Storey County board, water district oppose effort to let technology company form local government

Horses at Tahoe Reno Industrial Center

Storey County commissioners voted Tuesday to oppose “separatist governing control” within their jurisdiction after Democratic Gov. Steve Sisolak backed a legislative effort that could result in a private tech company and major campaign donor forming its own local government.

Blockchains LLC, a company that owns roughly 67,000 acres of land in Storey County, is asking lawmakers to approve a program that would allow large-scale landowners to create “Innovation Zones.” As described in draft legislation, Innovation Zones would operate as autonomous entities with governmental powers and focus on developing emerging technology.

A Storey County water district, governed by the commissioners, also voted to oppose the legislative effort Tuesday. Both motions direct staff to continue negotiating with the company. 

“This would carve out a part of Storey County and create another county, in essence,” Austin Osborne, Storey County manager, said before commissioners voted on the motion Tuesday. 

Osborne raised several concerns with the concept of letting Blockchains create a self-governing entity within the county. He argued that the Innovation Zones in the proposed legislation could place strain on the county’s resources and remove a portion of its potential tax base.

In publicly released documents, Blockchains outlined plans to build a “Smart City” on a portion of its land. The proposed residential development, which a company executive said would be located in the Painted Rock area along the Truckee River, would include about 15,000 dwelling units.

For the past decade, Storey County has used tax breaks and expedited permitting to lure major companies, including Tesla, Google and Switch, to set up operations in the county’s Tahoe Reno Industrial Center. The county has focused on growing commercial businesses with a small population. Most workers at the industrial center live in neighboring Washoe or Lyon counties. 

But Blockchains wants to build a residential town, and in the past, county officials had told the company they were not interested in a development at the scale they proposed, the AP reported.

“We have great respect for Storey County,” said Pete Ernaut, a lobbyist representing the tech firm. “They have a remarkable track record on permitting commercial development. However, their history of permitting residential or mixed-use development is where we separate.” 

In an interview Tuesday, Osborne said the company’s plans to build homes could potentially move forward within a traditional government structure. Storey County’s 2016 Master Plan, he noted, discusses the construction of a residential and mixed-use development in Painted Rock.

“It's something, with an appropriate proposal, we would certainly look at,” he said.

A Sisolak spokesperson did not respond to a request for comment. The governor unveiled the legislative proposal on Friday afternoon at a panel with his economic development czar and a private economic analyst. Sisolak asked for people to keep an “open mind” about the concept. Blockchains and its CEO Jeff Berns donated tens of thousands of dollars to help elect Sisolak.

The legislation has not been formally introduced.

Osborne and the county commissioners also questioned whether the legislation was necessary, given that Storey County already has a permissive regulatory environment known for tilting in favor of encouraging private development, a trend dating back to the Comstock mining boom.

“Storey County is the poster-child for this sort of thing,” Osborne said. “There is no place in Nevada that has fast permitting, permitting flexibility, nimbleness that Storey County does. We are well-known for that all over the United States as well as locally. We are the innovation zone.”

In 2019, The Nevada Independent reported on how private and public interests were blurred in the development of the industrial center, where Blockchains owns the majority of its land and is seeking even greater autonomy to pursue a master-planned development that includes housing. 

Storey County Commission Clayton Mitchell echoed Osborne’s comments Tuesday, adding that unlike many local governments, Storey County looks for creative ways to enable development. 

“We often take heat for being too flexible and moving too fast,” Mitchell said.

Mitchell, along with Storey County Commission Chairman Jay Carmona, signaled a willingness to work with Blockchains. The motion directs staff to engage in a “good-faith” dialogue with the company. The motion also asks staff to work with lawmakers to support blockchain technology. 

“They’ve invested substantially in Storey County, and I’d like us to be able to welcome them and facilitate their success as a productive, contributing member of our community like we have with our other corporate citizens,” Mitchell said.

But the commissioners said they could not endorse the company forming its own government, adopting language that opposed “separatist governing control and carving up of Storey County.” 

Mitchell and Carmona both voted for the motion. Commissioner Lance Gilman was not present at the meeting. Gilman, who represents the industrial park’s master developer and also serves on the County Commission, helped sell the roughly 67,000 acres of land to Blockchains in 2018. 

In a statement, Ernaut said the company is open to working with the county moving forward: “A smart city with 35,000 residents is essential to the vision of this Innovation Zone, which makes permitting a city of this size key to this discussion. We understand their initial reaction to such a unique idea, and look forward to finding a path forward that works for everyone.”

The commissioners adopted a similar motion to oppose the legislation at a separate meeting on Tuesday. The Storey County Commission oversees the water district for the industrial center, a utility that serves the Tesla Gigafactory, a Switch data center and other commercial businesses. 

According to a map that was presented at the meeting, all but 2,200 acres of Blockchains’ land is within the water district’s service territory, raising questions about how they would develop the residential land. The district was mainly formed to provide water connections for industrial use.

A map shows the land owned by Blockchains LLC (in blue) and the service territory of the Tahoe Reno Industrial Center's water district. The map was presented at a water district board meeting on Tuesday, March 2, 2020.

The company owns a majority of land within the water district’s service territory. There remains uncertainty about how the district would operate if Blockchains formed its own Innovation Zone.

“They would be a huge user of water in the area,” Will Adler, a lobbyist for the water district, said at the meeting. “And it’s kind of unclear whether you would have to provide that water initially or not, depending on how this is developed or not, because of that uncertainty.”

Legal sex worker sues Sisolak, wants state to reopen brothels or allow sex workers to work from home

A licensed sex worker in Nevada is suing Gov. Steve Sisolak over what she calls the “unconstitutional” decision to keep the state’s legal brothels closed even as other businesses resume operations during the COVID-19 pandemic.

The complaint was filed with the Third Judicial District Court in Lyon County on Friday on behalf of plaintiff Alice Little, a legal sex worker who had been working at the Moonlite Bunny Ranch Brothel, and Jane and John Does 1-100, who represent her clients. The complaint calls Sisolak’s choice not to open brothels “arbitrary” and is seeking either for the court to end the closures or to compel the governor to issue an executive order allowing legal sex work to happen outside of a brothel.

“I am surprised and a little bit upset at the fact that not a word has been said. It’s just as if he’s completely forgotten this entire sub sector of his constituents,” Little said in an interview with The Nevada Independent on Friday. “We are legal Nevada taxpayers. I feel like he has due cause to respond at this point and at least give us some sort of information, and yet we have been completely left in the dark this entire time, and it’s very, very frustrating.”

The state’s legal brothels have been closed since March, despite calls from sex workers and brothel owners to allow them to reopen, and those in the industry say they have been met with silence from state leadership on why they remain closed when close-contact businesses such as massage parlors and tattoo shops have been open since May. 

Sisolak said earlier this month that brothels are “not on his radar” to open, but that if owners can come up with a plan, it will be considered. Lance Gilman, owner of the Mustang Ranch, submitted a reopening plan to the state in May. The governor’s office declined to comment Friday.

Nevada is the only state in the country that allows legal brothels. Sex work is only legal in 10 counties in the state, and only if it takes place within a legal brothel, which can only be found in seven counties.

If brothels cannot reopen, Little is pushing to change that policy and allow sex workers to work from home or from other safe locations in order to allow workers a way to make an income.

“I see no reason as to why that isn’t a viable solution … You figure, the legality is what gives us safety, not the brothel,” Little said. “And if I wasn’t required to give 50 percent of my income to the brothel, I think that income would actually be far greater than what I would make if the brothels were open.”

Sex workers at Nevada’s brothels are independent contractors, and Little and others in the industry have said it’s been very difficult for any of them to secure unemployment benefits. While Little has been able to make up some lost income through online sex work, she fears that others have had a harder time with the transition.

“It’s incredibly difficult for a sex worker to just jump in to a different industry and enter a new career path given all the stigmas associated with the industry,” she said.

Little said that the decision to file the lawsuit was made because after seven months of a shutdown with no information, she “can’t wait any longer.” In addition to reopening brothels, Little is seeking damages for lost income during the closure. 

“At this point, I just want the right thing to happen,” she said.

This story was updated at 5:40 p.m. on Friday, Oct. 30, 2020 to clarify that the governor's office declined to comment.

As Nevada’s legal brothels remain closed, sex workers think bias is at play

Photo of the interior of the Mustang Ranch

When word got to Alice Little that brothels in Nevada would be closing for 30 days to comply with state orders and slow the spread of COVID-19, she brought the two houseplants in her room at the Bunny Ranch down to the front desk and asked the employee there to look after them while she was gone.

Eight months later, Little hasn’t seen her plants again.

Little is one of hundreds of legal sex workers in the state who lost their major source of income when brothels and other businesses shut down mid-March. While most other industries have been able to resume some level of operations, Gov. Steve Sisolak has indicated that the state’s brothels are “not on his radar” to reopen. 

