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Nov 23, 2019

Amazon: Behind the Smiles

Co-produced with PRX Logo

Shop. Click. And the next day, your purchase is on your doorstep. Amazon has changed the face of shopping, but at a surprisingly high human cost. With Black Friday and Cyber Monday coming soon, we look at what’s behind those smiling packages and expose the dangers of working at Amazon.

We start with an investigation from Reveal’s Will Evans into workplace injuries and safety culture at Amazon warehouses. While Amazon touts its workplaces as safe and efficient, Evans finds that many are much more dangerous than the industry average. 

Next, with cities all over the country vying to attract companies such as Amazon, Anjeanette Damon from the podcast “The City” looks at Reno, Nevada, which several years ago persuaded Tesla to build a battery factory there. We meet one of the colorful characters who made it happen. 

We end with a story about unforeseen problems created by Tesla’s arrival in Reno. Even though it brought thousands of jobs, it also prompted a housing crisis that’s put thousands of people on the edge of homelessness. 

Dig Deeper

Read: Will Evans’ investigation into Amazon, Behind the Smiles

Explore: Find out what injuries are like at the Amazon warehouse that handled your packages.

Contribute: Do you work for Amazon? Help us collect workplace safety records.

Listen: “The City” podcast

Credits

This week’s show was produced by Katharine Mieszkowski and Najib Aminy and edited by Taki Telonidis. Our story about Amazon was reported by Will Evans. 

Our Reno stories were reported and produced by Anjeanette Damon, with help from Fil Corbitt, Kameel Stanley, Taylor Maycan and Robin Amer.

The City’s editors are Amy Pyle and Matt Doig. Ben Austen was the story consultant. Original music and mixing  by Hannis Brown. Legal review by Tom Curley.

Our production manager is Mwende Hinojosa. Original score and sound design by Jim Briggs and Fernando Arruda, who had help from Amy Mostafa. Hosted by Al Letson.

Support for Reveal is provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Heising-Simons Foundation, Democracy Fund, and the Ethics and Excellence in Journalism Foundation.

Transcript

Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal's radio stories is the audio.
Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. It's the holidays, Black Friday, Cyber Monday. Oh, yeah, Thanksgiving too. 'Tis the season for one quick ordering and Amazon makes it easy for shoppers to get the goods overnight.

 

Al Letson: That's one way CEO Jeff Bezos became one of the world's richest people. But behind the scenes, it takes a massive effort. At Amazon, the season is called "peak" and it's intense. Here's how one manager revs up his staff at the beginning of a shift.

 

Speaker 2: [inaudible] on three: one, two, three. Rah!

 

Al Letson: More than 100,000 people work to get all those gifts out of the warehouse, sometimes on 12-hour shifts.

 

Christina V.: From the time you punch in to the time you punch out, you're like, going a million miles a minute.

 

Al Letson: That's Christina [Van Voors 00:00:59], who lives in Southern California. She started working at Amazon's Eastvale warehouse when it opened last year. Workers have to process hundreds of items an hour and their pace is monitored down to the second.

 

Christina V.: It's intense. It's very, very intense. Think of Santa's workshop.

 

Al Letson: These warehouses are giant, packed with every product imaginable. Instead of elves, robots zip around some of the warehouses. They find what you order and bring it to workers on these tall racks with dozens of compartments. Christina's job is kind of like being a robot buddy, restarting them when they act up.

 

Christina V.: Sometimes they crash unintentionally. We have to go clean up the messes that are out there.

 

Al Letson: That's right. She picks up after robots. But just after Christmas last year, Christina came up on one mess that was too big to deal with on her own. She told Reveal's Will Evans about it. He's been looking at these warehouses of the future and what it's like to be a human working there. Here's Will.

 

Will Evans: I first heard Christina's voice on a 911 call.

 

Christina V.: Hi, I'm calling from Amazon building. I'm one of the associates here and I believe that there is a gas leak here.

 

Will Evans: She's making this call on her cell phone, just after midnight, January 2, 2019.

 

911 Dispatch: Is anyone sick or injured?

 

Christina V.: Yes. Where I was at on my floor pretty much everyone on that side felt sick. [inaudible 00:02:25], but I know for sure that were vomiting. One girl almost completely passed out. She had to be taken by a wheelchair.

 

911 Dispatch: Okay. [crosstalk 00:02:32]-

 

Will Evans: At this point, Christina and her coworkers have been working with the gas smell for hours.

 

911 Dispatch: We are going to recommend that everyone leave the building immediately and leave the doors open as you do evacuate. [crosstalk 00:02:43].

 

Will Evans: Christina says her bosses don't want people to stop working.

 

Christina V.: ... several times, like everyone's sick and you're not letting people go. Like, they're trying to tell us we have to use our personal time if we want to leave.

 

911 Dispatch: Okay.

 

Will Evans: They'd have to take personal time off, she says, to flee the gas leak. When the fire department shows up, you can hear on the recordings we got that they have trouble getting around inside the building, with the all the robots zipping by.

 

Speaker 6: The robots are working against us, so we can't just walk in. It's basically like Tron.

 

Will Evans: Tron, that '80s sci-fi movie.

 

Speaker 7: Trapped inside an electronic arena.

 

Will Evans: I visited Christina at her apartment complex in Riverside, where she lives with her husband and three kids. On the night of the leak, she says she felt nauseous from the gas but was scared to make that 911 call. Her coworkers were scared too.

 

Christina V.: They were worried about getting fired or losing their hours or losing their pay. That's not something that they should be worried about when there's a gas leak; you should be worried about your life.

