Sunday, June 2nd, 2013

Viva Las Vegas! Part 2 – Will the Downtown Project Succeed?

This is the second installment in my look at the Las Vegas Downtown Project. In part one I gave an overview of the project and some of the positives and success indicators. On Thursday I looked at some of the commonalities between Vegas and other small cities as a bridge to this installment. And finally today I want to look at some of the challenges I see with the Downtown Project and ask, will it succeed?

As for the answer to that question, some of it is a matter of how you define success. At a base level, there’s already been success. Downtown Las Vegas is now on the mental map and the discussion agenda for urbanists around the country. The product offering is already better. Also, the original concept of building an extended urban campus for Zappos seems likely to succeed. Downtown will certainly be light-years ahead of where it started as a live/work/play environment.

Other goals are more speculative. Can Zappos avoid the sub-linear scaling curse? We shall see, but given that the same leadership is running both the company and the Downtown Project, this is a good laboratory and case study for business schools to look at.

The big, aspirational goals around making Vegas the most community focused city in the world, and the co-working and co-learning capital of the world seem much more challenging. My previous post around common traits of small cities shows why there’s lot of competition in the community department. Also, with NYC having an estimated 50 co-working facilities already, it seems unlikely Vegas is ever going to win in co-working on volume of activity.

Still, better to aim high than low I always say. But looking forward to how Downtown Project plays out, I see three major areas of concern: the conventionality of the program, the fact that it goes against the DNA of Las Vegas, and challenge of curating a city versus running a company.

The Conventionality of Downtown Project

One thing that struck me when I saw Tony’s original talk at BIF-8 is the conventionality of much of what is being done. The project has a reputation for being very innovative, but most of the components of it are conventional wisdom. Or “best practices” if you will.

Car share, collisions, fashion, tech startups, co-working, art, music, coffeeshops, restaurants, etc. Everything is exceptionally buzzword compliant, right down the PBR on tap in the local establishments. All of the boxes are checked perfectly – too perfectly.

I described the project as Ed Glaeser meets Richard Florida which highlights how this happened. They consulted with all the gurus, from Elon Musk to Burning Man. And all the leading edge thinking was incorporated into the program.

But think about Zappos for a minute. If you ever take the tour, it’s obvious that this is a very unique and different company. Here’s a snap:

The scene at Zappos

The Zappos culture and service mentality did not come from taking the best of Seth Godin, Jim Collns, etc. and creating a company culture from them. I’m sure that their HR policies, finance, tech, etc use many methods and tools common to all companies. But the company is not an amalgamation of best practices. Nor is the unique company culture and zaniness just frosting applied to a cake that’s similar to any other. It cuts through everything they do.

By contrast, I just don’t get the same sense of uniqueness in downtown Vegas. What makes downtown Vegas unique is unrelated to Downtown Project (e.g., casinos). There are definitely things I think they’ve innovated on. The Telsa car share and modal integration take that to a new level. The crash pads and sales mentality create a “WOW” experience that’s clearly unique – and probably explain why the project has gotten so much positive press. But those things don’t change the fact that they are basically trying to do what Ed Glaeser and Richard Florida told every city to do.

This I think limits what can be accomplished. Every city has coffee shops, a budding startup community, bars and restaurants, etc. They are all adding livable streets infrastructure and such. They’ve all got a lot of exciting stuff happening. The challenge is how to create the Zappos of cities. That is, a place when you go there you’re blown away by how unique it is and how cool is. And which has a certain polarizing effect, much like Zappos itself, which is not for everybody. Definitely the “WOW” thing they’ve got going with rolling out the red carpet is a great start. A willingness to stay a bit niche and not actually scale so they can preserve the uniqueness might be part of it too (more on this later).

To be fair, given how bleak downtown Vegas is, they pretty much have no choice but to build the basics, which every city needs. Almost by definition, the basics are conventional. So I should probably give them more time to see how this evolves.

Challenging the Vegas DNA

Another challenge is that they are directly going against the brand and cultural DNA of Las Vegas. Vegas is about gambling, etc. While there are definitely regular things in Vegas, including nice boring suburbs, the core of it seems to be in everything centered around casinos.

Downtown Project not only isn’t trying to roll with this but is actively cutting against the grain. The tech fund isn’t investing in gaming technology companies, for example, which is the obvious logical niche. Rather than trying to do cool-urban casinos or some such, they actually bought a casino (the Gold Spike) and ripped out the gambling.