Services allowing physical contact around the state have been allowed to resume service, with tattoo shops, estheticians, and massage parlors open since May. Women who work in Nevada’s legal sex industry say they feel they’re being ignored not because of the risk their business poses but because of a bias against their industry.

“I think it’s discriminatory of the governor,” said Kiki Lover, a legal sex worker living in Reno. “He’s discriminating against sex workers.”

Prior to the shutdown, Lover was working five days a week at the Sagebrush Ranch in Lyon County. She’s based locally, so when news came on March 19 that the facility would be closing its doors immediately, she was able to pack up her room and head back home.

But for the women living in the brothel full time, things weren’t as simple.

“The first couple of weeks, they let the girls [stay] that were homeless or lived too far away,” she said. “Then everybody has to get out because at the end of the day ... the brothel can’t just keep you there all the time without you working.”

Moonlite Bunny Ranch brothel
The Moonlite Bunny Ranch brothel in Mound House, east of Carson City on Thursday, Oct. 18, 2018. (David Calvert/The Nevada Independent)

Legal sex work in Nevada

According to both Little and Lover, it’s common for women from other states to stay at one of Nevada’s brothels for periods of a few weeks or months in order to take advantage of the state’s legal industry before returning back home. Nevada’s legal sex industry is still controversial, often condemned by anti-sex trafficking organizations that say brothels are part of a culture that encourages sexual exploitation, but a lawsuit that sought to ban them was dismissed last year.

Nevada is the only state to allow legal prostitution, but state law requires it to take place in a licensed brothel in a county with a population of less than 700,000.

Clark County is the only Nevada county to exceed that population count, but six other counties — Carson City, Douglas, Eureka, Lincoln, Pershing, and Washoe — have expressly outlawed prostitution. Among the 10 counties where brothels can legally operate, none are operating in Churchill, Esmeralda or Humboldt. 

The Mustang Ranch Brothel, officially sanctioned by Storey County in 1971, was the state’s first legal brothel. Joe Conforte, the ranch’s original owner, was forced to forfeit the property to the federal government in 1999, but owner Lance Gilman bought back the buildings and reopened the brothel in 2005.

“We employ 49 people,” Gilman said during an interview with The Nevada Independent. “Because we’re 24 hours a day, seven days a week — we’ve never closed except for COVID — we have to run a pretty good-sized staff in house.”

Those full-time employees include security, kitchen staff and chefs, bartenders, housekeeping staff, cashiers and “parlor hostesses” who manage in-house operations. In addition to the 49 staff members, there are several hundred sex workers who work at the brothel on a rotating basis. 

“We have ladies that work there from all walks of life,” Gilman said. “We have teachers there, we have attorneys there, and we have bookkeepers there. A lot of the ladies in the workforce are without a husband but with children, so they find that working in our industry legally is safe for them.”

Sisolak said during an interview this month at The Nevada Independent’s IndyFest conference that brothels are not his focus when other sectors are still trying to navigate reopening.

“Certainly we’re going to have to look at getting kids back into schools before we look at getting folks back into brothels,” he said. “We’ll be addressing it sometime, certainly, but it’s not in the immediate future.”

Gilman counters that his employees and contractors deserve the chance to resume work just like workers in other industries.

“We’ve been held closed longer than any other business in the state, and still are, and it’s unreasonable,” said Gilman. “We need help.”

Surviving in the interim

Legal sex workers in Nevada’s brothels are independent contractors and not employees, and this status has made it more difficult for those workers to receive supplemental benefits while out of work. Unemployment benefits were not immediately available to independent contractors during the first months lockdown, and although the Pandemic Unemployment Assistance (PUA) was eventually extended to workers with this classification in May, Lover, Little, and Gilman all said they don’t know any women in the industry who have actually received the benefits they applied for.

“Many sex workers found it difficult to apply for those or are still pending and waiting to get those funds,” Little said. “As we know, here in Nevada it took many months after the shutdown for the CARES Act to actually kick into gear, and sex workers are really left with zero options.”

Brothels were not eligible for the Small Business Administration loans that many businesses took advantage of earlier this year, but Gilman did manage to secure Paycheck Protection Program (PPP) loans for the restaurant attached to Mustang Ranch, the Wild Horse Saloon. 

Additionally, Gilman’s business was eligible for federal small business grants distributed by Storey County. Storey County is the only county that participated in the grant program, funded through federal coronavirus relief funding, in which legal brothels operate, and the decision is up to each county to determine what businesses are eligible. Gilman is a county commissioner in Storey.

Even after receiving between $150,000 and $350,000 in PPP loans, Gilman says he still eventually had to furlough his employees, and the contractors at Mustang Ranch who are not bona fide employees were not able to receive any supplemental income through these loans.

Without unemployment benefits, many women in the industry have tried turning to creative options to make up for lost income, including phone sex lines and cam work. Both Lover and Little have been utilizing the online platform Onlyfans, a content-sharing platform that allows users to charge for access to videos, photos, and direct messaging.

“It’s all online, and that has been keeping me afloat, but it’s nowhere near what I’d make at the brothel of course,” said Lover. “But, it’s been paying the bills.”

Images from a forum opposing Lyon County Question 1 featuring legal sex worker Alice Little at the Bunny Ranch Restaurant in Mound House, east of Carson City on Thursday, Oct. 18, 2018. (David Calvert/The Nevada Independent)

According to Little, however, online options are only viable for women who have already built a client base willing to pay for access to their content. Little bills herself as Nevada’s highest-paid legal sex worker and had standing appointments with clients that had to be cancelled because of the shutdown, but most women in the brothels make money from walk-in clients.

“I’m successful at a level that most ladies aren't, and even then I had to take a look at things and figure out, ‘Oh, I need to scale back,’” Little said. “My real concern is for the ladies who just recently got started in this industry. What are they supposed to do?”

Little said she knows some women who have had to start working independently without the protection of a legal system.

“They bought into the legal system, paid their taxes … only to be shut down and be worse off than they would have been working at any other job,” Little said. “The fault doesn’t lie with the women for making the choices that they’re making at this point. It, if anything, weighs on the sheer economics of our country and the lack of protections available to sex workers.”

Multiple counties are allowing brothels to provide non-sexual escort services, but escorts are not allowed to utilize brothel facilities. Little told the Reno-Gazette Journal that her clients are unwilling to travel for these services and are instead waiting for brothels to reopen. Escort services also pose the same difficulties for women who are just starting out and don’t have an established client base who will seek them out for these services.

To those who think sex workers should find new jobs, Little says the stigma of their current job is a major barrier.

“What do we expect sex workers to do, put down on their resume, ‘Was a sex worker at the Bunny Ranch for five years,’ and then go work as a cashier?” Little said. “I’m not sure what a reasonable expectation is here just given the sheer amount of stigma that comes with being associated with the industry.”

Losing their safety net

Beyond the difficulty in leaving, many women also have no desire to leave the industry as long as they can continue to work safely.

Although contractors working in brothels still had to pay for their own medical services, brothels did provide access to weekly testing, and being a legal sex worker provides a degree of protection for women because they can report incidents of violence or harassment without fear of charges for illegal prostitution. Women who have lost that option and are now transitioning to independent or survival sex work also lose those protections.

Service providers are seeing first hand how difficult it is for women in the industry, especially during the pandemic. The Cupcake Girls, a nonprofit organization based out of Las Vegas and Portland that offers support to women currently or previously involved with the sex industry, has seen a massive increase in demand for its services throughout the past several months.

“We saw [a] 150 percent increase in support requests,” said Jenny Fay, the organization’s executive director for Nevada. “Communications with clients … the number of emails, phone calls, meetings, year over year in those months it went up 600 percent.”

The Cupcake Girls does outreach at strip clubs and legal brothels, refers clients to partner organizations and offers intensive case management. Fay noted that, through its counseling services, the organization saw a 300 percent increase in reports of domestic violence.

Domestic violence rates have been increasing across the country throughout the COVID-19 pandemic, and, in Nevada, service providers have been working to address that need and find ways to help those who may be stuck at home with an abuser and unable to find assistance. 

The most dramatic increase noted by the organization, however, was a 1,100 percent increase in the number of individuals reaching out for financial support such as grants for rental assistance and utility payments compared with the same period in 2019. While the organization does not have statistics on how many of the individuals reaching out were previously working in legal brothels, Fay observed that the increases in need have been “across the board.”

“Whether it was somebody working in the legal brothels, or somebody working in a strip club, or somebody doing street based sex work, it seems from what we’re seeing, there is a need, especially, for financial support,” she said. “There’s just less money being made in any way right now in our city especially.”

What does social distancing look like in a brothel?

When asked during an IndyFest panel about brothels reopening, Sisolak said he doesn’t know how people would social distance in brothel, and that it’s up to brothel owners “coming up with a plan.” But those in the industry say they have submitted plans to the state only to be met with silence.

