How one man's shipping container housing pitch turned into a nightmare for Reno nonprofits
An ambitious storage container concept pushed by Masih Madani was supposed to help Reno’s housing woes. Then it all came crashing down. Here's what happened.
A train horn blared behind an empty lot just west of downtown Reno, the familiar sound of steel on steel ringing in the air as a long line of railroad cars rumbled through the tracks.
A few meters away, Monica DuPea surveyed the mix of gravel, brush and random bits of trash before her. By late summer, her nonprofit will break ground on a new housing project for seniors and young women at the property.
Getting to this point for DuPea marked the culmination of a grueling two-year legal battle that nearly derailed the project. It’s a fight that pitted her against one man who she and other Reno nonprofits once trusted. It’s also a fight that continues to haunt DuPea’s organization to this day.
DuPea smiled wryly as she looked at the passing train. Admittedly, land located right next to the train tracks isn’t exactly prime property due to the noise. For DuPea, it represented a valuable opportunity.
“It’s all s**t that nobody wants,” DuPea said. “But you’ve got to take what nobody wants to get things done."
For DuPea, getting things done means creating more housing.
In 2007, she founded Nevada Youth Empowerment Project, or NYEP, to provide transitional housing for vulnerable youth. Fast forward to today and the nonprofit’s mission is more important than ever as Reno finds itself in the midst of a full-blown housing affordability crisis — one that has been especially devastating for vulnerable populations.
It was against this backdrop of a housing crisis spiraling out of control and a community in desperate need of affordable housing that DuPea met the man behind TerraOne.
Founded by Masih Madani, TerraOne pitched a novel idea. The nonprofit claimed that it could repurpose shipping containers to build environmentally friendly tiny homes more cheaply and quickly, a potential godsend in Reno’s increasingly expensive construction market.
Madani, who was receiving positive press from some local media outlets as well as recommendations from well-connected people and organizations in the community, seemed like a perfect fit for NYEP. DuPea did not want to just build a simple transitional housing project. She wanted a unique development that would grab attention and show her organization’s dedication to seeking out-of-the-box solutions for longstanding problems.
“Masih was selling a fully furnished and completed unit for under $30,000,” DuPea said. “And, the concept is pretty cool — if he could pull it off.”
In October 2018, Nevada Youth Empowerment Project entered a contract with TerraOne to build a nine-unit, intergenerational housing project on the very same lot that DuPea now stands on. Both parties eyed an early 2020 completion date for the project.
More than two years later, however, the lot on Reno’s West Fourth Street still sits empty.
Meanwhile, the once-friendly relationship between NYEP and TerraOne is in tatters following a bitter legal battle. The acrimonious turn included a jail stint for Madani as well as an incident in early May where a gun was drawn and cops were called to a property housing TerraOne’s assets.
The NYEP project was supposed to be the first of several forward-thinking and disruptive affordable building projects for TerraOne — once seen as a rising star in a community in dire need of cheaper housing.
Instead, Madani left a trail of former clients claiming that they have been duped by the entrepreneur after taking their money while also raising questions about previous allegations of fraud against the businessman in California.
Madani, who continues to strongly maintain his innocence, claims he was the victim of a litigious client who ruined his once-promising business. Today, Madani has turned into persona non grata in the community as people who previously helped arrange meetings and appearances to introduce the TerraOne founder now disavow any knowledge or relationship involving the entrepreneur.
Just how did a previously unknown Southern California transplant gain a foothold within the community — one that reached into various agencies and nonprofits and went all the way up to Reno City Hall?
And then how did everything come crashing down?
The rise of TerraOne
Madani first started getting noticed in Northern Nevada back in 2018 when he was making a name for himself as a promising student at Western Nevada College in Carson City. The gray-haired Madani initially came to the Silver State to retire. Upon arriving, he reinvented himself as a self-made visionary with plans to tackle Reno-Sparks’ housing crisis.
