Developer of Zappos’ headquarters to pay less for City Hall building; company to bring in more workers
The developer bringing Zappos’ headquarters downtown would pay a reduced price for the current City Hall building than originally agreed upon, according to an amended contract the Las Vegas City Council is set to consider Wednesday.
If approved, the new agreement also requires more jobs to be brought downtown and reduces some of the financial risk to the city.
In 2010, Resort Gaming Group agreed to buy the City Hall building, two parking garages and the KCLV-TV building for $25 million.
The price would go down to $18 million under the amendment, but Zappos would have to bring 1,200 jobs downtown instead of 750, which was the original target in the contract.
The City Hall building at Stewart Avenue and Las Vegas Boulevard is used by the city of Las Vegas and the Metropolitan Police Department. Both entities are moving out: the city to a new building on Main Street, the police department to a new headquarters at Alta Drive and Martin Luther King Boulevard.
Resort Gaming Group plans to lease the building to Zappos, an online retailer now based in Henderson. The company plans to have room for 2,000 workers at its new building.
Plans also call for the retailer to create a corporate campus on now-vacant city-owned land .
Renovation costs have increased from $43 million to
$65 million.
“When they were doing their due diligence, they had not really been through City Hall,” Mayor Oscar Goodman said. “They may have missed the mark as far as what it’s going to cost them to fix it up, rehabilitate it.”
The deal calls for the city to be the noteholder on the sale, but that is subordinate to a private loan for building improvements that must be paid off first. In the amended agreement, the private loan would have to be paid off within 15 years instead of the original 30 years, which puts the city in a first lienholder position sooner.
If the council approves the changes, Resort Gaming Group will put $3 million down and finance the remaining $15 million with the city over a 30-year term, with a closing date set for April 1. The city plans to move to its new home by February or March.
Amazon.com, Zappos’ parent company, plans to guarantee Zappos’ initial 15-year lease.