When it opened in 1973 news reports called city hall "ultra modern." That the now dated edifice was marked by imposing center walls, stiflingly low interior ceilings, small offices and incredibly inefficient climate control was once considered "cutting edge" seems laughable.
That the incoming tenants from online retailer Zappos,now based in Henderson, intend to bring it back to the forefront of Las Vegas culture seems equally far-fetched at least to anyone who hasn't taken the time to listen to the people seeking to breathe new life into the forlorn downtown corner.
"This building has been here forty years" says Zach Ware who is leading the $40 million renovation for Zappos. What we are doing now is refitting it for another 40."
Ware and others working on the transformation have 18 months to create a space that fits with a Zappos culture that calls on employees to "create fun and a little weirdness."
The result is a renovation project that is unlike any other downtown, with demands to tear out interior walls, false ceilings and barriers that keep natural light from penetrating the structure, while retaining funky features like old jail cells that occupy part of the second floor.
The builiding also has to accomodate up to 2,000 employees, nearly 3 times the number of people who worked there for the city.
Although demolition work could start within a couple of weeks,much of the finished product remains in flux, as Zappos employees, Ware, CEO Tony Hsieh are still weighing ideas which range from rooftop gathering spaces to an outdoor concert venue.
What is known is that the jail cells will remain, a bistro is likely to go into the former library building and the number of entrances will be reduced to encourage "serendipitous interactions" that Hsieh and others say is essential to to fostering ideas.
That means not only creating individual work space for call center employees, but also placing heavy emphasis on common space that draws people out of the building to gather, eat, chat or enjoy the sun.
Inside, workers will tear out as many interior walls as possible to make views to the horizon available throughout the building.
In addition to the main structure, Zappos will have use of a parking structure across Stewart Avenue.
The construction manager from the Penta Building Group says that despite cosmetic flaws, the building is a high quality structure, with more concrete that would be used in newer buildings today, resulting in a strong structure that would hold up in the long term.
"The Penta manager said that taking a good old, solidly built building and make it more efficient makes more sense for a lot less cost and with a lot less waste."
George Wolin, the principal of Crescent Bay Holdings, from Scottsdale, Arizona, drove around the master planned North Las Vegas development by the recently bankrupt Olympia Group.
He realized that the $21 million price for 1.340 acres was a fantastic deal - 2 expensive Beltway interchanges required for the development have already been paid for and built.
Comparable infrastructure in Tuscon would have cost the developer around $30 million on top of land costs.
As far as investing in Las Vegas real estate, opportunities are plentiful if it's a long-term hold, Wolin said at a Las Vegas meeting of the National Association of Industrial and Office Properties.
"It's a demographic tsunami and I don't subscribe to the idea that anything has fundamentally changed in Las Vegas. It's not like people are picking up and moving to St.Louis or Iowa. Places like Phoenix and Las Vegas are very attractive in a down market."
"We do feel that Las Vegas is going to be a strong market in the long term."
Even in a challenging economy, investors are identifying opportunities to acquire distressed assets, said Garrett Toft, industrial broker for Voit Commercial of Las Vegas.
Toft represented ProLogis in buying the 171,000 square foot distribution center for $7 million.
"There is more money chasing deals and was surprised that the October auction for the District at Green ValleyRanch was fairly competitive and felt lucky to get it for $79 million."
"We felt that the worst of retail was coming to a close. We look for projects that could be the dominant center in that trade area. We are looking for a high-teens return on the District."
The new home price increased 3.3 per cent from February to $201,668, and is up 1.6 percent from $198,400 from a year ago in the same month.
The resale median was $103,000, an increase of $2,200 from February but down from $107,000 a year ago. Prices for non-distressed homes rose to $105,000 for the third straight month.
"Listings are down and the foreclosure volume took a nosedive - the new home housing market remains in a diminished state with just 352 sales in March." That's a fraction of the 1,600 sales a month during the boom years.
Not only is the new home sector showing signs of stability, the resale market continues to adjust to new market realities. There were 4,773 resales during the month, a 9.1 % decrease from March 2011, with 54% of closings in cash.
It appears that some new developers are feeling more optomistic about demand as residential permits grew to 514 in March, more than double the previous month and 43.2 % more than a year ago.
It's true that while 514 permits is not a "game changer" but it does reflect the highest permit total since March 2010 when 700 permits were pulled.
More Americans are taking out mortgages, paying them on time, and taking advantage of low interest rates to refinance.
At JP Morgan Chase, the biggest U.S. Bank, income from new home loans set a record for the first quarter. The bank issued 6 percent more mortgages than a year ago and got 33% more applications.
Wells Fargo, which issues the most home loans, booked the most mortgage fees since 2009. It issued 54% more mortgages than a year ago and took 84% more applications.
Home prices are still falling, although more slowly than in previous years, and more than half a million American homes were going through foreclosure in March, according to RealtyTrac.
Still, stronger mortgage business helped Chase and Wells Fargo beat Wall Street expectations for first quarter earnings. Chase reported that the bank had originated 200,000 mortgages in the quarter.