Gilman first submitted reopening plans in May to the COVID-19 Task Force and the health department as well as to the Local Empowerment Advisory Panel which helped develop reopening guidelines for Nevada businesses. He also submitted a letter with the plan attached to the Governor’s Office of Economic Development.

A representative said that Michael Brown, the office's executive director, received the letter and responded to Gilman, saying the reopening request, "could be considered at a future phase in the State's re-opening plan."

Gilman says he is uncertain where in the process the request is being rejected and is looking for clarity from the state. 

“Where we’re being held is an unknown right now,” he said. “We’ve had no feedback of any kind that anyone rejects them … So why we’re not open is an absolute unknown puzzle, and we need to be told.”

The reopening plan includes procedures for screening employees, customers and contractors, limiting the number of customers and contractors in the building, sanitizing procedures and mask use requirements, and procedures for containment in the case of a positive test or failed screening.

Gilman’s proposal would allow the brothel to operate without physical contact, essentially allowing the non-sexual escort services currently allowed by the county to take place within the brothel facility. 

“In this industry, much, if not the majority, of the courtesan-customer interaction does not involve physical contact even during normal business operations,” Gilman wrote in the plan.

The bar would also remain closed to customers under Gilman’s plan, but the kitchen would be able to operate to prepare food for guests, which would then be packaged and delivered to rented rooms.

The letter sent on behalf of the ranch to Brown also indicated that the brothel had been implementing safety protocols prior to its official shutdown.

“We took temperatures at the door with trained personnel, we took temperatures of every employee and every working lady prior to starting their workday every day,” Gilman said in the letter. “We use gloves, alcohol wipes and all forms of sanitary protocols. These are everyday standard procedures.” 

The front entrance to the Chicken Ranch brothel
The Chicken Ranch brothel in Pahrump as seen on Thursday, April 19, 2018. (Jeff Scheid/The Nevada Independent)

Gilman is not the only brothel operator who’s taken steps to assure the state of the industry’s safety standards. At an Oct. 8 COVID task force meeting, Trudy Kevoian, the general manager of the Chicken Ranch in Pahrump, attested to the sanitation of her business.

“When it comes to safety and sanitation,” she said, “I would say our front bars inside of the brothels far exceeds those of Walmart or any of the bars that are currently open and have been given the opportunity to bring their people back to work and let them provide for their family.”

Lover agreed that transitioning the already clean environment of the brothels into a COVID-compliant workplace would be simple, but she believes that physical contact can still be part of the job, using the same mask rules and appointment-only system that massage parlors in the state have been utilizing.

“The brothels are one of the cleanest places you could actually be or go,” she said. “So just let us reopen, we can just put on a mask! We can definitely do our jobs with a mask on. It’s not that hard.”

Little also emphasized that she believes reopening can be done safely. Without effective guidelines that ensure safety for women in the industry, including access to COVID testing, Little said she may not return.

“I would probably leave the industry,” Little said. “We need to have less ladies working. We, ideally, need to have people not coming in and out of the ranch hanging around the bar and drinking … I feel it’s very, very doable, but you can’t do it without some reasonable change.”

This story was updated Oct. 26 at 12:00 p.m. to include information provided by the Governor's Office of Economic Development.

Storey County Commission approves permit for medical incinerator at industrial park, despite concerns

Horses at Tahoe Reno Industrial Center

The Storey County Commission voted Tuesday to permit a medical waste incinerator at the Tahoe Reno Industrial Center near Reno, despite the plant operator’s history of regulatory compliance issues across the West and concerns raised by businesses in the area. 

Stericycle, the company proposing the facility, plans to build the medical waste incinerator in an area of the industrial center zoned for heavy industrial use. At the commission meeting Tuesday, executives stressed that the facility would be built with stringent air pollution controls, estimating that emissions would be low, comparable to about ten diesel trucks driving down the highway. 

But the industrial center’s largest landowner, Blockchains, remains concerned with Stericycle’s track record on environmental compliance issues and believes the presence of the facility could adversely affect future development, including on three parcels adjacent to the Stericycle site.

County staff recommended that the three-member commission approve the facility. 

Blockchains, a company that aims to build a cryptocurrency city at the industrial park, outlined its opposition to the facility in a seven-page brief it submitted to Storey County last week. In the brief, the company accuses Stericycle of not being transparent before the planning commission. Blockchains is the largest landowner at the industrial center.

At a planning commission meeting last month, Blockchains had raised concerns about Stericycle’s operations in North Salt Lake, where Utah regulators levied a $2.3 million fine against the company to settle emissions violations. The City of North Las Vegas, Blockchains noted, had recommended the denial of a similar special use permit last year when Stericycle sought to build the facility at the Apex Industrial Park.

Dominic Culotta, an executive vice president and chief engineer for Stericycle, countered those claims at the meeting Tuesday. He said the citation in Utah occurred nine years ago, and that the company did not move to North Las Vegas because of infrastructure issues. Ahead of the meeting, Stericycle submitted a nine-page reply to Blockchains’ claims.

The facility would occupy about five acres of a 20-acre parcel, Culotta said, to provide a buffer area. In a July planning commission meeting, horse advocates raised concerns about air emissions and about possible increased collisions with additional traffic in the area. 

“It was intentional to leave a sizable buffer zone…to minimize impact on wildlife as well as our neighbors,” he said, describing the incinerators as “small” compared to municipal solid waste facilities. “Our operations will be contained inside a 50,000 square-foot facility.” 

The American Wild Horse Campaign had previously expressed concerns about the project. But on Tuesday, Greg Hendricks, director of field operations for the group, applauded the company for working with wild horse advocates to address some of the issues. 

“It’s great to see a company look at these situations prior to their build so they can build in the appropriate mitigation and corrective actions to reduce our impact on wild horses,” he said.

Blockchains, however, said the assurances from the company were not enough. 

Matthew Digesti, Blockchains’ vice president for government affairs, urged the commission to deny the permit, saying that Stericycle has “bounced around the Western United States looking to create one of the most dangerous biohazard services known to man. And they have been appropriately challenged or denied everywhere they have been.”

Blockchains was not the only business interest in Storey County that raised concerns. Corrado DeGasperis, the CEO of the Sierra Springs Opportunity Fund and Comstock Mining, had expressed concerns about the project in a letter to the planning commission.

“We, as residents of Storey County, business operators in Storey County and northern Nevada, strongly oppose this application, on the grounds that incineration is a highly polluting activity with a history of mishaps, problems and violations across the US which are too many to list here,” DeGasperis wrote to planning commissioners on Aug. 6.

DeGasperis’ correspondence was included in the packet presented to the county commission. The Sierra Springs Opportunity Fund is meant to encourage development in opportunity zones. DeGasperis did not respond to an emailed request for comment.  

On Tuesday, Culotta argued that the company had changed over the past two years. 

“Stericycle’s committed to safety and the environment,” Culotta said. “We’ve implemented a multi-pronged program over the past 18 months that includes a centralized, global focus on safety, enhanced training programs and a shift to behavior-based safety culture.”

Storey County Commission Chair Marshall McBride and Storey County Commissioner Jay Carmona voted in favor of the permit. Storey County Commissioner Lance Gilman recused himself from the vote. Gilman’s real estate company is the broker for the industrial center. 

Stericycle, a global publicly-traded company, disposes of medical waste products, including trace chemotherapy drugs and pathological waste from hospitals, clinics and universities. 

“The reality is that we live in a world that generates waste that has to get brought down to the safest levels” Carmona said in comments before voting to grant Stericycle a permit. 

“Unfortunately, in today’s society we have to have a place that can get rid of that stuff,” he said. “While obviously we don’t want any more pollution, I think this is one of those necessary evils.”

Proposal to build medical waste incinerator at industrial park faces opposition

Horses at Tahoe Reno Industrial Center

A medical waste disposal company with a record of environmental compliance issues is facing pushback over a proposal to build an incinerator at the Tahoe Reno Industrial Center outside of Reno.

The industrial center’s largest landowner, Blockchains, and horse advocates told a Storey County Planning Commission earlier this month that Stericycle’s proposal to build a regional medical waste incinerator raised environmental concerns at the sprawling industrial park.

Stericycle, a publicly traded company that specializes in medical waste, is looking to build a roughly 50,000 squre-foot facility at the Northern Nevada industrial center. 

If built, the medical waste disposal at the Tahoe Reno Industrial Center would replace a facility in North Salt Lake, Utah. The incinerator would receive about 10 to 15 trucks of waste every day from the Western U.S. and Canada, according to an application for a special use permit.

The company indicated in its application that the incinerator facility, which would have the potential to generate electricity, could undergo an expansion in the future. 

