Downtown Project is rolling with recent redevelopment projects such as the John E. Carson Hotel, The Bunkhouse, The Market and Ferguson’s Motel along the Fremont East corridor, in addition to its signature Container Park.
But is residential on the redevelopment list too?
Zappos CEO and Downtown Project chief Tony Hsieh believes there is a demand among some of Zappos’ 1,500 employees and families for more downtown housing options and he told the Review-Journal that Downtown Project “at some point” will build residential.
Just not right now, he said.
“For us it’s just about priorities and timing,” Hsieh said. “While we’re always open to considering all options, building new housing is not on our immediate priority list, but we are looking at refurbishing existing buildings that we own for residential use.”
Hsieh also pointed out that in the meantime, there are the affordable 360-unit Mayan Plaza apartments that he bought last year on Alta Drive on the west side of Interstate 15 and only two miles from East Fremont.
Rohit Joshi appreciates Hsieh moving Zappos’ 1,500 jobs into downtown. But Joshi, owner of the Neonopolis shopping and food center on the Fremont Street Experience, said downtown needs to create many more new jobs before focusing on more residential development.
“First, we need jobs and be an employment center. You have to have the critical mass of jobs in downtown,” Joshi said. “Zappos was a good addition … but it’s just a drop in the bucket.”
Downtown Project does what it could. For example, start-up entrepreneurs who draw support from Downtown Project can find temporary lodging in “crash pads” in The Ogden, where Hsieh lives, and at Gold Spike, which Hsieh bought in 2013.
In fact, Gold Spike’s former hotel tower is now a combination of residential and crash pads. Additionally, Downtown Project is reopening the Oasis Hotel at Gold Spike in mid-September following renovations.
“The hotel will be open to the public and will extend the fun, whimsical brand and amenities of Gold Spike into a full-service hotel,” Downtown Project’s Michael Downs said. Downtown Project does not do titles, but Downs leads Downtown Project’s operations team.
There are 42 residential and 86 crash pads and hotel units at Gold Spike and Oasis, said Kim Schaefer, a Downtown Project spokeswoman.
At The Bunkhouse, the bar is scheduled to reopen on Monday. Downtown Project hopes to keep nine residential bungalow units on site at The Bunkhouse to house musicians. But that housing will not open when the bar makes its renovation debut next week.
Zappos employee Joanna Hass, who lives at Gold Spike, said Zappos workers find housing at Town Terrace, The Ogden, The Juhl and in the Huntridge neighborhood.
“I actually really like my situation at the Gold Spike, so I haven’t been looking around for more or better options. I know there are some great places like Town Terrace and The Ogden, so the variety is definitely there already. As for volume, it’s hard to say,” Hass said.
“I hear of people all the time who are on the wait list for more affordable options like the Gold Spike and Town Terrace as opposed to The Ogden, which I hear is pretty pricey,” she said. She noted monthly rent for the Gold Spike rooms are in the $500 range.
Indeed, The Ogden and Juhl are considered out of the price range for many Zappos workers, including some who earn $12 per hour.
Rents at The Ogden and Juhl fall in the $1,500-$2,500 range, said Uri Vaknin, a partner of KRE Capital LLC, which owns the two high rises. KRE is partnered with Dune Real Estate Parnters and Las Vegas-based Northcap and also owns Spanish Palms, One LV and Loft 5 in Las Vegas.
Vaknin, who oversees KRE’s residential portfolio in Las Vegas, said those rents might appear high for downtown, but they are in line with high rise rents in the downtowns of other sunbelt cities such as Phoenix, Houston and Atlanta.
Vaknin said changes are afoot at The Ogden, where residents have been informed that they can buy their housing units because the apartments are going to market in late September. KRE will honor residents’ current leases, he noted. Vaknin added The Ogden will soon unveil capital improvements to the building, where KRE owns 248 of the 275 units.
Meanwhile at the Juhl, there will be an announcement soon that five to seven retailers will be added to the ground floor of that building, Vaknin said. There are 341 homes in the Juhl.
Jacqueline Jensen, who came to downtown to work on a start-up called Ticketcake.com with two friends, lived in one of those Ogden crash pads in February 2012. She just moved into the Juhl.
Jenson, who works as a “Growth Hacker” at Originate, said there is a need for housing for families in downtown.
“There definitely has to be more housing opportunities. Families want to be downtown. I would like to see more high rises downtown and high-density family options,” Jensen said.
Dennis Smith, owner of Home Builders Research, noted that families looking for affordable housing options face challenges across the valley.
“That holds true anywhere in Las Vegas,” Smith said.
Smith said that even though some people might be looking for more downtown housing, the bigger historic backdrop is that downtown has never been a big source for residential living.
“When did they have housing for (downtown) residents? Never. Anything that is added is more, relative to what they have had,” Smith said.
Richard Worthington is bullish on building residential in downtown. The Molasky Group development company president and chief operating officer said he is looking at various downtown sites for residential development with the goal of building housing that will cost less than the rents at the Ogden and The Juhl.
With rents at the Ogden and Juhl running about $1.60-$2 a foot, Worthington wants to build downtown apartments that offer units of an average of 850 square feet at about $1.50 per square foot. The Molasky Group is used to developing apartments in the suburbs where the density is much less than in downtown, where Worthington envisions 71 units per acre.
“Smaller sites mean the cost gets driven up,” he said. “It’s all driven by the market and the rents. You have to be in the sweet spot.”
Contact reporter Alan Snel at firstname.lastname@example.org or 702-387-5273. Follow @BicycleManSnel on Twitter.
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