Two key factors were:
1. The average interest rate on a 30 year fixed mortgage dropped to 3.87 %, the lowest since the 1950s.
2. Job growth in January and February was some of the strongest since the great recession began.
At Wells Fargo, 15% of mortgage applications came from the Government's Home Affordable Refinance program, which helps Americans who owe more than their property is worth get more affordable loans.
Foreclosures are still holding the housing market back. A $25 billion settlement has paved the way for banks to take action on unpaid mortgages. The banks agreed to overhaul their mortgage practices. Because of that commitment and more disciplined internal rules, banks don't make as much money on foreclosures.
At a time when low interest has already reduced bank income, they must assign a banker to each homeowner undergoing a loan modification and ensure that each has the proper documentation.
Chase has set aside $2.5 billion to fight legal battles and Wells Fargo has added $314 million to it's legal reserves.
Chase turned a $ 5.4 billion profit for the quarter and Wells Fargo earned $4 billion, up from $3.6 billion a year ago.
Foreclosures are down and home prices have increased in recent months, but that doesn't mean that Nevada's housing market is on the way to recovery.
According to a Lending Tree Healthiest Housing Index released in late March, Nevada has the highest loan-to-value ratio - over 110 percent - meaning that the average home has about 10 percent negative equity.
The state also has the highest unemployment rate of 12.3 percent, compared with the national average of 8.5 percent.
The chief economist at Lending Tree, an online marketplace for home loans, said he's already seeing "regional disparity" in housing recovery around the country.
"Fundamentally, we have to define what recovery is for each state." For some, it's a lower unemployment rate. For others, it's home price stability or potentially a reduction in delinquency levels, a precursor to foreclosure expectations."
The Healthiest Housing Index is based on debt-to-income ratio, unemployment rate, home ownership and occupancy rates, past due mortgages, equity asset value, and loan to value ratio.
Certain elements of the Las Vegas housing market are looking better, some are looking worse, and some are about the same said David Brownell, broker with Keller-Williams Realty. Nearly 4,200 homes were sold in March, and 1,872 of these were under $100,000 he noted.
"Say what you can, it's incredibly affordable. Certainly the 54 percent of people who bought with cash think it's a good buy." Sales are happening, which is good for agents, but talk with sellers and they might not agree because they're stuck $300,000 under water and wondering what to do."
Negative home equity is extremely high in Nevada, about 1.7 times the national average.
Nearly 90 percent of Las Vegas homeowners with a mortgage have less than 30 percent equity, compared with a national average of 58 percent.
CoreLogic reported that 13.3 percent of Nevadans were at least 90 days delinquent on their home payment, compared with 16.7 percent a year ago.
THE LATEST SIGN THAT AMERICANS ARE FEELING BETTER ABOUT THE ECONOMY
A combination of warm weather and high demand for spring fashions boosted revenue for the month, but analysts say there is more than that as Americans who cut back on their spending in the slow economic recovery are encouraged by the improving job market.
Consumer spending accounts for more than 70 percent of all economic activity.
"Not only did we have nice weather, but there is a calming down or feeling that the worst is behind us."
In Las Vegas, Arm Candy, an accessories store at the Miracle Mile Shops has seen sales increase 50 percent since January. "We don't need a special deal or price,people are just buying."
Macy's, which owns the Macy's and Bloomingdale's department chains continued its strong monthly performance, reported that revenue figures rose 7.3 percent, which beat Analyst's expectation of a 4.8 percent rise.
Even Gap, which has been struggling, reported gains.The retailer which owns Gap, Old Navy and the Banana Republic, was one of the big success stories of the month.
It's revenue rose 8 percent, better than the 5.4 percent rise Analysts expected.
Clothing chains benefited from heavy demand for Spring fashions.
"Stores are showing something new and different from a fashion perspective, and that's getting people into the stores," said a spokesman from a consulting firm.
The total homes listed for sale in Henderson MLSand Vegas MLS fell to 18,200 in March, down 18 percent from 22,184 a year ago, when there were 11,334 available without offers.
That means homes under contract grew only slightly, from about 11,000 to 13,000 in the past year.
Several factors are contributing to declining inventory, starting with the robo-signing law that throttled notices of default filed by major lenders since October, said Dennis Smith, housing analyst with Home Builders Research.
Going back to last year before the law was passed,lenders were filing 2,700 to 5,700 defaults a month. Now it's about 300 a month. Bank repos are down to about 800 a month, the net effect of the law.
There has also been a sharp increase in short sales, homes offered at less than the principal mortgage balance, which requires lender approval. These homes may stay under contract for as long as six months.
Smith does not see a wave of foreclosures materializing from the "shadow inventory" which was ominously projected to hit Las Vegas.
"We will see some foreclosure inventory hit the market, but not a big wave." Banks are trying new things, like renting them back and doing more short sales."
Realtors sold 3,538 single family homes in March, a 4.4 percent increase from the same month a year ago.
The median price was $123,000, down 2.3 percent from February a year ago, but up 1.7 percent from February this year.
