Las Vegas’ city government is loath to use its powers of eminent domain and certainly has no agenda to drive out "characters" with public funds. What you’re seeing is the progress (or stasis, perhaps) of entrepreneur Tony Hsieh’s Downtown Project. Hsieh earmarked $350 million to remake real estate on the east side of downtown Las Vegas, including the already-shuttered Western Hotel. Bloomberg described the grand scheme thusly: "Hsieh is personally spending $100 million to buy land, $100 million to develop high-density apartment buildings, and $50 million backing tech startups that open in the area." All of this, Hsieh maintains, is being done without a dime of public money.
Unfortunately for Hsieh, by publicizing his intent and wallet size in advance, he created a seller’s market, resulting in Downtown Project purchases arguably made at greatly inflated cost. In one instance, Hsieh and associate Andrew Donner paid a dizzying $6.6 million for two acres (by contrast, Boyd Gaming only obtained $4 million an acre for its ex-Stardust site … on the Vegas Strip!). They sank another $14 million into the Western, hardly a property in demand. The eastward march of Hsieh and Donner has reached Fremont and 11th streets, absorbing Ferguson’s Downtown Motel and the Dragon Hotel ($2 million for a third of an acre) along the way.
Hsieh’s Container Park, with its giant praying mantis, took the site of a Motel 6. The Ambassador East Motel, the Purple Sage, the Hialeah … the Hsieh/Donner urban-renewal machine appears to have consumed them all. It’s possible that some of these properties will be converted to condos, but the presence of chain-link fence also raises the specter of demolition. Whatever their master plan is, Hsieh and Donner continue to maintain a stiff upper lip about it. One thing’s for sure: Hsieh’s dream doesn’t come cheap.
