Some Portlanders Haven’t Paid Their Property Taxes. These Are Their Stories.

We’re calling this spinoff “Chasing Ghosts: Property Tax Debts.”

Chasing Ghosts: Property Tax Debts

Portland’s economic picture is perplexing. Residential real estate is hot and unemployment hovers near record lows. Meanwhile, downtown office space is sinking faster than a Chinese spy balloon, with vacancy rates topping 25%.

The city is returning to life, but only partially. In part, that’s because a significant number of businesses that fell ill during the pandemic are now suffering their own version of long COVID.

And one indicator of the health of the economy: Property owners in trouble stop paying their taxes.

For nearly a year, our newsroom has tracked down the backstories of Portland’s vacant properties, in a series we call “Chasing Ghosts.” This week, we’re debuting a spinoff: Property Tax Debts. This time, not all the buildings are empty. But the tax bills are unpaid.

We asked the Multnomah County assessor for a list of all the commercial (i.e., nonresidential) accounts that are more than $5,000 in arrears. Initial property tax payments for 2022 were due Nov. 15, but hundreds of businesses failed to make payments. In many cases, such failure is an indication of financial distress, because Oregon counties charge a sky-high 16% interest rate on overdue balances.

On the deadbeat spreadsheet: downtown office buildings, of course. Also, hotels, restaurants, bars and other retail-focused operations that saw in-person customers vanish during the pandemic. But also medical offices, warehouses and other businesses that might seem more COVID-proof.

Peter Hulseman, the economist for the city of Portland, watches property taxes closely because they are the biggest source of revenue for the city’s general fund (as is also the case for Multnomah County).

“I’ve kept elevated delinquency in the forecast,” Hulseman says, “and it could get worse. The larger concern is that downtown properties really fall in value; people have fire sales when leases are up.”

For now, the city, county and other government agencies such as Portland Public Schools, Metro and the Port of Portland that get property tax revenue are insulated by the idiosyncrasies of Oregon’s property tax system. Ballot measures voters passed in the 1990s limit the increase in taxes to 3% per year, but market values have risen much faster. So even if the values of properties decline significantly, it will take time for that decline to depress tax collections.

Still, it can happen. Other West Coast cities think it will. San Francisco, for instance, recently announced that it expects to lose $200 million in property tax revenues between now and 2028.

For distressed property owners, foreclosure is a risk, either by lenders or the government, should they fail to pay taxes for long enough. Tax foreclosures are vanishingly rare in Multnomah County—assessor Mike Vaughn says he can only remember two in the past 20 years. (After three years, the assessor’s office can begin foreclosure but the owner has more than two years’ grace beyond that to make payments.)

But nonpayment of property taxes has real consequences: City and county services, including police, fire, parks, street maintenance, public health and aid for the homeless, depend on those dollars.

So we took a look at a dozen businesses that are behind, hoping to learn the particular struggles they face and to put in real terms what local citizens will not get—think firefighters, public health nurses, teachers, along with goods and services—because of the nonpayment.

Here’s what we found:

Umpqua Plaza Carries the Largest Property Tax Debt in Portland

The New Owner of the Former Greek Cusina Carries on a Tradition: Arguing With the Government

The Former Sears at Lloyd Center Mall Is Riddled With Debts

Why Didn’t the Best Value Inn on 82nd Avenue Pay Its Taxes? Guests Didn’t Pay, Either.

The Operators of SureStay Hotel Wish Multnomah County Would Take It Off Their Hands

An Eyesore on Powell Offers Few Clues to Its Owner’s Plans

A Portland Theater Became a Piano Showroom, Then a Dance Venue. The Tax Bill Got Lost in the Shuffle.

Ask About the Tax Bill at International Auto Sales and You Soon Run Into Family Secrets

What’s Legacy Emanuel Hospital Doing on a List of Delinquent Taxpayers?

The Manager of Loprinzi’s Gym Blames Late Taxes on the Tax Collector

Beloved North Tabor Watering Hole A&L Sports Pub Is Paying Off Its Back Taxes

The Landlord of a Payday Lender Now Owes a Debt of Its Own

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