Storey County Brothel Faces Closure Tuesday
It may be awhile before they return. If things go as expected, the Storey County Brothel Board may padlock the brothel side of the business following a hearing Tuesday afternoon.
Susan Austin, the brothel's madam and owner Lance Gilman's partner says it's an emotional moment.
"Some of my ladies have been with me from the beginning," she says. "Now I'm having to tell them to take some time off, that they're laid off. So that's the hardest thing for me right now."
As Gilman tells it, the facts behind this problem date back to the brothel's beginnings.
Rebuffed by traditional lenders, Gilman says he got a loan to build the place in 2003 from Tom Gonzales acting as TG Investments. Though he says he paid the loan in a matter of months, Gilman says Gonzales refused to accept the final payment, keeping the loan open and getting a cut of the business.
That arrangement came to light after Gonzales filed a lawsuit against Gilman. It also makes Gonzales a part owner and apparently put the Wild Horse in violation of the county ordinance requiring full disclosure and background checks for ownership.
Actually Gilman isn't arguing that point. "We're strong proponents of strong regulation. We can't fly in the face of a violation of regulation. It would be diametrically opposed to what we believe."
The county has already given notice it's prepared to revoke brothel license for the Wild Horse. Tuesday's hearing could make that official, but it seems unlikely to end there.
There's a lot riding on the outcome of this hearing, not just for Lance Gilman and Susan Austin, but for Storey County itself.
Taken together Gilman's two brothels put more than a half million dollars in fees and taxes into county coffers. The closure would affect only the Wild Horse and, in fact, would allow its restaurant and bar to remain open.
Still, closing the one brothel would mean a hit of hundreds of thousands of dollars for the county. That may not happen.
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Though he says he paid the loan in a matter of months, Gilman says Gonzales refused to accept the final payment, keeping the loan open and getting a cut of the business. That arrangement came to light after Gonzales filed a lawsuit against Gilman.
Adding a wrinkle to the negotiations is an additional $20 million mezzanine loan Ansley borrowed from RFC CDO 2006-1 Ltd. to pay for the resort. In a September 2010 interview, Ansley said he'd been able to reach a loan modification with the servicer on
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