"The shortage of inventory is bringing multiple offers like in the boom years when people were overbidding list prices. "Right now, we have to find inventory, and where we see this from is investors who bought with cash. They will be able to sell and carry the note at six percent and get a higher return from their investment than waiting for appreciation."
The Realtor's Association reported that 1,790 homes (40.7 percent) were sold as foreclosures while 1,171 (26.6 percent) were sold as short sales. The median price for a foreclosure was $106,000 and for short sales was $121,000.
Cash buyers represented 54.5 percent of all sales, compared with about 40 percent before the housing downturn.
"A combination of things will work to keep resale inventory low. It will be the rentals, the short sales, loan modifications. Foreclosures are the biggest loss the banks will have. Banks are starting to wise up.
More U.S. homes are entering the foreclosure process setting the stage for a surge in repossessions by lenders this year.
The number of homes that received notices of default rose 7 percent in March from the previous month. That marks the third consecutive monthly increase this year and reflects stepped-up efforts by banks to take action against homeowners who fail to keep up with their monthly payments.
"We are not out of the woods yet with foreclosures, said Daren Blomquist, a Vice President at RealtyTrac. There are more batches of foreclosures coming through the pipeline."
Foreclosure activity in the first quarter fell primarily in states where the courts do not play a role in foreclosures: Arkansas (79 percent), Nevada (62 percent) and Arizona (21 percent).
In contrast, in many states where courts must sign off on foreclosures saw outsized increases in foreclosures, Indiana (45 percent), Florida (26 percent), etc.
A broker for Keller-Williams Realty in Las Vegas, reported a total real estate owned or bank owned inventory of 986 homes in March, a 62 percent decrease from 2,581 a year ago. Forty percent of the 4,198 escrow closings in March were real estate owned.
Notices of default filings in Nevada have dropped since October since the robo-signing law was passed.
"There is talk of a second wave of foreclosures but I don't see that coming." It seems like the rush and the bulk of foreclosures was up front. We are going to be dealing with short sales and foreclosures for the next ten years but I don't see them being dumped on the market where prices drop another 20 percent."
The U.S. housing market remains weak, even after the best winter for home sales in five years, and improved job market. Home prices are back to 2002 levels according to the U.S. home price index.
Banks have turned the housing inventory spigot to a trickle following legal issues and government backlash from the robo-signing scandal creating their own support mechanism to help the housing recovery. "If this was a plan to help the housing market, it worked."
Rather than a large wave of bank owned homes crashing on the market at once, it's likely that the new crop of foreclosures will arrive in smaller waves throughout the year.
The BLM's offer gives Silver State Land LLC, a Delaware corporation working with the City of Henderson, an advantage in acquiring the property and starts a 45 day clock for bidding and public comment.
The BLM would accept bids and Silver State Land would have the opportunity to match the best offer. The minimum bid the BLM will accept for the land is $10.6 million under rules which require the Government to accept the fair market value when selling property.
Henderson, which has a development agreement with businessman Chris Milam to build a multi-stadium sports project made the request to BLM to build " enclosed, covered stadium to create a distinctive sports venue and mixed-use facilities."
Although the offer by the BLM gives stadium backers a chance to secure land for development, it doesn't guarantee the project will advance.
Milam has proposed stadium development in the City of Las Vegas before but failed to deliver results and also a deal to buy the Las Vegas 51s baseball team fell apart because of tax issues.
Milam also faces competing stadium proposals for a stadium at the UNLV campus, and an arena backed by Caesar's proposed on the strip. Still, Milam has persisted.
In February, Milam's company reported in a news release it had secured a memo of understanding with Chinese banking partners to provide "full financing and construction of the 750,000 square foot, 17,500 seat, $650 million state of the art Silver State Arena in Las Vegas, Nevada."
$40 million renovation likely to start soon for Zappos headquarters.
The announcement 16 months ago that internet shoe retailer Zappos would move its headquarters from Henderson to downtown Las Vegas started a buzz that the once declining downtownarea would become a growing technology hub.
Expect the buzz to get louder now that Zappos is ready to renovate the old building they are planning to fill with more than 1,000 employees.
On Tuesday the City of Las Vegas closed the deal to sell the old City Hall to a company that will lease it to Zappos for $18 million. As early as today fences could go up as construction workers will start work on a renovation that could cost about $40 million.
City Hall LLC, which is managed by Resort Gaming Group, is buying the old City Hall with a parking garage across Stewart Avenue.
The company will lease the building to Zappos, which is owned by Internet giant Amazon to use as its company headquarters.
In addition to the City Hall deal, they have options to buy about 10 acres across Las Vegas Blvd. for development for about $9.3 million, a price that is set to escalate 6 percent annually every year they don't exercise the option.
The deal is seller-financed, meaning the firm will pay the city directly for the real estate.
The transaction comes as Las Vegas is seeking to dig itself out of a recession. City leaders hope the downtown area will lead the way. Recent months have included the opening of the Mob Museum, and the Smith Center for the Performing Arts. The new City Hall has also opened.
But those projects were heavily subsidized by taxpayers and charitable donations.