Storey County Brothel Case Reversed

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The Nevada Supreme Court ruled Thursday that a lower court erred in rejecting part of a developer's effort to block construction of a Storey County brothel near an industrial park about 20 miles east of Reno.

The high court, overturning part of a 2002 ruling by Carson City District Judge Bill Maddox, said Maddox erred in not granting a request by DP Operating Partnership for an order against the Wild Horse Canyon Ranch&Spa, near the 102,000-acre Tahoe-Reno Industrial Park.

Justices said bordello developer Lance Gilman"failed to strictly comply with the brothel application ordinance,"adding that the failure made his application invalid and Storey County commissioners erred in relying on the application to grant him a license.

The Supreme Court also said Maddox correctly ruled that the brothel's location didn't violate zoning ordinances, that there was no violation of the state's open meeting law by county commissioners, and that the dispute wasn't subject to arbitration.

Opponents of the brothel wanted an arbitrator to consider whether the brothel would damage property values and hurt future efforts to woo Fortune 500 and Silicon Valley companies to the industrial park.

The Supreme Court returned the case to Maddox for an order that mirrors its ruling _ although a stop to construction is no longer an option since the 30,000-square-foot brothel opened last summer in a canyon about a mile from the western edge of the industrial park.

However, the Supreme Court's order may require another licensing process for Gilman since it states his failure to comply with ordinances"negated the validity"of his earlier application.

Lawyers for DP contended Storey County officials failed to require a detailed financial statement and audit by a certified public accountant of Gilman's finances.

The county sheriff conducted a financial investigation when Gilman first applied for a license in December 2001. Gilman later withdrew the application, and when he reapplied a year later, the sheriff gave a verbal report to commissioners, updating his previous investigation.

Michael Dermody, head DP, has said the proximity of the brothel to the 160 acres he owns in Storey County off Interstate 80 would harm his business and chase away prospective clients.

Dermody also said businesses in the area and at the industrial park in particular didn't want to share the exit off Interstate 80 with a brothel.

Along with the proposed brothel, Gilman owns 20,000 acres in the industrial center and brokers property in the park whose occupants include Kal Kan Industries, Alcoa Aluminum and DP Partners.