I understand this perfectly because it is exactly what most smaller, unhip cities try to do. You want to join the club, so you think you have to fit in. I have noted how the one thing everyone in the world thinks of when they think of Indianapolis, the 500-Mile Race, is something that’s never talked about by the local urban crowd. To them auto racing is declasse and an emblem of the past city they’d like to think they’ve transcended. Indy is way more than auto-racing today, goes the logic. Almost every city goes through this phase.

One of the things I’ve been most passionate about and that I feel most strongly about generally is the idea that cities need to be themselves. They need to understand who they are and build the future around that, not around junking the past. Yes, change to be sure. But remember who you are. My post “The Brand Promise of Indianapolis” gives the overview of my thinking on that. Cities simply cannot sever their roots and expect to thrive in most cases.

Going against the DNA of your city mean’s you are swimming upstream. As Paul Graham noted in “Cities and Ambition“:

How much does it matter what message a city sends? Empirically, the answer seems to be: a lot. You might think that if you had enough strength of mind to do great things, you’d be able to transcend your environment. Where you live should make at most a couple percent difference. But if you look at the historical evidence, it seems to matter more than that.

A city speaks to you mostly by accident—in things you see through windows, in conversations you overhear. It’s not something you have to seek out, but something you can’t turn off. One of the occupational hazards of living in Cambridge is overhearing the conversations of people who use interrogative intonation in declarative sentences. But on average I’ll take Cambridge conversations over New York or Silicon Valley ones.

It’s very tough to overcome the message that a city repeats in your ear over and over again. And for Vegas trying to reinvent itself around creative collisions, it’s doubly hard as Richard Florida put it in last place for creative class share among large cities. Trying to go from worst to first is a tough challenge indeed.

I come from a consulting background and so am obsessed with strategery. So my own biases are showing. But what do companies obsess about? Their unique customer segments and their value propositions to it, along with the financial model for realizing value. In short, it’s about the brand DNA. It amazes me to no end that while most companies try to convince you how unique and different they are from every other company in their market (Zappos being a great example), virtually every city is trying to convince you that they’re just like every other cool city (tech hub, creative, etc).

What’s the first thing a new creative director does when trying to revive a fashion house that’s fallen on hard times? Pay a visit to the archives. What is this company all about? It’s the same with cities. What is this city all about? And with most cities that question was asked and answered a long before we got there or were even born. The founding ethos of a city is almost impossible to displace. (The best documentation of this is E. Digby Baltzell’s “Puritan Boston and Quaker Philadelphia” which showed how the founding ethos of the Puritans and the Quakers permeated every aspect of those cities’ cultures up until the present day). So to understand this you have to dig below the surface (which in the case of Vegas would be gambling I guess) and become a sort of anthropologist. I’m sure my surface analysis of Vegas as about casinos is off and that deeper digging needs to be done. But it doesn’t appear to be a creative capital type of place, etc.

So in thinking about how to transcend conventionality, I think aligning with not against the civic DNA is important. In fact, the Downtown Project already has one area where they have done this and it is by far the most compelling thing I’ve seen them do. This is a hybrid of what they call “Subscribe to Las Vegas” and “Las Vegas Makes You Smarter.”

The idea behind subscribing to Las Vegas is that not everyone can or wants to move there. But that doesn’t mean you can’t be a part of the community. Some people are choosing to live or work there part time – say one week a month. The notion is that one purposeful visitor or part timer who is fully engaged in the community and “collisionable” is as good or better than a full time resident that is sitting home watching TV or at work in the burbs.

“Las Vegas makes you smarter” I believe came out of all the people Tony was bringing in to check out Downtown Project. He started asking them to give a presentation while they were in town. Most people said Yes. Hence the downtown speaker series and the notion of Vegas as a place you can get exposed to great minds and knowledge.

These are very in line with the Vegas DNA. First, most people don’t want to move to Vegas. But almost everyone would love to visit. So the idea of becoming a regular visitor to the city is an easy sell to a lot of people. It’s directly in line with the tourism focus of the city. Plus the air connections are superb to it’s easy to get into and out of. The speaker series also goes along with this. On any given day there are already tons of A-list people in Vegas. All you’ve got to do is convince a handful of them to make a community contribution.

So I think finding things like these are critical to building the “Only in Las Vegas” downtown experience that would be best. That’s not to say even this is without challenge. Downtown Vegas does not appear to be an intellectual center. While technology has certainly made it harder to tell, I didn’t see a single person reading a newspaper or book while I was there. There aren’t even that many boxes selling the local newspaper downtown, or a bookstore that I found. The book selection at the Beat Coffeehouse didn’t wow me either. However, I’m told the Inspire Theater that’s being built to house the speakers series will also have Vegas’ largest newsstand and that a bookstore is being looked at.

