$350K unpaid taxes plague micro-apartment developer. Marquee Tri-City site sold
Fortify Holdings, the Portland firm that transformed the Tri-Cities rental market when it converted 800+ hotel rooms into apartments, sold its marquee property in October, then missed a key deadline to pay property taxes on its remaining properties.
Fortify sold The Franklin in Richland on Oct. 24 to Te Amo LLC in a deal valued at $25.6 million. That’s nearly $10 million more than its assessed value.
It was the county’s largest commercial transaction that month, sales records show.
A week later, it missed the Oct. 31 deadline to finalize property tax payments to Benton and Franklin counties for the five properties it still owns.
The unpaid balance was a little more than $350,000 on Nov. 18. Fortify could not be reached last week about the tax bill or plans for its holdings.
Marquee property
Fortify roared into the Tri-Cities in 2021.
A $38.1 million buying spree made it the owner of six local hotels and motels, mostly older properties.
It set out to convert them into tiny apartments that would cater to budget-minded renters seeking efficiency units. Locally, it spent $13 million on conversions, according to building permits.
The influx of so many new, if small, units transformed the Tri-Cities rental market.
The vacancy rate rose to 7.7%, from 3.7% and market analysts credited Fortify’s new units with helping bring demand for rentals into balance with supply.
The former Best Western Plus at 1515 George Washington Way anchored its hotel-to-apartment model.
Fortify renamed it “The Franklin,” and converted the roughly 200 rooms into studio apartments. It welcomed tenants in 2022.
The new owner, Te Amo LLC of Bend, Ore., promptly relayed it to a separate limited liability company it controls. Te Amo is owned by Hayden Watson, owner and founder of Hayden Homes, also based in Bend, state corporation records show.
A spokesperson for Hayden Homes said Te Amo LLC is separate from the residential development firm, which is active in the Tri-Cities. Watson could not be reached by the Herald.
The Franklin has an unpaid tax bill of $79,000 tax records show.
Unpaid taxes
Overdue taxes are not loans.
By law, counties assess interest in unpaid balances, generally 6% for smaller residential properties and 12% for larger ones, including commercial properties.
After three years, properties are subject to foreclosure and being sold at auction if the bill remains unpaid. Delinquency is common. Foreclosure sales are not.
Benton County said taxes were delinquent on 6,112 parcels on Oct. 31. Just one property was put up for sale at its Nov. 5 foreclosure sale, a vacant lot in western Kennewick.
Fortify previously fell in arrears on property taxes in early 2024, when its unpaid bill totaled about $160,000.
Playing catchup
At that time, it told the Herald it was proud to create 840 much-needed apartments in a market where renters needed affordable housing and were struggling to keep up with double-digit rent increases. It pledged to get current on its accounts.
Eighteen months later, it had partly succeeded.
Tax records show Fortify was current on property taxes through 2024 for three of its five local properties. They include The Q in Kennewick, the Meriwether in Richland and The Alegre in Pasco.
But its tax bill for two others includes unpaid taxes from 2024 or before. They include the Clark in Pasco and The Kenn, formerly a Motel 6, in Kennewick.
Farmworker housing
The Kenn is unusual among Fortify’s Tri-Cities projects.
Instead of converting it to micro-apartments, it marked the property for farmworker housing. Bunk beds were placed in the former guest rooms, and it operated briefly before closing.
The Kenn has been empty for several years, attracting vagrants, vandals and metal thieves.
The city of Kennewick deemed it a nuisance and hired contractors to clean up graffiti and secure the building. The city said its code enforcement division visits regularly, and there have been no significant issues in 2025.
The city filed a lien totaling $26,088 to recover its cost.
Property taxes owed
Property taxes along with sales taxes are the two principal sources of money for state and local government, including schools, police and fire protection, city and county government and the justice system.
Property taxes are due in halves, with the first half due on April 30 and the second half on Oct. 31.
Amounts owed for Fortify-controlled properties in Benton and Franklin counties:
- The Alegre, 1520 N. Oregon., Pasco, 2025 bill unpaid. Amount owed including taxes, fees and interest $34,000.
- The Clark, 1801, 1824 and 1905 W. Lewis St., Pasco, taxes unpaid for 2023, 2024 and 2025. Amount owed including taxes, fees and interest: $144,000.
- The Meriwether, 615 Jadwin Ave., Richland. 2025 bill unpaid. Amount owed including taxes, fees and interest: $28,000.
- The Q, 7801 W. Quinault, Kennewick, 2025 bill unpaid. Amount owed including taxes, fees and interest: $121,000.
- The Kenn, aka former Motel 6, 2811 W. Second Ave., Kennewick. 2024 and 2025 takes unpaid. Amount owed including taxes, fees and interest: $25,000.
