Project Closure Report: Analysis of the Downtown Project's Failure

This project closure report meticulously analyzes the Downtown Project (DTP) in Las Vegas, initiated in 2012 with the vision of revitalizing a section of the city. The report, structured into three sections, begins with an overview of the project, its goals, and the involvement of Zappos CEO Tony Hsieh. It then delves into the project's performance, revealing its failure due to significant overruns in cost and time, as well as a scope that was overly ambitious. The analysis highlights the project's shortcomings from the perspectives of both the project sponsor and manager, detailing issues related to resource allocation, schedule management, and the utopian nature of the project's objectives. Section 2 provides detailed data on the project's cost, time, and scope, comparing the planned baseline with the actual outcomes, including the impact of real estate and development, tech startups, and small businesses. The report concludes by summarizing the project's failure, emphasizing the lack of expertise, resources, and the unrealistic scope, which ultimately led to the DTP's inability to achieve its goals of creating a vibrant community. This report is a comprehensive look at the project's closure, its performance, and the lessons learned.

Project Closure Report

Table of Contents
Section 1.....................................................................................................................................3
Section 2.....................................................................................................................................5
Section 3.....................................................................................................................................9
References................................................................................................................................13

Section 1
Project Overview- The Downtown Project was started in 2012 planned to be completed
within 5 years. Zappos CEO Tony Hsieh is the founder of the DTP project. The projects of
Downtown Las Vegas Nevada focused on transforming a part of Las Vegas in a vibrant
community full of opportunities related to employment for young professionals. Previously,
Downtown was full of bankruptcy, foreclosure and unemployment. The baseline cost
allocated to the Downtown project was $350 million obtained from personal capital of sale of
Amazon in 2009. The project focused on providing detailed information related to DTP,
which was considered as a revitalizing project with investments in real estate, small
businesses, start-up, technology, education, art, culture, and healthcare.
Project Performance Summary- The project is not yet completed because of inappropriate
estimation of time for such a huge project. The project was associated with number of risks
which involved cost risks, design risks and schedule risks. DTP Las Vegas is a failed project
based on Triple constraints i.e. Time, Cost and Scope. The project has exceeded both costs
and time of completion. Few of the various reasons behind failure of project are business
shattering, layoffs and shuttering of businesses. The DTP project aimed at achieving Utopian
vision but there was lack of expertise and enough resources. DTP selected an inappropriate
location for community development program as Nevada is a poor city with people having
conservative perception along with community facing unemployment, bankruptcy, poverty
and crime. All these issues resulted in failure of project. The project is a complete failure
from the perspective of project sponsor as well as project manager. From the perspective of
project sponsor, lack of enough time for a project to start from scratch, lack of resources
leading to delay in operations and in overall project delay. The scope of the project should
have reduced if the project was to be completed on time estimated for its completion. The
issues such as employees lay off and negative perception of locals for DTP project also

resulted in failure of project. From the perspective of project manager also, the DTP project
was a failed project on all the three important measures which is time, cost and scope. The
delay in scheduling of activities and ineffective allocation of projects led to the failure of
project. The time allotted for completion of project that included development of shopping
mall, fire capital, shipping container capital along with HealthCare facility, stores etc in an
undeveloped region required a long time period. The investments were also not enough
leading to failure of project. Lack of effective utilization of resources resulted in non-
addressal of the quality issues involved with project. The estimated cost for completion of
project was $350 million but it rose to $500 million due to lay offs and lack of affordable
housing projects. The scope of project has not been defined effectively as it was wide that
included development of various aspects. So, project sponsor and project manager would not
have taken this project considering all these aspects.
Cost- The costs of the project was estimated to be completed in $350 million but the actual
cost increased to $500 million but the project is still not yet completed. The costs exceeded
because of the wider scope of the project that included buildings, parks, schools, malls and all
other facilities for community development. Furthermore, the community has already been
less developed, and the people are uneducated and unemployed. The development of a
vibrant community required huge investment for starting the construction process from
scratch. The costs exceeded with increasing time in the completion of the project because
more resources are required to be purchased. All these aspects led to the increase in costs of
the project. The sponsors would not have considered it to be a profitable project if prior
planning would have been conducted.
Scope- The scope of the project has been wide that led to increase in costs of project and
increase in time of the project. The project has been an entire failure because it involved wide
scope including real estate, construction, art and culture. The project with such a large scope

