Downtown Las Vegas Renaissance
Here is a clip from Channel 8 news about all the good things that are happening in downtown… like I’ve been saying, the area is going through a revitalization. It is in it’s infancy, but the roots are growing and it will begin to blossom!
A cultural scene is being born- downtown is the place to be!
Insert Coin(s) opens tonight!! I heard about the concept a few months and have been anxiously awaiting it’s arrival… the general idea is a mash up of a nightclub, arcade, and LAN party. This RJ article goes into greater detail and you can check out their website here.
I love that they decided to plant their feet on Fremont Street in the heart of downtown. The concept will be right at home in the area and is sure to benefit from the Zappos move next year. They had a special pre-launch party for Zappos employees and Twitter followers (@insertcoinslv) last night… unfortunately, I wasn’t able to attend.
Here is a promo vid:
Insert Coin(s) Promo Vid
You might be asking yourself what the photo above has to do with the title of this post… keep reading and I promise it will all make sense by the end.
I came across an interesting article earlier this week that talked about a study conducted by the National Association of Realtors that found the following:
- 56 percent of American home buyers would choose a “smart growth” community (characterized by mixed-use development, multimodal transportation, walkability and a general downtown sort of vibe) over the single-use, car-centered suburban model that has dominated North American urban growth since the 1950s
- An even larger majority — 77 percent — say they look for the pedestrian infrastructure long absent from suburbia such as wide sidewalks when shopping for a new home
- 59 percent would swap square footage for a shorter commute
- 88 percent valued neighborhood quality over home size
- 50 percent wanted better public transit instead of more new roads
This points to a shift in trends and values over the past… which could be a key to success for downtown Las Vegas. We’ve seen that the downtown high rises can be successful when the prices make sense now that those condos are being rented out ($1-2,000/ month rent makes more sense than the $600k-2M purchase prices that they were fetching at the peak). The John S. Park neighborhood is great area with a ton of old town character and within walking distance of the downtown scene.
These areas are drawing people back in that are tired of the cookie cutter suburban homes that make up the Las Vegas valley. There is a different vibe and energy going into the area and I am excited to see where it goes in the next 5-10 years.
Is the area still a little rough around the edges? Absolutely, but that’s what makes it interesting. I think of it like an old classic car… there are some people that look at a beat up classic car and think, “What a pile of junk!” There are others that will look at that same car and see the potential that it offers. Make no mistake, anyone who has restored a car knows that it is no easy feat… it is absolutely a labor of love. But, when you can look back at what you started with and see the finished product, it’s always worth it!
An article from Fox News reporting on the 2011 Las Vegas Perspective tell us what we already knew… non-gaming business will be critical to the success of future Las Vegas.
There has been a lot of talk about the diversification of the Las Vegas economy, but when pressed I rarely hear new ideas other than tapping outside markets (specifically California) since we have offer preferential tax treatment. Our favorable tax environment is becoming less of a unique capability with other states considering the same strategy for themselves. Taking that strategy to market is a great way to appeal to all businesses… but as the famous saying goes, the middle of the road is the most dangerous place to drive.
If we truly want to make an impact and diversify Las Vegas, it makes more sense to approach this from a product launch perspective. Our city is the product- we need to identify our market. Any marketing 101 grad knows that a sure way to fail is to try to be all things to all people. It is far better to take a niche approach and serve that niche better than anyone else.
As far as what Las Vegas’ niche should be, I am not 100% sure. I used to think that we could make a name for ourselves in renewable energy, specifically solar power, but Boulder, CO has already established itself as the epicenter. That’s not to say that we can’t play a part. I just think we let a golden opportunity slip past us.
After touring the Switch Data Center, I firmly believe that Las Vegas offers a very unique capability to serve data centers and other companies that rely on similar criteria- ~70* annual average temperature, moderate climate, low humidity, low risk for natural disasters, etc. These are uniquenesses that apply to a very small section of our country and cannot be duplicated outside of that zone.
I am excited about Zappos’ relocation to downtown Las Vegas and the vison that Tony Hsieh has for the area. With Tony Hsieh acting as an evangelist for our city, I don’t think there is any reason we can’t attract more technology companies to relocate.
Whichever direction we choose, it is imperative that we build a strategy within the city to support that direction and then market it. That means getting state government, local government, the university, and local business to at least start moving in the same direction around a core strategy. That is a feat that is much easier said than done and an article that I will leave for another day…
Awesome new lounge opening up downtown… it’s projects like this that reaffirm what I believe is happening downtown. The growth is organic and real… it’s “normal” people creating a culture as opposed to the manufactured and contrived projects of the past (Neonopolis and the Main Street Station). This lounge was done on a shoestring $350k budget- it has whimsy and character and I am confident it will be a success!
