The multimillionaire founder of the once-flourishing Shilo Inn chain, Mark Hemstreet, has refused to pay nearly half a million dollars in the regional government Metro’s homelessness tax and Multnomah County’s Preschool for All taxes, according to the city of Portland.
The city filed suit earlier this month to collect about $479,000 in interest, fees, penalties and unpaid taxes that were meant to go toward fighting homelessness and offering tuition-free preschool for 3- and 4-year-old children. The city’s suit says that it “informed” Hemstreet of his “delinquent” status, yet “Hemstreet has failed to pay” for the 2023 tax year.
Both taxes were voter-approved and took effect in 2021, though they have often drawn grumbling from upper-income earners and businesses subject to them. They’ve even been blamed for an exodus of wealthy Portland or Portland-area residents seeking tax relief.
The taxes range from 1% to 3%, starting with income earned by individual filers who make at least $125,000 per year.
Hemstreet didn’t return messages seeking comment this week or last.
Hemstreet, who grew up in the Portland area and is now in his mid-70s, immersed himself in the hotel industry as a summer manager of a small motel when he was 16, according to the company’s website. He went on to open his first Shilo Inn at age 24 in 1974 and expanded across the western U.S. over the next quarter-century.
But financial woes aren’t new for Hemstreet, who has spent the past few decades dealing with entities and organizations trying to collect debts from him personally or from Shilo Inn locations.
The chain had 47 hotels at its peak, according to the Oregon Court of Appeals, and the COVID-19 pandemic hit it hard. Many locations — including among the most recent batch of hotels in Bend, Warrenton and Newport — filed for bankruptcy.
In 2016, a California bank won a $20 million judgment against Hemstreet, after alleging that he and three of his hotels defaulted on loans.
In 2023, Willamette Week reported that Hemstreet owed everything from about $100,000 for labor and cattle feed for his 9,000-plus-acre eastern Oregon ranch to more than $20 million in unpaid personal income taxes and employee withholdings to the federal government.
Multiple court cases are still ongoing, including a 2024 lawsuit in Multnomah County Circuit Court that alleges Hemstreet’s wife, Shannon Hemstreet, was paid $2.4 million in salary “in an intentional effort to hide assets” from Mark Hemstreet’s creditors. The couple is fighting that lawsuit, which is headed to trial in 2027.
Today, the company lists only four Shilo Inns in operation — in Salem, Klamath Falls, Mammoth Lakes in California and Elko in Nevada.
This month’s lawsuit says Hemstreet owes about $120,000 for the homelessness tax and $355,000 for the preschool tax. That includes interest and penalties. He owes about $4,000 more for unpaid portions of county and city business fees, the suit claims.
Specifically, Multnomah County levies its Preschool for All tax on individuals who make at least $125,000 annually or joint filers who make at least $200,000 annually. Those filers must pay 1.5% of their income above those amounts to the tax. The rate rises to 3% for incomes above $250,000 for individuals or $400,000 for joint filers.
But nonresidents must also pay the tax for income “sourced” from within the county. It’s unclear where Hemstreet lives, but this month’s lawsuit says he doesn’t live within Multnomah County.
Metro also levies its homelessness tax — officially known as the “Supportive Housing Services” tax — on residents of Multnomah, Washington and Clackamas counties. From 2021-25, it levied a 1% tax on individual income over $125,000 per year or joint income over $200,000. Businesses taking in more than $5 million per year also were required to pay a 1% tax on net income.
But in 2026, the income thresholds will increase according to inflation.
The city lists both Hemstreet and Shilo Franchise International, LLC, as defendants in its lawsuit.
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