Jul 10, 2015 · 3 minutes

Wednesday evening and after a day spent Walking with Libertarians at Freedom Fest, I made the curious — if not plain masochistic — decision to head downtown to revisit Tony Hsieh’s Downtown Project.

Keen readers might recall that last week I published an account of my time spent within the Downtown Project and expressed concern at Hsieh’s latest wheeze: Returning to Zappos to shift the entire company over to a management-free management system called “Holacracy.” [Disclosure: Hsieh is an investor in Pando.]

Since Hsieh announced the shift and gave staff the option to quit if they object, a reported 210 of the company’s roughly 1200 staff have left. (Dan Raile has the latest on Holacracy here.)

In the past few days,  I’ve received several dozen emails from former and current Hsieh employees and partners, many of them beginning the same way: “Your story was correct, but you missed something big.”

I’m still trying to confirm these myriad things big, but they include claims that Downtown restaurateurs are being made to sign insane investment contracts, that certain key figures in the Downtown Project are on the verge of quitting, and -- the closest to confirmed -- that whole departments at Zappos are exempt from Hsieh's pay-to-quit offer until later this year. According to one source, as soon as that restriction is lifted, scores more employees will head for the door.

There is also, I’m told, increasing concern amongst Zappos employees that the failure of Holacracy will give Amazon the excuse they need to seize full control of their wacky subsidiary. Those employees have read the stories about how Amazon treats its employees, and they’re quaking in their cut-priced, next-day-delivered boots.

During my trip Downtown on Wednesday, I heard yet another rumor. But this one sounded too ridiculous to be possibly true….

Maggie Hsu, the former McKinsey consultant who Hsieh named as his "chief of staff" for the Downtown Project, has packed up and moved to San Francisco.

Apart from the fact that Hsu’s departure would be one of the clearest signals of the Downtown Project’s failure yet, the rumor didn’t immediately pass the smell test: Hsu’s Twitter account still shows her location as Las Vegas, as does her LinkedIn profile. Two weeks ago she spoke at Create Detroit where she was still billed as Downtown Project chief of staff. It simply can’t be true that the head of a project designed to encourage people to live and work in Downtown Las Vegas would be doing that job from San Francisco.

You know how this story ends. Of course you do.

I admit, I did find it slightly odd when Hsu emailed me last week to suggest I update my story to remove any mention of her appointment:

Doesn't change the narrative of your story but at the Inspire meeting the announcement wasn't about me. Should read: "and appointing Downtown Project's General Counsel Millie Chou as its Strategy Implementation Lead.”

A few hours ago, Hsu sent me another email, in response to my badgering her over the rumors of her move. It seems the rumor mill bakes a fine loaf…

“I moved to San Francisco a few weeks ago and am splitting time between San Francisco and Las Vegas,” Hsu wrote. “I am still at Downtown Project.”

I wrote back, asking whether “I am still at Downtown Project” meant she is still the project’s chief of staff.

She responded that, as of today, she remains in her role, but “That may change in the next month or so, and I will let you know if it does.”

It never rains in Downtown Vegas, but it pours.