Updated Sept. 30, 2:43 p.m.
Downtown Project, the $350 million plan by Zappos.com CEO Tony Hsieh to create more “community” and make downtown Las Vegas “smarter,” is laying off people today.
Sources said a large number of the Project’s staff was laid off. Spokeswoman Kim Schaefer said 30 people were let go as the company "streamlines."
Schaefer added that Downtown Project still employs 300 people directly, but did not say how many of those were full-time or part-time employees.
Re/code.net also reported Tuesday that Hsieh is "stepping down as leader" of Downtown Project.
Downtown Project has purchased dozens of acres of property downtown, generally east of Las Vegas Boulevard, over the last three years. It has also funded numerous small businesses and built the Container Park, an estimated $40 million venture. The Park, an outdoor mall, features a large interior play area for children.
That the mall exists at all in its current site is a testament to the ambition of Downtown Project. Only five or more years ago, the mall’s location at 7th and Fremont streets was the center of a part of downtown into which few would venture.
Hsieh created Downtown Project shortly after announcing he would move Zappos.com headquarters from Henderson into the abandoned City Hall. That move happened in October 2013. Part of Downtown Project’s mission was to create an environment in the urban core that would draw Las Vegas residents and Zappos employees.
The $350 million redevelopment project has invested money into real estate, education – it created a private school – an ambitious multi-model transportation project and other small businesses.
A handful of restaurants and bars, along with the Container Park and several tech ventures resulted. Most of those tech businesses were Internet based. Then earlier this year, the Project announced the formation of Factorli, a $10 million manufacturing plant for small tech products.
Perhaps a sign of what was to come, Factorli was closed and its employees were laid off before it got off the ground in early August.
Downtown Project also began to change its mission earlier this year. In February, it eliminated "return on community" as one of its aims. That signaled an effort, Hsieh said at the time, to focus Downtown Project.
It also disillusioned many who originally saw Downtown Project as a new form of corporation -- with an aim for profit but also toward building genuine community.
David Gould, a University of Iowa professor who joined the Project to head its attempt to link it with academia, talked about Downtown Project's vision, and its reality, in an open letter to Hsieh that he published online today. The letter was prompted by the layoffs.
"Though I have come to understand the formidable challenges inherent in transforming a city, the story you crafted was not only visionary, but attainable," Gould wrote. "So what happened?"
'"Business is business' will be the defense from those you have charged with delivering the sad news," Gould continued. "But we have not experienced a string of tough breaks or bad luck. Rather, this is a collage of decadence, greed, and missing leadership. While some squandered the opportunity to “dent the universe,”others never cared about doing so in the first place. There were heroes among us, however, and it is for them that my soul weeps."
Read the rest of the letter here.
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