Can You Curate a Community and a City?

Zappos is known as a company that is very intentional about its culture. The know what they are trying to build, the invest in it, and they take great pains to protect it. But can you apply the same sort of intentionality to the city?

Real cities aren’t just about collisions, they are about conflict. “Iron sharpens iron, so one man sharpens another” says the proverb. This is different from “Hey, you’re cool. I’m cool. Let’s be cool together and collaborate.” It’s about people with very different agendas and ideas competing for the same space (in every sense of the word “space”). As Sam Jacob of FAT put it, “Cities are not about the perfect vision; they are not about a singular idea. They are about a collision of all kinds of incompatible demands.”

This is where the blank slate of downtown Vegas is a weakness. Because there’s nothing around but casinos and government, there’s really no vision I see apart from Downtown Project. And Downtown Project is investing in people and projects that are compatible with their vision. In effect, they are self-selecting for a monoculture, or for diversity within a particular worldview or paradigm. People who move to downtown Vegas personally or move their business there are likely going to do it because they are bought into the Downtown Project vision. It’s not exactly central economic planning, but there may actually be too much shared vision. I didn’t run into anybody who didn’t think the current approach was right on.

What’s more, because Downtown Project has been so successful in garnering mindshare and national press, it may have sucked all the oxygen out of the room. Unless a local casino billionaire or something gets attracted, anyone who wants to play in downtown Vegas is probably going to find it hard to gain mindshare unless they sign onto the Tony Show as it were. Another city with more of a plurality of players might actually be a better platform for getting noticed if you want to do your own thing.

This is where I think a city functions differently than a company. Downtown Las Vegas is not Zappos at a larger scale. It’s a fundamentally different kind of organism.

I’m not convinced it’s even possible to curate a community at more than a small scale anyway. Once more and more people come, you won’t have the same level of community because it will just plain be bigger and more anonymous. And what happens when people start showing up who don’t share the ethos, but are just there to consume? The magic starts to fade. This is exactly what Tony himself went through with the post-peak decline of rave culture and the erosion of PLUR.

Perhaps that magic fading ought to be the big goal after all, to create something that Downtown Project ultimately loses control of because it is so successful that others come in and build something on top of their platform that they never imagined. Maybe it won’t be the co-working capital of the world. But maybe it will be just as cool – or even cooler. Many of the best things turn out to be something their founders never could have imagined. It may be that the best tribute possible to Tony would be if his project became something radically different than what he ever thought it could be.

Concluding Thoughts

Though I obviously have my differences with some of the Downtown Project vision, you have to admire the chutzpah it takes to bring that much ambition to such as bleak place. What they’ve accomplished in such a short time with so little money and with so meager a starting platform in the city is very impressive, especially in contrast to the taxpayer money pits that exist in all too many places. And a number of the things they’ve done are particularly great, especially the subscriber model and their focus on selling downtown Las Vegas (which is truly the best I’ve every seen anywhere – definitely “WOW”). Clearly it’s a place everyone ought to visit to see for themselves – and to find out if Tony can talk you into moving there and starting your own business…

Topics: Arts and Culture, Economic Development, Public Policy, Strategic Planning, Talent Attraction, Technology, Urban Culture
Cities: Las Vegas

12 Responses to “Viva Las Vegas! Part 2 – Will the Downtown Project Succeed?”

  1. CityBeautiful21 says:

    “It amazes me to no end that while most companies try to convince you how unique and different they are from every other company in their market (Zappos being a great example), virtually every city is trying to convince you that they’re just like every other cool city (tech hub, creative, etc).”

    I think that to a certain extent, this is a function of an urban center trying to reach people in its own geographical orbit that are in the suburbs but are looking for something different/more urban, but can’t make the leap to a bigger metro/city for some strategic reason- family, job, etc.

    Focusing on a differentiation point as part of the city’s brand comes more easily when the urban center is already doing the basic functions of an urban core and the broader metro area accepts that the city does these things. I get the idea that this is not the case in Vegas, maybe not just yet.

    Until that shift occurs, I would find it only natural that there will be an “Urban 101” portion to every initiative.

  2. Rod Stevens says:

    A very good article, particularly on being true to the founding ethos of a place.

    My problem with the Las Vegas venture is that it is exactly that- one organization’s project. Not many of these have succeeded, although you might say that Boston and Philadelphia started that way and then rounded themselves out over time. But we’re talking 300+ years of evolution, with a small starting scale that made it easy for others to join in and make their mark.

