For a time, it has seemed as if the growth would never stop in Downtown Las Vegas: land purchases, new businesses and development at every turn, most of it driven by Downtown Project, the redevelopment group funded by a $350 million investment from Zappos CEO Tony Hsieh.
But today the bubble has burst. Sources say there has been a “bloodletting” at DTP, with numerous layoffs beginning this morning. Employees have been called in for individual meetings and entire teams have been cut from the payroll.
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. Names of those who lost their jobs are beginning trickle in, including Ashton Allen, head of the music team. Former University of Iowa professor David Gould, who moved to Las Vegas to work with DTP and ran the Window multi-use space, resigned this morning. He sent the Weekly an open letter he wrote to Tony Hsieh, which you can read here.
This afternoon, DTP released the following statement on today's layoffs:
"Since January 2012, Downtown Project has been working to help revitalize downtown Las Vegas through several hundred investments and initiatives. At this time, we are focused on streamlining our operations as we continue to execute on our plans. Doing so requires that we restructure our operations and focus on follow-on investments. We continue to evaluate all of our initiatives in terms of those that achieve the right balance of both ROI (return on investment) and ROC (return on collisions).
"We remain focused on the long-term plan and the evolution of the downtown area. As such, we have restructured our support team. This change has affected approximately 30 positions, the majority of which were based in our corporate office. We continue to directly employ more than 300 people across our various operations in downtown Las Vegas.
"We are optimistic and confident about the future of downtown Las Vegas and the continued growth of our entire portfolio of investments."
Since launching in January 2012, Downtown Project has purchased large swaths of Downtown Las Vegas and invested in numerous businesses, including Eat, La Comida, Coterie, the Gold Spike, Inspire and the Bunkhouse. In November 2013, DTP opened the Downtown Container Park, the open-air retail center on Fremont Street that houses numerous local shops, restaurants and bars, along with a playground and a stage for live music performances. The website for Downtown Project lists the number of jobs it has created at 893.
However, a source said that Hsieh has washed his hands of Downtown Project recently and has upper management handling the layoffs. Another source told the Weekly that some “weird things” have been happening in the last week, creating a sense that something was up, but “I don’t think anybody saw this coming a week ago.”
Sources attributed the problems at DTP to mismanagement and said that the people who've made the decisions about who's staying and who's going are the ones who need to go. "People are asleep at the wheel," a source said, adding, "Everyone's waiting for the shoe to drop at this point. And it could all be saved."
Sources tell the Weekly that DTP projects like the Bunkhouse Saloon, which celebrated its grand opening last week, will continue to operate, and that 11th Street Records, set to launch later this year, is still part of company's ongoing plans.