Downtowner Motel Brings Kitsch to Vegas Development

Downtown Las Vegas has experienced a wave of revitalization over the past few years. The newest addition to the landscape is the renovated Downtowner, a funky, brightly-hued habitation that the DTP Companies—formerly Downtown Project—transformed from a tired apart-hotel into a hybrid that's part motel, part furnished units for rent.

While Tony Hsieh, the mastermind behind DTP Companies, has stepped back and allowed experienced CRE operations executives like executive vice president Michael Downs (formerly of the Bellagio) and vice president of operations Mark Carlson (who held the same title at The Palms and Hard Rock Casino) take the tiller over the past couple years, the Downtowner continues the Downtown Project's promise; Its $2.5 million renovation budget comes from the $350 million revitalization fund Hsieh committed in 2012. The renovation signals an overall change of direction for the company, transitioning the concept from a community experiment to a place for locals to gather.

“The Downtowner was something we purchased 2012, and as we got into the footprint of land we owned (45 acres in downtown Las Vegas) there were several initiatives and focal points to consider. So, the Downtowner sat for a while in its 'before' state," says Carlson.

Hotels in downtown Las Vegas have always struggled to compete with the Strip's mega casinos, but one of the Downtowner's strengths is its funky, midcentury modern “desert oasis" aesthetic. While the structure's inherent Americana vibe drew interest, the Downtowner's former state was only able to command the lowest rates. Significant capital improvements were necessary.

“We had a third party running it as a weekly furnished type of rental, and it stayed that way for three years. At a certain point we decided we had the bandwidth to run the property directly."

At that point, the 203-unit property was divided into unfurnished six- to 12- month rentals and 166 hotel units. The hotel units were upgraded and refurbished gradually.

“The initial transition of 79 units went very well for us. So we decided at the end of 2018 that it was time for us to transition the remaining 88 units in the main building, and execute a more extensive renovation on that building," says Carlson.

With this guiding principle, the developers revisited the Downtowner for another phase of renovations in 2018 after the first phase was well received. They gave the lobby and common spaces a full facelift, installing a courtyard hangout space and a putt-putt golf course. The check-in area now doubles as a casual lobby bar. The designers also added social media-friendly backdrops, such as a color-changing fire pit, lawn flamingos, and a vintage Harley-Davidson golf cart. This phase of renovations also fully upgraded and refurnished 88 rooms to meet a higher standard.

“We tried to create an elevated experience," says Carlson. “We want it to be a destination where people can hang out."

Although the Downtown Project was positioned as an experiment in creating culture, it was a $200 million real estate investment at core. The retail and mixed-use real estate projects have been the success stories since the beginning: Container Park, Gold Spike, Corduroy, Bin 702, in addition to the Downtowner.

“Downtown is now known for its nightlife, food and beverage. It's important to get to a place where downtown is known equally as much for its retail offering," says Carlson. “In hindsight, one thing I would have done differently is focus more on residential from the beginning. But we're doing that now. We're evaluating future growth in hotel and residential."

He says occupancies are strong after one year at Fremont9, a 230-unit apartment complex that DTP Companies owns in partnership with The Wolff Co. This gives the developers confidence that there's more demand.

While the media has been quick to judge the Downtown Project's success in transforming the neighborhood over the past four years, no large-scale urban redevelopment story can be fully played out in just a few years. While the transformation of a neighborhood takes time, the group's vision of co-living and co-working in mixed-use redeveloped spaces is catching on, and new initiatives will be unveiled over the coming year.

“In the early days, we had more of a tech-focused mindset. Big components of that are trial and error, trouble shooting, and learning as you go," says Carlson. “We now want things to happen organically based on what people want. We don't want to over-orchestrate what something should be."