Spokane refugee organization locked in legal battle with troubled Portland developer

The first sign of trouble came in December 2023. On a Friday, contractors from Richland began packing their tools from a jobsite in downtown Spokane, never to return.

Mark Finney is the executive director of Thrive International, a nonprofit organization that provides housing for refugees until they can get jobs and homes of their own. He had worked alongside those Richland contractors at the former Quality Inn, located at 110 E Fourth Ave., which is where Thrive leases the upper floors to serve its clients.

For two years, Thrive helped hundreds of refugees get a foothold in the Lilac City.

Initially, most of them came here fleeing the war in Ukraine, but the program now serves clients from about 38 countries in the rooms at the former Quality Inn, which was renamed the Olmsted.

It was not always perfect. Sometimes the construction crews shut off the water or the power at the Olmsted as they worked to convert the first-floor hotel rooms into apartments.

The arrangement seemed to serve the needs for both Thrive and the property owner, Portland-based Fortify Holdings and its founder, Sean T. Keys.

Then came the Friday in 2023 when the Richland crews from Cliff Thorn Construction said they were leaving and would not return until the owners started paying for their work.

"That was my first red flag," Finney said. "Over the next several months, we started seeing (Fortify Holdings) seek to change the terms of our lease, and we did. We thought, if they succeed, we can, too."

But the relationship exploded into a full-scale legal war that has become an existential threat to Thrive and has raised questions about Fortify Holdings, which owns scores of properties, mostly former hotels. Many of the Fortify Holdings properties have fallen into squalor as the company struggles to pay taxes even while receiving taxpayer funds to provide affordable housing.

Its founder, Keys, started the business about the same time he was implicated in a property-investment Ponzi scheme in Portland in which his partner, Shayne M. Kniss, pleaded guilty to wire fraud. A judge sentenced Kniss to three years in a federal prison for his part in a conspiracy to defraud elderly investors in real estate deals that, according to court records, were all set up by Keys.

Most of those deals, in which Keys and Kniss reportedly bilked $5 million from the investors, involved purchasing low-grade buildings and converting them into affordable apartments, which is the same business plan being attempted at the Olmsted.

Federal court records from 2019 indicate that Keys paid part of a $4 million resolution to settle potential Oregon securities violations, although the exact terms of that deal remain confidential.

Keys also faces multiple lawsuits from Cliff Thorn Construction, the Richland contractor that was working on Fortify Holdings projects in Spokane, Tacoma and Yakima.

In the Spokane case alone, Superior Court Judge Julie McKay entered a default judgment last year against Fortify and ordered it to pay Cliff Thorn Construction $2.9 million for unpaid work on the Olmsted.

Efforts to reach Keys this past week, through his business and his attorney, were not immediately successful.

Threat to Thrive

Keys and Fortify Holdings filed a lawsuit against Spokane's Thrive International in November 2024 arguing that Finney had not paid hundreds of thousands of dollars' worth of property insurance and rent for some of the unfinished rooms.

Finney, through his attorney, disputed those allegations, and the case progressed until both parties agreed to enter arbitration. Recently, an arbitration judge ruled in favor of Fortify Holdings and ordered Thrive to pay $3.3 million in back rent and insurance costs.

As a result, the board of Thrive voted to enter a legal receivership, which basically means Thrive hired a former bankruptcy attorney, Shelly Crocker, to take over the management of the nonprofit and protect its clients and investors, who had given money to support Thrive.

The receivership paused Fortify's pursuit of Thrive's assets in court.

"I'm a neutral party," Crocker said. "I come in and poke around and make sure nothing bad is happening, no fraud. I will say that I've reassured myself that there is no misappropriation going on.

"Mark is a very good, inspirational leader. I think he's not a great manager," Crocker continued. "But we have a good leadership team. Mark is part of it and will stay a part of it."

Crocker also has a duty to Keys and Fortify Holdings.

"My job is to pay the creditors," Crocker said. "I'll work hard to do that once I know how much they are owed."

She noted that Thrive does not have $3.3 million and fully expects to ask a judge to reconsider, or appeal, that award.

"I want to also protect donors," Crocker said. "Part of my duty is to protect the public interest and the vulnerable people living in our facilities. I'm doing my best that they are not further traumatized and put out on the street."

Crocker practiced commercial bankruptcy cases for about 25 years before starting a consulting business in 2013 where she began working with companies, like Thrive, that are in trouble.

Since she was appointed on March 11, Crocker noted that much work remains to resolve the matter.

"I'm sure we do owe (Sean Keys) some money. No doubt about it," she said. "I don't know how much. A big part of my job is determining how much it is and how we are going to pay for it."

But she also said she supports Finney's continued involvement in the organization.

"Mark really is a good guy. He has made some mistakes," Crocker said. "Sometimes he comes across funny. But, he is relentlessly optimistic. He's relentlessly positive, and he's doing this because he's trying to help these people."

Finney said that Thrive is close to opening a new project in collaboration with Spokane Public Library that would provide a total of 48 units of housing at 6980 N. Nevada St.

About half of the units will be low-income, and the rest would be rented at market rate, he said.

