(Update: This article has been updated with additional comments from Mayor Michael Alvarez and Councilmember Jhoanna Jones made at the Tuesday night city council meeting.)
(Update Feb. 1, 3:30 p.m. This article has been updated to include former Councilmember Marianne Boring’s response.)
(Update: Feb. 5 This article has been updated to include comments from former Councilmember Bob Thompson)
A developer’s bid to buy the city-owned land under the Riverfront Hotel is dead, the Observer has learned.
Richland City Manager Jon Amundson shared the news with the Observer in a telephone interview on Tuesday. Fortify Holdings of Portland had proposed to turn the hotel into micro-apartments.
Fortify President Ziad Elsahili had said that the company wanted to buy the Riverfront Hotel and the Economy Hotel, but only if the city sold the company the land under the Riverfront Hotel. Elsahili told the Richland City Council that options to buy the Riverfront Hotel and the Economy Inn would expire March 31, 2022. A “For Sale” sign recently went up on the Economy Inn.
Amundson told the Observer that even without buying the land, Fortify could still request that the city reassign its lease for the Riverfront Hotel land from the current owner, Traum Ventures LLC, to Fortify, so Fortify could purchase and operate the hotel. Last week, Elsahili told the Tri-City Herald that the company would accept a similar deal for the Clover Island Inn in Kennewick.
After the Port of Kennewick commissioners voted against selling Fortify the land under the Clover Island Inn, Elsahili said that they would buy the Inn as planned and run it as a hotel but would not spend as much money on renovations.
Elsahili has not responded to emails asking if the company would pursue the same deal in Richland.
Amundson said that councilmembers did not see the micro-apartments as the best use for the riverfront property.
Fortify’s efforts did not fail for a lack of trying, however.
Fortify representatives have been lobbying councilmembers and staff behind the scenes long before its request went public, public records show.
The campaign included pressing individual councilmembers for one-on-one private meetings such as over lunch or drinks. In at least one case, those efforts were successful.
Lobbying for the sale became so intense that at one point, in a June 23 email, Fortify representative Rob Jacobs wrote to City Councilmember Michael Alvarez. “I also would like to apologize if my numerous attempts to contact you over the past month were an annoyance to you.”
The campaign was detailed in records produced by the city last week showing some of the correspondence between Fortify Holdings and the city between Jan. 1 and Oct. 31, 2021. Because of computer problems, some of the correspondence requested by The Observer won’t be available until Feb. 25. A request for more recent correspondence is pending.
The hotel was built in 1968 after the city leased out the riverfront land beneath it on Bradley Blvd. north of the Columbia Point Golf Course. Fortify wants to buy the hotel from Traum but wanted the land as well. The Benton County Auditor currently appraises the almost 20 acres of riverfront property that the hotel sits on at $5,614,060.
Fortify asked the city to accommodate them with several zoning changes
The lobbying campaign around the Riverfront heated up even as Fortify had been seeking zoning changes from the city so it could remodel the Days Inn, at 615 Jadwin Street. Fortify hoped to change its rooms into micro-apartments of approximately 250 sq. ft. On Jan. 28, 2021, Fortify filed a code amendment application to eliminate the 500 sq. ft. minimum dwelling unit size for Richland Central Business District.
Before that change had been approved, Fortify representatives began emailing and meeting with city staff about buying the riverfront land. On February 24, 2021, Fortify representative Robert Johnson, Jr. set up a virtual meeting with Fortify President Ziad Elsahili to discuss the issue with Development Services Director Kerwin Jensen.
Council lobbying begins
Elsahili met with then-Mayor Ryan Lukson as early as April, the records indicate.
When he emailed Lukson and City Councilmember Bob Thompson on May 10, Elsahili wrote, “After connecting with Ryan Lukson over lunch a few weeks ago, we discussed our proposals for Richland and the projects we are seeking to take on and what they needed.”
The conversations continued. On May 18, Elsahili writes Lukson, “Thanks for hopping on the Zoom meeting with us this morning.”
That same day, Jacobs emailed the other councilmembers and outlined what the company wanted from the city:
“To achieve our goals, we need the city of Richland to work with us on the 500 square foot minimum dwelling size (in the CBD and Waterfront), agree to sell us the land at the Riverfront Hotel site, and grant us a partial exception on the first-floor commercial usage requirement for the Best Western.”