 

Will Evans: We talked to one Amazon worker who said she spent hours in the ER and was put on oxygen because of the leak. Amazon said in a statement that no one was hospitalized. The company claimed they shut down the site for about an hour and a half to fix the leak and air out the building. They said workers who used their personal time off to leave were refunded their time.

 

Will Evans: In her job working with the robots, Christina sees a lot of the warehouse and over time she's seen her coworkers get hurt.

 

Will Evans: What kinds of injuries have you seen?

 

Christina V.: I've seen knee injuries. I've seen shoulder injuries. I've seen people pull things out and cut themselves.

 

Will Evans: Why do you think so many people are getting hurt?

 

Christina V.: Because they have to meet their quota.

 

Will Evans: When workers get seriously injured and can't do the job anymore, Amazon brings in new ones. But what happens to the employees who've been replaced? I go to see another worker from that same warehouse, Candace [Dixon 00:04:42]. We go for a walk with her dog, Fergie.

 

Will Evans: Fergie. Fergie.

 

Candace Dixon: Guess what you get to do for being so good?

 

Will Evans: Now when Candace and Fergie go on walks, they can't go as far as they used to.

 

Candace Dixon: I mean, I used to do like 45 minutes, but now it's more like 10 minutes.

 

Will Evans: And then it's just too painful?

 

Candace Dixon: Yeah. It just, like even I can feel it right here. [crosstalk] ...

 

Will Evans: When the Amazon warehouse opened up last year, it promised lots of jobs with benefits. You didn't need to have experience. Candace was excited to work for a big-name company where there are opportunities for advancement. Her job was to scan and load items into the racks carried by robots and every second counted. If she didn't make her rate, she'd be written up. If she got written up too many times, she'd be fired.

 

Candace Dixon: Eleven seconds was the goal.

 

Will Evans: Is that hard to meet?

 

Candace Dixon: Yeah.

 

Will Evans: Candace says she was able to make that rate, but one day she had one heavy item to load after another.

 

Candace Dixon: I had a full shift, my eight-hour shift of all heavy items and that's not the normal.

 

Will Evans: Usually she had a mix of heavy and light items. Even though she says she was lifting the way she'd been trained, picking up so many heavy things so quickly made something give way in her back.

 

Candace Dixon: I had hurt so bad I can't even tell you. Like just I would have these sharp pains in the middle of my back, excruciating pain. I was crying. I'm the type of person that just likes to continue working. I don't like to give up and I like to do my job well, so I just kept going. I didn't want to risk losing my job.

 

Will Evans: Candace was diagnosed with a back sprain and chronic pain from her injury. At 54, she's gone from being able to process hundreds of items an hour to struggling with just climbing a flight of stairs.

 

Candace Dixon: I can do it, but it hurts. I'm still too young to feel like I'm 90 years old. I'm too young to not be able to go upstairs and just do daily life stuff.

 

Will Evans: Finding a new job is also a problem. She did receive a worker's comp settlement for her back injury, but after several months, that money is running out.

 

Candace Dixon: I don't even know how I'm going to make it in a couple months, because I don't have a income.

 

Will Evans: Candace is afraid she won't be able to pay her mortgage and could lose her house. I tell Candace she's one of many people who are injured at the Southern California warehouse since April last year.

 

Will Evans: We actually got the injury records for that warehouse that you worked at.

 

Candace Dixon: Right.

 

Will Evans: Your injury was one of 422 injuries last year.

 

Candace Dixon: Oh, wow.

 

Will Evans: We calculated the injury rate and that rate was one of the highest injury rates we've seen and it's more than three and a half times the rate for general warehousing as an industry.

 

Candace Dixon: That's crazy. For Amazon, alls they care about is getting the job done and getting it out fast and not realizing how it's affecting us and our own bodies.

 

Will Evans: Amazon closely guards the records of serious injuries like Candace's, but regulations say the company has to give them to workers who request them. With the help of Amazon employees, we were able to obtain injury records from 23 fulfillment centers out of 110 around the country. We found that in 2018, workers at those Amazon facilities got seriously hurt at a rate more than double the industry average.

 

Will Evans: Amazon says these high numbers show they are extra diligent in recording all injuries and they're careful not to send employees back to work until they're ready. When the company found out we were getting their injury records, it refused to let us record a tour of one of its warehouses. But they've let a lot of other media in.

 

Speaker 9: Were so proud of our safe environment here for our associates, and also just a positive work environment here for them. That we want our guests to come in and just see how fun Amazon can be.

 

Will Evans: That's an Amazon representative talking to ABC-10 News on a tour of the company's warehouse in Tracy, California, inland from San Francisco. We found that the Tracy warehouse that they were showing off had 434 injuries last year and a serious injury rate nearly three times the industry average. And a warehouse in Troutdale, Oregon had a serious injury rate more than six times the industry average. But here's how Fox-12 Oregon covered that warehouse.

 

Speaker 10: It's incredible how automated it all is.

 

Speaker 11: Yeah. Those were like giant Roombas.

 

Speaker 10: But yeah.

 

Speaker 11: And they were just like vroom all over the place.

 

Speaker 10: Incredible.

 

Speaker 11: It's technology.

 

Will Evans: The company claims that all that exciting technology not only makes the warehouse faster but also safer for workers. But I talked to several former Amazon safety managers, who said the company's need for speed compromises safety. All of them were afraid of jeopardizing their careers by speaking about Amazon publicly. I met with one though, who would talk if we disguised his voice.

 

Speaker 12: We've looked at how we could get packages to the customer in a day, but we haven't figured out how we can get packages to the customer in a day without hurting people.

 

Will Evans: The safety manager said that within the company, warehouses with robots are known for having a lot of injuries, so much so that some safety managers don't want to work in them.