Blockchains raised concerns about its track record in Utah, where regulators levied a $2.3 million fine against the company. The fine, the largest in state history, was part of an agreement to settle allegations that the company exceeded emission limits and misreported test results. 

Stericycle has faced regulatory scrutiny elsewhere. In June, the company agreed to pay $2.2 million in penalties, settling compliance issues with Washington environmental regulators, including an investigation that found mismanagement led to a fire at a Tacoma waste facility. 

Despite wariness over the company’s checkered track record on environmental compliance across the West, Stericycle representatives told the planning commissioners that its incinerator facilities must follow strict air quality regulations and operate below allowable emission limits.

“We appreciate the concerns that have been raised during the development process and we are working closely with regulators, elected officials, neighboring businesses, and community groups to address their questions,” the company said in an emailed statement. “As a dedicated corporate citizen and neighbor, we are committed to ensuring the safety of our facility.”

The project would also create skilled jobs in western Nevada, Stericycle said.

“At a time when the local economy is struggling with employment and economic losses due to the pandemic, we are proud to bring meaningful work opportunities to the county,” the statement said.”

Stericycle’s facilities emit chemicals, including carbon monoxide, hydrogen chloride, particulate matter, sulphur dioxide, mercury, cadmium and lead, according to the company’s presentation to the planning board. The Nevada Division of Environmental Protection would be responsible for issuing an air quality permit and for enforcing emission standards, the permit application said. 

The planning commission, weighing whether to grant Stericycle’s application for a special use permit to allow the facility, postponed its vote. The next meeting is slated for early August. 

The debate over the medical incinerator also represents shifting power dynamics around future development at the industrial park, home to the Tesla Gigafactory and an Amazon warehouse. 

The deal to bring the company to the park was negotiated by the broker for the industrial park’s master developer, Storey County Commissioner Lance Gilman, who is also a real estate agent. For years, Gilman and the development company controlled much of the park’s operations. 

But in 2018, they sold most of their remaining land to Blockchains, a company that aims to build a cryptocurrency city at the park. Blockchains is pushing back against the Stericycle bid, as the largest landowner at the industrial park and with three parcels adjacent to Stericycle’s property.

In a letter to the planning commission, Blockchains said the ‘proposed transportation, storage, and incineration of special waste could have a materially negative impact on Blockchains’ properties and future development plans that mitigation efforts may not prevent.” 

Matthew Digesti, Blockchains’ vice president for government affairs and strategic initiatives, told the commission that it had not provided proper notice of the application, giving Blockchains four days to investigate the project proposal, rather than the required 10 days. He also said county staff had not fully studied the “adverse impacts” of the project on public health and public safety.

He said “the proposed use is extremely transformative and it should not be decided upon, on a short time frame, with little investigation or analysis surrounding potential adverse impacts.”

Mustangs, frequently seen at the industrial park, could also be harmed by “potential biohazard exposure,” a national horse advocacy group argued. Suzanne Roy, who leads the American Wild Horse Campaign, said she also worried the project would increase traffic in an area where the group has received multiple reports of horse collisions. 

Roy said the group plans to talk to the company about its concerns.

“These concerns include potential biohazard exposure for horses and for personnel working on the fertility control program at [industrial center] and proximity of the incinerator to a key water source for the horses, potentially leading to contamination and disturbance that would deter horses from watering,” Roy said in an emailed statement on Monday. 

The proposal comes after the company spent about three years seeking permission to operate at the Apex Industrial Park in North Las Vegas. The company scuttled its plans at Apex after North Las Vegas staff recommended denying the company’s application, the Las Vegas Sun reported. Staff, which initially signaled support, cited concerns about environmental compliance.

Selin Hoboy, the company’s vice president of government affairs and compliance, said that the company has not had compliance issues in Utah since the violations were uncovered in 2011.

 She also said the company has undergone a “significant change in leadership” over the past 18 months, and Stericycle’s new leadership has “embraced and enforced compliance and safety.”

“We really feel like this is a good fit for us, and we look forward to the opportunity to be in the community there,” Hoboy said at the Storey County Planning Commission meeting on July 16.

Hoboy said Stericycle withdrew its application in North Las Vegas because of infrastructure constraints at the Apex Industrial Park, echoing a longtime complaint from other developers. 

Storey County Planning Commissioner Kris Thompson, who works for the master developer, read a disclosure at the beginning of the meeting, recusing himself from the matter. In addition to negotiating the land sale, the park’s developer often helps with obtaining permits, setting up a conflict for Thompson, as a planning commissioner, and Gilman, as a county commissioner.

As a member of the public, Thompson offered public comment on the incinerator, noting that some manufacturing and processing companies at the park already require air quality permits.

In an email Monday, Thompson added that the industrial center vetted the project. Given that the company has operated for three decades and in multiple countries, Thompson added that its record was strong. He said incidents were “pretty rare, few and far between occurrences.” 

“And as far as I know,” he wrote, “there have been zero catastrophic environmental incidents by this company which is a very good track record for any company in business three decades dealing with sensitive materials and working with health care facilities all over the world.”

Although the Tesla Gigafactory and distribution warehouses receive frequent media attention, the industrial park is already home to several facilities that deal with hazardous materials. 

In late November, AquaMetals, a company exploring lead recycling technology, reported a fire at their facility in the industrial park. Another company, Asia Union Electronic Chemical Corporation, received a special use permit from the county to use hazardous chemicals as part of its operations. 

Update: This story was corrected on Aug. 18, 2020 at 4:04 p.m. An earlier draft included a typo indicating that Stericycle's facility would be about 50,000 acre-feet, a unit used in allocating water. The planned facility will be about 50,000 square-feet.

Indy Environment: Environmental injustice, an executive order and an endangered species lawsuit

Good morning, and welcome to the Indy Environment newsletter. 

To get this newsletter in your inbox, subscribe here. As always, we want to hear from readers. Email me with tips at daniel@thenvindy.com and let us know what you’re seeing on the ground.

The last edition of this newsletter came out two weeks ago, but it feels like a decade has gone by. Since the brutal death of George Floyd in Minnesota, thousands of demonstrators in Nevada — and across the nation — have come out to protest against systemic racism, police brutality and called for policy reform. In so many ways, the last few weeks have revealed, in stark and often explicit terms, the existing inequities and injustices already existing within the country.

Today, I want to start the newsletter by highlighting an issue that does not get enough attention from the media, politicians and many nonprofit groups — environmental injustice. 


Throughout the country, there are clear ways in which environmental pollution disproportionately affects people by race and income. It’s an environmental issue, but it’s also a governing issue.

And often, environmental injustices evolve in the nitty-gritty of policymaking and permitting, local and state functions that can have an outsized impact on pollution in specific and general ways. That’s why, in addition to seeking local and state-led police reform, many protesters across the country are asking politicians to consider broader policies that reform other systemic issues. 

But it also means that the policies for addressing these concerns don’t often come in a one-size-fits-all package. Instead they are often case specific, requiring both activists and policymakers to invest time and resources into working toward solutions. 

Environmental injustices are pronounced across the arid West, and only expected to worsen with climate change. That includes Nevada, where it is becoming a part of the policy debate.

In January, several groups banned together to form the Nevada Climate Justice Coalition. 

The coalition’s mission: “to engage policy-makers and the public in a collaborative discussion about how to move away from environmental, economic, and land-use policies that promote unsustainable patterns of development and resource use that contribute to the climate crisis.”

The group expressed concerns that the Clark County Lands Bill, a proposal to allow for more development outside of Las Vegas’ urban center, could drive increasing carbon pollution. 

The Fourth National Climate Assessment found that indigenous communities in the Southwest “are among the most at risk from climate change.” These same communities often face limited access to water (sometimes due to legal impediments), as Outside Magazine noted last week. 

Although tribes often hold priority rights to water, it can take years of litigation to ensure both water supply and quality issues, a result of both past political decisions and industrial pollution. 

The Anaconda Copper Mine, for instance, polluted an aquifer that is shared by the Yerington Paiute Tribe and domestic well-owners. For years, it meant a company provided water bottle deliveries to the tribe and residents in the area. The state approved a study last month showing that agricultural practices and naturally-occurring uranium also contributed to the contamination.

Another case, the Moapa Band of Paiutes and coal ash. 

In urban areas, environmental injustices are also pronounced. 

On Earth Day this year, leaders from the Department of Conservation and Natural Resources and Governor’s Office of Energy framed climate change as a public health issue, writing this: 

"Both Las Vegas and Reno rank among the fastest-warming cities in the US, and recent analysis shows that our most disadvantaged neighborhoods are located in the hottest parts of North Las Vegas and Las Vegas, making these communities among Nevada’s most vulnerable.”

These issues are hardly unique to Nevada. They are pervasive throughout the country. Reporter Sammy Roth explored this more in his newsletter this week for the Los Angeles Times. It has links with stories that look at this issue — and activism around it — form a broader perspective. 

