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It’s been some four years since Zappos CEO Tony Hsieh announced the Downtown Project. This was a $350 million gambit to upgrade the urban core of Las Vegas.
Since then, many believe the project has had both failures and successes.
But Paul Carr, who writes for online magazine PandoDaily, sees it just one way: an abject failure.
Carr, whose defunct online journalism site, NSFWCorp -- which was purchased by PandoDaily -- talked to KNPR's State of Nevada about a 7,000-word story he recently penned about Hsieh, Downtown Project and more.
"The scale of the failure, when you consider the scale of the investment, is plain to see," Carr said.
Downtown Project ventured into Las Vegas' urban core with lofty goals. It wanted to invest its money with less focus on monetary returns and more on what it called ROC -- return on community.
Part of its mission statement included wording to the effect that it wanted to build business downtown while stoking the inspirations of local residents and building community.
A few years into the project, however, the mission statement was altered to remove the word "community."
Then several major projects came and went. Shift, which was to be a multi-million-dollar, multi-modal transportation system, went belly up earlier this year.
Factorli, which was even touted by President Barack Obama as innovative, was going to be a place to build various 3-D printing businesses. But last year, the plug was pulled on that project, too.
More recently, Digital Royalty, which charged people to learn how to bolster their brand via social media, pulled the plug a few weeks ago. Digital Royalty had some two dozen employees.
At the same time, downtown Las Vegas, especially lower Fremont Street, seems to be attracting more visitors and customers drawn to Downtown Project's Container Park and a handful of new restaurants and bars that have been created.
Carr was especially critical, though, of the fact that when Hsieh began Downtown Project, he sold people "on a dream. He sells you on this idea that whatever you're dreaming of doing, the Downtown Project is the place to do it."
He also criticized Hsieh's move to adopt a management practice called holacracy at Zappos.com. Hsieh gave an ultimatum to Zappos' 1,200 employees earlier this year -- those who couldn't live with holacracy were given a buyout. More than 200 employees took the buyout.
"They are being given a choice," Carr said. "Basically, totally accept a totally new way of working or leave, as if people have the option to leave a job and go and get another job."
Mark Rowland, CEO of Downtown Project Ventures, said Downtown Project came in with big goals.
"But whenever you start a venture like this, you need to start to create excitement and buzz, and I guess you need to take it with a pinch of salt the really, really big, audacious goals that people make," he said.
Carr bristled at that.
"To just say, 'Well, they're just promises, they don't mean anything,'" he began. "If they don't mean anything, then there is no reason for anybody to trust any of this. And people certainly shouldn't trust their careers to this."
Rowland said he agreed with some of what Carr wrote in the PandoDaily article. And he said that some of the words used by Hsieh and Downtown Project in its early days should have been chosen more carefully.
But then again, he added, "I think that if you would have said, 'this is a 20-year-project' that we might not have seen a lot of the activity and endeavor that actually went into the first three years of the Downtown Project."
"I wouldn't call it a failure," he also said. "I still think we have a lot of ways to go."
A handful of projects have succeeded, such as the multi-million-dollar Container Park. Writer’s Block book store is popular with local residents. And several restaurants have come and gone. Some worked, such as Eat; some didn’t, such as Wild Pizza.
Carr didn't apologize for his criticisms. He said Downtown Project came in with certain goals; when those goals weren't met, it changed the goals and called it a success.
"You don't get to just change the terms at the end of the day and say, 'Well, we actually succeeded,'" Carr said.
Paul Carr, PandoDaily; Mark Rowland, DTP Ventures
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