 

Speaker 12: You're basically going in the lines then, because of the amount of issues and the amount of injuries.

 

Will Evans: The robots set a blistering pace and people can barely keep up, except for a select group.

 

Speaker 12: There's a saying that goes around the industry and especially in Amazon. That is the "industrial athlete." Here's the problem with that: not everybody's an athlete. We know that. We all went to high school; not everybody was on the football team. If you got a subsection of individuals that are athletes and maybe can perform at this high rate, great. Not everybody can do that.

 

Will Evans: Have the robots pushed the humans past their limits?

 

Speaker 12: Yeah. Man, humans are tapping out.

 

Will Evans: Most of the serious injuries at Amazon's warehouses, however debilitating, aren't life-threatening. When you look at the injury logs, you see patterns: strains and sprains, wrist and shoulder injuries or back problems from all that lifting, like what Candace suffered. But there have been more serious incidents.

 

911 Dispatch: County 911. What is the address and town of your emergency?

 

Speaker 13: Hold one second. There's an emergency in the maintenance area. I'm sorry. Amazon, 800 Perry Road. Stafford Road and-

 

911 Dispatch: 800 Perry Road-

 

Speaker 13: ... and he's stuck under a lift. Sorry.

 

911 Dispatch: You don't know if you have conscious and breathing.

 

Speaker 13: No, the man's [crosstalk] ...

 

Will Evans: At the Amazon warehouse in Plainfield, Indiana, a maintenance worker named Philip Lee Terry had been killed on the job. The next day, John Stallone, who worked for Indiana Occupational Safety and Health Administration, was sent to investigate. John recorded his inspection.

 

John Stallone: It's 12:10 PM on September 25, 2017, going into Amazon.

 

Will Evans: John studied the scene of the accident where there was still blood on the floor mixed with hydraulic fluid. 59-year-old Philip Lee Terry, who went by Lee, had been doing maintenance on a forklift. The forks and a metal platform which weighed 1,200 pounds were above his head. An Amazon manager described the accident.

 

Speaker 15: It came down on the individual, the tech, that was working on it.

 

John Stallone: Was he just kind of crumpled?

 

Speaker 15: Yes. He was folded.

 

John Stallone: Okay. [crosstalk] ...

 

Will Evans: John's inspection revealed that about five feet from where the accident had taken place was a safety device that should've been used to brace the forks while Lee worked on the machine.

 

John Stallone: This is something he'd been trained on?

 

Speaker 15: Yes, sir.

 

John Stallone: Is that something you guys document or is that something you would have in writing?

 

Speaker 15: No, sir. It's a peer training.

 

Will Evans: Peer training means informal training from another worker doing a similar job. Another maintenance employee John interviewed told him, "There's no training. There's no safety. It's get her done." The former Amazon safety manager we interviewed said Lee should've gone through a formal training program for the forklift. And, he said, it's standard practice for a company to have documentation of that training on hand.

 

Will Evans: John, the OSHA inspector, repeatedly pressed Amazon for those records and came up empty. He ultimately determined that Amazon failed to provide Lee with adequate training. He found that the company bore responsibility for Lee's death. Indiana OSHA hit Amazon with four serious safety citations, but even though a worker had died, a company that was then worth almost half a trillion dollars would have to pay fines of just $28,000.

 

Will Evans: That was less than what John had recommended and he began to get suspicious. He secretly recorded his Indiana OSHA bosses when they held a conference call with Amazon. That's legal in Indiana. Despite the fatal accident, it's a real friendly call.

 

Julie Alexander: We sometimes like to consider ripping citations to lower the penalty amounts. [crosstalk] ...

 

Will Evans: That's Julie Alexander, a director for Indiana OSHA. She's suggesting different ways that Amazon can reduce the citations. At one point she pitches Amazon on joining an OSHA program so it can set an example for other companies as a leader in safety.

 

Julie Alexander: ... be a leader in safety and [crosstalk] ...

 

Will Evans: After the call with Amazon is over, Julie goes even further. She tells John not to get too attached to his citations.

 

Julie Alexander: I hope you don't take it personally. We have to manipulate your citations in a year.

 

John Stallone: I think all four of them are pretty strong on their own, but, I mean, I'm just ... I get paid by the hour. You do what you got to do.

 

Will Evans: But one thing she said really galled John. She speculated about a worker who had died.

 

Julie Alexander: I'm guessing the guy was probably on drugs or something.

 

Will Evans: Just to be clear, Philip Lee Terry wasn't on drugs when he died. We got the toxicology report from the coroner that showed that the only things in his system at the time were caffeine and nicotine. Even so, on John's tape you hear a state official charged with keeping workers safe suggesting that a worker might've been high at the time of his death.

 

Will Evans: John Stallone doesn't work for Indiana OSHA anymore. I went to see him at his home in Anchorage, Alaska to talk about why. You can tell he's proud of his experience in safety. Right next to his front door, he keeps a collection of hard hats.

 

John Stallone: I was over in the Middle East, North Dakota, oil and gas up here in Alaska, BP. And then it's some government contract work. I did that in Florida.

 

Will Evans: Safety runs in this guys' family. John's dad used to be chief of enforcement for Alaska OSHA. John's also a veteran who served in the Air Force in Afghanistan. He's now working as a safety consultant. I asked John what happened with the case in Indiana.

 

John Stallone: It seemed like as I got closer and closer to the end of this case, things were getting more and more out of my hand.

 

Will Evans: He says he was getting pressure from his bosses to stop pursuing the case altogether.

 

John Stallone: All of my management telling me to back off, don't push this. Investigator like myself, it leaves me to wonder what are they looking for, what's going on in the background.

