Joe Downtown

Joe Downtown: How will the Zappos-DTP relationship affect other local businesses?

Wynn win: Steve Wynn had some fun at the opening of the Downtown Grand last month.
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Steve Wynn threw some dice at the Downtown Grand’s opening last month, then waxed with a smile about Downtown Las Vegas, where he got started some 47 years ago.

The man whose megaresort revolutionized the Strip and pushed tourism in the desert to new heights said that Downtown is returning to what it does best.

“The notion that Las Vegas can have a hip, affordable spot to go to, where the food is good, where the action is fun—we’re getting back to our roots,” Wynn said. “Fremont Street was always the place of lots of excitement. It was available to people of any income strata.”

The way he puts it, that return is welcome. There’s another way to see what’s going on, too.

Creating a place, an ecosystem fertile with young people, requires housing, food and entertainment that they can afford. Or you need a company that employs those young people to help underwrite those things. For Zappos employees, those subsidies are the stuff of lore: free lunch, lattes at the office, good health insurance. But they go well beyond the expected perks: think inexpensive, company-owned rental units, discounted booze or free tickets to a Smith Center talk.

A century or more ago, they called such places “company towns,” where most stores and properties were owned by a single company that reaped the benefits of turning employees into regular customers.

Las Vegas is a company town, though its “company” is an industry, gaming. But now the creation of neo-Downtown as a company town—or maybe a “company zone”—is coming into vogue.

That idea came partly into focus weeks ago when Todd Kessler, who handles real estate transactions for Downtown Project, talked about the need to convert former hotel rooms of the Gold Spike into apartments.

Low-rent apartments are “something the Downtown community is in need of, given the Zappos employees, the median income of those employees and the needs that exist,” he said. Sixty-eight units will be created in the old hotel, with rents starting at $500. Many Zappos employees will likely apply. It’s unclear whether non-Zapponians will be considered.

Though separate from Zappos, Downtown Project was created by partners that include Zappos CEO Tony Hsieh and others in the Zappos hierarchy. The organization has purchased a large number of properties Downtown and invested heavily in businesses in the area, with plans to invest much more in the future. It also purchased Gold Spike earlier this year, closing the hotel, removing the slot machines and turning the main floor into a sort of company clubhouse, open to the public but frequented by Zappos and DTP staff. With a special card, Zappos employees also get two-for-one drinks at the Gold Spike bar.

When Downtown Container Park opens in the next few weeks, the number of businesses established with Downtown Project money will number in the dozens—bars, restaurants, clothing stores and more. If Zappos or Downtown Project workers become customers of those places, that’s money returned on DTP’s investment.

Does that hurt businesses unaffiliated with Zappos or DTP?

“Zappos employees can’t afford to drink in my place,” said one independent business operator. Another built his business with no expectation that the Zappos’ influx would bring new customers. To him, all the activity is still beneficial.

“The new people, the new businesses and energy adds legitimacy to Downtown, just by the people being here.”

People complain little about Las Vegas as a company town when the casinos are doing well and people have jobs and a little extra change in their pockets. So far, the same goes for Downtown, a company town with a very different company.

Joe Shoenmann doesn’t just cover Downtown; he lives and works there. He is Greenspun Media Group’s embedded Downtown journalist, stationed at an office in Emergency Arts. His work appears in the Las Vegas Sun and Las Vegas Weekly.
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