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September 18, 2014

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Zappos views Las Vegas City Hall as perfect fit for new headquarters

Image

Justin M. Bowen

The Zappos.com office is shown in the Green Valley area in Henderson.

Updated Monday, Nov. 29, 2010 | 9:46 p.m.

Touring Zappos

Zappos headquarters in Henderson offers daily tours to anyone who is interested in seeing the inner workings of the billion-dollar company. Launch slideshow »
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Tony Hsieh

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Las Vegas City Hall is shown at 400 Stewart Ave. in downtown Las Vegas.

Map of Zappos.com

Zappos.com

2280 Corporate Circle #100, Henderson

In a move that could change the economic landscape of downtown Las Vegas, Zappos.com will take over City Hall, moving its headquarters and about 1,000 employees there sometime in 2012.

The CEO of Zappos, who had considered moving his company out of state, will purchase City Hall and relocate the online shoe retailer’s headquarters to the building that has served as the seat of city government since 1973, the company and Las Vegas city officials announced Monday.

Tony Hsieh, Zappos’ 37-year-old CEO, has been working with city officials for more than a year to complete the deal. He is buying the property in partnership with the Resort Gaming Group, whose founder and CEO Andrew Donner made an unsolicited offer to the city of Las Vegas to buy the site and about seven surrounding acres earlier this year with the intent of developing it as a corporate campus for Zappos.

The Las Vegas City Hall announcement came Monday afternoon, after its spokesman had denied any knowledge of the deal.

The company’s move from suburban Henderson, where more than 1,000 employees field customers’ calls, to downtown Las Vegas would be a significant boost to the area that has been the focus of the city’s redevelopment dreams. Hsieh would not only get the City Hall building at Las Vegas Boulevard and Stewart Avenue, but also seven acres to the east.

The company’s plans for that largely vacant land are unknown. But owners of neighboring businesses are optimistic the arrival of a business whose sales are said to top $1 billion annually and which has become an industry leader in customer service — business leaders and customers regularly tour Zappos’ headquarters to learn their methods — could have a major impact on the depressed downtown business climate.

Hsieh (pronounced shay) did not return the Sun's calls for comment.

The move coincides with Mayor Oscar Goodman’s announcement earlier this month that plans to construct an arena downtown are more likely to occur at Symphony Park than the old City Hall site. Speaking of plans to build an arena, the mayor said earlier this month that the 61-acre Symphony Park site is viewed as “more advantageous and more cost-effective, significantly increasing the project’s overall potential for success.”

Moving the arena to Symphony Park opens the door for the city hall to find a new use.

Sources close to the city say the city will pay Cordish Cos, the would-be developer of an arena, $2.5 million to abandon its rights to develop the City Hall site. Sources said Cordish still had a year left on its option to develop the City Hall acreage.

The city is so set on the new arena location, sources said, other potential Symphony Park developers are being asked to abandon their plans to make room for the arena. Many of those plans have been stalled by the recession.

“This will be a game changer for Southern Nevada,” Goodman said in a prepared statement. “This move will bring about a critical mass of creative persons to the inner core of Las Vegas in addition to causing a significant shot in the arm for the economy and for new jobs.”

Sources said that before setting his sites on downtown Las Vegas, Hsieh had planned to move the company out of Nevada. Hsieh, an innovative business mind, now believes the downtown move will benefit his company and the city.

“He sees the chance to really make an impact on downtown Las Vegas,” a source said.

City officials had said they would announce plans for the old City Hall on Wednesday.

New City Hall location

The earliest any move could take place is early 2012, when the new City Hall is expected to be finished a few blocks away at 518 First St.

Persons who have been tracking the unfolding plans said Hsieh would likely develop the seven acres that are included in the deal to either create a corporate center or to contribute to the ongoing redevelopment of downtown and the so-called Fremont East District, four blocks of entertainment venues and bars separate from the electric-canopied Fremont Street Experience.

