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The building in the Pearl District that currently houses one of Mayor Keith Wilson’s overnight homeless shelters is facing foreclosure.
A lawsuit filed in Multnomah County Circuit Court on Aug. 25 by Northwest Bank alleges that the owners of the building defaulted on a $6 million loan and now owe a total of $7.2 million in loan payments and interest to the lender.
Real estate developer Vanessa Sturgeon, Sturgeon Development Partners and North Pearl LLC are listed as defendants.
The building last year became the center of a neighborhood controversy when Sturgeon decided to lease it to the city of Portland for use as a homeless shelter at a rate of $18,000 per month. Despite fierce neighborhood pushback over livability concerns, the shelter opened in September 2025.
The 200-bed shelter, called the NW Northrup Shelter, is set to close permanently on Sept. 18—just one year after it started welcoming guests.
The impending closure comes after neighborhood associations and owners of neighboring businesses and buildings continued to pressure the city to shutter the shelter, citing a deterioration of the surrounding area.
It’s unclear if the foreclosure lawsuit will complicate the city’s lease agreement with Sturgeon in any way. Mayoral spokesman Cody Bowman says the city does not anticipate that the lawsuit will affect the city’s planned closure of the shelter.
The lawsuit, which was first reported by independent reporter Stephanie Volin on her Medium page, lays out the alleged timeline: Sturgeon and her company took out a $6 million from Northwest Bank in 2022, and then defaulted on the loan by failing to pay when it matured in March 2024.
The bank alleges that Sturgeon owes the bank a total of $7.2 million—that includes the unpaid loan payments and nearly $2 million in accrued interest.
Sturgeon did not immediately respond to a request for comment.
Meanwhile, the shelter is the subject of another lawsuit. In March, the owners of the neighboring ORO Apartments sued the city of Portland and the Salvation Army, the shelter operator, for $6 million in Multnomah County Circuit Court. ORO alleges that the city and Salvation Army “through a series of operational choices and failures...created a persistent and foreseeable pattern of drug use, public disorder, sanitation hazards, trespass, and criminal activity immediately outside the ORO Apartments.”
That lawsuit remains ongoing, too.
