Downtown revivals of this kind are, of course, nothing new-;they've been tried with some success in cities such as Portland, Oregon; Denver; and Miami. But this kind of ambitious makeover has never been tried in a place like Las Vegas, a large city (population 584,000) lacking both high-quality housing stock and anything resembling an urban culture. It's a transient place-;people come for a few years and then move on. "There's vacant land, no gathering space, no connection to nature," says Donald Carter, director of Carnegie Mellon's Remaking Cities Institute, who has advised Hsieh on his redevelopment plans. "It's like what Gertrude Stein said about Oakland: 'There's no there there.'"
What downtown Las Vegas lacks in parks and pedestrians, however, it makes up for in the singular ambition of Hsieh. Throughout Zappos's history, Hsieh has approached management the way Steve Jobs approached product development-;with an uncompromising rigor bordering on insanity-;and he has attempted to turn the humble act of selling stuff on the Internet into high art.
During Zappos's early years, Hsieh decided that customer service was the most important function of his company and proceeded to craft dozens of counterintuitive policies that lavished benefits on the low-wage workers who answered the phones. He required managers to spend at least 10 percent of their working hours socializing with their employees; he offered new hires up to $4,000 to quit in order to weed out those who wouldn't give the kind of service Zappos required. He offered free returns to all customers, even as Zappos struggled to make payroll.
Somehow, it all paid off. The company turned its first profit in 2003, surpassed $1 billion in sales in 2008, and was acquired by Amazon.com for $1.2 billion in 2009. Hsieh, who has no children, drives a Mazda, and takes many of his meals at a takeout kebab shop, made an estimated $400 million on the acquisition. His plan calls for roughly $50 million to be invested in tech start-ups, $50 million in small businesses, $50 million in education, $100 million in land, and $100 million in housing. Most of that money will come out of his own pocket. "I care more about making sure that we have the right community than I care about return on investment," Hsieh says. "I'd rather have something that I can help curate and that people will actually care about."
Hsieh is often described as a Silicon Valley-style entrepreneur who relocated to Las Vegas, but he seems more at home in this weird, fantastical place. After all, this is a city in which entire self-enclosed worlds can go up in a matter of months and can be vacated and demolished just as quickly. It is a young city that embraces, and has been embraced by, ambitious entrepreneurs (and mobsters) with visions that wildly transcend the reality of the place. "There are people who call Las Vegas an ethical car wash: You come here and you can reinvent yourself," says Michael Green, a professor of history at the College of Southern Nevada. "That obviously can be negative, but it means that Las Vegas accepts people at face value. It's a good aspect for someone like Tony Hsieh." Green says that though Hsieh is sometimes compared to the casino mogul Steve Wynn, he's more like the casino owners of the 1940s, who helped transform a dusty frontier town of 8,000. As a lifelong resident of Las Vegas, Green thinks that the idea of walking down the block for a latte in 120-degree heat is slightly ridiculous; but he also knows that in Las Vegas, ridiculous things can happen. "What Tony is pursuing strikes me in part as a pipe dream and in part as something worth doing," he says.
Hsieh's interest in urban planning began with a need for more space. By late 2009, Zappos was very close to outgrowing the three low-slung beige buildings it occupied in a corporate office park in Henderson. Hsieh, assuming Zappos would need a new headquarters, began studying the campuses of Apple, Google, and Nike. Those companies had thrived and won acclaim from the business press by providing so many perks-;free food, basketball courts, video-game rooms, laundry services-;that employees never had to leave the confines of the office park.
Hsieh thought about partnering with a casino and filling it with restaurants, a gym, and everything else a Zappos employee could possibly need. One proposed partner was the Silverton Casino, which has a 25-story tower on an 80-acre site. "The idea at the beginning was to build our own self-sufficient world," he says. "The Silverton was so big that you could still have the casino, but you could also have a Zappos campus and give employees access to all the casino amenities."
During his first few years in Las Vegas, Hsieh spent every weekend on the Strip. But a few years ago, he found himself at the Downtown Cocktail Room. It's a speakeasy sort of place, and one of the only bars in all of Las Vegas where you won't find a slot machine. Hsieh struck up a conversation with the bar's owner, Michael Cornthwaite, a 38-year-old entrepreneur who, along with his wife, Jennifer, is widely regarded as the first of downtown Las Vegas's urban pioneers. Hsieh kept coming back, and in 2009, when he mentioned that he was looking for a new headquarters, Cornthwaite jumped on the opportunity to sell him on downtown.
"I said, 'Forget about just your campus,'" Cornthwaite recalls. "'This is an opportunity to take a city that's young and raw and have a huge impact.'"
Cornthwaite's words stuck with Hsieh. He started wondering why corporate campuses, and corporate cultures for that matter, had to be so parochial. Why do companies radically cut themselves off from the surrounding community? He discovered the work of Geoffrey West, a theoretical physicist who has observed that cities, unlike animals and corporations, get more productive as they grow. By integrating Zappos into a city, Hsieh wondered, could he cheat the slow decline that seems to befall most large companies? "We're trying to integrate all the different concepts of what makes a city more productive, and crossbreed them into the company," he says. "We're creating this alien hybrid that benefits the city and benefits Zappos."
Hsieh knew that moving downtown was risky and potentially expensive. He explained to Jeff Bezos and his other Amazon overseers that he would finance aspects of the project from his own pocket. If Zappos couldn't afford to buy city hall, he would buy it and serve as the landlord. (Amazon did not respond to requests to comment for this article.)