Zappos’ move would magnify the area’s growth with an influx of employees who would not only spend money at downtown businesses but could also become residents of the area, potentially moving into high-rises built during the boom of the mid-2000s that stand largely empty. Those include the Streamline, finished in 2008, just south of City Hall.

“Zappos being in that location is going to be a boon for local businesses, which already thrive off the day workers — the lawyers and government workers,” said Bruce Hiatt, a luxury real estate broker. “It’s huge. This is one of the leading companies in the United States using social media in its marketing, and it’s great for Las Vegas having corporations being there on the leading edge of technology.”

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Jeremy Aguero

Jeremy Aguero, principal analyst with Applied Analysis who has previously been hired to look at development patterns for the city, called the Zappos move “a huge coup.”

“You have to be impressed with what the city has already done — the Lou Ruvo Center, World Market Center, the Smith Center — but this is going to be the first large, nongaming employment center downtown. It’s the first step forward into really making downtown Las Vegas a place where people want to live and work at the same time. I can’t think of a better fit, to be perfectly honest, than Zappos.”

John Restrepo, an economic and real estate analyst, said the influx of more than 1,000 jobs will be great for downtown and could be a “catalyst” for future redevelopment. “It’s enough of a critical mass to create additional redevelopment downtown, while encouraging other developers to move there,” he said.

Hsieh has had a golden touch in improving new ventures. When he was just 24, he sold his online advertising business, LinkExchange, to Microsoft for $265 million.

One Zappos employee said the announcement was made to company workers this afternoon, and that there was some discussion about employees now having to drive to the Spaghetti Bowl to get to work. Many had moved to Henderson to be near its facility there.

"If Tony thinks it's the best thing, I have to agree with him because he's gotten us this far," said one Zappos employee who asked not to be identified.

At Zappos — the name is derived from zapatos, the Spanish word for shoes — Hsieh reportedly helped increase sales to more than $1 billion. Having moved to Henderson in 2004, Zappos has been listed as one of the “Best Companies to Work For” by Fortune magazine. The corporation’s office, according to employees who have spoken to the Sun, creates a fun, relaxing environment. During Halloween, for example, large sheets of plastic were put up and the interior of the office was turned into a large haunted house.

Hsieh also delivers an interesting, sometimes humorous online feed of his thoughts through Twitter, including this one from November 25th: “Thanksgiving tip: After removing it from the oven, be sure to let the turkey rest 20-30 minutes. It’s had a long day.”

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  1. Chunky says:

    Great news! Zappos.com is one of the top growth companies and best employers in the country; rated among it's employees and peers.

    That's what Chunky thinks!

  2. @Tom

    I haven't read the comments on this site for months, because of the ignorant naive statements such as yours. I saw a link to this article, and had to read it.

    Zappos has won numerous numerous awards and accolades for being one of the best places to work in the Country. They pay well, treat their employees well, promote from within, and are a stand out corporation in todays day and age. And now, they are going to bring an enormous surge of activity to the struggling Downtown. THIS is what Downtown has needed. Not another casino, not another hotel, not a park...they needed Zappos.

    Tony Hsieh has done a lot for this city's economy, and he is continuing to do so.

    And before the debbie downers pop up, I am in Commercial Real Estate and yes I understand they are leaving Green Valley, and Green Valley Corporate Center will have a large vacancy. However if there were one ownership in town who could handle the loss, it's American Nevada.

  3. GREAT NEWS!!! I'm dying to see how the naysayers and haters who frequent this board spin this as something negative, but they will undoubtably.

    Thank You Zappos!

  4. Thank to all that kept this company here in vegas.

  5. As a downtown resident and homeowner, I couldn't be more thrilled. This news is just one more indication that the revitalization of downtown - as the heart of Las Vegas' culture and community - is well underway. Thank you, Tony Hsieh and Zappos!

  6. when does Harry make the announcement how he created these jobs? Go Mayor Goodman! Great news for downtown and Clark county. This should show you can work with the city in confidence.

