Tony Hsieh, CEO of Zappos, owns a party bus, a party house, and what could be termed a party insect—a 40-foot-long praying mantis that shoots fire from its antennas. He views all of these things as a particular sort of investment. The mantis, which was built for Burning Man and is made of sculpted and riveted steel and mounted on a truck, is something Hsieh snapped up for no other reason than he liked it and thought that a giant pyrotechnic mantis in his neighborhood on the north side of Las Vegas might make people smile. The party house was bought for similar reasons, because Hsieh likes parties, and though he already often invited friends and neighbors to his sprawling and minimally furnished apartment, having a house nearby only expanded the possibilities for fun. (Plus it had a backyard pool.) The bus, a vintage school bus, got everyone where they needed to go.

The 40-year-old Hsieh is legendary for building, in Zappos, a company that has managed to be both hugely successful—more than $2 billion in annual sales—and hugely high-spirited. One of Zappos' official corporate goals is to "create fun and a little weirdness." It is consistently ranked among the best US companies to work for.

Late in 2011, Hsieh became even more legendary by announcing almost larkishly that he'd be leading a $350 million effort to rejuvenate a blighted stretch of Las Vegas' downtown, home to some lower-end casinos and motels and not a whole lot else. His plan was to spend much of his own personal fortune to transform this lifeless area about a mile north of the neon blitz of the Strip into an entrepreneurial tech nirvana. He was hoping to lure a raft of startups to join him, offering $50 million in seed money, a supportive business community, and helpful infrastruc­ture. He wanted to do it all fast, recruiting 10,000 new residents within a span of five years while adding restaurants, bars, a members-only dog park, a climbing gym, coworking spaces, a medical center, and a highly enlightened preschool. He was simultaneously going to relocate more than a thousand Zappos employees to spiffy new headquarters in the middle of this spiffy new neighborhood. Never mind that neither Hsieh nor many of the people he'd hired had any experience in urban renewal or community development or the notorious grinding slowness of making change in a big city: The website for the Downtown Project, as Hsieh's enterprise was formally known, cheerfully declared its intention to transform downtown Las Vegas into "the most community-focused large city in the world."

In November 2012, I make the first of several visits to see what Hsieh is building out in the Nevada desert. Almost immediately I am ushered onto the party bus. As will prove to be true of a lot of things in the neighborhood, the bus belongs to Hsieh but seems to be used communally. There's a fully stocked bar at the back. There are 1970s concert posters pasted to the ceiling. For a while it was idling in a vacant lot, its stereo cranked high, but now a boisterous group of partygoers is taking it to a nearby outdoor arts festival. Just before the driver jams the bus into gear, I find a seat amid 60 or so mostly young, mostly tech-oriented women and men who have either moved to Vegas from out of state to get involved with the Downtown Project or have drifted to the downtown neighborhood, if only for an evening, to celebrate the general transformative spirit of things.

There are some pasty programmer-types on the bus, some Zappos employees, some random friends. Hsieh's cousin Jennifer, who has moved from the Bay Area, is here. So is Augusta Scott, an older woman wearing a backward-facing baseball cap, who describes herself as Zappos' "in-house life coach." A pair of guys who look like frat boys but introduce themselves as hackers hold two cups of beer each.

People on the bus talk about the bus—which is, in fact, a member of a fleet of party buses—with clear affection. They speak with equal enthusiasm about another bus, the Delivering Happiness bus, which Hsieh uses for 11th-hour road trips, like the time not long ago when everyone piled in and rode to Arizona to visit an alpaca farm because, as a blond woman sitting near me explains almost professorially, "Tony has a thing about llamas. And alpacas, if you think about it, are a lot like llamas."

Standing in the aisle beneath a revolving disco ball and dressed in a blue T-shirt and jeans is Hsieh himself. His black hair is buzz-cut. He wears a mirthful Mona Lisa half smile. Nearly every reporter who has ever met Hsieh has felt compelled to comment on the fact that he doesn't speak much, that he maintains an alert but unreadable expression, that for someone who runs one of the highest-revenue online retailers in the country he is inexplicably and even confoundingly mild. But those who know him best seem to appreciate him for exactly this trait. Hsieh's genius, they say, lies in his tendency to hang back and observe. He is said to be, above all, a masterful judge of character and a lover of quirk. Both of these traits helped him build the offbeat and chummy corporate culture that distinguishes Zappos—where one of the standard job-interview questions is "On a scale of 1 to 10, how weird are you?"—and now they seem to be informing his effort to populate downtown Las Vegas.

