With spring right around the corner, and signs of economic recovery everywhere, there is a feeling that brighter days are ahead. Glimmers of hope can even be seen in one of the most distressed U.S. housing markets in the country.
The Las Vegas real estate market was devastated when prices plunged 62% from the peak, giving rise to a massive number of foreclosures. Today, reports reflect a home sales recovery as sales grew the earlier part of this year to their highest level in five years, with current housing inventory down 46% from last year.
To sustain recovery in Las Vegas, as in many other localities, there must be long-term economic improvements, including the employment of the many remaining unemployed, in conjunction with the creation of a more diversified economic base.
Tony Hsieh, the highly successful CEO of Zappos.com Inc., is personally working to introduce such long-term economic improvement to the Las Vegas area.
Hsieh has recently embraced the role of urban planner and is working on a revitalization plan for the long-ailing Las Vegas downtown area. Hsieh’s vision is to create a vibrant downtown area where his people can both live and work. Unlike many of the corporate campus designs that were utilized extensively as a business expansion model over the last decade, Hsieh’s vision involves an approach that is aligned more closely with “build a community.”
New construction will ensue, but so will utilization and retrofitting of existing structures when feasible. Hsieh has earmarked $350 million for his project with $100 million for the acquisition of land, $100 million towards real estate development, $50 million to high tech start-ups and seed money for start-ups for a variety of small businesses like bakeries, restaurants, etc., and $50 million earmarked towards the building of a school system.
Hsieh plans to fully embrace this revitalization plan on a personal level as he is planning to move his company and its 1,200 employees into a newly leased downtown building by October 2013. The building is slated to begin a $60 million renovation this coming April.
As we reflect back on all the money that has been spent trying to revive the economy, $350 million, though substantial, is inconsequential in comparison to what has already been wasted. Sustained economic recovery, especially in the housing sector, will depend on new ideas and new approaches.
We hope that others with the means and the vision adopt their version of “building a community” with the enthusiasm that Hsieh and his group has exhibited in rebuilding Las Vegas.
Diane Gozza is EVP, business development at Integrated Mortgage Solutions, Houston.