Lastly, these issues are not only confined to policy. There are issues in who is included in these conversations and in outdoor spaces. With people seeking an escape amid the coronavirus pandemic, this conversation is more prominent than ever (see this incident). A striking piece of writing that explored this, in the context of Red Rock Canyon, was published earlier this year. 


Here’s what else I’m watching:

Building on public land: The Washington Post reported that President Trump planned to sign an executive order “to waive long-standing environmental laws to speed up federal approval for new mines, highways, pipelines and other projects given the current 'economic emergency.”’ In a state with so much federally managed land (about 85 percent of the state), this could have big consequences for an environmental review process used to inventory the impacts of projects. As the article notes, any decisions made under this order could be challenged in court.

The relict dace: The Center for Biological Diversity sued the U.S. Fish and Wildlife Service this week to protect a rare fish species, known as the relict dace, under the Endangered Species Act. The population lives in the Johnson Springs Wetland Complex in northeastern Nevada and near Nevada Gold Mines’ Long Canyon Mine. Several groups and the Confederated Tribes of the Goshute are protesting water rights to expand the mine. They argued that the mine’s plan to pump water would dry out the springs and threaten wildlife habitat, including for the relict dace. 

It’s all connected: This week, we published a three-part series with Aspen Journalism, KUNC and KJZZ that examined water investment across the Southwest. My article and radio segment looked specifically at the Humboldt River Basin and one idea to profit off of scarcity when towns and industry come calling. The other stories are equally relevant, especially as it relates to the Colorado River. The two stories about Colorado and Arizona look at the specter (or possibility, depending on your perspective) of water transfers and water markets across the basin. And will outside investors seek to profit off of increased scarcity and new programs to manage water?


A public service announcement: “Don't do stupid stuff to start a fire on any day but definitely don't do it on a red flag day.” That’s what a National Weather Service meteorologist said in a briefing about fire risk. The Reno Gazette Journal did a story about the fire season, already very active, and the added challenges facing firefighters responding during the pandemic. 

Effluent pipeline inches forward: Over the weekend, I wrote about a settlement agreement signed by the water district for the Tahoe Reno Industrial Center. The deal is not fully in place, but it settles an eminent domain dispute. The dispute emerged after the water district voted to seize property for a pipeline from the industrial center to a Reno-Sparks regional wastewater facility. After the vote, reporting found that the public water district’s board was employed by Lance Gilman, the private developer of the industrial center, and had delegated much of its operational responsibilities to a private utility tied to the industrial center. Those circumstances raised questions about whether or not the public water district could seize private property.

Sage grouse challenge: The Associated Press reported this week that conservationists are challenging the Trump administration’s decision to approve oil exploration on federal land that includes habitat for the imperiled Greater sage grouse, with a range that spans across much of the Intermountain West. It comes after a Montana judge, in a ruling last week, invalidated energy leases in Montana and Wyoming because the administration did not protect the grouse.

Water district signs agreement to settle eminent domain case for industrial center pipeline

A public water district for the country’s largest industrial park has agreed to settle an eminent domain case weeks after a judge ruled that the state Constitution gave a nearby family the right to a jury trial in determining whether seizing their private land for a pipeline project was valid.

Approved by the water district's board on May 21, the agreement could remove a major hurdle to building a regional pipeline from the Tahoe Reno Industrial Center to a municipal sewer plant serving the Reno area roughly 30 miles away. Several conditions in the 20-page agreement still need to be satisfied for it to be final. But all three parties involved have signed the settlement.

The agreement between the Menezes family, the water district and the developer would reroute the pipeline alignment and provide $500,000 in compensation to the family, including attorney fees. It also addresses several access issues during and after the pipeline’s construction. 

Once built, the pipeline will deliver treated effluent to the industrial center, which has attracted investment from big tech companies, including Tesla, Google and Switch. Elected officials have generally supported the project, which would ease the burden on the municipal sewer plant and bring more water to an industrial park that has propelled economic growth in Northern Nevada. 

But it hit a roadblock when a family refused to let the pipeline pass through their hay baling and trucking business along the Truckee River. After the industrial park developer tried to negotiate with the landowner, the water district’s board voted to occupy the land through eminent domain action, a special power that allows governments to seize property if it is for “public use.” 

According to court records, the water district argued that just compensation for all the property that it wanted to condemn was $137,410.

The Menezes family responded in court. 

They wanted to know more about the pipeline, including who was building it, paying for it and benefiting from it. And much of their inquiry focused on the nature of the public water district. 

They asked: Was the water district taking private property to benefit private interests?

The Nevada Constitution excludes “the direct or indirect transfer of any interest in property taken in an eminent domain proceeding from one private party to another private party.”

Details that arose from the litigation and reporting by The Nevada Independent showed that the water district had, for years, blurred the lines between a public and private entity. The findings raised further questions about whether a public body, controlled by private interests, could wield the power of eminent domain, a power allowing governments to seize property for “public use.”

The reporting found that the public water district had ceded most operations to a private water utility owned by the developer’s of the industrial park that it served. What governmental actions that could not be delegated were voted on by a governing board that came to solely comprise employees of Storey County Commissioner Lance Gilman, the face of the industrial park. 

In April, a judge ruled that the Nevada Constitution, under a 2008 amendment, gave the family the right to a jury trial to determine whether or not the taking of property was for a “public use.”

During a hearing on the case, First Judicial District Court Judge James Russell said that he thought effluent was for public use, according to hearing audio requested from the court. 

“But it’s got to be a jury determination,” he said. 

Then in May, the parties reached a settlement.

Luke Busby, the lawyer for the family, declined to comment on the settlement agreement. Kris Thompson, the board president for the water district, also declined to comment for this story.

The settlement became public when it was presented at a water district board meeting on May 21. The water district board unanimously approved the settlement agreement. Even before the lawsuit began, the public water district had been taking steps to professionalize its operations and part ways with the private developer-controlled utility charged with operations.

Board members, which include workers for Gilman’s brothel, now read disclosure notices at meetings.

Follow the Money: Campaign finance reports show GOP edges in key Assembly races, tight contests in State Senate

Front of the Nevada Legislature building at night

A year after legislative Republicans became close to an endangered species after widespread 2018 electoral defeats, the party’s attempted comeback was boosted by candidates in several key races outraising incumbent Democratic lawmakers during the last year.

Details from the 2019 contribution and expenses reports, due on Jan. 15, detailed how much legislative incumbents and candidates raised over the last calendar year and painted a more hopeful picture for Republicans in several “swing” Assembly races, with a more mixed view in competitive state Senate seats.

Although there are 63 seats in the Legislature — 42 Assembly members and 21 senators — actual control of the body, or more likely whether or not Democrats have a two-thirds majority (required for passing any increase in taxes) in either body, will likely come down to just a handful of competitive seats up in 2020. 

Changing the balance of the state Assembly, where Democrats enjoy a 29-13 seat advantage, could be the best ticket for Assembly Republicans. In at least three races — Assembly Districts 4, 29 and 37 — Republican candidates reported raising at least six figures and each substantially outraised the Democratic incumbent in the seat.

Only 10 seats are up for election in the Senate, with members serving staggered four-year terms. Democrats control 13 seats — one shy of a super-majority — but have not endorsed candidates in the two most likely pick-up districts; Heidi Gansert in Senate District 15 and Scott Hammond in Senate District 18. And those incumbents will start with a significant financial advantage — Gansert raised $245,000 in 2019, and Hammond also pulled in $107,800.

Senate Democrats will also have to work to defend two competitive seats — Senate Majority Leader Nicole Cannizzaro’s Senate District 6 and the open Senate District 5, vacated by termed-out Sen Joyce Woodhouse. They’ll also have to deal with a competitive, three-way primary in safely Democratic Senate District 7 between caucus-backed Roberta Lange and two long-time Assembly members, Richard Carrillo and Ellen Spiegel.

And with no major statewide or federal races (beyond congressional seats and the presidential election) on the ballot, it’s likely that more attention and funds will make their way to down-ticket legislative races, especially ahead of an expected redistricting after the 2020 Census that could determine the political trajectory of the state over the next decade.

Fundraising reports, especially those filed nearly a year before an election, aren’t a perfect barometer of the success of any particular candidate, but offer a helpful context in determining which races that individual parties determine to be the most winnable and whether or not individual candidates have the resources to compete in a down-ballot race. (It’s also worth noting that incumbents are disadvantaged in fundraising because of a legally required “blackout” period before, during and shortly after the 120-day legislative session).

On the flip-side, a close examination of major contributors can pull back the veil on which businesses or industries are trying to curry favor with lawmakers ahead of the 2021 legislative session. 

Here’s a look at the financial status of major legislative races:

Major state Senate races

Although 10 state Senate races will be on the 2020 ballot, only a handful of races are likely to be competitive and shift the current 13-8 seat advantage currently held by Democrats.

