The agreement credited with paving the way for about 2,000 tech industry workers to move to downtown Las Vegas while taking a potentially costly white elephant off the hands of city government is now official.
Leaders of online shoe retailer Zappos.com announced Tuesday they signed a 15-year lease on the City Hall building.
The deal, agreed to in principle late last year, ensures Zappos will make downtown Las Vegas its headquarters and help city government avoid the ugly scenario of spending taxpayer money to move into a gleaming new City Hall on Main Street while the old City Hall remained vacant.
“I’m really excited that it is not going to be imploded because that was my first thought years ago when Oscar said they were going to build this new City Hall,” Mayor Carolyn Goodman said in response to the signing, referring to her husband, Oscar Goodman, who was mayor when Zappos hatched its plan to move from Henderson to downtown .
The lease agreement is between Zappos and an offshoot of Resort Gaming Group called City Hall, LLC, both of which are led by Andrew Donner. Changes to the deal described as “nonmonetary” and not increasing financial risk to the city will still need approval from the City Council, possibly next month.
Although Donner expected the deal to finalize, he said he was relieved to get the signatures on paper because it means no more worrying that it could unravel and leave Las Vegas city government in a similar situation to North Las Vegas, which recently made national headlines for moving into a gleaming new city hall despite struggling with major financial shortfalls.
“There has been a lot of speculation, are they going to screw up like North Las Vegas and this thing is not going to happen,” Donner said in a phone interview after the announcement.
Under a development agreement Donner negotiated with the city, his firm will buy the City Hall building for $18 million, a deal scheduled to close April 1, and lease it to Zappos for an undisclosed amount.
The complicated transaction required support from the City Council, Zappos CEO Tony Hsieh and high-ranking officials from Zappos parent Amazon.
Zach Ware, who is leading the Zappos “downtown project” on behalf of Hsieh, estimates it will take another $40 million to complete the renovations necessary for Zappos to occupy the building in 2013.
Still, Zappos workers are excited about the pending move and some already have relocated to downtown Las Vegas.
“The building is in the middle of a community we really enjoy. That is a huge plus,” Ware said. “To be a part of maintaining and investing in a building like City Hall is kind of a once-in-a-lifetime opportunity.”