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City of Elko

ELKO – Elko brothel owners aren’t too happy with the city’s proposed dramatic boost in fees outlined in a business impact statement that will be coming before the Elko City Council Dec. 11.

The brothel owners wrote that the proposed licensing and yearly renewal fees are more than triple current fees, and these hikes were proposed “without sufficient research and feedback of the economic consequences to the affected businesses.”

The application fee for a brothel license would go from $2,500 per applicant to $5,000 per applicant. The proposal also calls for the license fee to jump from $3,000 to $10,000 per license, and the annual renewal fee to go from $3,000 to $10,000 per license.

The letter states the brothel owners understand the need to increase the $3,000 renewal fee because it hasn’t gone up since 2010, but the proposed increase is too high. They asked the city to consider $5,000 instead of $10,000.

“In our view, the four Elko brothels are being unfairly compared to brothels elsewhere in the state, as well as other types of lawful businesses within the community,” states the letter submitted Nov. 19 from Kathleen Ornelas, owner of Desert Rose Gentlemen’s Club; Gabriel Ornelas, Desert Rose manager; and Louis Goldberg, owner of Mona’s Ranch and Inez’s.

They said their business potential is limited by the “relatively small size of our community and severe zoning restrictions, which limit us to existing locations that are away from freeway access. We have no potential to expand our number of rooms as do other brothels with much higher populations in other areas.”

The brothels are restricted to the South Third Street area of the city.

Keith Bantz, manager member of Raymond Lee LLC, owner of the building Kathleen Ornelas leases for Desert Rose, also wrote to the city that the proposed license fee “appears to be excessive,” and could result in the loss of the tenant. The building is Raymond Lee LCC’s only property.

The letters were in response to the business impact statement.

If the new fees go through, the city expects to collect $40,000 per year for the licenses, or $10,000 each for the four brothels in Elko. No application revenue is anticipated at this point because the four brothels have current owners, according to the business impact statement.

Revenue to the city from the increased fees would be used to cover the costs for the Elko Police Department to enforce the brothel ordinance and for investigations relating to brothels.

The city also is proposing an amended ordinance that states brothel fees will be determined by council resolution rather than set out in the code. First reading of the ordinance can’t be held until the business impact statement is approved, however, said City Clerk Kelly Wooldridge.

She said on Dec. 7 that if the council decides the business impact statement with the proposed fee hikes would cause significant hardship for the brothel owners, the council “would need to discuss what changes could be made to the business impact statement.”

Any changes would be made before first reading of the proposed ordinance changes. Wooldridge expects first reading to be Dec. 18, and the second reading at the council’s Jan. 8 meeting. A public hearing is slated for 5:30 p.m. Dec. 18, according to the business impact statement. Another hearing would be held at the Jan. 8 meeting for second reading of the amended ordinance.

Wooldridge said action on the resolution setting brothel fees would be at the January meeting, as well.

She said the most significant changes to the proposed amended ordinance in addition fees set by resolution are the ones stating that four brothels will be allowed in the city, rather than five, and calling for translators for sex workers in their talks with city staff or police officers.

Councilman John Patrick Rice asked for the translator requirement at the council’s Oct. 23 meeting because of concerns about human trafficking. The council decided at that meeting to start work on a revised brothel ordinance and instructed city staff to issue a business impact statement on hiking brothel fees.

The proposed amendments to the brothel code also change definitions; revise contents of the license application; amend the application, filing and investigation requirements; amend work permit registration requirements; and clarify language on medical examinations.

In a related matter, the council agenda for the Dec. 11 meeting calls for the council to consider modifying the house of prostitution license and retail liquor license for Mona’s Ranch to add Peter Tang to the license.

Elko Police Chief Ben Reed stated in a memo to the council that Tang has no criminal history, and there is no evidence of him being involved in organized crime or human trafficking. He has positive personal references.

Tang has no other employment besides managing Inez’s, and he lives in Elko for roughly five or six weeks at a time before returning home to San Francisco for a week, according to the memo.

City council also will be asked to act on brothel and retail liquor licenses for Louis Goldberg, Anna Brown and Tang for Inez’s. Investigations were completed on Goldberg and Brown in August when Goldberg took over Mona’s Ranch. Brown’s name went on the license as a manager. Tang’s would be added.

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