A key battleground will be in Senate District 6, which is held by Cannizzaro, who narrowly beat former Assemblywoman Victoria Seaman in the 2016 election. Senate Republicans have endorsed April Becker, a Las Vegas-based attorney. Democrats make up 40 percent of registered voters in the district, and Republicans make up roughly 32.8 percent of registered voters.

Cannizzaro, who also beat back a politically motivated recall attempt in 2017, starts the race with a significant financial advantage after raising more than $326,000 throughout 2019, spending just $22,000 and ending the reporting period with $531,000 in the bank. Her top donors include $30,000 from properties affiliated with the Las Vegas Sands and $10,000 checks each from the Mirage, Switch and the Home Building Industry PAC, as well as nearly $10,000 from Woodhouse’s campaign.

But Becker’s first campaign finance report isn’t shabby; she reported raising nearly $313,000 over the fundraising period (including a “written commitment” from herself for $125,000) and ended the period with $152,000 in her campaign account.

Top donors to Becker included several Republican senators ($10,000 each from James Settelmeyer and the Senate Republican Leadership Conference, $5,000 each from Ben Kieckhefer, Joe Hardy and former state Sen. Michael Roberson and $2,000 from Keith Pickard), as well as $10,000 each from Abbey Dental Center owner Sanjeeta Khurana, the law firm of Gerald Gillock & Associates and Nevsur, Inc. (owned by Bruce and Barry Becker ).

Another highly competitive seat is Senate District 5, where Woodhouse narrowly beat Republican candidate and charter school principal Carrie Buck by less than one percentage point in the 2016 election. Democrats make up 38.4 percent of registered voters in the district compared to 32.6 percent for registered Republicans.

Buck, who is running again and has been endorsed by Senate Republicans, reported raising nearly $63,000 and ended the fundraising period with nearly $58,000 in the bank. Her top donors were fellow Republican senators; $10,000 each from the caucus itself and Settelmeyer, $5,000 each from Kieckhefer, Roberson and Hardy and $2,000 from Pickard.

But Buck’s fundraising total was eclipsed by Democrat Kristee Watson, a literacy nonprofit program facilitator endorsed by Senate Democrats in October.

Watson, who ran unsuccessfully for a Henderson-area Assembly seat in 2018, reported raising nearly $87,000 through the fundraising period, with a significant chunk coming from transfers from other candidates and office-holders. She received $10,000 contributions each from a PAC affiliated with Cannizzaro and the campaigns of Sens. Woodhouse, Chris Brooks, Marilyn Dondero Loop, and $5,000 from the campaigns of Sens. Melanie Scheible, Julia Ratti and Yvanna Cancela.

Other potentially competitive state Senate races feature a lopsided fundraising advantage for the incumbent. Democratic Sen. Dallas Harris in Senate District 11 was appointed to fill the term of now-Attorney General Aaron Ford, and reported raising nearly $46,000 over the fundraising period ($65,000 cash on hand). Her Republican opponents, Edgar Miron Galindo and Joshua Dowden, raised only $7,250 and $ 11,500 respectively over the fundraising period.

Two Republican incumbents up for re-election also posted impressive fundraising numbers that far outstripped potential opponents. Gansert in Senate District 15 raised nearly $246,000 and has nearly $237,000 in cash on hand; potential Democratic opponent Lindsy Judd did not file a 2019 campaign finance report.

In Senate District 18, incumbent Hammond raised nearly $108,000 and has more than $91,000 left in his campaign account; potential Democratic opponent Liz Becker raised $21,700 in comparison and has just $11,200 in cash on hand.

Primary battles

One of the most intriguing legislative races could come in the three-way Democratic primary to replace longtime Sen. David Parks, who is termed out of his Senate District 7 seat. Two Assembly members — Ellen Spiegel and Richard Carrillo — are running for the seat, but state Senate Democrats have thrown their weight behind another candidate, former state party head Roberta Lange.

Lange — who only made her bid for the seat official in mid-December — reported raising more than $64,000 for the seat, essentially during only the last two weeks of December. Her major donors included $10,000 from Cannizzaro’s political action committee, and $5,000 each from six incumbent senators — Ratti, Brooks, Scheible, Woodhouse, Cancela and Dondero Loop. She also received $2,500 from Parks, $1,000 from former U.S. Sen. Harry Reid’s Searchlight Leadership PAC and $5,000 each from UNLV professor and former gaming executive Tom Gallagher and his wife, Mary Kay Gallagher.

But she faces a potentially tough primary fight from Spiegel, who raised $63,000 throughout 2019 and has nearly $213,000 in available cash on hand. Her top contributor was Cox Communications ($10,000 cumulative) but other top givers included the Nevada REALTORS PAC, pharmaceutical company trade group PhRMA, health insurance giant Centene and AT&T ($3,000 from each). 

Carrillo lagged behind both Lange and Spiegel in initial fundraising reports. He reported raising $29,500 throughout the fundraising period, spending $37,600 and having just $17,000 left in available cash. His biggest contributor was the Laborers Union Local 872, which donated $12,500 through contributions by five affiliated political action committees. Other top contributors include tobacco company Altria and the political arm of the Teamsters Union ($5,000 each), and $3,000 each from Nevada REALTORS PAC and the Nevada Trucking Association.

Another major primary election is brewing between Republican candidates Andy Matthews (a former campaign spokesman for former Attorney General Adam Laxalt) and Michelle Mortensen (former television host and congressional candidate) in a primary for the right to challenge Assemblywoman Shea Backus in Assembly District 37.

Matthews raised a massive $154,000 over the fundraising period, the highest amount of any Republican Assembly candidate and the second most of any Assembly candidate behind only Speaker Jason Frierson.

He reported spending $23,800 and ending the period with more than $130,000 in available cash. His top donors included $10,000 combined from manufacturer EE Technologies and founder Sonny Newman, and $5,000 each from Las Vegas-based businesses Vegas Heavy Haul and InCorp Services, Inc. 

Mortensen also posted a substantial fundraising total; more than $102,000 raised, $9,500 spent and more than $93,000 in cash on hand. Her major donors included primarily family members; her husband Robert Marshall and his company Marshall & Associates ($20,000 total), her father-in-law James Marshall ($10,000) and maximum $10,000 donations from several family members including Betty Mortensen, Tom Mortensen, Ryan Mortensen and Mila Mortensen.

Both Republican candidates outraised incumbent Backus, who raised nearly $25,000 during the reporting period and has nearly $64,000 left in cash on hand. Her top donor was Wynn Resorts, which gave her $5,000. Backus narrowly defeated then-Republican Assemblyman Jim Marchant in the 2018 election, the first time a Democrat won the district in four election cycles.

Another competitive primary is happening in Assembly District 36, where appointed Assembly Republican Gregory Hafen II is facing off against Joseph Bradley, who ran for the seat last cycle against former Assemblyman James Oscarson and famed brothel owner Dennis Hof, who won the primary but died before the election.

Hafen reported raising $62,000 over the fundraising period (including a $9,500 loan) and has nearly $47,000 in cash on hand. Bradley reported raising $54,000 and has $38,500 left in his campaign account.

Key Assembly races

Nevada’s Assembly Democrats hit a potential high-water mark in 2018, winning control of 29 seats for the first time since 1992 and gaining enough seats to relegate Assembly Republicans to a super-minority (fewer than two-thirds of members).

But in a handful of competitive Assembly seats currently held by Democrats, Republican candidates posted substantial fundraising totals that not only eclipsed but often lapped the amount raised by incumbent Democrats, giving Republicans a financial leg up in some of the state’s most competitive legislative districts.

In Assembly District 4, first-term lawmaker Connie Munk reported raising $18,600 throughout 2019 and ended the period with just over $30,000 in cash on hand. Her biggest donors were PhRMA and trial attorneys-affiliated Citizens for Justice, Trust.

But her fundraising total was overwhelmed by Republican candidate Donnie Gibson, who reported raising $115,000 and has $87,000 left in his campaign account. Gibson, who runs a grading and paving company called Civil Werx, received maximum contributions from home builders and developers: $10,000 each from Associated Builders & Contractors, Associated General Contractors, the Nevada Contractors Association and the Home Industry Building PAC.

A similar disparity in fundraising totals was also present in Assembly District 29, where incumbent Democrat Lesley Cohen reported raising $16,000 over the fundraising period and has just under $50,000 in available cash.

Steven Delisle, a dentist and former state Senate candidate who announced his intention to run for the Assembly seat on Thursday, reported raising more than $134,000 for the race against Cohen, including a $125,000 loan to his campaign account.

But Democrats may have caught a break in Assembly District 31, where incumbent Skip Daly has won multiple races despite representing a district that went for President Donald Trump in 2016. Daly raised $46,425 through 2019 and has $75,800 left in his campaign account.

