LAS VEGAS (AP) -- Online apparel company Zappos.com has finalized an $18 million deal to buy the existing Las Vegas City Hall and convert it into a new corporate campus.
The deal sealed Wednesday is part of Zappos' efforts to revitalize the aging downtown area, which have included sponsoring events such as the First Friday street fair. Mayor Carolyn Goodman says the Zappos deal has been triggering more business investments and greater enthusiasm in the neighborhood.
“The relocation of Zappos’ corporate headquarters to downtown is triggering more interest, more business investments and a resurgence of enthusiasm for living and working in the heart of the city,” Mayor Goodman said. “You can already see the investments that Zappos CEO Tony Hsieh is making downtown with sponsoring events like First Friday and being so supportive of small, start-up business development. The entrepreneurs in the Fremont East Entertainment District and the city’s work in revitalizing the area have really been the catalysts that have sparked Zappos’ interest in downtown, and we are ecstatic to welcome the company and its employees.”
Zappos will also pay for an estimated $40 million in building improvements, which are expected to create more than 100 construction jobs.
Company officials expect to relocate Zappos headquarters by the end of 2013. City employees plan to leave by the end of February and move to a new City Hall building.
Ranked for the fourth straight year among FORTUNE's "100 Best Companies to Work For," the Zappos Family of Companies intends to relocate its corporate headquarters to the current City Hall site in late 2013, after completing building renovations. Zappos’ plans for the site include adapting the site to accommodate up to 2,000 employees.
Zappos’ corporate headquarters is expected to generate $126.3 million in employee wages and benefits, according to the RCG report. In addition, the redevelopment of the site is projected to increase the taxable value of the site from $33 million (exempt) to approximately $64.5 million (non-exempt), resulting in the city collecting approximately $395,900 annually in property taxes not previously received.
RGG and Zappos have an option to purchase an additional 10 acres directly east of the City Hall for the expansion of its corporate campus.
The development of the additional acreage would bring a direct investment of approximately $269.5 million in private funds to the area, which would establish recurring operational benefits of approximately $275.3 million per year within the city’s downtown core, according to the RCG Report.