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August 3, 2015

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Zappos CEO buys motel, strikes deal to bring young talent downtown

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Joe Schoenmann

Tony Hsieh purchased the Motel 6 property on 707 E. Fremont for $5.2 million.

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Tony Hsieh purchased the Motel 6 property on 707 E. Fremont for $5.2 million.

Zappos’ efforts to remake downtown Las Vegas take another step forward with a real estate deal and plan to lure more young talent to the area.

The Downtown Project, founded by Zappos CEO Tony Hsieh and other investors to spearhead revitalization efforts, will announce today a partnership with Venture for America to bring new college graduates for two-year stints to help startup businesses get off the ground. The hope is participants will make their move downtown a permanent one.

“There’s a good chance they’ll be inspired by the startup and want to stay with that business,” said Zach Ware, campus/urban/startup development leader at Zappos and the Downtown Project. “It’s great exposure and experience for them.”

Founded a year ago, Venture for America is a nonprofit that describes itself as “a pathway for young, talented grads to become business builders and job creators in areas of need.” In August, 50 graduates selected by the group will join startup companies across the nation, including in Las Vegas.

Ware called the organization “a natural partner for us.”

“Their fellows will be a valuable part of the community we are developing,” he said, adding that he appreciates the nonprofit’s focus on job creation. “We’re going to create thousands of jobs here in downtown Las Vegas over the next five to 10 years.”

The deal echoes Zappos and Hsieh’s donation of $1.5 million to Teach for America , which trains teachers to work in schools that serve children from households in poverty. One reason behind the donation was a hope that the teachers will consider working and living downtown.

Meanwhile, the Downtown Project, funded with $350 million from Hsieh and others, recently closed on the $5.2 million purchase of the Motel 6 property at 707 E. Fremont St. The building will be demolished to make way for a yet-to-be determined facility.

Ware said a number of options were weighed, including renovating the building, before the decision was made to demolish it. Demolition will take place within 30 days.

The purchase continues a high-profile buying spree by Zappos and its affiliated groups: the Downtown Project’s recent purchase of the former 7-Eleven building at Las Vegas Boulevard and Fremont Street for $4.1 million; the acquisition of between 40-50 condos at The Ogden high-rise, where it houses people considering moving their business to Las Vegas; and, of course, the deal to move Zappos’ headquarters into the old City Hall.

Exactly what will go into the Motel 6 space isn’t known yet, Ware said, adding that the group is still discussing different ideas. Some of those include affordable residential units and retail space made out of large storage containers similar to those transported by railroad and tractor-trailers.

The $350 million invested into the Downtown Project includes $200 million for commercial and residential real estate, $50 million for tech startups, $50 million for local business and $50 million for education.

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