 

Will Evans: John says he found the answer to his questions when he was pulled into a meeting with the state labor commissioner, Rick Ruble and the government of Indiana, Eric Holcomb. See, at the time, Indianapolis was one of many cities vying to be the site of Amazon's second headquarters. The company had promised an investment of more than five billion dollars and as many as 50,000 high-paying jobs. John says the labor commissioner and the governor pressured him to drop the investigation.

 

John Stallone: You need to back off from this case. You don't need to push this. If you're going to, then you need to resign.

 

Will Evans: And they've specifically brought up the fact that Amazon might bring its second headquarters to Indiana.

 

John Stallone: Correct.

 

Will Evans: In a statement, Governor Holcomb's office denied that this meeting ever took place. The Indiana Labor Department called John's account fantastical, in addition to being absolutely false. The governor's reelection campaign received a $1,000 donation from Amazon, just shortly after John says the meeting took place. It wasn't even an election year and Amazon hasn't given to Governor Holcomb before or since.

 

Will Evans: John says the meeting had its intended effect. He left Indiana OSHA and ended up moving back to Alaska. The four serious safety citations and $28,000 fine, those went away too. Amazon didn't pay a cent in fines and the company never admitted any fault in the death of Philip Lee Terry. Lee's death was chalked up to employee misconduct. In the end Amazon blamed Lee for his own death. The former Amazon safety manager we interviewed called that appalling.

 

Speaker 15: If there's any misconduct there, it's putting a person that has little to no experience in working on this piece of equipment, whoever allowed that to happen. That's the misconduct.

 

Will Evans: Just three weeks after all the citations were deleted and the fines went away, Governor Holcomb appeared at an Amazon roundtable. At that point, Indianapolis was a finalist in the headquarters search. He told WTHR-TV in Indianapolis that he was still working to land the deal.

 

Eric Holcomb: We offer a great place to grow, space to grow. Obviously our tax and regulatory climates are very not just attractive but enticing.

 

Will Evans: Despite that enticing regulatory climate, Indianapolis didn't win the second Amazon headquarters. It ended up going to Virginia.

 

Will Evans: State officials in Indiana, including Julie Alexander, refused all our requests to be interviewed about Philip Lee Terry's death. Instead, in a written statement the Indiana Department of Labor said Amazon provided evidence that Lee had been properly trained. Despite a public records request, the department refused to provide Reveal with any documents showing how they decided to wipe away Amazon's citations.

 

Will Evans: The department said it couldn't prove Amazon knew Lee was performing the task incorrectly, in part because he was working alone. That's one thing that everyone involved in the case can agree on. Lee was working alone. After the accident, his body wasn't discovered for nearly two hours.

 

Will Evans: The evening of the accident, Lee's son Zack was making dinner when he got a call from a police chaplain.

 

Zack Terry: I was out cooking on the grill and I immediately dropped to my knees. It didn't seem real and it didn't seem real for a long time.

 

Will Evans: I went out to southern Indiana to meet Zack this fall. He didn't want to talk about the accident or its aftermath or Amazon. With his kids playing in the background, he wanted to talk about his dad.

 

Zack Terry: I have a lot of anger built up because of everything that's happened. My big thing is honoring my dad's memory and who he was as a person and you know, he wasn't an accident. He was the patriarch of our family, and how do I put this? The dude lit up a room.

 

Will Evans: Zack was raised by his father and they were especially close.

 

Zack Terry: He got custody of me, two years old, and I lived with him all the way up until I was out on my own. He put me before anything else. He supported all of my endeavors. He's what I strive to be as a father.

 

Speaker 13: You [inaudible 00:21:48].

 

Will Evans: Zack and his wife Lisa are raising three kids with another baby on the way. Two of his children will never get the chance to meet their grandfather.

 

Will Evans: The former Amazon safety manager we interviewed didn't work at the warehouse where Lee died, but he was inspired to speak out because of the way Amazon handled it. He hopes Amazon will change its safety practices, but until then ...

 

Speaker 15: You know, when you order something from Amazon and you've worked inside of Amazon, you wonder like, hey is ordering my package going to be the demise of somebody?

 

Al Letson: Amazon said it provided Philip Lee Terry's training records to Indiana officials. But the company declined to say any more about his death, citing the privacy of employee information.

 

Al Letson: Our story was produced by Katherine Mieszkowski. You might be wondering what injury rates look like at the warehouses that handle your packages. We're building a tool that makes this information easy to look up. Text Records to 474747 and we'll send you a link when it launches. Again, that's Records to 474747. Standard data rates apply and you can text Stop or Cancel at any time.

 

Al Letson: Coming up next, what does it mean when a company like Amazon or Tesla moves into your back yard? You're listening to Reveal. From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson.

 

Al Letson: Just like in Indiana, governors all over the country have tried to convince companies like Amazon to set up shop in their state. That's what Brian Sandoval did when he was governor of Nevada. It's 2018 and Sandoval is hosting a tech summit to celebrate the opening of Tesla's giant factory, the Gigafactory in the Nevada desert 20 miles outside of Reno. It was a big get for the state, which was still struggling to recover from the Great Recession.

 

Brian Sandoval: Exactly eight years ago there was a front page story in the Reno Gazette Journal above the fold that said, "Reno, Detroit of the West."

 

Al Letson: Now, companies like Amazon and Apple have settled in the state. But none represent the new Nevada better than Tesla, which created 7,000 jobs. Onstage with Sandoval is CEO Elon Musk in a charcoal suit coat and slim fit black jeans.

 

Brian Sandoval: So when you came over that hill and you see this landscape, did you say, "This is the place"?

