Playing SimCity in Real Life

— Tony Hsieh, founder and CEO of Zappos, on his new start-up, a $350 million downtown revitalization of Las Vegas.

What started as a search for a bigger office park, has transformed into a new model for urban revitalization and how corporations integrate with their communities. Hsieh thought about partnering with a casino and building one of those all-inclusive, self-sufficient work environments with free food, gaming rooms, a gym, and all of the other great Silicon Valley office amenities. Instead, he has decided to integrate Zappos into the blighted Vegas downtown, providing a much-needed boost for a declining city and a long-term creative platform for his company. Hsieh wants to catalyze what he calls, “serendipitous interactions”.

Hsieh believes that the kind of unplanned encounters that occur naturally between people and place in close proximity stirs innovation, learning and increased productivity. He wants Zappos employees to learn from this infusion but to also be a center of knowledge and ideas for the community.

To get this started, Hseih opted not to move Zappos into a casino but instead to the old City Hall building. On top of that, Hsieh is putting $350 million toward his goal of making Las Vegas the next great creative class city:

$100 million for the purchase of land and buildings
$100 million for residential development, including high-rise apartments
$50 million in the form of 100K/per seed investments to attract tech startups
$50 million for bringing in creative class amenities, such as yoga studios, coffee shops and restaurants
$50 million
for an education fund to build a school system (he already pitched Sal Khan of Khan Academy on the idea)

Pretty impressive. Some of those big block investments have already or are being drawn out in greater detail:

  • $7 million for 20% of a charter airline to fly in entrepreneurs and musicians
  • $2 million for a new performing arts center
  • $1.5 million deal to bring 1,000 Teach for America members and alumni downtown to live and improve city schools
  • In talks with Khan Academy about building a school
  • Pursuing purchase of the local minor league baseball team
  • Plans for a large co-working space
  • Talk of a back-office technology platform for small businesses to share operations management

Hsieh and his team may not have a lot of urban planning experience but they have been consulting some of the best resources. They have been advised by Richard Florida’s Creative Class Group and are avid readers of Edward Glaeser’s Triumph of the City, as well as the work of Geoffrey West.

Here’s to hoping that the model works and that others take note.


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