Joe Downtown:

Joe Downtown: Hsieh says Downtown Project not a charity, can’t solve every community problem

Tony Hsieh, CEO of, talks about ideas for downtown redevelopment at a Zappos condo in the Ogden in downtown Las Vegas Thursday, June 7, 2012.

Community and downtown Las Vegas have been inseparably linked by the Downtown Project since its inception two years ago.

But months after removing "community" from its slogan of core values — community, co-learning, collisions — and adding "connectedness," the Downtown Project now has removed all references about a "return on community" from its website.

Return on community was a paradigm promoted often by the $350 million private redevelopment group, whose partners include Zappos CEO Tony Hsieh. It encompasses the idea that although investments need to make money, the Downtown Project’s investments also have to help foster the downtown community. The concept was written about worldwide because it added a unique layer to business decisions.

Hsieh, the mastermind behind the Downtown Project, spoke about return on community at the 2013 Techonomy conference in Tucson.

“Whether we’re investing in a tech company or in small business or another type of business, in addition to it making sense as an investment in its own right, the entrepreneurs and the company need to care more about just themselves," he said. "They need to care about the community and help out other entrepreneurs in the community."

So if return on community now is gone, is the Downtown Project in the same boat as other developers, motivated primarily by profit?

Hsieh wrote an in-depth reply to VEGAS INC’s question about why return on community has disappeared.

“In the past, we used the word 'community' a lot more, but we learned that a lot of people misinterpreted or misunderstood our goals,” Hsieh told VEGAS INC. “We've even wondered if maybe we should have chosen a different name for the company. With a name like ‘Downtown Project,’ we've found that a lot of people no longer view us as another business or developer that will coexist amongst many other businesses and developers, but instead there are a lot of people that seem to expect us to address and solve every single problem that exists in a city (for example, homelessness, substance abuse, and mental health).

“Downtown Project is a startup entrepreneurial venture that happens to also have good intentions, and due to limited resources, we unfortunately aren't able to address and solve every single problem that exists in a city. We are also not a charity or nonprofit. We believe that financial self-sustainability creates the greatest chance for our investment impact to be long-term, which is why we invest in small businesses and entrepreneurs. We found that when we used the word 'community,' there were a lot of groups that suddenly expected us to donate money to them or invest in them just because they lived in the community or because it was for a good cause. People would be upset if donating or investing in them did not happen to fit in with our priorities and business goals, and they would refer back to our use of the word ‘community.’”

Community remains important, Hsieh said, but the Downtown Project now is more focused on "collisions, co-learning and connectedness," which he said are more clearly defined and easier to measure.

From its inception, the Downtown Project has been criticized by locals who say it didn’t live up to its community focus. The wondered why organizers didn't reach out to residents for suggestions. Some complained the Downtown Project's land and property grab felt like insensitive gentrification.

The notion of return on community didn’t make sense to a for-profit developer, said a downtown businessman, who spoke on condition of anonymity.

“Capital has to have discipline," he said. "To get money around, you have to handle it responsibly, no matter how much money you have. I saw how gentrification or revitalization, whatever you want to call it, was a challenge. In addition to his business agenda, I think Tony would rather gag than live in a master-planned community like Green Valley or Summerlin. So when you understand that, (return on community) starts to make sense.”

Tags: News, Business

Joe Schoenmann doesn’t just cover downtown; he lives and works there. Schoenmann is Greenspun Media Group’s embedded downtown journalist, working from an office in the Emergency Arts building.