    Think of the more modern places where one or a few companies have been dominant: The Big 3 and Detroit, Disney and Celebration, and the Bass Brothers in downtown Fort Worth. All of these have been interesting in their own right (Detroit lately because of the reversal from big business making the decisions to urban homesteaders), but all suffer a kind of monoculture monotony that reflects having brought in the “experts”. Think RenCen in Detroit, or the cute hometown architecture of Celebration. Fort Worth is nice, but the street life there feels anything but organic. One response might then be “okay, so we’ll hire yet more experts, and let them rule different parts of the city”, but at the end of the day the result is still the same, since one party is still writing the checks.

    Aaron is right here about competition. What makes New York interesting is all the competing interests. The same was true in Florence, where different families and trading interests vied for power, giving rise to the expression “defenestration”. There was something in those places that was worth going after. What is that something in downtown Las Vegas?

  3. George V. says:

    In your clear zeal and vision, I’m reminded somewhat of the writings of Frederick Law Olmsted. But where you differ is that you’ve yet to truly put your ideas into practice, where they can be tested against reality and honed. I think, if you’re to reach your full potential you need to take the great leap into true design like Olmsted did. Otherwise, it’s just a bunch of musings. That’s my advice, unwanted and as worthless as it is.

  4. Gerhard Ehresmann says:

    Excellent analysis. Things are getting much more interesting as support for the ‘Creative Class’ theory takes a nosedive among critics.

    Sounds like there is some “Fresh Conservatism”–a term coined by Roemer van Toorn (Dutch architectural theorist)–going on here in terms of checking all the cool boxes: “a tendency that presents the normally discreet character of conservatism in a spectacularly fresh fashion, as a work of art” with the attitude (borrowed from Pulp Fiction): “Whatever you do, do it cool”.

    Behind all the TED-type hubbub appears conventionality.

    The monoculture/shared vision is symptomatic of the monopolistic structure behind the project (I assume centralized ownership & management–like a mall)–for internal cohesion (and financial predictability) it needs this shared vision and tabula rasa approach to create a strong identity [of artificial or simulated urbanity]…to the detriment of any possibility of urbanity:

    ‘Community’ is for neighborhoods while cosmopolitanism is for the city.

  5. Paul Lambie says:

    I agree with CityBeautiful21 in that I believe some of your criticism of cities trying to all copy the same model is misplaced. While they are emulating one another somewhat, I think this is an appropriate strategy to lure residents of means (who can pay higher taxes and support city services for themselves and others) into the City as opposed to suburban municipalities. As CityB said, this is more about “Urban101”, i.e. reversing the trend of suburbanizing the inner-city that was tried, mostly unsuccessfully, for decades as an antidote to the so-called “white flight” of residents fleeing to the suburbs.

    Some cities, such as Indianapolis, have still not mastered the basic science (or art) of appropriately designing streets in the inner-city in a way that will make neighborhoods attractive to pedestrians and bicyclists, and if people are looking for an automobile-oriented environment, they’ll most often choose the suburbs instead of a similarly unwalkable inner-city neighborhood with all the additional challenges that typically come with it.

    Once cities have have mastered “Urban 101”, they can spend more time focusing on a particular, unique branding that distinguishes them from all the similar sized competitors. But I think they need to get the basics of creating the appropriate physical urban environment correct first. Perhaps the marketing of these cities as hip and cool is a substitute for actually being hip and cool, because if they already had achieved the hip and cool status, the word would’ve gotten around. I presume that the cities that don’t spend time and money selling themselves as hip and cool, don’t need to do so, because they already are, and people already know this.

  6. AC says:

    What’s more, because Downtown Project has been so successful in garnering mindshare and national press, it may have sucked all the oxygen out of the room. Unless a local casino billionaire or something gets attracted, anyone who wants to play in downtown Vegas is probably going to find it hard to gain mindshare unless they sign onto the Tony Show as it were. Another city with more of a plurality of players might actually be a better platform for getting noticed if you want to do your own thing.

    Aaron, thank you very much for this post, which dovetails some issues that I’ve been thinking about lately. Thank you for pointing out that the a sense of history and/or archives is essential in creating a sense of place. I agree with you that cities aren’t curated, and that trying to curate a city quickly reveals a lack of taste in addition to strategy (or strategery!).

