By JEFF MANNING/The Lincoln Chronicle
The parent company of the Shilo Inn motel complex overlooking the ocean in Newport intends to sell the property at public auction this week.
Three parties have submitted formal letters of intent to buy the property, the company said in court documents. A court-ordered sale in July drew no bidders.
The deadline for new bids is Tuesday, Nov. 18. A public auction, if needed, is tentatively set for three days later, according to Jordan Shack, vice president with Hilco Global, the real estate firm hired to help sell the property.
The sale marks another step in the court-authorized dismantling of the hospitality empire built by Mark Hemstreet. Although it boasted 47 hotels at its peak, Shilo took on mountains of debt that it struggled to pay. Among its largest creditors were the Internal Revenue Service and the Oregon Department of Revenue. As of 2023, Hemstreet admitted in court filings, he and his companies owed $29 million in tax debt.
Among the lenders who claimed they’d been cheated was Los Angeles-based Cathay Bank, which in 2022 sued Hemstreet and Shilo to recover more than $4 million in loans.
The judge in the Cathay case appointed Southern California business consultant Brian Weiss as receiver and charged him with taking control of the company and liquidating its assets.
Hemstreet fought Weiss’s appointment for nearly two years. Neither he nor his lawyer, Rahn Hostetter, would comment.
In earlier court documents, Hemstreet said he and Shilo “are paying down the senior tax liens to the best of their ability during these challenging economic times.”
In the documents, Hemstreet said the hospitality industry was devastated by the Covid pandemic, recession, inflation and high gas prices, and numerous hotels in the Portland area were facing foreclosures.
“Despite this, the Hemstreet Parties are doing their best to keep the Shilo hotels operating for the benefit of the communities, to keep people employed, and to pay creditors,” the documents said.
The Oregon Court of Appeals ruled against Hemstreet earlier this year.
Weiss, in turn, has filed suit against Hemstreet and his wife, Shannon Hemstreet. He claims that Hemstreet named his wife as chief executive officer of Shilo and paid her $480,000 a year even though she performed no daily job functions “with the intention to hinder, delay or defraud his creditors, including those creditors that would have garnished his salary.”
Great site; poor condition
Despite Shilo’s financial woes, some of its properties are still valuable.
In February 2024, Weiss sold the Shilo Inn in Seaside for $23 million, according to Clatsop County property documents. Like the Shilo in Newport, the Seaside hotel is located on prime beachfront property.
“The locations are wonderful, they really are,” said James Mulloy, the head of Malbco Holdings, the winning bidder for the Seaside hotel. But the property had been neglected over the years, requiring major renovations.
Mulloy and his team hoped to keep remodeling costs in the $5 million range, although they knew it could be more. Now, 20 months since completing the purchase, Mulloy told the Lincoln Chronicle “it’s gonna cost every bit of $10 million. It’s really sad what has happened.”
The ongoing tension between Weiss and Hemstreet has scared off at least one interested buyer of the Newport Shilo. “The buyer declined to move forward because of … Mr. Hemstreet’s appeal of the receivership,” Weiss said in a recent report to creditors.
The Shilo is one of the largest hotels in Newport with 179 rooms on 2.48 oceanfront acres along Southwest Elizabeth Street in the popular Nye Beach neighborhood.
Newly filed records in bankruptcy court show how the hotel fell on hard times as the company racked up significant unpaid debts. Court documents state that the Shilo Newport owes $534,707 in back taxes to Lincoln County and more than $230,120 to the city of Newport for unpaid transient lodging taxes.
Meanwhile, the hotel’s revenue fell 38 percent in a single year, from $2.6 million in 2023 to $1.7 million in 2024. Sales were $1.3 million through the first nine months of 2025.
The Newport fire marshal in late July ordered the hotel to close one of its buildings due to poor maintenance that led to various violations of the city fire code. The closure of so-called “Building D” was a difficult blow for the Shilo as it is the largest of the five buildings at the site with 70 guest rooms.
The restaurant and coffee shop at the site have also been shuttered.
- Jeff Manning is a former investigative reporter for The Oregonian who now writes for various Northwest publications and can be reached at jeffmanning62@gmail.com