Zappos CEO Tony Hsieh is building a community-powered, whimsy-driven tech mecca.

Peter Bohler

"Tony collects people," someone tells me later. "You almost don't even realize you're being collected."

Across from me on the bus sit two men and a woman, members of a band called Rabbit. A month earlier they uprooted themselves from Florida and are now living—alongside many of the other people on the bus—in the Ogden, an apartment building where Hsieh leases a number of units and loans them out as live/work spaces, sometimes in conjunction with coveted startup financing. The members of Rabbit don't have financing, though, or even a business idea. They have come simply because Hsieh saw them perform once at a venture-capital conference in Hawaii, told them he liked their music, and invited them to move to Las Vegas. Other than that, they aren't sure why they're here.

This is the first of many odd conversion stories I will hear as I come and go from Las Vegas, checking in on the nirvana-in-the-making and Hsieh's growing tribe of recruits: For many reasons—and sometimes for no reason—people seem ready to drop everything and move to Vegas, as if pulled in by a tractor beam, lured by Hsieh's below-the-radar charisma, his enormous ambitions, and an ethos that combines the idealistic, artistic communalism of Burning Man with the can-do workaholism of 21st-century digital entrepreneurialism.

"The whole thing is kind of crazy," says a band member named Devin, who spent the afternoon working on a sideline freelance job composing a TV ditty about vegetables.

Emma, the band's vocalist, says, "Here you're just surrounded by people who are huge dreamers."

It is getting hard to talk now, because the stereo volume has been bumped up and the dreamers around us are all singing. The bus turns a corner. I am not sure how to feel. Even by the standards of the tech industry, which exists on the semipermeable membrane between munificence and megalomania, it seems outlandish. I am wondering how, in an area without a supermarket, dry cleaner, or single patch of greenery and in a Trumpified city full of celebrity DJs, Cirque du Soleil trapeze acts, and fly-by-night gamblers but without a significant population of software developers, web designers, or venture capitalists, downtown Vegas will ever compete with Silicon Valley or even Austin or Boulder. I'm wondering how realistic it is to think that a man standing near me could pump such a vast amount of his own cash into a place like this, into an idea like this, to fix and bolster on the scale that things need fixing and bolstering, and make any of it last. I have questions about the plausibility of everything, this grand, civic chimera.

But nobody else seems worried. People are singing "Ob-La-Di, Ob-La-Da," and then when Journey comes on, they begin to sway soulfully, crooning, "When the lights go down in the citeeeeee ... and the sun shines on the baaaaay ..."

The bus deposits us at the arts festival, amid food trucks and art stalls and rivers of wandering people. Hsieh waves for me to join the small pack that is following him. We buy some barbecue and beer and then find our way to a stage where a California band called the Dancetronauts is playing—three DJs dressed in astronaut garb, spinning trance music while surrounded by female dancers in furry moon boots. Hsieh says that he himself hired them to come perform tonight. In fact he joined some other investors to buy the operating rights to the whole First Friday arts festival in Las Vegas, which has been around for 11 years but has been undergoing a resurgence since the management change. He's given it an infusion of money, hired a few new people, and dialed up the Dancetronauts. All this too is part of the plan.

We dance for a while—me, Hsieh, Augusta the in-house life coach, the hackers, and the blonde who explained about llamas. The music pulses. The onstage dancers strut while a DJ uses a little cannon to shoot smoke rings at the crowd. The air grows vaporous. The effect is dreamy and odd, almost as if we've unhooked from one world but haven't quite arrived at the next. After a while, Hsieh taps me on the shoulder.

"Come see something," he says.

It is late now, and we lope across a darkened parking lot. The lot is filled with art trucks—massive, functional, kinetic, scrap-metal sculptures mounted onto vehicles. But they've all been shut down for the night. Except for one. At the far side of the lot, dramatic against the desert sky, is a two-masted pirate ship built on a gooseneck trailer and strung with lights and wind-shredded flags. As we draw closer, I hear music playing. A woman dressed as a bare-midriffed pirate wench is dancing by herself on the bow.

