Hsieh's downtown Las Vegas Container Park. Flickr/somewhatfrank

Tony Hsieh's visionary plan for the city's off-strip core seems to be imploding, leaving followers disillusioned.

Zappos CEO and "evangelical urbanist" Tony Hsieh has stepped down from his role as leader of Las Vegas' Downtown Project, and 30 additional staff members were laid off yesterday. A statement explains the cuts as an aim to "restructure ... operations and focus on follow-on investments."

Seeded by Hsieh's own $350 million, the Downtown Project is a redevelopment group aimed at turning Las Vegas' off-strip urban core into a kind of alt-wonderland. Since 2012, "DTP," as it's known to insiders, has purchased some 60 acres of property in the area, funding restaurants, bars, shops, bakeries, a record store, a hardware hacking center, and a $40 million outdoor mall built from shipping containers. A source close to the project told Re/Code that many of these new businesses were "bleeding money."  

Hsieh, who's been called the "mayor of downtown," said in an email dispersed to media that he never considered himself the “CEO” of the project.

That may be telling. Many sources pointed to Hsieh's leadership and hiring practices as contributors to the apparent implosion. “There are a lot of people in leadership at Downtown Project who have absolutely no business being there,” another source told Re/Code. “Tony is not always altogether the most wise judge of character. There’s a lot of family. There’s a lot of drinking buddies. And some poor choices were made.”

Certainly, the massive layoff is sharply disillusioning for the many DTP staffers who latched on to Hsieh's community-oriented, "beyond-the-bottom-line" vision for redevelopment. The Las Vegas Weekly reports:

One source said the cuts directly hit non-revenue-generating entities—the Learning Village, music programs, tours, kids and family, and the Window at the Ogden. Another source said that almost everyone “non-operational” was being let go."

David Gould, an academic who left the University of Iowa to be "Director of Imagination" at DTP, resigned yesterday following the layoffs. In an open letter to Hsieh published in the Weekly, he sums up a sense of disenchantment reminiscent of a former religious convert now wracked with doubt:

“Business is business” will be the defense from those you have charged with delivering the sad news. But we have not experienced a string of tough breaks or bad luck. Rather, this is a collage of decadence, greed, and missing leadership. While some squandered the opportunity to “dent the universe,”others never cared about doing so in the first place. There were heroes among us, however, and it is for them that my soul weeps.

Hsieh said in another statement that he would continue to act as an "investor, advisor, and equivalent of a board member" at DTP, but would not be "involved in day-to-day management of people or projects." His lawyer, Millie Chou, will be taking over that role, Re/Code reports.

Hsieh also outlined a plan for the project through 2016 that includes more so-called streamlining. “[J]ust like any startup,” Hsieh wrote, “[DTP] has gone through the same range of ups and downs that we went through at Zappos—just twice as quickly, so therefore the highs and lows can oftentimes appear to be twice as intense.”

Top image courtesy of Flickr user somewhatfrank.

About the Author

Most Popular

  1. A photo of a Google employee on a bicycle.
    Equity

    How Far Will Google’s Billion-Dollar Bay Area Housing Plan Go?

    The single largest commitment by a private employer to address the Bay Area’s acute affordable housing crisis is unique in its focus on land redevelopment.

  2. A person tapes an eviction notice to the door of an apartment.
    Equity

    Why Landlords File for Eviction (Hint: It’s Usually Not to Evict)

    Most of the time, a new study finds, landlords file for eviction because it tilts the power dynamic in their favor—not because they want to eject their tenants.

  3. Equity

    Berlin Will Freeze Rents for Five Years

    Local lawmakers agreed to one of Europe’s most radical rental laws, but it sets the stage for a battle with Germany’s national government.

  4. A map showing the affordability of housing in the U.S.
    Equity

    Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

    The 30th anniversary edition of the National Low Income Housing Coalition report, “Out of Reach,” shows that housing affordability is getting worse, not better.

  5. Environment

    Paris Wants to Grow ‘Urban Forests’ at Famous Landmarks

    The city plans to fill some small but treasured sites with trees—a climate strategy that may also change the way Paris frames its architectural heritage.

×