Already facing foreclosure on a luxury condo development gone wrong in Chelsea, a Somerville-based developer was slapped with a lawsuit from the federal government this week demanding the repayment of a grant awarded to operate a wind turbine that hasn’t been spinning.
Forbes Park was supposed to be a cutting edge sustainable urban development. A conversion of an old industrial area along the Chelsea River into over 300 luxury lofts equipped with a plumbing system running on recycled rain water, a fleet of electric cars, solar panels, and a wind turbine supported by funding from the federal stimulus in 2009.
But the project stalled during the economic collapse as the developers ran into deep debts with lenders. The conversion was never completed, and the wind turbine, although built, never produced a significant amount of energy.
The development was backed by Forbes Park, LLC, a corporation established by Blair Galinsky, a Somerville developer who previously created the luxury Davis Square Lofts on Elmwood Street in Somerville and lists a unit at that development as its principal office, according to state records.
The parcel in Chelsea was purchased for $8.83 million in 2004, and multiple mortgages were taken out between 2005 and 2008 that totaled nearly $150 million, according to records from the Suffolk County Registry of Deeds. In November 2009, the development was awarded a $620,000 grant through the American Recovery and Reinvestment Act to operate the 600kWh wind turbine, which was built in 2008.
A foreclosure auction for the 17.4-acre parcel is scheduled for Thursday afternoon, and on Tuesday US Attorney Carmen Ortiz’s office filed a lawsuit against Forbes Park, LLC, demanding it return $372,411 of the grant, plus pay over $140,000 in fees and interest.
A review by the National Renewable Energy Board in March 2012 found the turbine at Forbes Park failed to meet the minimum requirements of energy production for the federal grant program, and the government has been trying to get the grant money returned ever since, according to the lawsuit.
The federal treasury’s Public Debt Bureau sent Galinsky a demand letter in May 2012, and sent a second letter in August, the lawsuit said. Since the second letter was sent, the treasury, and private collection agencies hired by the treasury, have attempted unsuccessfully to get the debt repaid, the lawsuit said.
The corporation also was hit with municipal liens in 2006 and 2008 for failing to pay utilities, and has faced multiple additional liens for allegedly failing to fully pay construction contracts, according to state records.
Galinsky could not be reached for comment Wednesday afternoon.
The foreclosure auction, conducted by Paul E. Saperstein Co. of Holbrook, is scheduled for 1 p.m. Thursday.