Downtown Faces Headwinds From Pandemic, Tony Hsieh's Death
In her state of the city address this month, Las Vegas Mayor Carolyn Goodman said ” all roads lead to downtown."
These days, though, downtown faces a bumpy path.
The $1 billion Circa resort just opened on Fremont Street, but the pandemic is keeping tourists away.
Las Vegas Boulevard is getting a $125 million facelift, but many offices sit empty as people work from home.
And downtown Las Vegas lost one of its biggest advocates with November’s death of tech billionaire Tony Hsieh.
With so many sectors counting on a healthy downtown — gaming, commercial real estate, the arts — what’s the economic climate at the crossroads of Southern Nevada?
Carolyn Wheeler is the executive director of the Downtown Vegas Alliance. She said her organization has been working with downtown businesses to make sure they survive the impacts of the pandemic.
The Alliance has provided information to businesses about federal, state and local grants that are available. It has also provided information on safety protocols and how to stay connected with clients and customers.
"They're being smart. They're being innovative," she said, "When you think about some of the great things that have come out of the pandemic, as far as business models, curbside pickup, outdoor dining, online models for their businesses, a lot of that has come out of the downtown community."
Wheeler said federal aid in the form of grants and loans has significantly helped small businesses during the pandemic, especially when the rules changed allowing businesses to use the money for expenses outside of payroll.
The decrease in tourism has had a significant impact on downtown businesses, especially along Fremont Street.
"The decrease in tourist traffic has certainly impacted the downtown community," she said, "More so the Fremont East Entertainment District."
Wheeler said that impact is exactly why Nevada, especially Las Vegas, needs to diversify its economy, which is an idea Gov. Steve Sisolak championed in his State of the State address earlier this month.
One area of downtown that has seen an increase in businesses is the Arts District.
Becky Miller is the vice president of the Las Vegas Arts District. She said more than 15 new businesses have opened in the area in the past year.
"The Arts District has always been very grassroots," she said, "It is not the big corporate businesses. It is a ton of mom and pops. It is all these individual stores and restaurants and gyms and some residents living down there in our neighborhoods."
Miller said having the economy grind to a near halt because of the pandemic really affected the area because mom-and-pop operations don't have a lot of resources to fall back on. She said most business owners have put everything into their businesses and have little reserves for rainy days.
She said a few businesses in the area have closed.
"This area has never been supersaturated with tourists and locals," she said, "It has been a classic downtown neighborhood. We did see a drop in business because people were staying home. People are coming out now again, in small numbers. A lot of us have gone online. A lot of us have found other creative ways of keeping our capital in coming."
Miller said some of the younger business owners have been generous in teaching the older owners how to capitalize on social media platforms like Instagram.
While businesses are doing their best to stay afloat during difficult times. The office market in the downtown area is struggling, according to commercial real estate agent David Scherer.
"From 2010 to 2020, the downtown office market has evolved into the worst-performing submarket - or one of the top two worst-performing - in the city," he said, "This again has to do with increased vacancy and decreased occupancy of businesses."
Scherer said there are several reasons why businesses have left the urban core. One of the most important is the rise of mixed-use office buildings in the city's suburbs.
The mixed-used spaces easily allow workers to go to a restaurant or retail space or gym near their workspace, and there is less of an issue around safety compared with downtown, he said.
"Why is this issue important? The issue of mixed-use projects in the suburbs? Because businesses think that they can better recruit new talent, younger talent in these environments versus downtown," he said.
Another reason is the technological advancement that has allowed attorneys to file documents electronically, instead of having to go to the courthouses downtown.
Attorneys can now rent office space in Henderson or Summerlin without having to go to the courts.
Scherer suggests people involved in the development of downtown Las Vegas take a broader view of how to solve some of the area's problems. He would like them to talk with the leaders of cities like Nashville, Orlando and Austin to see how they were able to redevelop their downtown cores.
"My recommendation is real leadership and getting out of our own box of thinking and try to reach out to people in cities where they have been successful," he said.
Scherer said it isn't just about having enough incentives to bring businesses downtown but it is also about having the educated workforce companies need, the education infrastructure to educate the next generation of workers and creating a city people want to live in.
One of the components of a city with a great quality of life is arts and culture. Historically, Las Vegas has not been known for its cultural amenities but that has changed over the years.
Uri Vaknin is a downtown investor and the chairman of the Neon Museum. He said the museum was one of the few things that stayed open during the pandemic closures in the spring.
"What I like to say is the Neon Museum has proven to be pandemic proof," he said, "We are an outdoor facility. People felt comfortable and safe coming there - both locals and tourists."
Vaknin said that is a sign that not only is the Neon Museum surviving but it actually stayed viable, during difficult times.
The museum is now expanding into the Reed Whipple building across Las Vegas Boulevard from the main museum area. Vaknin said that move would allow it to add more exhibits and programming, including educationally programming for school kids.
In addition to institutions like his, Vaknin said efforts to beautify the area, like the Gateway Arches that were put in place last year, do a "tremendous amount."
"If you look at the linear park that the city has done on Third Street, which is absolutely gorgeous," he said, "One of the great things during the pandemic was everyone started bike riding downtown and everyone fell in love again."
Carolyn Wheeler, executive director, Downtown Vegas Alliance; David Scherer, commercial real estate agent, Cushman & Wakefield; Uri Vaknin, downtown investor, Neon Museum chairman; Becky Miller, Arts District vice president; area businesswoman