This week, Downtown Project announced it was severing ties with Jen McCabe and ceasing operations at Factorli, a manufacturing plant she founded a few months ago.
Why is this a big deal? Despite its cutesy name, Factorli was seen by many as a vehicle to lift Downtown Project and its VegasTechFund into the rarefied air of manufacturing, something there isn’t much of in Las Vegas—or Nevada, for that matter.
The $10 million venture north of Charleston near Casino Center Boulevard was to be a factory for plastic-and-chip-based consumer electronics. McCabe described the scope as somewhere between the small scale of a 3D printer and a big factory in China.
The idea was so groundbreaking—manufacturing in Downtown Las Vegas?—that President Obama singled out McCabe in June, declaring Las Vegas could become the center for “a revolution … in American manufacturing.”
Apparently, DTP didn’t see it. McCabe couldn’t be reached for comment, but Tony Hsieh, the mastermind behind Downtown Project, said he didn’t know much about the move and referred questions to lawyers, public relations people and others.
One longtime developer and Downtown observer who has been watching the Hsieh Revolution put it succinctly after learning about Factorli: “Sounds like they don’t think things out.”
You might come to the same conclusion based on some of Downtown Project’s other interesting moves. A few weeks ago, DTP’s $3.5 million purchase of Atomic Liquors’ building and lot, whose owners only spent $500,000 to buy it last year, had people scratching their heads. A year ago, DTP bought venerable dive the Bunkhouse and said it would be open 60 days later. It has been more than a year now, and the venue is finally scheduled to open August 25.
A bookstore was once planned to open in March or April on Fremont East next to Inspire Theater. People moved here from out of state to run it, but that space is now destined for some other business and the bookstore is going to be moved further east.
Downtown Project-ers have made it known they have no master plan for Downtown property. In a city where everything we look at seems to come from a developer’s cookie-cutter plan, Hsieh’s famous wall of Post-It notes full of potential businesses Downtown needed seemed, at the time, somewhat refreshing.
Growth-by-Post-It somehow seemed more organic.
Was Factorli an organic idea, too?
Speculation about what happened has already begun. Some say Hsieh and his real estate people came to realize it was going to be much more expensive than anticipated. Roughly three years into its existence, DTP has already spent lots of money, needs revenue—unless Hsieh pours more cash in—and perhaps doesn’t want a big drain on capital resources.
That all seems reasonable. But what about the $3.5 million spent to buy the Atomic?
People want to know because the Downtown Project is the $350 million, 800-pound gorilla in Downtown Las Vegas. Nothing it does goes unnoticed or unquestioned.
Right now, the dominant belief Downtown is that the Project is running out of money; that it will finish a few projects it has already started, maybe do some housing and then … who knows? Sell off property to make money?
The hope is that other businesses will move into the area and draw more residents to support the businesses Hsieh & Co. have created. Maybe DTP’s possible foray into housing will lead the way.
None of us really knows, though. And it’s Downtown Project’s right not to tell anyone anything about what it’s planning until those plans enter the public domain.
It can’t be understated, though, that Factorli’s demise reveals what appears to be a distinct lack of planning.
That’s not a good thing if a goal is to draw other businesses, residential developers and the like to the area. It’s not even good for Downtown Project, if it finds that $350 million pot of gold is down to the last few doubloons.
Business operators like stability and predictability. They like plans.
Somehow, Post-It notes just don’t seem to produce the same kind of confidence.