At the time, Madani hammered and welded together the initial concept for his storage container housing project: a two-bedroom, one-bath unit built out of two shipping containers. The containers would provide the framework for a studio-type unit with a living room, bedroom, bathroom and its own kitchen.
“I watched containers on ships crossing the Panama Canal back in 2004,” Madani explained when interviewed recently by the Reno Gazette Journal. “So I thought it would be a good idea to use them as building blocks and began researching how to make it happen.”
The use of shipping containers gave Madani’s tiny home concept a unique twist compared to traditional stick-built or modular housing units. It also came with one advantage, according to Madani: lower cost.
Madani was estimating a price of $20,000 per unit, which places the project at around $72 per square foot. This was a much better deal than the $100 to $150 per square foot for more traditional construction, he said. Madani’s work would also be cheaper than a high-profile shipping container project by Marmot Properties and Twisted Metal Works in Midtown Reno, which started accepting tenants in early 2020. That project ultimately turned into a premium apartment complex after initially being envisioned as a more affordable housing option.
By 2014, Madani started working on his initial concept for the shipping container units. Two years later, Madani says he was in talks with people at the city of Reno and Washoe County about his ideas.
It did not take long for Madani’s efforts to garner attention. While still a student at WNC in 2018, the aspiring builder was profiled by a couple of TV stations as well as local public radio for his affordable housing concept. From here, Madani would continue to build his clout in the community, showing up at events held by the University of Nevada, Reno, and Truckee Meadows Community College while also catching the eye of people in organizations such as the Reno Housing Authority.
It was during this time that DuPea would hear about Madani from several contacts.
“The crazy thing to me is how I met this guy,” DuPea said.
“I actually met him through the city of Reno … and he was introduced to me by people with credibility in the community. Someone from the RHA board even reached out to me and said, ‘Hey, have you heard of Masih Madani? I just watched him do a presentation at TMCC on shipping containers and rehabbing them into low-income units.’”
As Madani’s profile grew, so did the number of organizations and people who wanted to use his services. In addition to NYEP, Madani inked a deal with nonprofit Urban Roots to build a test kitchen for the organization. Madani was also approached by Regenesis Reno for a workforce housing project. The entrepreneur and his company were flying high.
But things would soon come crashing down.
Other Reno nonprofits say Madani swindled them
Countless hand prints in an array of colors dotted the fence on an acre of land just off East Second and Gould Streets in Reno on a sunny April afternoon. A nearby wood sign with the words “Welcome to the Farm” can be seen on the entrance of a greenhouse.
Inside the structure, several CDs were suspended by strings above plots bearing an assortment of leafy greens — prime targets for unwelcome foragers.
“They scare the birds away,” said Fayth Ross, executive director of Urban Roots.
Come summer, the educational garden will be welcoming its first group of children since COVID-19 hit the community last year. For Ross, it was a much welcome return to some semblance of normalcy after the pandemic essentially shut down the garden. At the same time, something was also missing.
“We were supposed to have a teaching kitchen over here,” Ross said as she motioned toward an empty space in the property.
Just a few years ago, Ross was thinking of potential designs for a teaching kitchen on the site that could be used to show kids how to cook the vegetables they harvested from the garden. Ross was especially inspired by the design of The Eddy, a colorful spot in downtown Reno that used shipping containers for several of its structures. By some twist of fate, Ross found herself sitting just one table away from Madani at a career fair that was held at the University of Nevada, Reno.
For Ross, it felt like serendipity.
“We were like, ‘Oh, we were wanting to get a shipping container (structure) at our site and here was this guy who’s attracting potential UNR grads to work for his company and does exactly that,” Ross said. “I also heard second-hand that the city recommended him as well.”
Madani would eventually produce renderings for Urban Roots. Madani's design, which repurposed older containers, was exactly what Urban Roots was looking for.
“Madani showed us the renderings and the whole team, my whole staff, were all just so excited for this,” Ross said. “It was such a novel thing and we’ve always wanted to be innovative while also showing that sustainability was one of our farm’s cornerstones.”