Hsieh and I board the ship. On its deck is a collection of carousel horses made of welded metal. Without really discussing it, we each find a horse and get on. Some­one must have pressed a button, because the horses start to move, lifting and falling as the pirate woman, seemingly unaware of our presence, keeps dancing up front. After a minute, Hsieh stands up on the back of his metal horse, so I stand up on mine too. He leads and I follow. There is no reason not to.

We are on the edge of the city. Las Vegas, vast and improbable, lies glittering ahead in the distance. From my vantage point, Hsieh is only a silhouette. He looks like an explorer on the prow of a boat, gazing wordlessly at a lit-up horizon. Already my questions are beginning to recede. I've read the early news coverage of what Hsieh is doing here, and almost always the headlines play off the most predictable of Las Vegas tropes. This is Hsieh's "Big Gamble." He is "Rolling the Dice." Everything is "High Stakes." You can almost feel the media sweating, maybe a touch gleefully, on Hsieh's behalf, calculating the odds on whether he'll ever pull it off. Standing on his horse, though, Hsieh seems impervious.

After a time, the horses shudder to a stop and we both climb down. We cross the parking lot, weaving between art trucks that lie like giant slumbering animals, heading back to find all the people from the bus. Hsieh, who hasn't said much the whole evening, seems suddenly energized, tweaked by weird pirate magic.

"Doesn't it make you think," he says, "about what's possible?"

When I first visit, the Downtown Project's headquarters are located in a wide, fluorescent-lit, linoleum-floored room in the back of an old check-cashing outfit on Fremont Street. The building itself is unremarkable, a narrow midblock store­front with a couple of dingy back rooms, but Hsieh is clearly fond of it. Mostly he seems charmed by the sign out front, a wedge-shaped marquee that reads, in utilitarian block letters, "Checks Cashed," which he's opted to keep in place even after installing his team of about a dozen people in the back offices. Around the neighbor­hood, the offices are known simply as Check-Cashing.

"See you at Check-Cashing," Hsieh calls out to coworkers he passes on the sidewalk or bumps into on the elevator at the Ogden. Just saying the words seems to make him happy.

Zach Ware, Hsieh's right-hand man. Peter Bohler

The building's storefront is occupied by one of the Downtown Project's first small-business investments, a boutique clothing store called Coterie, run by an exuberant woman named Sarah Nisperos. An old friend of Hsieh's, Nisperos has been granted a $350,000 investment. Her business, located on an otherwise largely barren block, represents a toehold of prosperity in an area obviously unaccustomed to prosper­ity. Some of the neighborhood's more down-on-their-luck residents still totter in on the first of the month hoping to cash government-assistance checks but find instead racks of high-end cocktail dresses and $40-a-pair men's boxer shorts.

This clearly is the dissonance of transformation. If the Strip is where visitors sweep in on a tide of promise and ride the wave of a classic 48-hour all-you-can-everything binge, the downtown area is the place where grizzled lifers, the people who don't ever manage to leave, eventually wash up. There is no glitz to be found downtown. There is instead a very old casino, the El Cortez. There's the Down­towner motel, a tattoo parlor, and a pizza place owned by an Albanian who goes by Uncle Joe.

Joe, whom I meet during a walk with Hsieh, tells me about how it used to be, not long ago. "Street fights all the time," he says, waving a hand in front of his face, as if erasing the memory from an invisible chalkboard. "It was bad around here. Every day it was bad."

Since Hsieh and his friends began moving into the neighborhood, Joe reports, crime is down and pizza sales are up. Way up. "Things are changing," he says. By this he seems to mean that the roughness of the neighborhood has been balanced somewhat by the handfuls of idealistic tech people who now live and work and generally spend time on his block. The Ogden, which has 248 condominium units, had been only about 20 percent occupied in May 2011 when Hsieh moved in. A year later, the building is full, with 40 percent of it leased by the Downtown Project and the rest appearing to have been snapped up by young professionals.