 

Elon Musk: Yeah. Yeah. Yeah. Oh, this is beautiful. You know there's like 10,000 wild horses here? It's like the idyllic Wild West.

 

Al Letson: Musk likes to bring up the horses whenever he's asked this question, but he also sees something more fundamental in Nevada's high desert landscape.

 

Elon Musk: This is, Nevada's the land of opportunity here, feels like freedom right here. Feels like freedom. Yeah.

 

Al Letson: Our friends at USA Today's podcast The City have spent the past 18 months looking at how the Gigafactory is reshaping the area around Reno. One of the first things they wanted to know was how Reno was able to hook Tesla in the first place. Reporter Anjeanette Damon has our story.

 

Anjeanette D.: The wild horses frolicking in the Nevada sagebrush obviously made an impression on Elon Musk. But it was guys like Lance Gilman who really spoke his language. Lance played a big role in selling Musk on this spot.

 

Lance Gilman: So that's the Tesla building across over there to the right with the red stripe. That's 5,000 acres.

 

Anjeanette D.: We're on a knoll looking down at the Tahoe Reno Industrial Center. In the distance are mountains, like out of a Hollywood movie. Lance looks like he belongs out here with his cowboy hat and bolo tie. He's a real estate developer who moved from Southern California to Reno in the '80s. When he and his partners bought this land, it was nothing but dirt roads and rolling hills.

 

Lance Gilman: The big building right below us, the largest one, is Zulily.

 

Anjeanette D.: Zulily is an online clothing retailer. The footprint for its distribution center out here is more than 600,000 square feet, about six times larger than your typical Walmart. Diapers.com, Ebay, Petsmart, and even a company that makes machine guns, they all have giant buildings out here.

 

Anjeanette D.: Right on the edge of the industrial park, tucked into a quiet hillside surrounded by big cottonwood trees, is a business that in a bizarre way made the Gigafactory and the rest of this possible. It's the one business Lance owns himself, the Mustang Ranch, one of the most famous brothels in the country.

 

Anjeanette D.: Contrary to popular belief, brothels aren't legal in Reno or even Las Vegas, but they are legal in many of the smaller counties on the outskirts of town. Like this one, Storey County. Lance didn't come here looking to get into the brothel business, but the precarious finances of Storey County pretty much gave him no choice. Now he likes to show off the Mustang.

 

Lance Gilman: So Sarah, Jerry, these people are [crosstalk] ...

 

Anjeanette D.: The front door opens into a restaurant and bar. It's pretty typical looking. In the back is another door that leads into the brothel.

 

Anjeanette D.: So we've walked through the green door from the bar and now it's like very dimly lit, nice chandeliers, wooden exposed beam ceiling, all manner of taxidermied heads.

 

Lance Gilman: It's like a British hunting lodge. We kind of were thinking British hunting lodge when we built it.

 

Anjeanette D.: Lance hands us off to our tour guide, a sex worker who goes by the name Cherry. Cherry?

 

Cherry: Nice to meet you.

 

Anjeanette D.: She's petite with long, flowing brown hair, wearing a silky robe and high heels. Cherry shows us a tiny room where ladies and customers come to an agreement on what services can be rendered.

 

Cherry: We take credit, debit, cash. We're totally legal, so I guess this is where the magic happens.

 

Anjeanette D.: These days business is good at the Mustang Ranch. But that wasn't the case when Lance came into the picture 20 years ago looking to buy land for the industrial park. With just 4,000 residents and one tiny tourist trap of a town, Storey is the smallest county in the state, and when Lance came knocking, it was desperate.

 

Lance Gilman: They were church-mice poor. As a matter of fact, they were on the brink of bankruptcy.

 

Anjeanette D.: Back then the county's major source of tax revenue was its two brothels, but the one Lance ended up owning, the Mustang Ranch, was in trouble at the time. The owner had been indicted on money laundering charges and fled the country.

 

Speaker 24: Now he's racked up an 18 million dollar tax debt and is on the run from Uncle Sam.

 

Anjeanette D.: The feds closed the Mustang Ranch right about the time Lance and company bought their industrial park land. Losing that brothel and the $500,000 a year in tax revenue meant the county was about to go broke. He says things were so dire that the state was talking about eliminating Storey County altogether by annexing his land into the larger neighboring counties.

 

Lance Gilman: So we got this call from one of our attorneys as a matter of fact, and he said, "You know the legislature's going to break the county up."

 

Anjeanette D.: For the industrial park to succeed, this could not happen. Lance and his partners needed to be able to negotiate with one county, not three. He needed Storey County to survive and for Storey to survive, it needed cash.

 

Lance Gilman: So it was suggested to us by the county fathers that if we would reopen a brothel, that it would shore up that cash flow in the county.

 

Anjeanette D.: Why didn't they pursue some other kind of industry to replace that cash flow? Why were they intent on preserving the brothel business in county?

 

Lance Gilman: I don't think there's a business in America that would generate cash flow instantly except the brothel business.

 

Anjeanette D.: Lance opened up a brothel called the Wild Horse in 2002, and a few years later he bought the Mustang Ranch from the federal government on eBay, of all places. Soon Storey County was once again rolling in cash, and Lance was able to move ahead with his industrial park. Lance's lawyer, Kris Thompson, puts it this way.

 

Kris Thompson: And had he not done that, that magic phone call to get that Tesla deal may not have ever come.

 

Anjeanette D.: In 2014 when Elon Musk went looking for a place to build his battery factory, he was under tremendous pressure. Tesla had introduced a new electric car, the Model 3, that was less expensive than the company's other models. Tesla's future depended on selling a lot of Model 3s, but the rollout was way behind schedule. Musk needed a factory to build the battery packs and he needed it fast.

