PORTLAND, Maine — A federal judge has approved foreclosing on an affordable senior housing project in Skowhegan built in 1985 by Portland-based developer Michael Liberty’s company, Liberty Group Inc.
U.S. District Judge John Woodcock on Monday approved a consent agreement to foreclose on the Springhouse Gardens property, owned by the partnership Spring House Associates and operated by Stanford Management.
The order comes after the U.S. attorney’s office sought to foreclose because of more than $1 million of overdue debt on a Rural Rental Housing loan granted in 1985 to Spring House to help build the 25-unit project at 22 Silver St.
In email correspondence with Spring House general partner David Cope, Assistant U.S. Attorney Andrew Lizotte wrote that the consent agreement would “resolve the lawsuit by having the United States foreclose on and sell the Spring House real and personal property.”
David Johnson, the attorney for Spring House, did not respond Tuesday to an email seeking comment on whether his client would make any effort to prevent a foreclosure auction.
A representative from Stanford Management did not respond Tuesday morning to a request for comment on the effect the judgment might have on any residents of the Springhouse Gardens units.
With interest, the U.S. attorney’s office claimed the outstanding amount on the loan came to $1,190,784, plus interest that would continue to accrue at a rate of $320.25 per day.
The consent order calls for Spring House to settle the debt within 90 days or the property will be put up for a public auction, but it also allows for the government to reinstate the loan or convey the property back to Spring House.
The order specifies that if any amount remains due on the loan after the foreclosure sale, the government cannot look to sue any of the partners in Spring House for that amount.
In response to the U.S. attorney’s office’s effort to foreclose on the property, Cope had said that he sold his partnership interest in the project in 1991 to Liberty Group, but the U.S. attorney’s office said the U.S. Department of Agriculture, which granted the loan, did not consent to that transaction and Cope remained a general partner.
Spring House and its members Cope, Liberty and Liberty Group consented to the foreclosure in emails last week.