    In your opinion, do you think that private investment like Zappos/Las Vegas in urban planning runs the risk of turning cities into company towns? Other examples that comes to mind are Dan Gilbert’s investment in a very small area (compared to the city limits) in downtown Detroit, and Providence’s very-public failed investment in Curt Schilling’s gaming company. These types of projects seem to lack sustainability by creating the signifiers of urban development (coffeehouses, tech, etc) rather than civic infrastructure and engagement.

    Cities outside of mega-regions will be more likely to give carte blanche to private investment in order to cultivate a “creative” downtown. Hitching a city’s future to single company’s (or single investor’s) prosperity seems a little short-sighted, especially when there seems to be more anecdotal evidence that tech/new media sectors aren’t as interested in helping traditional institutions such as museums, symphonies, orchestras, public libraries, etc. Moreover, I wonder about the employees’ own loyalty to these cities – how many will be willing to run for local office, for example? That’s a very specific example, granted, but I think it gets to the heart of the problem that I see in projects like Zappos/Vegas – the bottom line is that these efforts ultimately are meant to help a company, not a city.

    I admit that my observations are being made from afar so I’m very interested in other people’s experiences and input.

  7. John Lynn says:

    I’m interested to see if another Vegas company like Switch will do a good job bringing in some bigger companies to downtown vegas to compete and compliment what Tony’s doing downtown. I think they see the need to have activity beyond just what they’re doing with Downtown Project. Otherwise, it will just be an extended Zappos campus and they’ll miss out on what they’re really trying to build.

  8. EJ says:

    This urbanist sees Downtown Las Vegas and the city as a whole as ultimately being a doomed project. No city can survive without a reliable supply of water, and if current climate trends hold up, they will very likely leave Vegas in a very, very bad way, with a depleted Lake Mead, before the end of this decade. It reeks of the all too typical brand of American arrogance meeting wilfull ignorance about the limits of our resources, as if throwing money and marketing magic around is a deterrent for reality.

  9. Jonah says:

    All the data I’ve seen points to SF being the co-working capital of the country.

    That could certainly change over time (although probably not per-capita) but despite all the hype the tech scene in NYC is but a fraction of SF’s…

  10. Rod Stevens says:

    I find these goals ludicrous. While it is laudable that Las Vegas wants to create a more urban center, it is starting virtually from scratch. Creating the kind of variety and life there, and to be the best or highest at various measure of urbanism like co-working is a little like taking a logged-over piece of northwest land and saying that you are going to re-create a 1000-year-old rain forest with all of its diversity and ecosystem relationships. One of the facts of the rain forest is that the smallest and most overlooked organisms and dynamics can be critically important. The same is true in cities. When the skyscrapers went up in the Financial District of San Franisco in the 1970s and 1980s and later, on 17th Street in Denver, they wiped out the older, smaller, cheaper buildings where the average worker went out for lunch or for a beer after work. The disappearance of these small bars and restaurants wiped out their street life, other than people coming and going to meetings and work. In San Francisco, the work life moved south of Market, and in Denver the work life moved to LoDo.

    Are consultants in Las Vegas going to engineer in cheap space? Are they going to design in and write specifications for the shoe repairman, the street performer, the fourth generation retailer of Stetson hats, the fur shop, the piano teacher, the clog manufacturer, and all of the other vestiges, remnants, outgrowths, anomalies and otherwise evolutionary by-products of a a rich urban history? More likely, the the tenants will be the same chain stores you find at an ICSC convention there once a year.

  11. Rod, there are none of those places in Vegas, so there isn’t the worry about displacement. I don’t believe that the Downtown Project has actually displaced a functional business.

    They did buy the Gold Spike and took out gambling, but it is still open. I think they are going to use the hotel rooms as cheap apartments as well as lower rent offices. Probably that’s partially of necessity as they don’t have the money to scrape and start over. However, there should be plenty of funky and cheapish space around.

  12. John Lynn says:

    One thing should be clear. No one in Las Vegas thinks it will ever be silicon valley or that it will ever displace the tourism/gaming part of Las Vegas. We just want to create an environment that’s great for starting companies and living a great life.

    That change is already happening. When I started listing Vegas Startup companies about 2 years ago we had 20 companies listed. We figured there were 20 more out there that we just didn’t know about. We’re now at about 200 companies…and so now we wonder if there are 200 more out there that we don’t know about. Every week I have a new company message me that they’re in Vegas and not involved.

    My point being that if nothing else, social media and Downtown Project have helped bring together the existing startup companies that had never worked together before. Regardless of the success of failure of Downtown Project, this won’t go away and is a change for good. Plus, many of us are her for the long haul.

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