The U.S. Housing & Urban Development Dept. wants the state of Wisconsin to fork over some $12.3 million the Badger State’s then-commerce secretary granted to induce Abbott (NYSE:ABT) to build a plant there.

The grant was used to set aside a 40-acre parcel in Pleasant Prairie, Wis., that Abbott planned to build. The plant was forecast to create some 2,400 new jobs over a decade, but it was never built and the land is still undeveloped, the Milwaukee Journal Sentinel reported.

The Wisconsin commerce secretary at the time of the 2006 award, Mary Burke, is battling Gov. Scott Walker and a slate of her fellow Democrats for the top spot in Wisconsin’s government.

Abbott, which is based just over the Illinois state line from the parcel in question, began buying up a 467-acre plot in 2005; the 40 acre parcel in Pleasant Prairie was meant to be added to Abbott’s land, according to the newspaper. Now Wisconsin must pay back some $6 million in cash and forego another roughly $6 million in federal community block grants to repay the $12.3 million forgivable loan funded through the block grant program, the newspaper reported.

"The HUD office in Milwaukee ordered the $12.3 million repaid, saying in August 2013 the development project was ineligible for the block grant dollars the state had used," according to the Journal Sentinel. "HUD’s letter noted the Commerce Department under Burke had no written commitment from Abbott to develop the property or create jobs. In any event, HUD concluded, 10 years is too long to meet the "public benefit" test for block grants. Commerce "participated in a speculative land banking venture without ensuring that the funded activity" would be eligible, HUD found."

Abbott declined to comment for the story, the Journal Sentinel said.