Assembly Republicans initially rallied behind Jake Wiskerchen, a marriage and family therapist who reported raising $27,700 for the race and had $19,000 in cash on hand at the end of 2019. But Wiskerchen opted to publicly drop out of the race in early January, leaving Republicans without an endorsed candidate for the time being. Daly’s 2018, 2016 and 2014 opponent, Jill Dickman, reported raising $8,800 in 2019 and has nearly $104,000 in leftover campaign cash.

Legislative leaders

Democratic Assembly Speaker Frierson reported raising more than $233,000 through the fundraising period, spending $174,000 and ended the period with just under $475,000 in cash on hand. His top contributors included a wide swath of Nevada businesses, including $10,000 each from Southern Glazer’s Wine and Spirits, the campaign account of former Assemblyman Elliot Anderson, Home Building Industry PAC, MGM Resorts and UFC parent company Zuffa, LLC. He also received $5,000 from the Vegas Golden Knights.

Republican Assembly Leader Robin Titus, who took over the caucus leadership position after the 2019 legislature, raised just over $38,000 during the fundraising period, spending more than $16,000 and ending the period with $72,000 in cash on hand. Top contributors to Titus included PhRMA and the Nevada REALTOR PAC ($5,000 each).

Her Republican counterpart in the state Senate, Settelmeyer, reported raising nearly $95,000 over the reporting period, with top contributors including UFC parent company Zuffa ($7,500), TitleMax, Nevada Credit Union League PAC, Grand Sierra Resort and Storey County businessman Lance Gilman ($5,000 from each). Settelmeyer ended the reporting period with $137,000 in cash on hand.

Sisolak

Although he isn’t up for re-election until 2022, Gov. Steve Sisolak broke fundraising records for Nevada governors in their first year in office after raising more than $1.6 million for his campaign and another $1.7 million for two closely affiliated political action committees. 

Sisolak reported having more than $2.3 million in available cash on hand at the end of 2019, and only reported spending $164,000 throughout the year. The governor also raised $1.7 million between the Sisolak Inaugural Committee and the Home Means Nevada PAC, which were initially set up to manage Sisolak’s inaugural events but have since been used for pro-Sisolak advertising. Political action committees in Nevada are allowed to accept unlimited donations.

Updated at 12:55 p.m. on Saturday, January 18th to include fundraising totals from Senate Republican candidate Joshua Dowden.

'The deal was rushed:' Records show company skeptical of state financing, discussions to restructure public water district

Horses at Tahoe Reno Industrial Center

In early September last year, high-profile tech companies in the Tahoe Reno Industrial Center appeared before a legislative committee with a request — public financing to help defray the costs of a major pipeline project. Their goal was to obtain more water to help fuel growth at the Northern Nevada industrial park, one of the largest in the world and home to Tesla’s Gigafactory. 

The lawmakers approved. Then the state financing fell apart.

Less than three weeks later, the industrial park’s largest landowner withdrew its support of the deal, notifying the companies in a letter obtained by The Nevada Independent that it did not want to be associated with a project that could be seen as providing “corporate welfare.”

An attorney for Blockchains, a little-known techno-utopia company that owns most of the park’s land, wrote in the letter that “the project has now transformed to focus primarily on the precise type of taxpayer-funded subsidiary that we were against when we first learned of the project.”

Blockchains’ letter and other documents obtained through two public records requests offer new insight into the relationship between business and government at an industrial park that lured companies with incentives and support from the state. 

The letter comes amid new scrutiny of those practices. Last month, The Nevada Independent detailed how the industrial park’s public water district, which wants to use eminent domain to build the pipeline project, blurred the line between a government and private utility for decades. 

The water district is operated by a developer-owned company, TRI Water and Sewer, with board members who all reside at a brothel that is owned by the main broker for the industrial park.

The state office that helped engineer the complicated public financing for the pipeline has also come under recent scrutiny. On Monday, Gov. Steve Sisolak criticized the Governor’s Office of Economic Development for the criteria it uses when deciding to approve tax incentives. Sisolak said he plans to move the office in a new direction. Major companies at the industrial park have benefited from state and local tax breaks in addition to Nevada’s already lenient tax structure. 

In an email last week, a high-ranking Reno lawmaker criticized the proposed pipeline financing.

“This deal was rushed, lacked transparency and is the antithesis of public accountability,” said Assembly Majority Leader Teresa Benitez-Thompson, a Democrat who was on the Interim Finance Committee. “It begs the question of allowing such statutes to remain on the books.”

A request from the state

In 2015, the Legislature met for a special session to consider tax breaks for Faraday Future, an electric car company that planned to move to North Las Vegas. The cash-strapped car company abandoned its plans to build a factory, but the statutes from that session remained on the books. 

Out of that special session, the economic development office gained bonding authority. By September 2018, the office was looking at using bonds to help finance the effluent pipeline. 

The 16-mile pipeline will siphon treated effluent from a regional wastewater facility to the park. City officials consider it a win-win for the Reno area, helping ratepayers defer costly upgrades while bringing more water to an industrial park that has helped diversify the state’s economy.

The companies backing the effluent pipeline wanted to expand their existing operations or build on vacant land. One limiting factor for their growth plans was water. But the effluent project was expected to cost more than $100 million. To finance the off-site pipeline — stretching from the park to the regional wastewater facility along the Truckee River — they turned to the state. 

The proposed financing worked like this. 

  • The industrial park would be responsible for building the project. 
  • Storey County would issue special assessment bonds up to $35 million.
  • The state would issue mirroring bonds to pay for the Storey County bonds.
  • The companies would reimburse the state by agreeing to pay periodic assessments.

Eventually, the companies could get paid for some of their costs too. The companies would be reimbursed through a Tax Increment Area (TIA), a special tax district where a portion of new tax revenue — tied to the area — is reimbursed to the companies that paid for the infrastructure.

The reimbursements would not dip into dedicated property taxes for schools but would tap into revenues for county fire services. It also taps into payroll tax and the modified business tax. The state justified the revenue loss by noting that the reimbursements would be a sliver of the $1.35 billion in tax revenue that it expected the area to generate with the new infrastructure. Officials also noted that the revenues would benefit infrastructure built outside of the industrial park. 

On Sept. 5, the 23-member Interim Finance Committee approved of what came to be known as the SAD/TIA deal. The vote to approve the bonds was unanimous. 

But six legislators voted against using the newly-generated tax revenue to reimburse the companies: Benitez-Thompson, Sen. Pete Goicoechea, Assemblywoman Daniele Monroe-Moreno, Assemblywoman Ellen Spiegel, Assembly Mike Sprinkle and Assemblywoman Heidi Swank. 

Blockchains: ‘Corporate welfare’

Those bonds were never issued. 

After months of negotiations, several companies decided to pre-pay about 75 percent of the periodic assessments, according to the letter Blockchains sent to project leaders on Sept. 24.

In the letter, Blockchains General Counsel Lee Weiss recounts learning the night before that several companies intended to pre-pay about $24 million of the project upfront, despite their request for bonds. It suggested that companies had the finances to pay for the project. 

At the same time, the companies would still be reimbursed with the new revenue.

With the company’s official launch about one month away, he wrote Blockchains was “unwilling to assume the risk of being portrayed as an organization that promotes projects that provide corporate welfare to pay for improvements that we have already contractually agreed to fund.”

Blockchains announced that it was withdrawing from the public financing.

Bob Sader, a former legislator and an attorney for the industrial park’s developer, declined to comment on the letter. 

Not everyone agreed with Blockchains’ view of the deal. Proponents argue that in addition to boosting the economy, the pipeline would help cities save on expensive facility upgrades. 

“I was disappointed by [Blockchains’] characterization of the project,” Ben Kieckhefer said in an interview last week. “There were plenty of reasons to support it from a public perspective.”

Kieckhefer has expressed reservations about other aspects of the pipeline construction.

By October, the companies had scrapped the financing deal. The park’s developer, Tahoe Reno Industrial Center LLC, will pay to construct the pipeline. It has entered into private agreements with companies to fund it. The companies could still be reimbursed with the new tax revenue that the project helps generate. The county could reimburse up to $28 million to the companies.

The companies are not reimbursed from existing revenue.

A new landowner

At the center of the pipeline project is the industrial park’s public water district. Once the project is constructed, the water district will operate the pipeline and oversee how the water is used.

But the water district is another place where government and business collide. Despite being a political subdivision with public powers, the water district is operated by the park’s developer.

It is operated by a developer-controlled company, TRI Water and Sewer, and its board members live at a brothel owned by Lance Gilman, responsible for marketing the industrial park. Gilman is also a Storey County commissioner and lists TRI Water and Sewer on his financial disclosure.

The board members also report income from at least one of Gilman’s companies.