Hsieh greets Joe like he greets everyone he encounters on the street, stopping deliberately to chat with a casual familiarity. Hsieh has steady brown eyes and sculpted cheekbones that funnel down toward his mouth. He smiles often but just barely, contributing to an air of general unflappability. The son of two Taiwan­ese immigrants, he was raised in Northern California and spent his early years experi­menting with entrepreneurship, selling earthworms, greeting cards, and later, as a student at Harvard, pizza. His first business after college was an Internet advertising startup called LinkExchange, cofounded in 1996 with his friend Sanjay Madan. They sold it two years later for $265 million. Hsieh, 24 at the time, was rich, but he realized that he hadn't been happy.

In his 2010 book, Delivering Happiness, which is one part autobiography and one part chipper how-to on building a strong corporate culture like the one at Zappos, Hsieh describes how LinkExchange's rapid growth led to a dissolution of its values and a lack of community. Too many people, he concluded, were motivated by money and short-term reward. Too few were having fun. For him, going to work had become a drag. For the company, he wrote, it was "like death by a thousand paper cuts."

Hsieh's life since then is perhaps best described as a sustained effort to never, under any circumstances, feel that way again. He joined Zappos as CEO in 2000, the year after it was founded, and quickly instilled an aura of almost fanatically good vibes, urging employees to form personal connections with customers, compiling an annual Culture Book in which workers share what Zappos means to them, and providing everything from a nap room to frequent parades. The company has maintained that spirit even as it has grown. In 2009 Amazon purchased the com­pany for more than $900 million, but it has allowed Zappos to retain its indepen­dence. Hsieh still serves as CEO, though much of his time is dedicated to the Downtown Project. (When I ask whether the company is suffering at all given his divided attention, Hsieh answers with a flicker of defensiveness: "I would say that putting my time into the neighborhood is actually the best thing I could be doing for the company right now.")

As we amble around downtown Las Vegas, Hsieh carries a MacBook Air under one arm and keeps the other hand jammed into a pocket of his jeans. He seems, in his mind, to be carefully tracking what everyone around him is doing, how they contribute to the overall plan. During the course of a couple of days, Hsieh intro­duces me to probably 40 people, often while he's standing in the glaring sunlight on the Fremont Street sidewalk, never once forgetting a name or a critical detail, never failing to emphasize both the whimsy and the ambition of his people and their plans.

"This is Zubin," he says. "He's going to revolutionize health care." Or "This is Candin. She's making an educational videogame about American presidents, where they have fistfights and stuff."

Many of the people we encounter are the beneficiaries of the Downtown Project's largesse, having received seed money from Hsieh's VegasTechFund. Of the $350 million total commitment, $200 million is going toward buying real estate in the neighborhood—Hsieh and his team are snapping up old motel complexes and commercial buildings that haven't flourished in decades. Another $50 million has been earmarked for small businesses, $50 million goes to the TechFund, and $50 million more is being steered toward improving education, including the development of a private preschool.

Hsieh, for his part, seems delighted in his seedling investments. Some people have gone through an informal pitch process. Others appear to be friends, or friends of friends, whose business plans have been vetted by members of the Downtown Project team. Some of the startups that the TechFund has invested in include a digital-media branding company, a car-sharing network, and a robotics company called Romotive whose three founders relocated from Seattle and are now work­ing out of the Ogden, shipping miniature iPhone-powered robots from a spare bedroom on the 21st floor. Of all the new companies in residence on the downtown frontier, Romotive appears to be growing the fastest.

"We didn't come here for the money," cofounder Keller Rinaudo tells me during my 2012 visit, explaining that the company has first-round funding from the TechFund and several other sources. Instead, he says, they were motivated by the intimacy of the Las Vegas entrepreneurial community. Since its move to the desert a year earlier, Romotive has grown from three employees to 15 and now leases 11 units in the Ogden. We speak while sitting at a table in Romotive's main apartment/office. Behind us, in an open kitchen, Bobby Walter, who serves as company accountant as well as in-house chef, unwraps packages of sausages to put into a lunchtime jambalaya for the team. Rinaudo concedes that it has been harder to persuade new hires, especially people with families, to uproot themselves and move here, but he's firm about the benefits of being in Vegas. Space for both living and working is readily available, making it easier for the company to grow.