 

Lance Gilman: So it's not real fancy.

 

Anjeanette D.: No.

 

Lance Gilman: But we've done a lot of major real estate deals right here.

 

Anjeanette D.: Yeah. This little nondescript room in a county office building is where Lance helped land the Gigafactory deal. I say helped, because what really clinched the deal was the $1.3 billion in tax incentives passed by the state legislature, the largest tax break in Nevada history. But it wasn't just the money. In fact, other states were offering much more in incentives.

 

Lance Gilman: Texas was offering them billions of dollars to come to Texas and New Mexico was in the hunt and Arizona was in the hunt. And California was offering them billions of dollars to come to California.

 

Anjeanette D.: Lance got two Tesla higher-ups in this little room. He wanted to know why they hadn't yet settled on a location. The answer? They were still looking for a place that could make things happen fast enough. Tesla couldn't afford any delays in the building schedule, no pesky zoning fights or environment assessments. And in this meeting, these Tesla execs, they want to know ...

 

Lance Gilman: How fast could we get a grading permit?

 

Anjeanette D.: A grading permit would let them start clearing the land, getting it ready for construction. The county's planning manager, Dean Haymore, was sitting next to Lance.

 

Lance Gilman: So Dean took a piece of paper out of his notebook and he said, "That's your grading permit. Fill in your name and you can leave here with it."

 

Anjeanette D.: Handing Tesla execs a permit scrawled on a torn sheet of paper was largely a symbolic move. But here in Storey County, you can get just such a permit within seven days. In many cities it can take months, even years, to get that first permit.

 

Anjeanette D.: Tesla's general contractor came back a little later to pull the actual permit. To clear a flat pad for initial construction, they needed to move enough dirt to fill 42 Olympic swimming pools.

 

Lance Gilman: Three and a half weeks later, I stood on a bank watching this anthill of activity going on with Yates Construction, their vice president, and he said, "Lance Gilman, this could've only happened maybe one other place in the world today. That would've been China."

 

Anjeanette D.: Nevada, the China of the West. But how could they possibly move that fast?

 

Lance Gilman: What we did out here is not just zoning. We pre-approved every industrial project in the United States known at the time. It was all pre-approved. So if you were doing batteries, you were pre-approved. If you were doing flowers, you were pre-approved. If you were doing tires, you were pre-approved.

 

Anjeanette D.: They didn't do any traffic studies or environment studies or talk about whether the region had enough housing for all these new workers. Here's Elon Musk at the announcement of the Gigafactory site.

 

Elon Musk: What the people of Nevada created is a state where you can do things quickly and get things done. It's a real get-things-done state. I think that was a really fundamental, that was a really important part of the decision.

 

Anjeanette D.: Lawmakers were easily swayed by Tesla's promise. The company would build its Gigafactory in Nevada, create thousands of jobs, invest billions of dollars in construction, and in return, pay virtually no taxes for 10 years.

 

Al Letson: Lance Gilman and the county officials he worked with brought Tesla to northern Nevada with the promise that would solve the area's problems. But it ended up creating some new ones.

 

Velma Shoals: We need this hotel more than anything in the world right now. Not just me but other families. I'm not the only family raising kids there.

 

Al Letson: That's coming up next on Reveal.

 

Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson.

 

Al Letson: When Tesla opened the doors to its Gigafactory in early 2016, the Reno area saw something it had not seen in a while: new jobs.

 

Isabelle West: I am a production associate at Tesla, but I am training to become a technician.

 

Al Letson: Isabel West is 20. She has pink hair and an infectious laugh. She loves to read but in school, she didn't have the best grades, so she was nervous when she first applied for a job at Tesla.

 

Isabelle West: They were a big company and they were professionals and it was just like, they won't want me. I'm a nobody. What do they want with me?

 

Al Letson: But Isabel impressed the recruiter and now works 12-hour shifts making batteries at the Gigafactory. She likes her job but says it can be tedious and stressful.

 

Isabelle West: I can hang right at 5,000 car sets a week right now, and so that's a lot of batteries that we have to do.

 

Al Letson: Jobs like Isabel's are considered good for the Reno area, which had been trying for decades to add more high-paying jobs to its economy. She started out making around $14.50 an hour, twice the minimum wage in Nevada. The average at the Gigafactory is $30 an hour. Before joining Tesla, she wasn't sure what she wanted to do.

 

Isabelle West: But now that I'm actually seeing it firsthand, like yeah, this is me. This is what I really like and Tesla kind of helped me figure out myself.

 

Al Letson: Like Isabel, Reno is figuring itself out. Anjeanette Damon from USA Today's podcast The City picks up the story.

 

Anjeanette D.: When Isabel and most other workers from the Gigafactory punch out for the day, they head home to Reno, one county over from the industrial park we told you about. All over town parked outside grocery stores and gyms, you see factory workers' cars with these black and white parking passes. In the past five years, the Reno area has grown by nearly 30,000 people and added 48,000 jobs. The city's changing fast and it's trying to figure out how much to keep of its old Reno character, a gritty town that years ago made its name capitalizing on gambling, drinking and debauchery.

 

Speaker 28: Reno, the biggest little city in the world.

 

Anjeanette D.: I grew up here, built a career as an investigative reporter. I kind of like Reno's grittiness, but that edge is starting to disappear. Midtown is a part of the city that just a few years ago was one of Reno's rougher neighborhoods, full of biker bars, liquor stores and a crack house or two. Now it's a symbol of new Reno, high-end wine bars and sushi burrito joints are taking over the buildings that used to sit empty. And the tattoo parlors are now clean and trendy.