Through a 2001 operating agreement, any board responsibilities that are not required by statute were delegated to an existing developer-owned private water company, TRI Water and Sewer. 

For many years, the relationship, blessed by Storey County, reflected a financial arrangement. The master developer, Tahoe Reno Industrial Center LLC, paid for the infrastructure and gave it to the public water district free of charge. It acquired the water rights that the district controlled. 

Until recently, the water district operated in the red. The master developer subsidized the water district for more than a decade to keep rates competitive for companies coming to the park.

But the relationship came with benefits too.

The unique structure, a combination of circumstances and loopholes in Nevada law, allowed the industrial center to effectively operate a private water utility while avoiding oversight from state regulators. Instead, its oversight came from a board that is closely tied to the park’s developer. 

When the industrial park land was largely vacant, the arrangement flew under the radar. 

Then in January, Blockchains scooped up about 67,000 acres of land at the 107,000 acre park. It comprised most of the remaining acreage at the park. At the time, a land play of that size by such a mysterious company raised eyebrows about how it planned to develop its land. Those questions have only amplified since the Trump administration made the area eligible for a new tax break that could boost Blockchains and others if they invest in the land or decide to sell it.

With the sale, what became clear was the need to change the water district’s structure, said Sader, the attorney for the park’s developer. Once the sale went through, the water district was still controlled by the park’s developer, but the developer no longer controlled most of the land. 

In early 2018, Sader began discussing the issue with the park’s major customers.

Those involved in or advised of the talks included Google, Switch, Tesla and Blockchains, Sader said. All of the companies declined to comment or did not respond to multiple email requests.

‘Change of control'

By the time legislators reviewed the financing, the companies had not resolved the problem of the water district’s structure. But during that time, one possible solution was being discussed.

Some companies were looking into transferring the ownership of the water district’s operating company, TRI Water and Sewer, from the developer to the major companies at the park. That would have put major customers, such as Switch and Google, in control of the water district.

One email suggests that the structure of the water district had some bearing on the project. On Sept. 24, 2018, Sader emailed Switch that he needed a decision soon on whether the large companies would take over the water district’s operator, TRI Water and Sewer.

Sader writes “time has just about run out on effectuating the transfer...so as not to disrupt the [project] and on-site process water projects. If so, [the park] must plan for an alternative path.”

“If I do not hear from you with details on a proposed change of control this week, I will assume Switch has lost interest in the concept and proceed accordingly,” Sader writes in his email.

The companies opted against the takeover, and the park’s developer still controls the district. 

Sader said that the water district turned to an alternative plan. Based on Nevada law, a county commission can serve as a public water district’s de facto board in certain circumstances. 

In one email in October, the water district’s recently hired general manager wrote to a group of Storey County officials and consultants that at an upcoming meeting, they would consider “a method of protecting Storey County from liability associated with taking on the [the water district] as a component unit of Storey County in the event that the [commission] elects to do so.”

The commission has yet to vote on whether it wants to serve as the district’s trustees. 

“That is only in discussion,” said Austin Osborne, the county manager.

He said the county was not interested in taking over the management of the water district.

In recent weeks, the public water district has rolled out reforms and is restructuring itself so that it can operate as an independent entity, separate from the master developer. The district plans to hire staff, and board members have started reading disclosure statements at meetings. TRI Water and Sewer plans to terminate its operating contract with the water district on June 30.

A power struggle

The documents also highlight a shifting power dynamic at the park. Blockchains now controls most of the park’s land — an amount larger than Reno — but it has little power over decisions. 

After The Nevada Independent first reported that the privately controlled public water district was planning on using eminent domain for the project, Blockchains’ lawyer sent another letter. In it, he challenged whether the project met the legal threshold for seizing private property. 

“While we do not profess to be eminent domain experts, as attorneys, we are not convinced that the pipeline project constitutes a ‘public use,’ Weiss, the lawyer, wrote in an Oct. 24 letter. 

“First, it is the Master Developer, a private entity, not the [water district], that has the obligation to construct the pipeline such that the [water district] may not have standing to pursue the action. Second, the beneficiaries of the pipeline... are all private companies,” he continued.

Weiss’ letter concluded that “even if the [water district] has standing, as the pipeline is being constructed by a private party for the benefit of private parties, we do not believe that there is any significant public purpose to justify an eminent domain action.”

Other companies have not commented publicly on how they view the water district’s use of eminent domain. The water district has said eminent domain is justified, noting that it was a last-resort move after it made numerous efforts to negotiate with the private property owner.

The public records show a continued effort to negotiate with the Menezes family, which owns a trucking company, a hay cubing operation and owns land above the pipeline’s proposed route.

In an emailed response to Weiss on Nov. 1, Sader noted that “our eminent domain attorney is strongly of the opinion that the legal analysis in your letter on the public use issue is flawed.”

During a board meeting on Friday, that eminent domain lawyer, John Gezelin, recommended using condemnation because the Menezes family declined the most recent settlement offer.

In an initial challenge to eminent domain, the Menezes family raised questions about who was behind the project and who was paying for it. They cited a 2008 constitutional amendment “that the transfer of property from one private party to another private party is not considered a public use.” Whether or not a project is for “public use” is a key standard for justifying eminent domain.

Some legal experts are unsure how the courts would rule on the provision. 

Because many eminent domain cases end with settlements, there are few precedents. Reno attorney Steven Silva, who teaches property law at Truckee Meadows Community College, said the courts have traditionally weighed a project’s purpose more heavily than who is paying for it. 

“The form of the actor has been less important,” he said “It is traditionally the use.”

A court dismissed the water district’s first attempt to use eminent domain over noticing issues.  

On Friday, the water district voted to approve a new eminent domain action. 

Supreme Court rules that news shield law applies to digital media, sends developer's defamation case back to lower court

Nevada Supreme Court

In a unanimous decision Thursday, the Nevada Supreme Court ruled that journalists writing for digital publications are protected from revealing their sources. The ruling expands the state’s media shield law, which has not been updated since 1975 and did not contemplate the Internet.

The ruling overturned a lower court decision earlier this year that suggested the law did not protect online publishers in the same way that it protected newspapers. Media industry groups and media law experts said the ruling was flawed and placed significant restrictions on a law that was intended to protect First Amendment speech, whether or not it was made online.

The Supreme Court concluded “that one can ‘print’ in more than one way.”

“Just because a newspaper can exist online, it does not mean it ceases to be a newspaper,”  Chief Justice Mark Gibbons wrote in the court’s opinion. “To hold otherwise would be to create an absurd result in direct contradiction of the rules of statutory interpretation.”

The case in question arose after an online publisher, Sam Toll, was asked to reveal his sources about reporting that questioned whether Storey County Commissioner Lance Gilman resided in the county. Gilman, who owns the Mustang Ranch brothel and claims to live there, sued Toll for alleged defamation. During the course of the litigation, Gilman asked the court to compel Toll to reveal his sources for the claim, claiming the shield statute did not protect an online blogger.

Toll publishes an online publication, The Storey Teller.

In March, Carson City Judge James Wilson granted Gilman’s request to compel. Because the statute says the shield law privilege applies to “any newspaper, periodical or press association,” Wilson reasoned that Toll was not covered until he paid to join the Nevada Press Association. 

Media law experts cast the decision as harmful to a free press, noting that the narrow reading could put a chilling effect on the news gathering process for freelancers, documentarians and online publications. Their sources might fear retaliation and be less likely to share information.

Toll asked the Supreme Court to weigh in. 

Press groups, including the Nevada Press Association, the Reporters Committee for Freedom of the Press, the Online News Association and Reporters Without Borders, filed briefs before the Supreme Court in support of Toll’s argument — that the law should protect his reporting.

On Thursday, the Supreme Court said that the district court erred by granting Gilman’s request that Toll reveal his sources. The court said denying the media shield law cannot be based on reasoning that there is a difference whether news is printed online or in a physical medium. 

Patrick File, a UNR professor studying media law, said that finding was broadly significant.

“It’s clarity on a question that clearly needed some clarity,” File said.

In the specific case, litigation is likely to continue. The Supreme Court refrained from making a determination about whether The Storey Teller itself qualified for protection under the shield law.

Instead, the court said the way that Toll publishes his reporting — online — is not a valid reason to disqualify a publication from invoking the shield law. The Supreme Court directed the District Court, under the new ruling, to re-analyze Gilman’s motion to compel Toll to reveal his sources.

“While we decline to resolve whether or not a blog falls under the definition of a newspaper, we conclude that a blog should not be disqualified from the news shield statute...merely on the basis that the blog is digital, rather than appearing in an ink-printed, physical form,” Gibbons wrote.

Toll invoked the shield law during a deposition. The district court issued an order allowing Gilman to conduct limited discovery to determine whether the comments met the standards for proving a defamation claim. Toll had also challenged that order before the Supreme Court. 

The Supreme Court denied Toll’s challenge.