Urban Roots would officially sign a deal with Madani in 2019 to create a two-story shipping container structure that would contain a teaching kitchen, restroom, office and storage space.
Madani quoted Urban Roots just a little under $210,000 — a steal for the type of project that Urban Roots wanted. The nonprofit made an initial payment of $110,325 dollars, an amount that it painstakingly raised from its donors.
By early 2020, however, Ross started to feel uneasy about Madani.
The first issue occurred after Madani missed the October deadline for the project, which then got pushed to early 2020. As the delays mounted, so did the costs for Urban Roots, which had to rent child-friendly portable restrooms for their upcoming programs.
“The relationship started out super strong and Madani was really wonderful and answered every call,” Ross said.
“By February (2020), he became increasingly hard to get a hold of and there was just this lack of communication. Then COVID hit but we were already having delays before the pandemic even happened.”
It was a story that would be repeated by other former clients of TerraOne.
Gordon Gossage, president of regenerative design company Regenesis Reno, did not mince words when asked about his experience working with Madani.
“I like to think that I’m a pretty smart guy,” Gossage said. “But I gotta tell you, he’s a very skillful con artist.”
Gossage was looking to start a workforce housing project near the Wells Avenue bridge for formerly homeless people when he first heard about Madani from DuPea. Just to be safe, Gossage had a contractor friend quiz Madani about building techniques. Madani passed with flying colors. Gossage also heard good things about Madani from people he knew in the community.
“I asked people who work at the city who I really trusted about what they’ve heard about Masih,” Gossage said. “They all said he’s a straight guy.”
Gossage eventually paid Madani $16,000 in July 2019 to get started. As weeks turned to months, however, Madani never delivered on the work he promised, according to Gossage.
“He'll say, ‘I’m working on a job at Tahoe’ or ‘I’m working on this other job and I’ll get to yours in two months’ — it was always one thing or another,” Gossage said.
By October, Madani stopped returning emails. Then Gossage heard from DuPea that Madani had disappeared on NYEP. Gossage was furious. He fired off an angry email to Madani, who did not respond. Gossage has not heard from Madani since.
Gossage felt so upset and ashamed that he didn’t even bother to get his money back.
“It’s embarrassing to know that you were hustled,” Gossage said.
“So I didn’t want to pursue it anymore. I just had so many negative emotions about it. I don’t need the $16,000.”
DuPea turns to legal help and Madani's past surfaces
While Gossage decided not to pursue things further with Madani, DuPea decided to do something different. She hired a lawyer.
On Oct. 30, 2019, NYEP filed suit against Madani at district court in Washoe County. The lawsuit would prove to be devastating for Madani.
On June 19, 2020, the court ruled in favor of Nevada Youth Empowerment Project, awarding the nonprofit a judgment of more than $140,000 against Madani. The judgment was five times the amount that NYEP paid Madani — at least $26,960 for the first unit, according to court documents obtained by the Reno Gazette Journal.
The amount was fully justified, DuPea said. In addition to the cost of the first unit, NYEP claimed that the delays in the project led to $34,000 in additional rental expenses to house the people who were supposed to live in the units that Madani was tasked with building.
Failure to meet the deadlines also meant that the nonprofit had to renegotiate the terms for the project site, which was donated by the city of Reno with specific timelines for development. DuPea says NYEP was fortunate that its major financial backer, the Jacobs Family Foundation for Children, did not pull the $500,000 that it donated to the project.
“(Madani) ripped us off,” DuPea said. “He stole money from us at a time when we’re so desperate for housing.”
The court case would also raise Madani’s past.
In 2010, Madani was accused of stealing $3.5 million as part of a fraudulent scheme involving a Southern California bank. At the time, Madani ran a company called Opus Ventures, which processed bank transactions. First Vietnamese American Bank would end up failing, suing Madani in the process. The suit was settled in 2012.