 

Anjeanette D.: In the middle of all this hipness is the Ponderosa Hotel. It's cheap and most people live here year round. To call it a hotel might be generous. It's more of a six-story motel that sits right behind a strip club and it's pretty rundown. The elevator constantly breaks. Half the light bulbs are missing and the ones that still work flicker, almost like a strobe light.

 

Anjeanette D.: Hi.

 

Velma Shoals: Come on in.

 

Anjeanette D.: [inaudible 00:38:51]. I'm here to visit Velma Shoals, a 64-year-old grandmother who lives on the fourth floor with a sweeping view of the changing city.

 

Velma Shoals: Come on. It's okay. Come on.

 

Anjeanette D.: Velma invites me into the room she shares with her 16-year-old granddaughter Tayla. She's done a great job of turning the hotel room into a comfortable living space.

 

Velma Shoals: Well, it's got a living area here. It's got two beds in it. I could have a table and chairs if I wanted. I do have the table.

 

Anjeanette D.: Velma spends her days darting up and down the hallways of the Ponderosa, gripping her oversize cell phone. She's a defacto leader here, checking in on her neighbors, making sure they have food.

 

Velma Shoals: That little man that just moved in a couple doors over, he's lived here before. But he was homeless and so I told him I'd fix him a little box of stuff and bring to him. Some of those, we just kind of look out for one another.

 

Anjeanette D.: Velma was homeless too at one time, so even though the Ponderosa's rundown, she sees it as her best option.

 

Velma Shoals: I don't have money to move, so I've got Tayla. What am I going to do with her?

 

Anjeanette D.: Velma's one of 4,000 people in the city who rely on weekly motels for housing. But places like the Ponderosa are becoming scarce as the new Reno takes hold. With people flocking to the city for jobs, there's a serious housing shortage, about 25,000 units at last count. Weekly motel owners are cashing in and selling to developers who are building fancier apartments. No cause evictions, where landlords boot tenants without a reason, have spiked 300%.

 

Anjeanette D.: These are the kinds of problems that could've been planned for if government officials had taken the time to do more thorough impact studies when they approved projects like the Gigafactory. Even Elon Musk says the lack of housing is a problem that could threaten the completion of the Gigafactory. Here he is at a 2018 tech summit.

 

Elon Musk: There's going to need to be single-family units with a yard, there can be apartment buildings. I think we're looking at creating a sort of housing compound just on site at the Gigafactory.

 

Anjeanette D.: That compound was never built. And while city leaders are now starting to act, building new work force housing and a tiny home village, for instance, they sometimes just turn a blind eye to the problem, like when I go on a tour of Midtown with executives from the Economic Development Authority of Western Nevada. Mike Kazmierski has taken me around like I'm a prospective business owner interested in moving to Reno.

 

Mike Kazmierski: Well, we've just crossed the river and really most communities would kill to have a river run through it like this.

 

Anjeanette D.: He brings along Brian McCardle. He's young, clean-cut, used to own a hookah lounge in downtown actually. He's the guy that schmoozes tech clients.

 

Brian BcCardle: We're driving into Midtown, which is sort of the main street that leads into our downtown corridor. And over the last decade it's sort of transitioned to be the foodie, cultural, artsy section of downtown.

 

Anjeanette D.: They love showing off the gentrifying parts of town. But then we were led to Reno's homeless shelter. It's an overcrowded complex in a new brewery district just east of downtown. I asked them if they drive their clients past the shelter, and Brian kind of dodges my question.

 

Brian BcCardle: Yeah, I wouldn't say that we have a homelessness issue. I think it's more perception than reality.

 

Anjeanette D.: Mike doesn't correct him, but we are literally staring at a block filled with homeless people waiting to get into the shelter for a meal or a shower or a bed. Perception versus reality, in many ways that's Reno's whole fight.

 

Anjeanette D.: Back at the Ponderosa, the housing crunch came to Velma Shoals doorstep in January, 2018, when she found a letter tacked to her door.

 

Velma Shoals: They said to "To all Ponderosa hotel tenants: Unfortunately I must relay some bad, very bad news to you."

 

Anjeanette D.: The letter was from Kamy Keshmiri, the owner of the hotel. It goes on to say he might have to nearly double her rent to $1,300 a month.

 

Velma Shoals: Ain’t no way in the world. $1,300?! Who's got that kind of money? Nobody. That's a lot of money.

 

Anjeanette D.: Her landlord was on the front lines of the battle between old Reno and new Reno and now Velma was being drawn into the fight. See, in addition to owning the Ponderosa, Kamy Keshmiri owns the strip club next door, the Wild Orchid. It's one of three clubs he owns in town. Kamy and his family opened the club in the late '90s and it's still got that distinctly '90s feel.

 

Kamy Keshmiri: You know, give the citizens of Reno a little Vegas, touch of Vegas.

 

Anjeanette D.: The Wild Orchid is pretty wilted now, but Kamy is proud of it. Over the years it's made him a lot of money, enough, he says, to keep rents at the Ponderosa low. But a lot of city leaders want the strip clubs to disappear. They want to move past old Reno's reputation as a home to aging casinos and dingy clubs. Here's Mike Kazmierski again:

 

Mike Kazmierski: I think it's an embarrassment to our community, and it's something that I believe we should've done something about a long time ago. They should not be defining us.

 

Anjeanette D.: The clubs have become an issue at the Reno City Council too, which approved drying up ordinances to get rid of flashy strip club signs and alcohol sales and moved the clubs to industrial areas away from downtown. If the clubs go, so would the Ponderosa, which is why Kamy ended his letter to Velma and her neighbors with an appeal:

 

Velma Shoals: "Perhaps you can stop the city from gentrification of the Wild Orchid at the expense of your homes. You have my sincere apologies for this bad news."