  7. @Tom... Oh you nay-sayer! Zappos starts their employees out at 13.00 an hour for their call center and that was 4 years ago. Take a moment and look at their website for jobs! Everything from a Software Engineer to a Visual Designer.

  8. How exciting. I think this is a fabulous move on Zappo's part, I believe they will integrate the Zappo's culture into the local scene and bring a regeneration of interest into this area that is much needed. I love Zappos for the emphasis they put on employee value and creativity. Though I have yet to purchase from them. I LOVE that they are one of the FEW companies that understand work needs to be stress and boring free, their success proves it. I use their philosophy and ideas in managing my own team of sales associates, HAVE FUN, BE CREATIVE, BUILD CAMARADERIE, makes us all look forward to coming to work everyday, AND giving OUR ABSOLUTE BEST. My best references are my associates. YAAAAAYYYYYYY ZAPPOS'S !

  9. Amazing news. To all my associates who have invested in the future of Downtown, those who have talked about the future of Downtown (like myself) for twenty years, for Mayor Goodman and those who have helped him achieve this: The future starts now!

  10. Kc-702 : They may start out at $13.00 an hour but that doesn't mean they are paying those with higher education and skills that much...

    As far as the Hendersonites that may have to drive a little further, I for one, who absolutely HATES to drive, would drive 10 extra miles to work at Zappos, knowing I would LOVE my job.

  11. James_P_Reza :

    I've lived in this town for 30 years, and have seen many well intended fruitless efforts in bringing traffic and attention to this area. I agree the time is NOW where all of that will change with the Zappo's move... I'm excited ! Now, if we can all band together to please remove that monstrosity people call The Fremont Street experience canopy, to bring back the beauty, and elegance of what brought people to downtown.. The open sky, neon lights, and class act lounge entertainers.

  12. Now this is WIN WIN for Las Vegas (though with just a little bit of loss for Henderson).
    Not only does this add to the nascent "THERE there" of downtown Vegas, but it makes that pill of a new city hall easier to swallow, too.

    The economic ripple-effects of having a nationally (globally?) known, 21st century company operating right here in our own downtown will spread out quite nicely.

    I too, live and own downtown. Business are nothing, if not copycats. If other young, agile firms see Zappos thriving and stylin' in the middle of Glitter Gulch, they'll come too. At a more personal level, one of the early side benefits I anticipate is getting better shopping over here. Fresh & Easy, Whole Foods: your regional manager for Nevada is calling on line one.

  13. DTJ : Amen to Whole foods, Fresh & Easy and lets not leave Trader Joes out... I'm definitely feeling a strong positive vibe and much needed resurgence. Thank you Zappo's Big shoes to fill, but confident that people will pull together to make that difference happen...

  14. This sounds like great news also for the Streamline Towers Condominium, as it is so close to the old City Hall that Zappos' workers can live within a couple of hundred feet from where they work. What fantastic news for Downtown Las Vegas, my favourite holiday destination.

  15. Bless you Tony for keeping the company in Nevada and more so moving to downtown Las Vegas!

    It was a bit troubling to learn that you were 'considering' moving out of state.
    Just curious.....Why?.......what did they have that Nevada did not?

  16. i'm glad this move will create 1,000 more jobs. this city definitely needs it. i'm still sad, however, that Zappos outsourced its 6pm dept to the Phillipines instead of keeping those jobs here for people, adding to those who've lost their jobs via layoffs at the company in 2008. i wonder if Zappos will be rehiring any of those people they laid off? i hope so...

  17. Just when I had resigned myself to the fact the Oscar Goodman was full of hot air, he comes through in a major way. I was never a big supporter of the City's decision to undertake the financial responsibility of constructing a new city hall at at the same time they are talking layoffs. I would have bet money that the City Hall building would have sat as useless as the old county building does today.
    Way to go Oscar, this pretty much makes up for you bringing that awful All Star week here.

  18. All indications seem to point out that this is GOOD news.

  19. Perfect!