requires a structured approach, expertise and knowledge but there has been lack of expertise
and structured approach. The Downtown project was started with the intention of creating a
shipping container, fire capital and co working capital within 5 years. Even after 5 years, the
project was not complete because of its utopian mission to create an ideal society. So, scope
of the project also resulted in failure of project.
Section 2
The projects of Downtown Las Vegas Nevada is a transforming project that focuses on
transforming one of the parts of Las Vegas in a vibrant community that is full of
opportunities related to employment for the young professionals. The project will offer
foundation to new companies and provide income and job to the city. The Downtown before
the project was full of bankruptcy, foreclosure and unemployment by the CEO of Zappos
realized the potential of the Downtown. From here the idea of DTP evolved. In the year 2012
the idea of accelerating growth, connectedness , innovation, happiness and growth feel into
place and the project started in the same year. The project was started with a compelling
vision of creating a large city that is community focused. The planned baseline cost allocated
to the Downtown project was $350 million that was obtained from the personal capital of
Amazon’s sale in the year 2009. This project will focus on providing detailed information
related to DTP that was one of the most popular revitalizing project with investments in areas
such as real estate and development, small businesses, start up and technology, education, art,
culture and healthcare. In order to provide full details of the project focus will be on defining
the cost, time, scope and variances etc. related to a project.
Cost of the project
The DTP was started with mission of revitalization of Downtown of Las Vegas with the 3
C’s - Collision, Co learning and connectedness.

The DTP was a large scale project that involved huge costs as funds have to be allocated in
different areas. The base line costs allocated for each of the area in DTP are discussed
below:
Baseline Cost Actual Cost
Total cost Revitalization of
Downtown
$ 350 Million $500 Million (Approx.)
Real Estate and development $200 Million N.a
Tech start up $ 50 Million N.a
Small businesses $ 50 Million N.a
Art , culture, education and healthcare $ 50 Million N.a
(Gorth, 2018)
Real Estate and Development - The highest percentage of cost has been invested in area of
Real Estate and development ($200 Million). The developments were done is around 45
Acres of the land for operations of 11 businesses.
Small businesses – The small businesses in the project included restaurants, stores, bars,
recording studios, toy stores, microbreweries, application based laundry businesses and a
business for dry cleaning. (DTPLV, 2019)
Time (2012 – till present)
The Downtown Project Las Vegas was started in the year 2012 with a mission of completing
the same within next five years. The project DTP is not yet completed and its mission of
creating a real city is also not accomplished. The report of Groth (2017) indicates that the
Downtown project was started with the intention of creating a shipping container, fire capital

and co working capital in 5 or less than 5 years. Even after the five the DTP was not complete
because of its utopian mission. In other words, a mission of creating an ideal society that is
best is every way. (Gorth, 2018). The expected timeline of the project is given below:
Year Task
Year 1 (2012) Acquiring and assembling technology, businesses and investments
Year 2 (2013) Funding/investments in different areas
Year 3 (2014) Focus on resource optimization and streamlining of processes
Year 4 (2015) Scaling and streamlining the processes
Year 5 (2016) Getting positive cash flow and sustainability
The expected timeline of DTP is not achieved yet. This is possible because of the short time
of period of 5 years was estimated for a big project like DTP that involved number of tasks
and activities. DTP has fallen short of its ideal mission as it has also denied some of the
important pieces for making a city. (Evernote, 2019)
Project Scope
Project scope can be defined as the part of project planning that determines as well as
documents the specific goals, deliverables, goals, deadlines, tasks, costs, etc. A project scope
needs to be defined in the most effective form so that project goals and objectives can be
achieved. Project scope also helps project managers in allocating the organisational resources
and achieve project goals and objectives within a budget.

Project Name – Downtown Project Las Vegas
The project was founded in the year 2012 with an objective of reinventing the Nevada city
with help of a community development plan in a budget of 350 Million. The project included
the reinvention of the city with an investments in areas such a technology, small business,
real estate, culture, education, healthcare and technology. The time allocated to the project
was of 5 years. Zappos CEO Tony Hsieh is the founder of DTP project. (reviewjournal, 2018)
The DTP was starter with a view that the community development program will offer number
of advantages in terms innovation, inspiration, energy, creativity, mobility and discovery with
help of co learning, collision and connectedness is a sustainable manner. (dtplv, 2019) The
project also includes construction projects, investments and the revenue from the visitors.
(dtplv, 2018). The DTP also helps in offering opportunities related to employment, salaries
and the economic outputs. The DTP was also associated with number of risks such as the
cost risk, design risks and schedule risks. The cost risks are may lead to an increase in the
overall budget of project, the design risks may lead to modifications in design that is both
time and resource consuming, and scheduling risk may lead to delay in the overall project.
DTP has a wide range of stakeholders including employees, architectures, authorities,
shareholders, government, tourists and all other people involved in project (DPTLV, 2019).
The time scope and cost are the three major measures of project success. The measures
together are also known as the ‘triple constraints’. DTP Las Vegas is a failed project on the

