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Four years ago, Zappos’ CEO Tony Hsieh and the Downtown Project embarked on an effort to revitalize Las Vegas' historic downtown district.
As a result of pouring some $350 million into about 60 acres of land, the Downtown Project has helped develop businesses, restaurants, living space, and other ventures.
Some may say Downtown Las Vegas is in a far better state than it was before the Project started work.
On the other hand, some of the businesses have failed, and some investments have yielded little. Last fall a round of layoffs indicated that Downtown Project was trying to right itself.
Now comes news that Downtown Project has hired Mark Rowland to be the CEO of DTP Ventures, overseeing 160 businesses.
Rowland has a background in hospitality, technology, retail and professional coaching. He points out the project owns and operates some businesses, provides a $50 million in a small business fund for others and also operates the $50 million Vegas Tech Fund for start-ups.
WHAT IS SUCCESS?
We’re going to do our damnedest to help them become profitable as soon as possible.
Critics of the whole idea have pointed to a string of businesses that have received money but failed or moved away from Las Vegas.
Rowland told KNPR’s State of Nevada that the effort is a long-term one and that whether a project is successful really depends on the definition of success.
“Most tech investments you’re looking for growth as opposed to necessarily profitability,” Rowland said, “But on the small business side you are looking for profitability and sustainability in the early stages of that company’s life.”
He said most tech companies simply don’t work out, and on the small business side of the project many are still too early in their development to say.
“But we’re going to do our damnedest to help them become profitable as soon as possible,” Rowland said.
Sarah Lacy, a tech journalist and founder of Pando Daily, a site that received some of its early funding from Vegas Tech Fund, said Pando Daily was actually one of the first news organizations to point out the potential problems but now she finds herself in the odd position of defending Downtown Project.
She told KNPR’s State of Nevada that no project could have lived up to the hype surrounding Downtown Project when it first started.
“There was so much hype. There was this vision that couldn’t have been delivered on,” Lacy said.
She points to coverage of the project in the early days, along the hyperbole of the project supporters themselves for the overall belief that so much was going to get done.
“People in the community were excited. Tony Hsieh was some sort of savior. He was going to fix retirement and transportation and it was almost like people were describing him as mayor,” Lacy said.
Now, with some high profile departures, layoffs and changes, she believes the project needs to own up to how things have evolved.
“Now, people feel abandoned and there is a problem of accountability. People in the community feel that things that were promised haven’t been delivered,” Lacy said, “They don’t understand what is real and what isn’t real.”
HOW DO OTHER CITIES DO IT?
Will Wynn is the former mayor of Austin, Texas and while in office, he oversaw the redevelopment of the city’s downtown core.
He has consulted with Downtown Project. He said the project has a big advantage over Austin because it owns a large swath of land, but his city had to work with hundreds of property owners to improve the area.
“I was envious of downtown Las Vegas because of this large-scale common owner. I thought, ‘how spectacular is that?’” Wynn said.
But now that he looks back at efforts in Austin, he said the different business and land owners forced city planners to build a consensus. Changes to the city’s core included ways to make it easier for pedicabs to get around and for food trucks to get a foothold.
But Wynn said residential developers also saw the fundamental advantages of the city’s downtown like the Colorado River, a trail system and the State Capitol Building. They reused old buildings to create relatively inexpensive housing.
But there were also collective efforts by city leaders, developers and business owners to change the downtown.
The city built a new city hall, convention center and convention center hotel that were eight blocks apart but shared a common air conditioning system. City leaders purposally put more capacity into the chilled water pipes and allowed residential developers to tap into the water loop, cutting their costs.
“The buildings cost less to construct,” Wynn said, “And as one project came out of the ground, six or seven or 12 followed it.”
However, Wynn said none of the changes to Austin’s downtown came quickly. When he was elected mayor, they city had had 10 years of efforts before he even made it a priority.
Rowland agrees and said there is a chicken-or-the-egg problem for downtown. He said the infrastructure needed to bring residential and corporate development wasn’t there four years ago, but it’s there now.
“Putting in the infrastructure of launching a school and a medical facilities, opening restaurant and bars and some co-working spaces, these are something that I as a resident would expect to see before I made a decision to live a downtown area,” Rowland said.
One of the biggest problems that remains for downtown Las Vegas is the negative image that surrounds the area. However, Rowland believes if people, from locals to tourists, would just come downtown it would change the dynamic.
“If we could get more people to actually physically go downtown, you would see a massive turnaround of profitability of these small businesses,” Rowland said. “These things take time.”
But Lacy said the biggest problem is a lack of focus from everyone involved in efforts to improve downtown, not just the area of the city owned by Downtown Project.
“Until there is a focus, there is not enough resources to really change things,” she said.
Mark Rowland, CEO, DTP Ventures; Will Wynn (D), former mayor, Austin, Texas (2003-2009); Sarah Lacy, PandoDaily