"It's about 90% complete. That would be the place where folks move when they are ready for the next step. If we have to vacate (the Olmsted), that would be the place that we move as many families as we can."

While Finney said he was limited on what he could say about the legal case, he is hoping for good outcome.

"This is a very difficult situation for us ... because of the very large amount that they are claiming we owe them," he said. "It not only threatens our programs but the viability of our entire organization."

The Olmsted has "been a great facility for us because we have been able to help hundreds of families from all over the world rapidly become productive community members."

Keys' other ventures

Keys' attorney in the suit against Thrive International is Boise-based KC Hovda.

On Friday, Hovda did not appear to be aware of the $2.89 million judgment against Fortify Holdings in favor of the Richland general contractor. She also seemed unaware of Keys' involvement in the Kniss conviction from 2019.

As for the current suit involving Thrive, she noted that she could not comment as the litigation progresses.

But Keys' problems seem to be nearly as vast as his company's property holdings.

While he did not immediately respond to interview requests, Keys and Fortify Holdings nonetheless currently use a Spokesman-Review news article about a vegan baker as a promotion on its website under the heading: "Building Communities through Hotel Conversions."

Fortify Holdings lists its assets as "existing properties" and those "under development."

According to a manual count on its website, Fortify Holdings has about 20 properties in Washington, 15 in Oregon, three in Idaho, including one in Moscow; and one in Reno. While some of the properties are listed twice, four of them are in Spokane.

In addition to the Olmsted, Fortify Holdings owns the GoGo West apartments at 2808 S. Assembly Road; the Imperial, a former hotel converted to apartments at 120 W. 3rd Ave.; the GoGo Heights Apartments at 7024 N. Colton St.; and the James, which is a former hotel located at 1503 S. Rustle St.

Spokane city officials ordered a stop work order at the James in 2021 after they found crews working without proper permits. As of Thursday, the property was surrounded by a 6-foot chain link fence, and every door was covered with plywood.

According to the Tri-City Herald, Fortify Holdings had equally mixed successes in hotels it purchased there.

Starting in 2021, Fortify Holdings spent $38.1 million to buy six Tri-Cities motels and spent nearly $13 million more to convert five of them into tiny apartments.

Just like the James in Spokane, it appears Fortify Holdings abandoned a former Motel 6 in Kennewick that forced city officials there to spend $16,000 to board it up because it had become a magnet for homeless persons seeking shelter.

Then last year, the newspaper reported that Fortify Holdings owed more than $350,000 in unpaid taxes.

In Spokane County, Fortify Holdings had rung up several hundred thousands of dollars' worth of property taxes before paying off most of those debts by the end of 2025, according to county records.

It is a problem that has followed Keys.

In Oregon, Fortify Holdings had received more than $70 million in taxpayer funding to house or feed wildfire survivors at the same time in 2024 that it owned more than $900,000 in property taxes, according to the Oregonian.

Keys to success

According to his LinkedIn page, Keys was raised in Oregon "with a lifelong passion for real estate."

In 2003, Keys founded Metropolitan Land Group after a decade of owning a variety of homebuilding, rental management and land development businesses. As of Friday, Metropolitan Land Group no longer listed Keys on its management team.

Then in 2018, he founded Fortify Holdings, which owns the properties in Spokane.

That company "is one of the largest Housing and Urban Development (HUD) borrowers in Oregon, helping expand access to affordable housing throughout the Portland area," Keys wrote.

It is not clear how Keys has been able to secure federal grants after his involvement in the fraud case against Kniss.

But in court records, Kniss spent 30 pages explaining to a judge how he believed he was duped by Keys, whom he mentioned 114 times as part of an explanation for how Kniss committed wire fraud.

Kniss explained that he had worked with Keys at another investment firm before Kniss founded Iris Capital Management in 2010.

In fact, the entire company became based on properties that Keys managed.

"Mr. Kniss relied on Mr. Keys' representations of himself as a man whose family has over 100 years of experience in the real estate business," court records state. "Make no mistake about it, Mr. Kniss' attorneys, and Sean Keys provided Mr. Kniss with terrible advice which led directly to the conduct for which he now stands before the Court."

Keys used the properties for his, and not the company's benefit, a court-appointed receiver wrote in court records.

"Sean Keys used the Iris properties to secure loans in order to pay down personal debts unrelated to Iris, ultimately diverting over $500,000 away from Iris," according to court records. "Unfortunately, Sean Keys did not have Mr. Kniss' best interests in mind, and he certainly did not have any concern for the wellbeing of Iris investors.

"Sean Keys used a confused and increasingly mentally unstable Mr. Kniss to finance his own private projects."

Based on the evidence presented against Kniss, U.S. District Court Judge Michael Mosman sentenced Kniss on Feb. 25, 2019, to three years in federal prison, although prosecutors were seeking more time.

At the sentencing, Mosman noted that others largely were to blame for the conduct for which Kniss was punished, according to the Oregonian.

"The case occurs in a larger context of bigger players paying their way out of this problem while you're left holding the bag,'" Mosman told Kniss at the time.

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