The Shilo Inn Suites Hotel in Bend is headed for auction after defaulting on about $9 million in debt, according to a published legal notice.

The auction is set for 11 a.m., Sept. 6, on the front steps of the Deschutes County Courthouse, according to the notice published in The Bulletin.

Shilo Inn, Bend, LLC could pay off the debt at any time before the sale, said Bend business attorney Jason Conger at Lynch, Conger LLP. “It’s a lot of money, but you never know,” he said.

Calls to the Shilo Inns home office in Portland were not returned. The company owns 11 hotels in Oregon and nine more in Washington, Texas, Nevada, Montana, Idaho, Arizona and California, according to the company website.

Shilo’s Bend property is about 7½ acres with frontage on the Deschutes River, just north of Riverhouse on the Deschutes. The hotel has 151 rooms, banquet facilities and a restaurant, according to The Bulletin’s archive. The hotel is still operating, but a large for-lease sign hangs over the restaurant space.

“I think it will attract buyers, given the huge amount of tourism we experience,” said Brian Fratzke, principal broker and founder of Fratzke Commercial Real Estate.

Hotel developers have more than 600 rooms in various stages of planning and construction across Bend and Redmond, but others are still interested in Central Oregon, Fratzke said.

Acquiring an existing property is much faster than new construction, Fratzke said.

Foreclosures, especially on large commercial properties, have been rare in recent years. Deschutes County has received 62 mortgage notices of default so far this year, compared with 3,507 in 2009, according to the Deschutes County Clerk’s website.

Shilo Inns founder Mark Hemstreet bought the Bend property from Touch of Class Motor Inn in 1992, Deschutes County records show.

Shilo Inn, Bend, LLC, took on the debt in November 2015 and defaulted in September, according to the published notice. Also in September, Hemstreet and Shilo Inn, Newberg, LLC and Shilo Inn, Seaside East, LLC settled federal lawsuits brought in 2012 by California Bank & Trust over nonpayment of loans. Shilo Inns in nine different locations in the Northwest, not including Bend, sought Chapter 11 bankruptcy protection in 2013.

Shilo Inn, Bend, LLC owes $8.97 million in unpaid principal to Wilmington Trust, National Association, trustee of Wells Fargo Commercial Mortgage Trust, according to the legal notice. With fees and interest, the total due is $9.3 million.

Trustee David Criswell at Lane Powell PC in Portland declined to comment.

— Reporter: 541-617-7860, kmclaughlin@bendbulletin.com