these businesses will grow to other places in Las Vegas. Vegenation is opening its second restaurant in Henderson and Bin 702 are opening their second operation in Downtown.” John Courtney, culinary director of Carson Kitchen on S Sixth Street, says: “We are planning to open a new Asian place called Alley Cat not far from here.” He adds: “Come back again in five years’ time and you probably won’t even recognise this street because there will be a light rail system coming through. All we have right now are buses, and they are terrible.”
From crème brûlée donuts at the Donut Bar to the Neon Boneyard, where vintage signs go to die, it’s no surprise Downtown is pulling in tourists who are happy to take an Uber 20 minutes away from the Strip for something more “authentic”. Carlson says the DTP is also endeavouring to attract more corporate travel. “We started working with some of the other casinos in the Downtown area to create a convention association as a way of attracting more business. We have now formulated this group of 15 or 20 individuals representing the other hotels and event spaces in Downtown and it has been gaining a lot of traction.”
Derek Stevens, who owns The D casino and hotel, recently revamped and expanded the Golden Gate casino (five years earlier he added a hotel tower). This year he also demolished the Las Vegas Club to make way for a new resort in Symphony Park, with construction to begin next year on what has been named the “Fremont 18” project. “They are pretty tight-lipped about their plans but it will be the first new casino to open in Downtown in over 50 years,” says Carlson.
The next step is bringing in more residents with the construction of new housing, something Hsieh has since said he wishes he’d done sooner. Debuting early next year, with a 50 per cent investment of US$21 million from Wolff Company, will be Fremont 9, a 232-unit
It’s no surprise Downtown is pulling in tourists who are happy to take an Uber from the Strip
…apartment block close to Atomic Liquors, where, back in the 1950s, people used to sit on the roof to watch mushroom clouds rising from nuclear bomb tests in the Nevada desert.
Downs says: “One of the things we could have focused on earlier was multifamily housing and having more people living down here. There are four condo and apartment towers but beyond that there is a big gap between what is available and what we need.” The City of Las Vegas says it hopes to see 3,000 new housing units in the next five years. “We would also like to grow more trendy micro-offices with kitchenettes and conference rooms – kind of co-living, co-working spaces.”
J Dapper, principal of real-estate developer Dapper Companies, is also getting involved. He says: “As a Las Vegas native, I became a customer of some of the stores and businesses that Tony Hsieh created, and fell in love with the storyline. As a developer, I take the most pride in creating opportunities and jobs for people, so the first area of Downtown I invested in was an old shopping centre off of Charleston and Maryland Parkway, which is near Huntridge Theatre – a place I grew up seeing concerts in. I’ve since purchased two additional properties off of Maryland and Bonneville, and another at 630 S 11th Street.”
He continues: “Over the years, I’ve witnessed Downtown Las Vegas go through several different stages, but this is the first time that I feel it is in this renaissance era, where all of the developers involved have a love for architecture and a desire to preserve what used to be. The tenants that occupy the now renovated Huntridge shopping centre have all rallied to incorporate old neon signs on their store fronts to capture the original Vegas; so you’ll see a Wing Stop, Circle K and Savers, all with neon lights. Normally, the consensus is against developers doing any type of renovation, but in this instance, not only is the neighbourhood and elected officials behind what we’re doing, but the whole city is pulling for us.” STATE OF THE ART Close to the DTP, another area that is being developed is the low-rise 18b Arts District. I visit the Velveteen Rabbit bar on S Main Street, which is also known as “Antique Alley” for its quirky vintage stores and thrift shops. During the course of a cocktail making workshop, co-owners and sisters Pamela and Christina Dylag tell me how they launched their business. “We took over this building four and a half years ago after it had been in a fire. We had to replace the roof and there was no front wall,” says Christina. “It was an upholstery shop, which is why the whole thing went up,” explains Pamela.
Christina says: “People thought we were crazy for opening here but we saw the potential and the city was incentivising people to open in this area by waiving the liquor licence fees. We got some grants from the city too. Since then, things have really gained momentum. This whole area has changed dramatically over the last few years – you can see major construction going on. It’s really cool.” One of the biggest investors in this neighbourhood is LA-based developer Jonathan Kermani. The 18-block site already has a cluster of artist studios, galleries and warehouses in around East Charleston Boulevard (the Arts Factory and Art Square are the most established).
Jason Thompson, deputy director of the Economic and Urban Development department for the City of Las Vegas, says: “Vegas was very much in expansion mode, especially in the real-estate sector, from 2004 to 2007, when new home sales went from 4,000 a year to 40,000. When the Great Depression hit in 2008, Vegas was as hard hit as any city in the US. Development halted until 2012. Since then, we have seen the market recover and Downtown has seen a huge resurgence. We are even pitching for Amazon to open their new HQ here.”
While most of the development taking place in Downtown is privately funded, the City of Las Vegas also has a master plan. “Vision 2045”, as it is known, claims to be “the most ambitious planning document crafted by the city since its inception in 1905”. It describes a future Downtown that will become “the cultural and economic hub of the region” and “a network of neighbourhoods that will enjoy the highest quality of life, built on the legacy and energy of local culture, green infrastructure, education, and a robust and diversified economy”. It says that start-ups and local entrepreneurs will be able to take advantage of incubator space, and there will be tax incentives to get new businesses off the ground.
Over the next 25 years, Downtown hopes to have carved out nine hectares of parks and plazas with hundreds of young trees. Bike paths and walking trails will be increased seven-fold and 16,000 new jobs will have been generated. It will also be looking to implement “smart city” innovations such as co-ordinated IT and wayfinding systems for traffic and parking management, while 50 per cent of its energy will come from renewable sources. If it continues on this trajectory, life will be beautiful. Viva Las Vegas.