Once downtown, Zappos expects to grow

The 1,000 jobs Zappos plans to bring to downtown Las Vegas might be just the beginning.

That number could swell to 3,000 within 10 years as the company expands, Las Vegas city spokesman David Riggleman said.

Room to grow was one of the reasons the company sought to move from Henderson, he said.

That makes the online clothing retailer’s pending departure from Nevada’s second-largest city, where it moved in 2004, a little easier to bear, Henderson Mayor Andy Hafen said in a statement.

“We’ve known for some time that Zappos has been looking at locations outside of Nevada to expand their operations,” Hafen said, adding that he is excited the company decided to remain in Southern Nevada.

“They are a growing company with potential for even further expansion. We are excited for them and for the economic benefits their growth will bring to our entire valley.”

On Monday, Las Vegas announced plans to sell the current City Hall building and ancillary structures at Las Vegas Boulevard and Stewart Avenue to Resort Gaming Group for $25 million. That company would remodel the building and lease it to Zappos, which would move its headquarters there.

Resort Gaming Group would get an option on city-owned land across the street from City Hall that could be purchased and developed into additional space for the Zappos campus.

The City Council is scheduled to hear a presentation on the plan today and could vote to approve it.

A new city hall is under construction on Main Street downtown and is expected to be ready in 2012. City offices will remain in the existing City Hall until the new building is ready.

The Metropolitan Police Department also occupies part of City Hall but expects to move into a new building of its own next year.

Zappos has technology employees such as Web designers, system architects and software engineers. The company also has call center customer service workers.

Company officials wouldn’t say how many of each type of employee would be downtown.

“As of right now we aren’t breaking it down into that level of detail, but our plan is to continue to grow in all departments,” Maria Espitia of Zappos said. “Thank you for your interest and remember to keep smiling.”

There were plenty of smiles Monday when the deal was announced, with Mayor Oscar Goodman and Councilman Ricki Barlow predicting more activity downtown once the company relocates.

It also means revenue for the city.

Las Vegas is holding the note on the purchase and would receive annual payments on the sale. Additionally, moving the public property into private hands puts it on the property tax rolls.

Over 30 years, revenue from the land sale and property taxes will be $97 million, according to Bill Arent, director of the city’s office of business development.

Both sources of money would go into a fund for the new city hall’s construction, city spokesman Jace Radke said.

The city financed the new city hall’s construction, which was budgeted at $147 million. No payments are due for the first three years after construction. That will be followed by four years of payments of $2 million or less, and full payments of $14 million to $15.6 million start in the eighth year.

Las Vegas has the option of buying the building outright or refinancing the debt.

The City Hall site and the adjacent parcels total about 20 acres, and it has been a longtime goal to bring a commercial venture to the property on Las Vegas Boulevard that also faces U.S. Highway 95.

City leaders engaged a Baltimore developer, The Cordish Cos., to study building a sports arena, an entertainment district and possibly a hotel-casino on the site.

When Resort Gaming Group approached the city about the Zappos project in June, however, the city renegotiated with Cordish and moved the proposed arena study to land in Symphony Park. That effort remains ongoing.

Contact reporter Alan Choate at achoate@reviewjournal.
com or 702-229-6435.

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