It's easy to find a kind of autonomy here too. Rinaudo describes Hsieh as a beneficent and hands-off godfather, happy to offer advice when needed but never hovering or second-guessing. Rinaudo is pleased to launch a company away from what he calls the "mercenary ADD" of the Bay Area. "Here we can build our own culture from scratch," he says. "Out there, the access to capital is so easy and everybody wants to be the founder of their own company. Loyalty is less valued." He pauses to look back at Walter standing over the stove, tending to a pan of sizzling chopped vegetables. "I don't think there's a chance there of building a tribe of people who love each other," he says, "and that's what we've built here."

Any time I go to downtown Las Vegas, Hsieh seems to be in deliberate public orbit, tending to the growing tribe. He lingers in the lobby of the Ogden, chats people up at a coffee shop called the Beat, and stops to visit the architects charged with many of the grand-scale conversions under way: A run-down Motel 6 has been razed to make room for an outdoor mall, which will be built out of stacked shipping con­tainers; a corner building that previously held a 7-Eleven is being refashioned into a 150-seat theater called Inspire. By the time I visit in spring 2013, the Downtown Project's staff has grown so big they have left Check-Cashing and are operating out of various other coworking spaces and newly opened cafés around the neighbor­hood. Dropping by Coterie one afternoon, Hsieh props his laptop on a shelving unit stuffed with graphic T-shirts and spends 20 minutes answering emails.

He refers to what he is doing—the open and ambulatory nature of his days—as "being collisionable." Hsieh is a believer in the idea, popular in organizational psychology, that random, unplanned interactions between people often yield the most innovative results. His life, as I witness it, involves the same raft of scheduled business meetings you'd expect any busy CEO to have. (Hsieh's daily agenda, along with those of most Downtown Project team members and even visiting guests, is rigorously maintained by one of several "time ninjas" on staff.) But those meetings almost always take place in a bar or a coffee shop or an open workspace, leaving plenty of room for casual bump-ins and idle chat on the edges. I see him kick off meetings with whiskey shots. I see him rush off to get his head shaved in front of hundreds of Zappos employees for the company's "bald and blue" mass-shaving event held with the Blue Man Group. More than once, I watch him rearrange other people's dinner plans so that new parties can be added to the table. Or he may expand his own plans, collecting tagalongs as he moves around until, by the end of the night, what might have started as an intimate get-together now includes a wandering flock of 20 or more.

Visiting entrepreneurs continuously roam the neighborhood. Many of them are from the Bay Area, in Las Vegas for a few days to check out the scene and meet with those who have already staked a claim here. Some seem clearly on the hunt for Hsieh's coveted investment money. Others appear merely curious about the broader attempt at alterna-culture. Hsieh squires bloggers, celebrities, and billionaires around town, looping them through the neighborhood and over the sweltering sidewalks, pointing out what's already there and, more important, what's still to come. Elon Musk has walked around. Ashton Kutcher has walked around. Tyra Banks has walked around. Everybody collisions, almost pathologi­cally, with everybody.

"It's the Downtown Project's big bet," Hsieh says, "that a focus on collisions, com­munity, and colearning will lead to happiness, luckiness, innovation, and pro­ductivity. It's not even so big a bet," he adds. "Research has been done about this on the office level. It's just never really been applied in a consolidated way to a city revitalization project."

Much of the collisioning and communing is taking place at Eat, a restaurant owned by Natalie Young, a chef who never had her own place until Hsieh and the Down­town Project blessed her with a generous startup investment and help with every­thing from accounting to permitting. The restaurant is surrounded by vacant properties and faces an empty lot. Like Coterie, it has the feeling of an outpost, but one that has been embraced with a kind of we're-all-in-this-together brand of ferocity. On a winter day early in 2013, the restaurant teems with chattering customers at lunch. Young is working more hours than she imagined possible and turning a profit several months ahead of schedule. It is the community, she says, that is responsible for her success. Around downtown, "the community" is often referred to as if it were a single organism, a living thing. Hsieh has frequently invoked the idea, oft-repeated by his acolytes, that any business should be evalu­ated not just on its return on investment but its ROC—return on community. If any of it sounds odd and cultish, Young doesn't care.

"Once a month I have to come out and take a picture because the scenery changes so much," she says, describing the neighborhood. "The changes here are no joke. When people hear me speak they say, 'You drank the Kool-Aid,' and I'm like, 'Yup, and it tastes real good.'"

