Leavening Las Vegas

Worth a bet: Tony Hsieh is gambling on successfully regnerating the rundown downtown of Las Vegas. (Spencer Platt, Getty Images, AFP)

Worth a bet: Tony Hsieh is gambling on successfully regnerating the rundown downtown of Las Vegas. (Spencer Platt, Getty Images, AFP)

A few blocks from the glitzy hotel where Prince Harry cavorted in Las Vegas last year, doing his bit for its party-town image, the neon-lit strip of casinos, bars, restaurants and malls greys into a landscape he almost certainly did not see: broken pavements, empty lots, boarded-up façades.

This urban wasteland is the real downtown Las Vegas; the product of decades of dysfunction and neglect, home to poverty, unemployment and foreclosures: a dystopian hangover to the Strip’s excesses in a town hit harder than most by the recession. Ocean’s Eleven feels far away.

Yet it is here an enigmatic tycoon is spending $350-million in a unique experiment at urban regeneration and, as he puts it, human happiness. Tony Hsieh (pronounced Shay) is luring poets, artists, inventors, investors, geeks, a motley band of British entrepreneurs and 1 500 ferociously cheerful employees known as Zapponians into an attempt to turn downtown Las Vegas into a hub of culture and innovation.

Hsieh (39), a Silicon Valley wunderkind with a Midas touch, has become an improbable aristocrat of Sin City. In the past year he has bought swaths of real estate, including the former city hall, as part of an ambitious plan to jumble together business, arts and architecture in a way that fosters “serendipity” — connections between people that fuel creativity and fulfilment.

“Evolution has proven that we’re more intelligent and better off when we collaborate socially,” he says, overlooking the city. “It’s our genetics.”

Downtown Project, as it is formally known, is one of Las Vegas’s boldest gambles. Success, says Hsieh, will show that any city, no matter how decayed, can be rescued. If it fails, the experiment will be branded utopianism and could leave Hsieh ruing a very expensive roll of the dice.

Young entrepreneurs from Silicon Valley, London and New York have flocked to the desert on the promise of a tabula rasa (a blank slate) that its urban and civic failure offers a clean slate for transformation.

“Las Vegas is the last big city that’s still being invented,” says Paul Carr (33), a British writer turned entrepreneur. “Vegas is not even slightly finished yet. There’s a sense you can make a difference here.”

Everyone is asking two questions: Who exactly is Tony Hsieh? And will his idea work?

Hsieh has made his headquarters near Fremont Street, where U2 filmed the video for I Still Haven’t Found What I’m Looking For. It is a historic quarter of sorts. Bars and brothels sprang up in the 1920s to service workers from the Hoover dam, a seedy heyday. Once the strip started attracting megacasinos and acts such as Elvis Presley and Frank Sinatra, all the money and attention migrated to Las Vegas Boulevard, which formed a dividing line. To the west, the razzmatazz that is a magnet for 39-million tourists annually; to the east, the dilapidation locals call home. The 2008 economic crisis hit particularly hard — Nevada had the United States’s highest rate of foreclosure.

Towering over the grim concrete wilderness is the Ogden, a 25-storey luxury apartment complex. Hsieh has leased dozens of rooms in top floors where he and his collaborators live and work. The views are spectacular, especially at sunset: a carnival of lights — the Strip — and then the Mojave desert, a scorched plain ending in a mountain horizon.

We meet for brunch on one of the top floors. Shy and soft-spoken, Hsieh wears jeans, a grey hoodie and black suede slippers — an antithesis of the blow-dried Donald Trump, whose tower rises in the distance. Downtown Project, says Hsieh, is all about getting people to interact, because therein lie success and happiness. “We’re trying to get people to run into each other, to collide on the street, in cafés, bars, offices, galleries. The idea is to create as many walkable collisions as possible.”

He has been inspired by Edward Glaeser’s book Triumph of the City (subtitle: How our greatest invention makes us richer, smarter, greener, healthier and happier) and its idea of cafés, parks or squares anchoring communities. “You need to cluster anchors but they should be not too close, not too far. The idea is people walk and collide; it’s not just about the destination.”

The target for downtown, which feels ghostly in places, is to have more than 100 people an acre. Hsieh envisages a community in which a software developer, a painter and a waiter could bump into each other, hang out and maybe come up with a brilliant idea. “Most innovations come from something outside your industry.”

The $350-million is divided into $100-million for land, $100-million for residential development, $50-million for small businesses, $50-million for education, $50-million for tech start-ups.

Many ideas have come from Post-it notes, which people are encouraged to leave on a wall in Hsieh’s apartment.

The son of Taiwanese immigrants, Hsieh grew up in California, earned a Harvard computer science degree, co-founded the internet advertising network LinkExchange and sold it to Microsoft in 1999 for $265-million. He was 26.

With business partner Alfred Lin he co-founded an investment firm, Venture Frogs, and in 2000 took over Zappos, a small company that sold shoes online. In 2009 he sold it to Amazon for $1.2-billion.

Hsieh remained as chief executive of Zappos because to him it was not just a company but also a vehicle for developing ideas from his 2010 book, Delivering Happiness, which he wrote in two-and-a-half weeks, barely sleeping, swigging vodka with coffee beans. Subtitled A Path to Profits, Passion and Purpose, it debuted at No 1 on the New York Times bestseller list. As the company grew he considered converting its headquarters in Henderson, a suburban sprawl outside Las Vegas, into a Facebook or Google-style campus.

Instead, prompted by a bar-owner friend, Hsieh moved the operation downtown to apply Triumph of the City.

City and state authorities, delighted that someone is taking responsibility for the blight, are largely giving Hsieh’s team a free rein. A few trendy bars and cafés have already sprouted to serve the “pioneers”. Low taxes and living costs are also big attractions.

Frank Gruber (34) recently moved his media networking company Tech Cocktail to Vegas because he considers it a new frontier. “You see all these empty lots. There’s so much to do here.” He cites nightly events such as “poetry slams, jamming, art openings, cocktails, you name it” as proof the experiment is already working.

Not all are convinced. At Macworld/iWorld, a technology show in San Francisco, opinions range from cautious to dismissive. “I think the jury’s out on whether they’ll persuade top talent to move out there,” says Brian David Johnson, a futurist with Intel. Seth Weintraub, a blogger on 9to5mac.com, says: “I hate Vegas, there’s nothing real there. A rock-star developer earns enough to live in a place that’s already livable.” — ­© Guardian News & Media 2013



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