Community ponders the ripple effect of Downtown Project shake-up

By Ed Komenda

Tuesday, Sept. 30, 2014 | 8:30 p.m.

Following the layoff of 30 Downtown Project employees Tuesday, entrepreneurs downtown are left with mixed feelings about the future of the fledgling tech corridor.

"I'm legitimately shocked," said Christopher LaPorte, owner of the popular arcade bar Insert Coins on Fremont East. “But really, downtown has been challenging for about a year now."

The restructuring of the $350-million transformation campaign to revitalize and expand downtown Las Vegas comes more than three years after the program's inception. Its mission aimed to zap new life into the city's struggling urban core and create a new community based on the tech industry.

But Tuesday’s layoffs were reportedly targeted at the project's nonrevenue-generating sectors based in the community, including the Learning Village, DTP’s music programs, tours and the Window at the Ogden.

In a statement on the layoffs, Downtown Project officials said new plans have called for a streamlining of operations.

"Doing so requires that we restructure our operations and focus on follow-on investments," the statement said. "We are optimistic and confident about the future of downtown Las Vegas and the continued growth of our entire portfolio of investments."

Technology news site Re/Code reported Tuesday that Tony Hsieh was stepping down as the project's leader. In a second statement released Tuesday night, Hsieh said he has never considered himself in charge of day-to-day management of the project and that his role "as an investor, advisor, and equivalent of a board member" will continue.

Even after news broke this morning, some startups connected to the project hadn’t heard about the cuts.

"I actually know nothing about this," said Scott Allison, co-founder of Teamly, an application aimed at helping companies become more productive. Teamly is partly funded by the Las Vegas Tech Fund, an investment group partnered with Hsieh.

Despite the shock factor, some downtown locals said the layoffs likely won’t impact the progress of tech in Southern Nevada overall.

“My thing is: Don’t cry over spilled milk. Keep your eyes to yourself, and make sure you keep focused and keep trudging along," LaPorte said. "We shouldn’t be relying on someone like Tony Hsieh. My business doesn’t rely on whether he succeeds or the Downtown Project succeeds.”

Others feared the bad news will spill over from the Downtown Project and negatively impact the community by way of dwindling commerce and poor spirits.

"What you're going to see is places start closing," said one downtown business owner who wished to remain anonymous out of a fear of retaliation. “They 100 percent missed the mark ... They're trying to make people believe they're making money when they're not."

The owner recalled a time when the downtown’s expansion was independent of a generous billionaire’s bank account. But that changed when Hsieh showed up, he said.

“You can’t force growth,” he said.

Josh Bowden, co-founder of Work In Progress, a co-working site rooted in the heart of the downtown, said the layoffs and restructuring will undoubtedly impact downtown Las Vegas as a community.

But Bowden said the news will not alter day-to-day operations at co-working sites like his. For Bowden, the story has a more personal tone.

"I was here when the Downtown Project started," Bowden said. "A lot of them were friends.”

This story has been updated to include information from a second statement released by the Downtown Project.