Once-decrepit casinos are being renovated as social hubs. Peter Bohler

"All this," Hsieh says to me one afternoon in May, "is kind of a semi-brainstorm." We are outdoors, on a corner lot that sits between the Ogden and the old Las Vegas city hall, soon to house Zappos' new headquarters. It's 100 degrees out, but Hsieh seems unfazed. He steps through a gate leading to a fenced outdoor courtyard and waves me inside. This is the Gold Spike Hotel and Casino, freshly purchased by the Downtown Project and in the throes of being reimagined for the community.

Until recently, the Gold Spike advertised "Sexy Blackjack" and "$1 Shots" and featured waitresses in high heels and short shorts. Now, though, having been shut­tered for a hasty renovation, it's reopening, without its casino, as a smoke-free bar and restaurant and 24-hour "hangout space." The former casino's restaurant menu has been upgraded to include healthier food like lettuce cups and portobello burgers. The video poker and slot machines have been stripped from the bar area, replaced by free high-speed Wi-Fi, an electrical outlet at every other barstool, and—a hallmark of Hsiehian whimsy—a giant cornhole game, a giant version of Jenga, and a giant shuffleboard court.

It can seem, just as Hsieh says, like downtown Las Vegas is one enormous in-progress brainstorm, a fantastically bankrolled exercise in municipal free association. At his apartment in the Ogden, where he often hosts meetings, Hsieh maintains a wide wall covered in multicolored Post-it notes filled with ideas from the community about what the neighborhood still needs. (Hardware store! Gay bar! Community garden! Cupcakes!) Rather than actively recruit personnel to fill various niches, Hsieh and his team encourage people who show interest—or who interest them—to come visit, stay for a while, and find their own way. Newcomers sometimes live for months free of charge in the Ogden, courtesy of Hsieh, with no requirement but that they collision freely and enthusiastically with others.

Doubters have no place in the ecosystem. Pragmatists stand little chance. A love of hyperbole prevails. Hsieh and his crew have plans to build the country's largest rock-climbing wall, to install the fastest free public Wi-Fi, to develop the most innovative transportation system. At a meeting discussing the construction of the dog park, Hsieh suggests they build the world's largest fire hydrant to plunk at its center. Because, well, why not?

Peter Bohler

"We do things kind of hacky" is how Zach Ware, one of Hsieh's top deputies at the Downtown Project, puts it. Ware, a clean-cut, 32-year-old former product devel­opment manager at Zappos, is spearheading multiple projects around town—the renovation of city hall, the construction of coworking spaces, the transportation system, which will be membership-based and include shared cars, bikes, and even planes.

Hsieh's tight-knit utopia, however, has endured some setbacks. In January 2013, in an incident that rocked the downtown community and made headlines around the country, a well-known entrepreneur named Jody Sherman committed suicide on a quiet country road outside of Las Vegas. He had moved his company, Ecomom, from Los Angeles in 2011, having been the recipient of one of the TechFund's first investments. Within weeks of his death, the company folded, leaving 28 employees out of work. Not long afterward, Romotive, the robot company and crown jewel of Vegas-based startups, having closed its second round of funding, announced it was moving its operations to San Francisco. In a pained-sounding open letter, Rinaudo thanked the Downtown Project and community members profusely, saying that the move was necessitated by his company's need to be in "close proximity to strategic partners" and to woo "brilliant senior talent."

Somewhat unsurprisingly, the community spun Romotive's departure as positive, proof of Hsieh's vision of Las Vegas as a startup incubator. "We think it demon­strates that downtown Las Vegas is an awesome place to launch and build a company," Ware said at the time, reminding everyone of the more than 20 other promising startups still in residence.

There are smaller, more predictable issues as well. A recent East Coast college grad tells me that he finds the dating pool to be lamentably small. I walk into one of the elevators at the Ogden late one night and overhear a resident—a member of the tech community—complaining tipsily to a friend about the claustrophobia that comes from knowing everybody around you, collisioning with the same people all the time. "I don't want to leave this place," he says, "but sometimes I do."

