Updated December 1, 2020 - 6:40 pm
Tony Hsieh was known for making a fortune at Zappos selling shoes online and leading an unorthodox lifestyle. He lived an Airstream trailer with a pet alpaca and had a fondness for the Burning Man festival.
He also was a major real estate investor in Las Vegas who, in a short period, became a dominant property owner downtown.
Hsieh, who died Friday at age 46 from complications of smoke inhalation after being injured in a house fire in Connecticut, launched a side venture in 2012, then called Downtown Project, that would ultimately have a huge footprint in Las Vegas with dozens of properties in its portfolio.
Now DTP Companies, the venture acquired vacant lots, old motels, apartment buildings and other properties; developed the open-air retail hub Downtown Container Park and, with a partner, the Fremont9 apartment complex; turned the old Fergusons motel into a commercial center with small retail shops; and, just in October, purchased Zappos’ headquarters, the former Las Vegas City Hall, for $65 million.
Related: More Tony Hsieh coverage
Bill Arent, the city’s director of economic and urban development, told the Review-Journal on Monday that DTP is among the biggest property owners downtown.
As of 2017, its holdings spanned around 45 acres of land.
Outside Las Vegas, Hsieh also went on a homebuying spree in the wealthy ski town of Park City, Utah, this year, acquiring at least eight homes as of August, including a 17,350-square-foot mansion with a sports court, private lake and horseback riding corral.
‘A lot more’ than $350M
It’s unclear what will happen with Hsieh’s real estate holdings. His lawyer, Puoy Premsrirut, did not respond to an email Monday asking whether Hsieh left a will or if she expects to file a probate case.
DTP assembled its real estate portfolio quickly, acquiring entire city blocks along Fremont Street, and today still hasn’t built out or redeveloped multiple sites, including some shuttered, decades-old motels.
“Candidly, we bought all these blocks a few years ago with no idea of what we were going to do with them,” DTP’s then-real estate portfolio manager, John Curran, told the Review-Journal in a 2017 interview about the motels.
Overall, Hsieh’s venture had assembled a portfolio of some 90 properties by then, Curran said at the time.
Hsieh launched Downtown Project with the goal of putting $350 million into the Fremont Street area. It put money into restaurants, bars, tech startups and other ventures, but the majority of the fund, at $200 million, was allocated for real estate and development.
It invested heavily in a once-neglected area of Las Vegas that grappled with prostitution and drugs, locals say. When the business was beginning, “people laughed at us” and said the group was “nuts,” said Todd Kessler, a partner and attorney with Resort Gaming Group, Zappos’ former landlord at the old City Hall, who helped launch DTP.
He said DTP’s pot of money was “100 percent” Hsieh’s, and the group ended up spending “a lot more” than $350 million.
Colliers International retail-property broker Chris Clifford likened Hsieh’s real estate strategy to a phrase from Apple co-founder Steve Jobs on people not knowing what they want until a person gives it to them.
“I think it was the same situation with downtown Las Vegas,” Clifford said.
Roll of the dice
There was very little momentum downtown, and new investment was stagnant, before DTP began pouring money into the area, said CBRE Group broker Amy Lance, an office specialist.
Former City Councilman Bob Coffin, whose ward included downtown, said the Fremont East area was “kind of seedy” when he took office in 2011, and no new construction was happening.
Before DTP came around, the Fremont East Entertainment District had been formed to attract more taverns and nightlife to the area, Arent said. But for the most part, downtown “was not seen as a place for locals” until Hsieh started investing heavily in the area, he added.
“That’s what really changed,” Arent said.
Clifford said interest in downtown is still growing, but with projects like casino owner Derek Stevens’ newly built resort, Circa, it’s just a matter of time before more investors flock to the area.