Companies suing to stop a Storey County brothel could face a $1-million-a- month lawsuit, Reno entrepreneur Lance Gilman threatened Thursday.
Kal Kan Foods, Inc. and Roybridge Investments Limited are suing Storey County in federal court to stop construction of Gilman's proposed brothel, Wild Horse Canyon Ranch and Spa.
Both companies, located in northern Storey County's Tahoe Reno Industrial Center, filed a complaint in U.S. District Court on Jan. 16 against Storey County and its commissioners, charging the license process was "arbitrary and capricious." They're asking the court to void the license for the brothel, which is about a mile from the industrial park. Storey commissioners Greg "Bum" Hess, Chuck Haynes, Bob Kershaw and Storey County are named in the suit.
Gilman, who was one of the industrial center's owners, accused the companies of using the lawsuit as a delaying tactic. He said grading permits have been issued, equipment is on site and construction of the brothel will proceed as planned.
"I promised Storey County that I would turn this cash flow on for the new fiscal year and they're counting on that money for their community services," he said. "If these people delay me inappropriately, I will file a damage suit for $1 million a month.
"They say Storey County didn't follow the proper licensing procedure," he said. "If they deviated from that procedure, they will be required to amend the procedure and re-license."
The facility has been moved as far west on the property as possible. It's hidden in a secluded canyon and no one could have done more to remove this business from the public eye, according to Gilman.
"I can't imagine why a large company would want to rattle papers at us," brothel manager Susan Austin said. "They moved into a county where brothels are legal and there was one right down the road from them when they located at the Center. The site was chosen for privacy. It will be hidden from public view with berms and trees and there will be no flashing lights, or signs."
Gilman emphasized that patrons will use the Patrick interchange and will not use any of the roads cutting through the Industrial Park, as had been previously reported.
"I've been a land developer for 30 years in 19 different cities or counties," he said. "I want to put a beautiful hotel facility on this land and lease it to someone who will operate it. I was required to apply for this license because in Nevada, they want to protect the people of the state from those operating gaming or brothel facilities."
Gilman said he and his business partners gave the county $360,000 for a new roof for the county's schools, hot lunch programs and buses.
"We help the county that's helping us," he said. "These businesses are enjoying Nevada's tax advantages and now they're challenging something that helps the county. It's unfair to us. We're entrenched."
Among the allegations in the lawsuit is that Sheriff Pat Whitten did not prepare a required written report on the brothel license application. The businesses contend they were not given the opportunity to speak when the license was approved in early January.
Another claim is that the investigation of the brothel's operator, Austin, was not completed before the license was granted.
Royal Sierra Extrusions Inc. president Gordon Case said he is not against legalized prostitution. Case's company is a subsidiary of Roybridge Investments, one of the plaintiffs in the lawsuit.
"I'm not one of those trying to change Nevada. I love this state, " Case said. "I'd like to emphasize that our battle is not against legalized prostitution in Storey County. We're not trying to ban brothels, but we do feel they are incompatible with this environment. We are concerned about safety and image and we feel the brothels are a total detraction from business."
Employees have expressed concern about sharing the road at all hours with brothel clientele. The plant, which produces vinyl products, operates seven days a week, 24 hours a day and employees are coming and going at all hours. The complaints started Wednesday and are increasing, according to Case.
"We're a growing business and there are a lot of job opportunities here, but this issue may discourage people from commuting here," said Kavin Henry, a production manager at Royal Sierra. "How would you feel if there was a brothel in your back yard?"
Case said the company is also concerned about the impact on property values and the impact of the brothel on economic diversification efforts. Gary Duhon, attorney for both companies, echoed that concern.
"We thought federal court was appropriate because this issue has dramatic impact on economic diversification in all of Northern Nevada," he said. "One of the concerns expressed by our clients was that the blue chip companies interested in the complex will be discouraged by the presence of the brothel. It creates an image in the mind of these companies, reflecting on the area as a whole. Northern Nevada was recently complimented concerning its business development in the Wall street Journal. This a black eye for the entire region."
Case pointed out that the industrial center's rules ban brothels on the property. He claims Gilman used the brothel ban as a selling point.
"I think locating the brothel this close to the (Industrial) Park is very shortsighted on Storey County's part. The brothel may end up costing the county a lot of high-end business and a substantial amount of money," Case said.