One afternoon in September, I go for another stroll around downtown Las Vegas with Don Welch, a former New York investment banker who is now in charge of small businesses for the Downtown Project. Another season has passed. The wheel has revolved again, bringing Hsieh's neighborhood another click closer to maturation. As in previous visits, I still pass empty lots and abandoned buildings and sidewalk brochure dispensers advertising "Free College Girls in Your Room." There are still some sun-beaten drunk people loitering on Fremont Street. The morning news still carries reports of neighborhood crime. But maybe because I've now been here a few times, or maybe because I am with Welch—who has spent the past two years working with Hsieh, who sees the neighborhood as he does—I notice these things less.

The new Zappos campus is now fully built, and the first groups of employees have moved in. A 65-acre open-access Wi-Fi network is in the works. The outdoor mall made of shipping containers looks half finished. An Airstream village and an outdoor concert space are nearly complete (having been overseen in part by some members of Rabbit who are now formally employed by the Downtown Project). Ground has been broken on a neighborhood medical center. The long-discussed preschool (overseen by Welch's wife, Connie Yeh, who is also Hsieh's first cousin) has enrolled its first class of students. Everywhere we look, some sort of change seems to be under way.

"This is going to be a flower shop with an architect studio up top," Welch says, gesturing to part of a two-story hotel building they are renovating, with multiple wide windows fronting the street. "This is going to be a juice bar," he says, his finger moving between windows. "That's going to be a sushi place over there, with a doughnut shop next to it. And up there will be a yoga space." A block later, he is at it again: "This is going to be a fried-chicken place. This will be a vegan restaurant." He shows me the future nail salon and wine bar and places where they are still waiting for city permits to come through. ("Everything takes longer and is more expensive than we thought it would be," Welch admits.)

It's easy to believe in all that's coming. And I'm not the only one. Over the months, a secondary wave of immigrants and investors has been drawn to downtown Las Vegas—people outside the Downtown Project but clearly inspired by it. Tech businesses are being launched out of low-slung ranch houses along an area infor­mally known as the startup block. A New York-based videogame company is renovating a space not far from the Ogden and has said it will bring 150 employees to the city. A couple of new restaurants have popped up, bringing more foot traffic to Fremont Street.

One evening, the community gathers to celebrate the opening of a Mexican restaurant called La Comida, owned by Michael Morton, a well-known restaura­teur. Hsieh himself shows up, as does his giant praying mantis art truck, which is parked on the street in front of the restaurant, its spiny arms lofting over the crowd, its triangular head—operated by a driver sitting behind its wings—swerving left and right, as if to take in the scene. Every few minutes, from its pipelike antennas, it lets out a cannonlike noise and shoots plumes of gas fire rippling into the dark sky. It is charming and mystical and just plain funny. But it feels almost defiant too, as if it's pushing back against the world's less wacky, less idealistic people, its skeptics and doubters—all the people who might never believe an urban neighborhood can be built primarily on friendliness and free thinking.

On my last night in Vegas, I meet up with a few people on the patio of a Fremont Street bar called Park. One of them is Cathy Brooks, who spent 20 years working in communications and tech startups in San Francisco before moving to Las Vegas in early 2013, drawn by Hsieh and his plans. She is now the owner of the much-anticipated dog park, called the Hydrant Club. Already Brooks is feeling a senti­mental sort of pride. "Even if what we're doing doesn't succeed to everyone's wildest dreams, and I actually believe it will," she says, "downtown has already changed."

The sun is setting when a strapping guy with an easy smile shows up and orders a beer. This is Gerome Sapp, the 33-year-old founder of a social media company called Fluencr.com, which he's in the process of transplanting from Austin. Seven days earlier, he formalized a round of funding from Hsieh's TechFund. Since then he's been driving around with a real estate agent, looking for a place to live. It turns out that, beyond the genial community of entrepreneurs and artists, not everyone sees downtown as Tony Hsieh does. "I keep telling her I want to be down­town," Sapp announces to the people at the bar table. "But she says, 'No, no. Don't do that. Downtown's a ghetto.'"

He shrugs and shakes his head, as if astonished by the agent's blindness, as if she sees nothing where he sees everything. It is, after all, only a matter of perception. You just need to get on the bus. "She can think what she wants," Sapp says, grinning at everyone around him, "but this is my place."

Startup Fantasyland

Tony Hsieh is revitalizing downtown Las Vegas by investing in ambitious tech companies and playful small businesses. Here are some of them. — Katie M. Palmer

Josh Cochran