The alleged scheme, whose victims included some nonprofits that failed to receive payments owed to them, was brought up as an example of Madani’s alleged penchant for swindling organizations such as NYEP.
A few years after the bank case was settled, Madani was in legal trouble again.
Court documents acquired by the Reno Gazette Journal detailing a suit filed in Los Angeles County showed that Madani was accused of defrauding a 74-year-old man whom he met in 2013 of hundreds of thousands of dollars. The money was supposed to be used to fund Madani’s business but was allegedly spent for personal use instead.
When the man demanded repayment in 2016, Madani ceased all communications, the court filing stated. The man then filed suit against Madani a year later, securing a judgment of more than $1 million in 2018.
When asked about his history of legal troubles, Madani responded that they were being overblown. Madani pointed out that he never admitted guilt in the bank case and that it was dismissed with prejudice, meaning it can’t be filed again.
“The case in California involved a bank that sued not just me but a bunch of other people and made all kinds of claims,” Madani said. “A federal judge dismissed the case against me.”
As for the second fraud case, Madani described the man as a former business partner.
“He simply wanted to secure his loans to businesses that failed as a result of the financial crisis of 2007-2008,” Madani said. “We have an agreement.”
As far as the lawsuit from NYEP, Madani accused the judge of ignoring contract law, claiming he had a clause in the agreement with DuPea’s nonprofit that any disagreements must go through arbitration. Madani also could not afford a lawyer. The lack of legal representation was detrimental to his case when it came to getting documents and pleading his case in court, according to Madani.
“I don’t have a Simons law firm,” Madani said, referring to NYEP lawyer Mark Simons.
“All that stuff was happening during COVID so I couldn’t even get half of the stuff I needed online because I didn’t have an attorney. And the stuff that I did have, the judge wouldn’t even listen. I had no way to defend myself.”
Despite losing his case, Madani still expressed confidence in paying the judgment when reached by the Reno Gazette Journal late last year. Madani’s plans included selling the unit he was building for NYEP to help raise money, which already had cabinetry and appliances installed and could be sold for three times the discounted price he quoted DuPea, he claimed.
For Madani, however, things would only get worse.
Warrant issued for Madani's arrest
In February, a warrant was issued for Madani’s arrest for failing to pay his debt to NYEP.
By March 17, Lyon County Sheriff Frank Hunewill informed NYEP lawyer Simons that Madani was in custody. The TerraOne founder was held in Yerington before being moved to the Washoe County jail.
When reached after his release in April, Madani described the arrest as a vindictive measure designed to further humiliate him.
“Why would they do that? They know where I am and they’ve been talking to me this whole time,” Madani said. “Had they just told me, I would have just turned myself in.”
“A murderer has a right to go in front of a judge within 72 hours,” Madani added. “I was held from March 17 to April 5th before seeing a judge via Zoom in jail with no access to documents or anything to defend myself.”
Simons, who contacted Hunewill to enforce the warrant, described the arrest as a necessary measure to ensure that Madani paid his debt. This was reflected by the conditions of Madani’s release, which required Madani to make arrangements to pay NYEP the $140,000 he owed from the judgment.
All one needs to do is look at Madani’s track record to see why the arrest was necessary, Simons said.
“There was a long history of Monica DuPea trying to get him to respond to letters and emails and he ignored her, necessitating my involvement,” Simons said.
“If he’s trying to say he’s some kind of good guy, that’s so not true. He defrauds everyone.”
To secure his release, Madani agreed to give NYEP access to his belongings at a holding facility he rents at Mound House. The items comprised five shipping containers — including the furnished unit Madani was originally building for NYEP — a flatbed trailer, water tanks and a computer. NYEP plans to sell all the items to recoup its payment and additional losses from the delayed project.
The storage site, however, would serve as another flashpoint in the case between NYEP and TerraOne.
On May 4, DuPea arrived at the property to check out the items that were being turned over to her nonprofit. A misunderstanding over locks that DuPea’s group cut resulted in the property owner pulling out a gun, leading to a call to law enforcement. Madani, who received a call from the property owner, would later arrive with keys but was turned away by officers at the scene.
