Correction: The article has been corrected to show that the land under the Riverfront Hotel was property seized by the government during World War II and deeded to Richland in 1959.
Developer Sean Keys, whose company plans to convert five Tri-Cities hotels to micro-apartments, was the real estate manager for a company whose owner went to prison for a $5 million scam.
Key’s company, Fortify Holdings Inc., has been in Tri-Cities news because representatives have been pressuring the city to sell riverfront land that the U.S. government deeded to Richland in 1959. The city currently leases the property to the Riverfront Inn, a hotel that Fortify wants to convert to micro-apartments.
Court records and reports in The Oregonian ( Iris Capital real estate scandal put one in prison but judge says ‘bigger players’ were culpable, too – oregonlive.com), show that the Portland man was a player in a 2019 federal criminal case in Oregon. His boss Shawn Kniss was sentenced to three years in prison for fleecing investors of $5 million, and U.S. District Court Judge Michael Mosman told Kniss that bigger players were “paying their way out of this problem while you’re left holding the bag.”
Keys, CEO of Fortify, did not respond to a phone call and a LinkedIn message from the Observer. Neither Ziad Elsahili, president of Fortify nor the attorney Mark E. Fickes, who signed the paperwork for a requested zoning change for the company in Richland responded to phone calls, emails and Facebook messages. The contact email on the Fortify webpage bounces back .
The Observer also reached out to all members of the Richland City Council for a comment. None have responded.
Keys was among those blamed by Kniss’ attorney in a court filing, “Make no mistake about it, Mr. Kniss’ attorneys, accountants, and Sean Keys provided Mr. Kniss with terrible advice which led directly to the conduct for which he now stands before the Court.”
“Mr. Keys has not been prosecuted, but paid an undisclosed amount to settle his case civilly when a Receiver was appointed to recoup Iris investor funds. Similarly, the attorneys who handled virtually every aspect of the formation of Iris funds, and who advised Mr. Kniss about what disclosures needed to be made to investors, also paid their way out of this case with multimillion dollar civil settlements.”
In 2011 Iris Capital began attracting investors.
Kniss’ company, Iris Capital, employed Keys as a real estate manager. The business raised more than $5 million from investors from 2011 to 2013 to buy, remodel and flip houses promising them eight to twelve percent interest on their money. Kniss used investors’ money to pay other investors and used some of it to invest in a marijuana business before the business failed.
In court, Kniss’ attorney claimed Keys played a role in the company’s demise. “As Shayne Kniss attempted to recoup investor money, he discovered Sean Keys had encumbered investor properties with a personal loan he obtained without Shayne Kniss’ knowledge,” the attorney wrote in a filing.
Polo ponies and no-fault evictions
Keys is no stranger to publicity. He’s also drawn attention for his devotion to polo. In 2006, he began building fields and stables for his 25 polo ponies, according to the Willamette Week. “Portland Polo” magazine featured Keys Hidden Creek Polo Club in 2017.
“Hidden Creek is more than just a polo club…it’s a venue dedicated to raising money for Portland charities,” was a subtitle on the story.
At about the time Keys was raising money for Portland charities at his polo venue, he and other investors were raising the rent and sending out no-fault eviction notices to tenants at Titan Manor, a rundown apartment complex in Portland, according to records and reports on Oregon Public Broadcasting
Created New Company in 2018
Sean Keys created Fortify Holding LLC in 2018, the year before the federal criminal sentencing, according to Oregon Secretary of State corporation records.
Since 2020, the company has been on a buying binge of rundown hotels in the Northwest. An online search indicates that in about the last year and a half Fortify has purchased four hotels in Medford, OR; two in Lincoln, OR; two in Spokane, WA; and two in Boise, ID; in addition to the five purchased in the Tri-Cities.
Fortify’s other projects
While Fortify’s website advertises that they have successfully developed 17 properties, it is clear from the website that the 17 described are apartment complex remodels, not hotel to apartment conversions.
For instance, Go Go West, in Spokane was an older apartment complex that Fortify bought and remodeled.
A hotel to apartment conversion not mentioned on their website, the Imperial in Spokane, recently started renting units.
According to the management company website, a 263 sq.ft. apartment rents for $1145 a month. Larger units that include a small closet rent for more. Tenants may have up to two small pets in their unit and no pet interview is required.