Portland Homeless Shelter Operator to Shut Down After Whistleblower Lawsuit Alleges Financial Mismanagement
PORTLAND, Ore. — Following a $4.5M lawsuit alleging whistleblower retaliation by an ex-executive of Sunstone Way, which manages more than 400 shelter beds in Multnomah County and Portland, their shelters will close at the end of June.
Portland Homeless Shelter Closing After Financial Management Whistleblower Sues
Sunstone Way currently holds shelter contracts with both the city of Portland and Multnomah County. A former Sunstone Way executive, the nonprofit’s former finance director, filed a $4.5 million lawsuit against Sunstone Way a month ago, alleging mismanagement and saying the nonprofit’s top executives wasted public dollars.
The executive alleged whistleblower retaliation.
The nonprofit manages more than 400 shelter beds that will be lost as a result of the closure, including the shelters at Market Street, Delta Park Motel Shelter, Rockwood Bridge, Weidler Village, SW Naito Village, and Centennial Neighborhood Overnight Shelter.
The problems at the nonprofit, formerly known as All Good Northwest, are not new. The organization was flagged for unallowed expenses in 2022, but the Homeless Services Department continued to work with the nonprofit, which rebranded as Sunstone in 2024.
The loss of beds is over and above the 10 shelters with a total of 675 units that the county’s Homeless Services Department announced are on the chopping block because of budget shortfalls.
Source: Multnomah County FY 2027 Homeless Services Department requested transmittal letter
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County commissioners say they are looking at ways to potentially substitute some of the Sunstone shelters set to close, but it’s unclear whether those substitutions will result in the same number of units.
AFSCME Local 1790, the union representing Sunstone Way Employees, confirmed that the union is actively advocating for these shelters to continue providing union jobs and services, regardless of who manages them.
The county auditor’s office is currently busy with a fiscal review of Sunstone as part of standard contract monitoring.
The nonprofit will close at the end of the fiscal year, after which all invoice reimbursements under its city and county contracts will be finalized. The city of Portland has not yet announced a plan for the shelters operated by Sunstone Way under its contract.