What Happens in Vegas Stays in Vegas, Unless You're Tony Hsieh At SXSW, Zappos founder and CEO Tony Hsieh stops by the Samsung Blogger Lounge to discuss the revitalization project of Downtown Las Vegas, the new SXSW V2V program and more.

What's Tony Hsieh secret to building a thriving company? Location, location, location.

When the founder and CEO of Zappos isn't running the online shoe and apparel business, Hsieh's biggest preoccupation (or maybe even obsession at this point) is taking over the old Las Vegas City Hall in the heart of Sin City, with the goal of turning it into his company's new corporate campus.

For years, his team has looked for a prime location to house everyone and implement structures that would foster production and make employees happy. Finally, they settled on a home that he could build from the inside out. Hsieh describes the location as "more analogous to New York University where the campus kind of blends in with the city, and you don't really know where one begins and the other ends."

Hsieh says that his priority was not just to invest in his own business but also to "invest in the community and the surrounding ecosystem. In the long run that's just going to help us attract and retain more employees." This will require a great deal of redesign. They'll turn the City Hall's old jail cells into a speakeasy and obliterate structures that stunt interaction between co-workers and city dwellers. They'll also be partnering with the founders of Burning Man to bring large-scale art to downtown Vegas and make the city more walkable.

Related: Why Tony Hsieh Wants to Rehabilitate Sin City

"Research has shown that most innovation actually comes from something outside your industry being applied to your own," Hsieh says. Using the resources of the Downtown Project, which is a privately funded effort to revitalize downtown Las Vegas, he won't just stop at building up Zappos' own campus. and a few others with a $350 million budget, they can take their time and do things right instead of focusing on short term ROI goals. "We have this concept of ROC: return on community," says Hsieh who plans to invest $350 million into making over the city, which is more commonly considered a tourist mecca than a tech center.

With culture as its number one priority, Hsieh's team is always grasping for an answer to the question, "How do you architect serendipity?" Answer: get more lucky encounters to happen. "We actually shut down most of the doors [in the office] and forced employees through a single door in order to get more collisions," he reveals. "We prioritize collisions over convenience."

Related: How To Motivate Employees

Hsieh also has his hands in a few other major upcoming events, such as a newborn branch of SXSW called V2V, which will test run in August at the Cosmopolitan Casino and could eventually move downtown and integrate into the Vegas startup scene. In October, his own company will host an arts and music festival called "Life is Beautiful," shutting down 15 Vegas blocks to feature music from San Francisco's Outside Lands.

Again, he points to the research. Studies have shown that every time the size of a city doubles, productivity or innovation per resident increases by 15 percent, Hsieh says. "But when companies get bigger, productivity per employee generally goes down. Our whole strategy at Downtown Project is we have something we refer to as the 3 Cs, and that's collisions, community and co-learning."

What do you think of Hsieh's efforts in Las Vegas? Leave a comment and let us know.