When John Creedon arrived at his downtown home one evening in July, the nonprofit director was surprised to find an eviction notice taped to his door.
The apartment complex Creedon lived in had come under new ownership – the Downtown Project, through 330 7th Street LLC, owned by Andrew Donner, the CEO of Resort Gaming Group, which purchased the former Las Vegas City Hall and leases the property to Zappos.
The company purchased Towne Terrace with the intention of converting the apartment structure into a dormitory for members of Teach For America as part of the Downtown Project, according to Creedon.
The Downtown Project is a privately funded $350 million venture aimed at reviving downtown Las Vegas through investment in startup businesses, technology, the arts, culture and education.
The close-knit residents of Towne Terrace, who hold regular building meetings and often hang out together at the downtown restaurants and bars, were given less than 30 days to vacate the premises, Creedon said.
Upon researching the new owners, Creedon said he was shocked to find out that Zappos CEO and Downtown Project benefactor Tony Hsieh had a hand in the deal.
"(Hsieh) wants to build a community downtown, and we already have a community here (at Towne Terrace)," Creedon said. "You’re tearing this community apart."
After voicing his concern to Hsieh via emails and meeting with Donner, Creedon said a notice was sent to the tenants informing them they could stay and that they would receive six months’ notice of any future changes.
"Most of us didn’t want to leave," he said. "There is really not any other place to go for the people who work in the casinos, law offices and in the community."
As the dust began to settle, little changes were made, Creedon said – small renovations here and there.
"My roommate and I originally had two parking spaces," he said. "Well, they took one away and it’s been a nightmare ever since. I’ve had to come up with creative ways to park my car at night."
The tenants were sent another notice a week later that all the units would be remodeled . They would have to leave for two months, and the rent would be increasing by $200 to $400.
"I can get a place at the Ogden or Juhl for that," Creedon said. "And those places have pools and a gym."
Again, the tenants voiced their concern and, again, a letter was sent out saying the previous notice was incorrect and that they had the option of having their unit renovated and rent raised.
"Hsieh and his people have handled the situation well, and I like that they’re investing in downtown," Creedon said. "But it’s been a headache. It’s either this building or move out of the neighborhood."
A GROWING CONCERN
Brandon Wiegand, executive vice president of acquisitions and sales for Focus Commercial Group, commonly refers to the present real estate landscape of downtown Las Vegas as a "stratified market."
"You’ve got options like restricted- income apartments next to expensive high-rises and nothing in between," he said. "It’s a direct result of high land prices."
With the price of land in the downtown area being driven up, developers look to maximize their return on investment by maximizing density, resulting in high-priced high-rises, Wiegand said.
"(The Downtown Project) is far and away paying the most for land downtown," he said. "If (the Downtown Project) stopped overpaying for the property they’re buying up, it would be easier for developers to go in, buy and develop land."
Wiegand added that the economy has not yet reached the point where capital is flowing freely enough to complete such projects.
"The demand for (affordable housing downtown) is there," he said. "It’s going to take somebody who has a bit of vision, has the capital and who has the (guts) to take on a project like that."
Zach Ware, head of the Downtown Project, said that unlike most projects focused on city revitalization, his group’s vision does not have a master plan dictating which property must be purchased.
"We’re confident that the investments we’re making right now are the right ones," he said in an email. "So if a particular property has an inflated value, we’ll generally decline to purchase it."
Still, the problem does not appear that it will be getting better anytime soon. In August, Zappos plans to begin moving its operations into its downtown campus, the former site of Las Vegas City Hall, along with an estimated 1,200 employees.
"We’re focused on bringing Zappos into the heart of a vibrant creative community where you can live, work and play without driving," Ware, also a Zappos employee, said. "So it’s natural that we’d hope employees would want to live here."
Additionally, the Downtown Project has also recently agreed to bring about 100 Venture for America Fellows to Las Vegas over the next five years. The nonprofit organization Venture for America places top graduates in startups and small businesses, a seemingly good match for downtown’s burgeoning tech startup scene.
Brian "Paco" Alvarez, a downtown resident and blogger, said there is not enough room for all of them.
Alvarez lives at the L’Octaine apartments, one of the few mid-rise complexes in Las Vegas’ urban core and one that has a roughly three-month waiting list.
"There is no doubt there’s a lack of affordable housing … and a need for more projects like (L’Octaine)," Alvarez said. "We don’t have that mid-level housing, and I don’t suspect anything will come about within the next year."
With a lack of available space and free-flowing capital, companies such as the Focus Commercial Group have had to get creative with their investments.
According to Wiegand, the investors he works with have purchased existing buildings in the area, much like the Downtown Project, with the intention of renovating the spaces and marketing them to middle-class, white-collar workers who want to live downtown near their businesses.
Wiegand said the apartment complexes his investors are working on at the intersection of Casino Center and Charleston boulevards are scheduled to open by January.
Viable options such as this are readily available, especially in the eastern portion of the neighborhood near Maryland Parkway, according to Alvarez.
"It only takes a few brave individuals to move into the neighborhood, and you start to create this really cool energy," he said. "It becomes sticky. If you want to change a neighborhood, you have to get people who care about it to move in."
The Downtown Project is taking a similar approach, focusing more on the neighbors and less on the neighborhood, according to Ware.
"(W)e’re very mindful that for a neighborhood to be truly authentic and to grow organically, housing needs to be accessible," he said. "For now, we’re mostly focused on investing in passionate entrepreneurs to create the foundation of the neighborhood."
Wiegand agreed and said an increase in population in the area would bring about the positive change many are hoping for.
"When there are a lot more people living in the area who are investing in the community, that’s when you get to the next level," he said.
Creedon, executive director of the Nevada Youth Coalition, a nonprofit that promotes community service among young people, is concerned that current residents such as himself will be forced out of the neighborhood they love.
"There is absolutely not enough affordable housing down here, and I’m scared to think of what is going to happen when thousands of Zappos employees move down here," he said.
The tenants will be allowed to remain in their homes for now, according to Ware.
"The Towne Terrace property is operating like a traditional apartment building," he said. "(There are) no major plans for change there other than a freshening up. We have purchased a number of vacant hotels and apartment buildings that we hope to see converted to retail or other uses, but few plans are in place as of now."
Creedon said he and his fellow tenants will continue to voice their concerns but that their voices may be falling on deaf ears.
"The everyday working folks are not being brought into the conversation," he said. "It’s almost like the colonization of a new world."
Contact Paradise/Downtown View reporter Nolan Lister at firstname.lastname@example.org or 702-383-0492.