To Thompson’s email Jacobs added a paragraph, “Hope all is well and your golf game is in tip-top shape these days!! I just wanted to share with you an informational email we are circulating around to city council members and some city staff in Richland. Let me know if you have any time for a quick meeting next Tuesday (5/25) to discuss our projects in Richland. Ziad, the president of our company, will be in town for a meeting with Jon and Kerwin and we’d love to sit down with you, as well. Thanks Bob….”
Jacobs followed up his May 18 email to councilmembers with a May 21 invitation to meet with Elsahili at some unspecified location when he was in Richland touring the Fortify projects.
Councilmember Kent responded that she would get back to them on the invitation. Jacobs emailed again that hopefully they could meet the next day. When Kent said she’s unusually busy, Jacobs pressed on saying that Elsahili would be in town until 4:00 p.m. if she had 30 minutes.
Kent’s were the only emails from a councilmember produced in the correspondence the Observer obtained initially from Richland through its public record request.
The Observer asked councilmembers in emails and phone calls if they had met with representatives of Fortify. Lukson did not respond. Former councilmember Bob Thompson wrote in an email, “I never met, had lunch or drinks with anybody from Fortify Holdings. I do play golf and do know Jacob’s father. When called, I referred them to Richland’s economic development director.”
Councilmembers Phil Lemley and Terry Christensen and former Councilmember Marianne Boring said that they visited model rooms that Fortify had completed for councilmembers and staff to tour at the former M Hotel on George Washington Way. Kent and newly elected Councilmembers Jhoanna Jones and Theresa Richardson said they had not met with any representatives of the company.
Alvarez, in an email, said he would respond to the Observer’s inquiries in a public session tonight, calling them “fair questions.”
The Observer had asked about one of the emails obtained from the city. In it, Jacobs wrote Alvarez, “I completely respect your position not to engage with us outside of settings where the entire council is present on specific issues.”
Jacobs continued, “With that said, I was wondering if you would be available to meet up and grab a drink sometime next week?”
During the Council Comment section of the Tuesday night city council meeting Alvarez responded as promised. “I would not meet with any developer, especially during a process to decide on which way to go to approve a project. I believe in transparency; I ran on transparency.”
Fortify’s lobbying efforts had been noted at the May 25, 2021, council workshop on the zoning changes Fortify wanted for the Central Business District, Alvarez pointed out. “I opted not to answer those phone calls. I want everything to be transparent,” he said at that meeting.
Alvarez said Tuesday night that it was his comments in May about all of the phone calls that he had received that prompted Jacobs to send the email apologizing for “…numerous attempts to contact you.”
Jones also commented Tuesday night, “I think that we may need to consider doing something to prevent city council members from meeting privately with any developer or any special interest groups that might have interest in getting their votes.” She added that meeting privately may not be the right way to conduct business as a city council.
Council passes the business district zoning change
On June 15, the council passed Fortify’s proposed zoning amendment by a vote of five to two. Christensen and Boring voted against the change.
Christensen said that the council should be considering how the proposal would affect the whole district, not just the Days Inn owned by Fortify. “This proposal is too wide and too broad sweeping,” he said.
Boring agreed with Christensen, “If we do this, we’ll never have a family downtown again.”
Riverfront micro-apartment plan met with little enthusiasm
The riverfront land sale was not discussed publicly until Sept.17, at least four months after discussions with individual council members began.
That disclosure occurred during the City Council’s yearly retreat held virtually this year. Retreats are typically intended to be an opportunity for elected officials to discuss long term plans. At the meeting, interim City Manager Jon Amundson proposed a presentation from Fortify at the next meeting on Sept. 24.
Councilmember Alvarez said that he wanted to see completion of the other hotels Fortify had purchased in the area and revisit the proposal later.
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 were built. He said he favored waiting again for the right development.
“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.” Of course, the council had heard what Fortify wanted in May, but they agreed to hear a formal presentation the following week.
Fortify explains their plan
At the Sept. 24 meeting Elsahili and Jacobs explained that Fortify would remodel the hotel into micro-apartments. Framed as an extra incentive, they said they would also restore the mid-century Economy Inn at George Washington Way and Jadwin Street.The company would do this, however, only if the city agreed to sell them the land under the hotel and allow micro-apartments in the riverfront district. Fortify was willing to pay 10 percent over the appraised value, the company representatives said.
Amundson said that Fortify could request that the lease be reassigned from Traum Ventures, the current owner, to Fortify. The Observer emailed Jacobs and Elsahili about Fortify’s current plan for the hotel purchases but received no response.