Correction: This article has been corrected to show that the land under the Riverfront Hotel was seized by the U.S. government during World War II and deeded to Richland in 1959.
While Portland developer Sean Keys’ firm Fortify Holdings has purchased at least 16 hotels in eight cities, five in the Tri-Cities, for conversion to apartments in the last two years, records show that none is complete.
Fortify also has yet to show success at renting micro-apartments.
Fortify Regional Manager Robert Jacob and President Ziad Elsahili have been pressuring the Richland City Council to sell the 22 acres of leased land under the Riverfront Hotel that Fortify wants to buy. The company plans to convert the hotel into 250 square-foot micro-apartments.
The land under the hotel was seized by the U.S. government in during World War II and deeded to Richland in 1959. It was leased in 1961 and became a hotel site.
Only two of Fortify’s 16 hotel conversions are nearing completion. The company’s listing agent has advertised for tenants for 2022.
Keys, Elsahili and Jacob did not answer phone calls or emails asking for comment.
Medford and Lincoln City, Oregon hotel rooms receive state funding
The four hotels Fortify owns in Medford, Oregon, are occupied by forest fire victims. The state pays Fortify for nightly shelter, according to Delia Hernandez, communications officer with the Oregon Health Authority.
Medford Planning Director Matt Brinkley said that one Fortify hotel, The Merrick at the Commons, has three quarters of the 118 hotel rooms occupied by fire victims, and the state is paying $100 a night for the rooms.
Another hotel — formerly an America’s Best Value Inn, now known as The Jackson — is the first that Fortify is renovating in Medford. Hernandez said that wildfire survivors will have priority renting those apartments, and grants will subsidize the rent. On Oct. 28, Fortify received a $50,000 grant from Medford Urban Renewal for sprinklers for the new renovation.
According to the planning office in Lincoln City, the two Fortify-owned hotels there have received no permits for renovation.
Spendy in Spokane
Fortify’s only hotel conversions near completion are in Spokane. According to Tavis Schmidt, a neighborhood and housing specialist with the city’s planning department, Fortify hotels there are still under construction.
Rental agencies have started advertising apartments in The Imperial, formerly a Days Inn in downtown Spokane; and The James, a few miles from downtown. The advertised monthly rent for The Imperial units vary from $950 a month to $1,225 a month depending on the listing agent and the size of the unit.
Promotional materials for the approximately 250 square-foot Imperial apartments list sewer, water, electricity and garbage as averaging $150 a month. A one-time fee for pets is $400, and pet rent is $25 a month.
Apartments at The James are listed as “available soon.” A 228 square-foot apartment is advertised for $1,095 a month.
Demand in Boise
Architect Erik Hagen, who is working on a hotel conversion for Fortify in Boise, told the Observer that the demand for housing in Boise far outstrips the supply, and the hotel conversions “fill a niche for a group that are willing to downsize.”
He pointed out that Boise had made zoning changes to allow for accessory dwelling units behind houses and over garages to try to increase the amount of housing in the city.
Hagen said that he is working on applying for permits to convert the old Howard Johnsons in Boise. He said that details like adequate garbage and recycling facilities must be accommodated in completing a conversion. Hagen said he is working with the city to iron out the details.
Not much movement in Moscow, Idaho
The Moscow, Idaho permit website shows that the hotel that Fortify bought in July, the Idaho Inn, has a compliance permit. That is an inspection to determine if there are any code violations or corrections that need to be made in the existing hotel.
According to Aimee Hennrich in the Moscow city planning office, Fortify has applied for permits for exterior doors, decks and patios. She said the hotel has been used in the past to house graduate students.
Five Tri-City properties, double the price
According to Benton County property records, Fortify-affiliated LLCs have purchased one hotel in Kennewick, two in Richland and two in Pasco.
Permit websites for those cities show none of those hotels has renovation permits.
CV the Alegre LLC bought The Rodeway Inn at 1520 N. Oregon Ave., four others bought the Loyalty Inn at 1800 Lewis St., both in Pasco. A fifth LLC picked up the Quality Inn at 7901 W. Quinault Ave., Kennewick.
In Richland, CV The Franklin LLC owns the former M Hotel at 1515 George Washington Way that has about 200 rooms, and the STK Hosford South LLC owns the Days Inn at 615 Jadwin Ave., which has about 100 rooms.
Fortify paid $31,582,430 for the five properties that had county assessed values of $17,587,310.
Pressuring the Richland City Council
Jacobs and Elsahili of Fortify told the Richland City Council at a Sept. 28 workshop that a third purchase in Richland, the Riverfront Hotel, depends on the purchase of the land. As an incentive for the city to sell the land, the pair told the city council that Fortify will also buy and renovate the Economy Inn at 515 George Washington Way.
Elsahili told the council that the micro-apartments would rent at about the same rate as the Park Place apartments. In March, a Tri-City Herald article reported those apartments, at nearly 500 square feet, started at $1,250, with $125 a month for the garage parking or $35 for the carport.
Not buying what they’re selling
When the Richland City Council heard about the proposal to buy the land under the Riverfront Hotel at their Sept. 17 retreat meeting, only Mayor Ryan Lukson seemed interested enough to hear a presentation from the developers at the council’s Sept. 28 workshop.
“It may not be the exact use that all of us would want, but …I would at least like to hear their proposal,” Lukson said at the retreat. “I don’t see any downside to listening.”
Councilmember Alvarez said, “Let’s actually see how they complete the project on the M Hotel, and then we can always revisit this and look at that.”
Councilmembers Sandra Kent and Terry Christensen said at the retreat that they wanted more data on the number of remaining hotel rooms, as well as other information.
Christensen pointed out how long Richland had to wait to get the right development for the old “pit” property where the Park Place Apartments was built. He said he favored waiting again for the right development.
The group decided to go along with Lukson and hear the developers’ presentation. After the Sept. 28 workshop, the council still had a wait and see position.