It started as an ambitious idea six years ago — to create a sustainable residential development that promotes environmentally friendly living.

But for the partners of Greenbridge Developments, the 10-story mixed-use development that opened in downtown Chapel Hill last fall, the dream could soon come to an end.

After selling less than half of its 97 condominiums, Greenbridge has defaulted on its loan and could go up for sale June 27 unless the project finds a lender to cover its debt.

On April 8, Bank of America, which financed a $43.8 million loan for the development, filed documents to appoint a temporary receiver to oversee the development’s operations.

The documents initiated foreclosure proceedings, claiming Greenbridge owes the bank about $28.7 million on its loan. The filing also states that Greenbridge owes 13 different companies money.

“The borrower is in default,” said Shirley Norton, spokeswoman for Bank of America.

“We’ve been trying to work with them for some time to no avail.”

At a May 16 hearing, Chip Shelton of Charlotte-based Liberty Solutions will become the development’s permanent receiver, Norton said. As the temporary receiver, Shelton has overseen all operations of the $54 million property, like collecting rents and maintaining the grounds.

Norton said the bank has worked with the developers to avoid foreclosure, which came as a last resort.

“We’ve restructured the loan several times. We gave them additional funds last summer, but they went over budget again,” she said. “We’re still hopeful we will be able to work something out with the borrower.”

Greenbridge developer Tim Toben did not return calls for comment.

Matt Czajkowski, a member of the Chapel Hill Town Council, said he thinks the development is facing the threat of foreclosure because of the poor state of the real estate market.

“To me, what Greenbridge has shown is really a reflection of what’s happened all over this country,” he said. “Projects were built with the expectation they could be sold at a certain price, but after the real estate market crashed they can no longer be sold for that price point.”

Czajkowski said he thinks people are beginning to move away from buying to renting, which also might have been a factor in Greenbridge’s inability to sell its units.

“There’s not so strong a sentiment to own homes anymore,” he said. “We have to ask ourselves whether that change is going to be with us for quite some time and whether we need to reevaluate our approach.”

Contact the City Editor at city@dailytarheel.com.