Read more from the Las Vegas Weekly article here.
For anyone that missed the article in the Las Vegas Sun yesterday:
Tony Hsieh’s Vision for Downtown Las Vegas
As mentioned in previous posts here and here, the Zappos deal is having an impact on the future of downtown Las Vegas. Having a visionary like Tony Hsieh playing part in actively recruiting tech businesses to downtown Las Vegas will not only play a part in aiding the redevelopment of the area, but will also help bring the much needed diversity that our Las Vegas economy needs.
I am incredibly excited to see these changes taking place. As I have said before, there are many people who have been involved in laying a foundation for the downtown area, but it hasn’t seem to hit a “critical mass.” I believe that the Zappos move is the tipping point to really begin moving things in the right direction.
In addition, with Carolyn Goodman showing a strong lead for Mayor, we should be able to count on the vision that Oscar laid out to be continued.
Here is a link to an article on Bigger Pockets about the changing attitudes to Las Vegas real estate.
Optimism is in the air, investors are looking at ground zero (Las Vegas in case you were guessing) for opportunities, and things are starting to happen.
As I mentioned in a previous article about the Zappos deal that is mirrored in the Bigger Pockets link above, the relocation of the Zappos headquarters to downtown Las Vegas has spurred bars and restaurants to begin moving in. I firmly believe there will be some great opportunities in the downtown area.
I hope Las Vegas will never return to the ridiculous boom days that we experienced… it isn’t healthy and it’s not sustainable. That being said, we will recover and there will be fortunes made through the recovery.
Good fortune has not been on the Lady Luck’s side.
Before shutting it’s doors for renovations in 2006, Lady Luck had become a dilapidated, remnant reminder of what used to be in downtown Las Vegas. Mayor Oscar Goodman was not as kind with his words describing it as a rotting corpse, a blight, a disaster, and a carcass. That was all supposed to change with the renovations that were planned… then the recession hit.
Finally though, luck appears to be swinging back to the Lady’s side with new plans for a massive renovation being put in place by Resort Gaming Group (the same ones who helped arrange Zappos moving into the old City Hall).
The new renovation has been modified from the original plan. A restaurant/bar and sportsbook will replace the Celebrity Theatre on the corner of 3rd and Ogden. Sidebar will be enlarged slightly and converted into a wine bar. Triple George is staying and will undergo only “minor modifications” (which is great to hear- I highly recommend the restaurant).
The remainder of the Lady Luck itself will see meeting space, a rooftop pool over the casino, spa, fitness room, and a complete renovation of the remaining rooms.
Opening is slated for 2012, which should coincide with the Zappos move and the opening of the Mob Museum.
Las Vegas has ranked 2nd to last in a national index compiled by Marcus & Millichap… see the article here.
The Marcus & Millichap report projects an increase of .5%… a small increase, but the first in over 3 years. Vacancy rates are expected to fall to 9.1%- a drop by 80 basis points.
As would be expected, the area around UNLV is projected to be the most highly sought due to the student population and the opening of The Cosmopolitan nearby.
I personally see a great opportunity with multi-family housing. The recession has tarnished many individuals personal credit and stricter lending practices will keep many people in the rental market. As the economy begins to recover, rental rates can be more easily adjusted in multi-family than commercial leases. As a result, multi-family will reflect increased values more quickly.
The UNLV area could yield some lucrative investments… the opportunity to pick up assets in a high demand area coupled with the remote possibility of the UNLV arena project could provide a positive cash flow investment in the present with the upside potential for redevelopment down the road.
I also believe the downtown Las Vegas area is poised for growth and opportunity. With the relocation of Zappos to the soon to be vacated city hall there will certainly be an increase in demand for housing. What is particularly exciting about the Zappos move is that the employee culture of Zappos lends itself to people that would like to be a part of the downtown culture- youthful, creative, artistic, and just a little bit weird.
Exciting news to see Zappos going downtown and taking over the old City Hall… I think this is the kick that was needed to really spur the redevelopment and excitement for our old downtown area. There has been a really great core group of people that have been incredibly committed to really changing the area, but it has never seemed able to hit that “critical mass” to really take off.
Zappos moving offices to old city hall in downtown Las Vegas