Madani blamed DuPea and her crew for the standoff at Mound House.
“They have broken into containers not on the judge’s order, that belonged to others,” Madani said.
DuPea, meanwhile, called it an honest mistake, adding that they replaced the lock on the container they mistakenly thought was theirs. Regardless, the incident reflected the heightened tension and frustration between the people involved as the fight between NYEP and TerraOne dragged on.
“Both officers ... insisted that we should have called them and they too would be surprised if people were on their property and they would also pull a gun over it,” DuPea said. “(There was) lots of arguing.”
A valuable lesson for the community: 'Nobody did their homework'
Once the toast of the town, Madani now finds himself a pariah in the Biggest Little City.
In a place where everybody knows each other — at least when it comes to people with influence — the fall from a meteoric rise can be just as dramatic.
Today, the same people and organizations that helped spread Madani’s name are quick to distance themselves from him. Western Nevada College, where Madani learned to weld and received media attention for his idea, downplayed its links to the TerraOne founder.
“While (the storage container housing project) was an interesting idea, it never really got off the ground,” said Niki Gladys, WNC’s executive director for advancement. “WNC’s leadership, at that time, decided not to move forward with the project.”
The Reno Housing Authority, meanwhile, says it is always open to new ideas that could potentially address the area’s affordable housing crisis. Its interactions with Madani, however, were limited to a tour and a few follow-up emails, said spokeswoman April Conway.
“In 2018, the RHA executive staff was invited to tour a location with Mr. Madani in Washoe Valley that held several shipping containers, and hear information about how they could be turned into affordable homes,” Conway said. “The RHA was not provided enough information to consider his product and did not move forward with any program or partnership with Madani.”
Angela Fuss — who was responsible for setting up a meeting with the city in June 2019, according to Madani — says her interaction with TerraOne was limited to work she did for engineering firm Lumos & Associates on behalf of NYEP. At the time, Fuss was the planning group manager for Lumos prior to taking the planning manager job for the city in July of that year.
“My involvement was pretty limited in scope and timeframe, due to leaving my job at Lumos and taking a position with the city of Reno,” Fuss said.
Madani also met with Reno Councilman Oscar Delgado on Nov. 4, 2019 to discuss the use of shipping containers as affordable tiny homes. No formal action or agreement ever came out of the meeting, however, according to Delgado.
“I only recall having the meeting because it’s in my calendar,” Delgado said. “(There was) no followup.”
Madani says he is not surprised by the responses.
“This thing became political very fast,” Madani said. “This city is a good old boys town and I’m not one of the good old boys.”
Madani also accused DuPea of going out of her way to destroy his reputation. Madani contrasted NYEP’s interaction with Urban Roots, which was able to get the materials it paid for from Madani without the same amount of drama.
Despite his track record of lawsuits, fraud allegations and a trail of angry clients, Madani continues to insist that he just happens to be the victim of unfortunate circumstances and people with an axe to grind.
For the people who were left hanging by Madani’s unfulfilled promises, however, Madani is something else.
“He’s a con artist,” DuPea said.
“The problem is, you don’t expect a con, especially when you meet people through the city of Reno and the community colleges. You think they’re vetted for you.”
The biggest surprise for DuPea is just how far Madani got.
A simple Google search of his name, for example, would reveal his bank fraud case in Southern California. It is such an embarrassing oversight that DuPea says she understands why groups and organizations are suddenly distancing themselves from Madani.
It also serves as a valuable lesson for the community, according to DuPea.
“I can see why people are washing their hands of him — nobody did their homework,” DuPea said.
“We weren’t expecting a con,” DuPea added. “And if you’re not expecting a con, you don’t look for it.”
Jason Hidalgo covers business and technology for the Reno Gazette Journal, and also reviews the latest video games. Follow him on Twitter @jasonhidalgo. Like this content? Support local journalism with an RGJ digital subscription.