 

Neoma Jardon: 24th meeting of the Reno City Council. Our first order of business is the Pledge of Allegiance, and if we can ...

 

Anjeanette D.: It's the day after Velma got Kamy's letter. I'm at City Hall for a routine council meeting.

 

Neoma Jardon: Thank you very much, Madam Clerk. At this time we will begin the public comment period. I will remind everybody [crosstalk] ...

 

Anjeanette D.: Just as the meeting is getting underway, about two dozen people file into the room. Some are young and look to be blue-collar workers. A couple of others are in wheelchairs. There's an elderly man with a frayed sports coat, his hair pomaded into place. And Velma. After getting that letter, she's rounded up her neighbors at the Ponderosa and they've marched to City Hall to fight for their homes.

 

Velma Shoals: Yes, my name's Velma Shoals and I’ve been at the Ponderosa for almost five years, six years, with my granddaughter. [crosstalk] ...

 

Anjeanette D.: Velma is barely taller than the lectern but her chin is set as she faces the council members.

 

Velma Shoals: We really need our, we need this hotel more than anything in the world right now. Not just me, but other families. I'm not the only family raising kids there. [crosstalk] ...

 

Anjeanette D.: This confrontation is exactly what Kamy wanted.

 

Velma Shoals: I mean, please don't take that from us. Just do the best you can to help us save that. I would appreciate that and thank you very much. Thank you. [crosstalk] ...

 

Anjeanette D.: It's clear that Velma and the other hotel residents don't blame Kamy for any of this. They blame the Reno City Council, but Councilwoman Neoma Jardon tries to turn their attention back to the guy threatening to double their rent.

 

Neoma Jardon: It's a disgusting tactic and they're using you as their mechanism and pawn.

 

Anjeanette D.: Whether what she's saying about Kamy is true or not, it's clear the City hasn't kept up with the growing housing crisis. I talk about it with Mike Kazmierski, the economic development guy.

 

Anjeanette D.: All right. So test, test.

 

Anjeanette D.: I want to know why City leaders haven't done a better job of planing.

 

Mike Kazmierski: So the growth we've been able to attract, with it come growing pains. We could have been more aggressive at affordable housing. We have not been. But it's time to play catch-up.

 

Anjeanette D.: So I come back to this question of Tesla's here now. It's a huge member of the community. It's adding stress to a lot of these safety nets, and not just safety nets, but just our infrastructure in general. Should we be asking more of the company?

 

Mike Kazmierski: You've got to be careful about calling out one business and then expecting them to pay for things that businesses are not there for. They're there to create a product that ultimately if they're successful here, will allow us to have many well-paid employees able to do things in our community. When you do the numbers, we come out way ahead.

 

Anjeanette D.: It's April, 2019 and I'm back at City Hall. Today the City Council is going to make a final decision about restricting the strip clubs or possibly moving them altogether.

 

Neoma Jardon: Let the record reflect that the City Council opening the public hearing at this time. [crosstalk] ...

 

Anjeanette D.: The arguments go back and forth. Why the clubs should go, the rights they have as established businesses.

 

Neoma Jardon: All those in favor say aye.

 

Speaker 33: Aye.

 

Neoma Jardon: All those opposed.

 

Speaker 34: I'm opposed.

 

Anjeanette D.: And in the end they back down. They decide not to move the clubs. They do put in a bunch of restrictions, but Kamy gets to keep his clubs downtown. So I go back to the Ponderosa to visit Velma. Kamy is no longer threatening to double her rent, but I wonder if she thinks her troubles are over.

 

Anjeanette D.: Reno's still changing around you and rents are going up everywhere.

 

Velma Shoals: Yeah, everywhere.

 

Anjeanette D.: Do you think about that very much?

 

Velma Shoals: Yes, I do. And I know if I leave here, I ain't got nowhere to go. I know that and I know in another year I could go apply for senior housing because I'll be 65. But there again, it's still going to be hard because there's such a waiting list.

 

Anjeanette D.: The city around her is still changing. Developers are circling with an eye on Kamy's property. Gentrifying Midtown is creeping closer and closer as the city continues to fill with tech workers. The City Council's vote didn't change any of that.

 

Al Letson: That was reporter Anjeanette Damon with The City, an investigative podcast from USA Today. Check it out wherever you get podcasts.

 

Al Letson: Our lead producer for this week's show is Katherine Mieszkowski. She had help from Najib Amini and Rachel de Leon. Taki Telonidis edited the show. Thanks to Melissa Lewis, Hannah Young, David Rodriguez, Byard Duncan and Andy Donahue. Special thanks to Jessica Bruder, author of the book, Nomadland.

 

Al Letson: The City podcast was reported and produced by Fil Corbitt, Kameel Stanley, Taylor Maycan, and me, Robin Amer. The editors are Amy Pyle and Matt Doig. Ben Austen was the story consultant. Original music by Hannis Brown.

 

Al Letson: Our production manager is Mwende Hinojosa. Original score and sound design by the dynamic duo, J-Breezy, Mr. Jim Briggs and Fernando, my man, yo, Arruda. They had help this week from Amy Mostafa.

 

Al Letson: Our CEO is Christa Scharfenberg. Matt Thompson is our editor in chief. Our executive producer is Kevin Sullivan. Our theme music is by Kamarado, Lightning.

 

Al Letson: Support for Reveal is provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Heising-Simons Foundation, the Democracy Fund, and the Ethics and Excellence in Journalism Foundation.

 

Al Letson: Reveal is a co-production of the Center for Investigative Reporting and PRX. I'm Al Letson. And remember, there is always more to the story.

 

Electronic: From PRX.