Judge denies restraining order against Storey County brothel

Friday, Feb. 22, 2002 | 7:29 a.m.

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By SANDRA CHEREB

Associated Press Writer

RENO, Nev.- A judge has rejected a developer's effort to block construction of a 40-room brothel near a Storey County industrial park east of Reno.

In an 11-page order issued early Friday, First Judicial District Judge William Maddox denied an injunction sought by DP Operating Partnership to halt construction of the Wild Horse Canyon Ranch & Spa near the 102,000-acre Tahoe-Reno Industrial Park.

During a two-day hearing last week in historic Virginia City, Leif Reid, representing DP Partners, contended Storey County officials violated county code and the state's Open Meeting Law when it approved a brothel license for bordello developer Lance Gilman, who also is the major developer of the industrial park.

Reid argued that county officials failed to require a detailed financial statement and audit by a certified public accountant of Gilman's finances. County officials said the sheriff conducted a financial investigation when Gilman first applied for a license in December 2001. Gilman later withdrew the application.

When Gilman reapplied a year later, the sheriff gave a verbal report to commissioners, updating his previous investigation.

Brothel opponents also argued the bordello's location violated county zoning laws.

Maddox, however, said county ordinance gives commissioners "broad discretion" in the application and approval of brothel licenses.

Michael Dermody, president and CEO of DP Partnership, 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 earlier said businesses in the area and at the industrial park in particular do not want to share the exit off I-80 with a brothel.

"We want to make sure the Patrick exit has businesses that are compatible with the ones that are already here," Dermody said.

That sentiment is shared by other businesses, including Kal Kan Foods Inc. and Roybridge Investments. Company officials have filed their own lawsuit to try to stop Gilman's project.

That suit, filed in U.S. District Court in Reno, argues the brothel will lower property values and make it more difficult for them to sell or lease the land they own within the industrial park.

Gilman broke ground for the bordello early this month. A July 1 opening date is targeted.