Gold Spike Casino Sold to Downtown Vegas Investment Group

Zappos founder Tony Hsieh has been a visible force in the recent history of downtown Las Vegas, investing hundreds of millions into the revitalization of the area ahead of a planned move of some 1,300 employees to a new corporate headquarters there later this year.

Now, he and a group of investors of which he is a part can add another feather to their downtown Vegas real estate cap, having made a deal to purchase the Gold Spike Casino and Hotel, a property to which they previously held the note.

The Gold Spike ceased taking hotel reservations last week and will close its doors officially at 3 p.m. on Sunday. The current operators of the property, Siegel Group Nevada Inc., acquired the property back in 2008 and attempted to re-brand it as a hotel and casino with an array of amenities, a venture that was poorly-timed with the hotel opening just as the recession was at its worst.

“We saw early on the redevelopment potential that Downtown Las Vegas had to offer and are proud to have been an integral part of transforming this great area,” said Stephan Siegel, the group’s president and CEO.

“We will remain active in the downtown market, where we have a number of other holdings and intend to continue investing in the area with other projects we will be announcing in the near future,” he went on to add.

For his part, Hsieh confirmed suspicions that he has no intention of entering the casino business, suggesting that the 112 hotel rooms may end up being utilized as housing for business visitors. The Zappos ethos, and indeed the driving force behind much of Hsieh’s work to transform downtown Las Vegas, long an overlooked part of Sin City as most of the newer, more modern casinos and attractions took hold further south along The Strip, is rooted in community building.

“People who are trying to help build a community,” was Hsieh’s answer to questioning about what type of people would not want to operate a profitable casino business.

Hsieh, who is 39 years old and was raised in the San Francisco, California area, sold Zappos to Amazon back in 2009. As part of that deal, he reportedly took home $214 million. He has a degree from Harvard and has been noted as an example of how CEOs can utilize social media, in particular Twitter, to interact with customers and the public.

The Las Vegas Sun noted that the purchase of the Gold Spike might just be a cost-saving measure for Hsieh, who currently puts up his guests in a series of apartments he rents at The Ogden, an apartment tower in the downtown area. Using the hotel rooms as guest quarters for visiting associates would almost certainly be cheaper.