Tri-Cities port refuses to sell Clover Island land. But hotel may still be sold
The Port of Kennewick has thrown a wrench into a developer’s plan to invest $20 million into a Clover Island hotel and the future development that could come from it.
Port of Kennewick commissioners voted Tuesday on a resolution reinforcing its policy of not selling land on Clover Island. The vote was 2-1 with Commissioner Tom Moak voting against.
The move may kill an attempt by Fortify Holdings to turn the aging Clover Island Inn into micro-apartments.
The developer also had offered itself up as a potential future partner for more development in line with goals of the port’s 2021 Clover Island Master Plan if they had approved the land deal.
At the last regular port meeting Jan. 11, Port CEO Tim Arntzen recommended commissioners take time to do their due diligence to determine whether they should sell the land, and what type of housing, if any, would be best for the island.
He did not offer a time table for the process during that meeting. Then, on Tuesday he presented two resolution options to the commissioners that would effectively put a stop to the apartment proposal.
Deal or no deal
Still, Fortify President Ziad Elsahili said that they intend to go through with the purchase, which has a closing deadline of March 31. However, he said they will likely continue to operate the inn as a hotel, and forego the multi-million dollar renovations they planned if the port decides not to sell the land.
Elsahili said it was possible that they would be open to a lease with better conditions to help safeguard their investment, but did not want to commit to doing so without further clarification from the port.
“We think we have a very compelling case for a land sale, and it will justify investment from us to overhaul this facility and investment in the master plan,” Elsahili said. “We think this building should shine and be something the community can look at with pride.”
Tri-Cities businessman Bill Lampson co-owns the hotel with six other Tri-Cities investors. He told the Tri-City Herald last week that the hotel was not for sale but that Fortify approached with an offer they couldn’t refuse. County assessors value the hotel at $3 million.
Comments and concerns
During Tuesday meeting’s regular public comment section, several Tri-Cities residents offered their thoughts both for and against the development and sale of land. Some questioned Fortify’s track record, saying they have no operational properties.
Elsahili said that was not correct, that Fortify has a significant history of development and owns many regular apartment complexes and rentals. Commenters later narrowed their objections to lack of history of converting hotels to micro-apartments.
Fortify began buying old, under-performing hotels in 2020 in Oregon and Washington, and began purchasing hotels in the Tri-Cities in spring 2021. The sites are still under renovation.
The company has bought five hotels and motels in the Tri-Cities so far and is trying to work out deals for the Clover Island Inn and the Riverfront Hotel on George Washington Way in Richland.
The company faces a similar issue with the 50-year-old Riverfront Hotel because the land is owned by the city. The closing date for that hotel sale is also set for March 31.
Restricting zoning
On Tuesday, the Port of Kennewick commission tabled the second resolution, which would limit the types of housing developments. The move could further damage Fortify’s attempt to turn the hotel into housing if they did accept a lease.
That resolution, as presented, would prevent rezoning of the inn to multi-family housing.
Included in that resolution were comments from emails and social media posts on the proposal.
Artnzen believes the scale of the comments should satisfy the port’s need to solicit public comment on the matter, and had his staff compile them for review by the commissioners. Most of the commentary came from posts on Facebook.
“In my almost 20 years at the port, I think this is the most extensive public comment process that I have ever witnessed,” Arntzen said. “I think the commission could take the viewpoint that we have completed the process by which the public can comment. I would say that the vast majority of the comments are that the commission should not entertain this proposal to convert the Clover Island Inn to high density housing project.”
Commissioner Tom Moak said that while the port had previously sided with not selling land to developers, he believes that the need for housing in the Tri-Cities area, and a developer with a plan to invest warrants consideration.
“I think times have changed, I think times have changed even in the last six months. For one, we have someone wanting to invest on the island. In the past eight years that I’ve been on this board, we haven’t had anyone wanting to make that kind of investment,” he said.
“When I see that private enterprise is interested is investing, then I’m interested. When I see that the proposal invests in (areas) of the master plan to implement things we don’t even have a proposal for money to do, I’m interested,” he said.
The initial project will include a renovation of the Clover Island hotel into 180-200 high-end micro-apartments, set up as studios or 1-bedrooms.
The first floor of the nearly 45-year-old hotel would include retail shops and restaurants, to meet the port’s rule for 20% commercial occupancy.
Moak said he doesn’t think the port should immediately accept the deal, but that they should be open to considering making an exception if it means the port and community will benefit.
Commissioners Skip Novakovich and newly elected Ken Hohenberg said they believe it was their duty to protect the land on the island.
“I don’t think we’re closing the door. I do really strongly think that Clover Island is unique. Do we sell property on the island or don’t we?” Hohenberg said. “Right now, the Port of Kennewick is the sole owner. I just think it’s important that we maintain that.”
The commissioners agreed to table the second resolution to give Fortify time to review their plan and make adjustments they feel necessary.
They expect to continue discussion on the matter at the port’s first commission meeting in March, tentatively scheduled for 2 p.m. March 8.
This story was originally published January 26, 2022 at 5:00 AM.