basis of Triple Constraints. (projectsmart, 2011). The project has exceeded both its cost and
time of completion. The project was scheduled to be completed after 5 years from 2012 but
the project is not completed yet. The outcomes of project are mixed in nature with few
successes and more failures. For example: the project has seen some businesses shattering,
layoffs and shuttering of businesses (CNBC, 2018).
The overall community development project of DTP failed on the dimensions ion of cost ,
scope and time. The time estimated for project completion was exceeded, the cost estimated
was also exceeded and scope was utopian in nature i.e. ideal in nature that was hard to
achieve in duration of 5 years. Instead DTP should have been started with a smaller and
clearly defined scope. The DTP was started with a scope of reinventing or transforming a
poor country that lacked basic resources required for a project (Southern Naveda Strong,
2014). Variance in a project can be defined as the difference between the standard value or
baseline and actual results. High variance in a project indicates the failure of a project in
terms of time, cost and scope. There were also variances in DTP were high as the project took
more than 5 years for completion and the budget is also estimated to exceed by 2 Million.
Section 3
As a project sponsor I consider the DTP as a failed project. The project aimed at achieving
utopian vision that is hard to achieve without experience, expertise and resources. According
to me DTP has chosen a wrong location for a community development program. The location
that was chosen by DTP was Nevada that is a poor city with people having conservative
perception. The region is associated with issues such as unemployment, bankruptcy, poverty
and crime. (Harris, 2014) These issues collectively lead to failure of a project. The
underdevelopment of Nevada led to an increase in the dependency of Nevada on investment

but companies were not much interested in investing in a backward region. In addition the
future of the city was also uncertain because of underdevelopment (lasvegasnevada., 2019).
As a Project Sponsor I would have never approved a project like DTP with a vision that is
hard to achieve in just 5 years.
Timeliness
The time allotted for the project was 5 years that was short enough for a project like DTP that
had to be started from a scratch. The time required for the development of city like Nevada is
itself very high. Lack of resources led to delays in operations that further leads to a delay in
overall project. The time of the project also increased because project managers and leaders
of DTP also had to wait for the investments in the community. (Inc, 2018). The DPT is
complete failure on the measure of timeliness as it failed to deliver the project on time. The
project should have been allotted more time or the scope of the project should have been
reduced. The time of the project would have also increased because of the issues such as
employees lay off and negative perception of locals for the DTP project.
The project by Zappos CEO Tony Hsieh with a compelling vision was started in the year
2012 with an investments as high as 350 Million. With a perspective of a project manager I
consider DTP as a failed project. The project is failed on the three important measures of
project management – time , cost and scope. The time , cost and scope are the foundation of a
successful project.
Time
The time assigned for the project was 5 year but it was not completed on time. The delays
might be in the scheduling of activities involved in community development program. The
project included number of tasks and activities as it was a large scale project of community
development with huge investments. The resources were however not allocated effectively.
The project could have been completed in part rather than with an utopoian vision of creating

an ideal city out of an undeveloped city. The time allotted for the completion of a large
project like DTP that included activities such as creation of shopping mall, fire capital ,
shipping container capital along with HealthCare facility, stores etc. was very short. A
community development program like DTP requires at least 10- 8 years. This is because the
vision was of reinventing an undeveloped region into a place that is full of opportunities. The
5 years’ time for project completion was also not optimum considering the scope of project.
The DTP was much dependent on the investments of different parties that again requires a
huge amount of time. DTP was not able much of the investments leading to a failure.
(Schoenmann, 2017).
The resources in project were not utilized properly that led to shortage of resources. The
project managers hence could not address the quality issues in the community development
program. The project in Las Vegas was also launched in Nevada where people expected that
the company is doing a work of charity but project was heavily dependent on investments and
small businesses (vegasinc.lasvegassun., 2019).
Cost
The project management triangle is a highly valuable tool that is used for prioritizing the
decision making by project managers. This tools can however be used by competent leaders
and managers (Caccamese & Bragantini, 2012).
In estimated cost of the project was 350 million but by the DTP project was on its journey of
completion the cost of project rose to 500 million. The cost of project would have further
increased because of future development. The cost estimation of DTP project was not done
accurately (Gorth, 2018) The cost of DTP also increased because of the layoffs that were
done in the project. The cost of the project also increased because focus was not on offering
affordable housing in Nevada but on the costly houses. The affordable housing projects
would have helped DTP in attracting investments (Segall, 2018).

Scope
As a project manager I believe that the scope of DTP was not defined effectively. The scope
of DTP was wide including real estate, construction, art and culture etc. A project with such a
large scope requires a structured approach, expertise and knowledge. (Lasvegasweekly, 2018)
The scope of project in addition also did not match with the location chosen for the project –
Naveda. People in Naveda are not so rich and inspired by a tribal culture. The things seemed
to be expensive for community people. The location of the project is one of the important
factors that decides success and failure of a project. (Buchanan, 2017). The scope of
project was as large as revitalizing the city by creating employment opportunities, business
opportunities, real estate, technology start-ups, sustainability, innovation mobility etc. This
indicates that the project should have been given more time and cost (Archdaily, 2018).
Lessons Learned
In essence, I can say that as a project manager I would have not preferred to join a
disorganized project with such a large scope less time and resources. The DTP project offers
number of learning to the present and future project managers and sponsors.
 Firstly, time and cost of the project should be based on the scope of the project. A
project with a large scope like DTP requires more time and resources.
 Secondly the location of project should be chosen considering the opportunities,
development and resources present in the region.
 Third, scope of the project should not be vague but real that can be achieved in reality.
 A large project should be managed by an experienced project team.
References