City Sues Developer of Sinking and Leaning Luxury High-Rise

iStock/Thinkstock(SAN FRANCISCO) — The city of San Francisco announced Thursday that it is suing the developer behind the sinking (and leaning) luxury high-rise Millennium Tower for allegedly defrauding homebuyers.

“[Millennium Partners] knew for at least a year, before they began selling condominiums, that this 58-story residential building was sinking much faster than expected,” San Francisco City Attorney Dennis Herrera said during a news conference. “Yet, they went ahead and sold condominiums for a handsome profit without telling the buyers about the situation, even though they were legally required to disclose it.”

According to Herrera, when construction was completed in February 2008, the building had already settled by almost six inches — the maximum, he said, the tower’s geotechnical engineer had predicted the building would sink over its lifetime. He said it continued to settle, unevenly, subsequently causing the building also tilt.

“We’re not going to sit by and allow a developer or anyone else to enrich themselves at the expense of others by hiding crucial information that they’re required by law to disclose,” he said. “That gave the developer in this case an unfair advantage against competitors and it cheated homebuyers out of the information that they needed to make an informed choice.”

The 58-story building was completed in 2008. So far, Herrera said it has sunk at least 16 inches and has reportedly tilted at least two inches at its base.

The city was seeking damages that the court deemed appropriate, Herrera said today. He said the average price of a condo in the tower in 2013 was $1.8 million.

Residents like Frank Jernigan said they were rattled.

Jernigan, who became a Millennium resident in 2011, said he had not noticed the building’s lean. He said he was informed about it at a residents’ meeting in May. He said a friend had suggested rolling a marble around the floor to see what would happen so he did. Jernigan said the results were astounding.

He took a video and posted it online of a marble rolling — in different directions — across the floor of his condominium to illustrate the tilt in the building.

“It’s frightening,” Jernigan said. “We decided we really don’t feel safe in this building.”

In October, Millennium Partners said its building was safe.

“It’s seismically sound. Its structural integrity has not been compromised and that’s a good thing,” spokesman PJ Johnston of Millennium Partners told ABC-owned station KGO-TV at the time.

Johnston said today that Herrera’s allegations had “no merit” and that the tower’s developers had “complied with all state and local laws concerning the disclosure of information to prospective buyers.”

He pointed to the construction of the new Transbay Transit Center, which is located next to the tower, for causing the building to sink to 16 inches.

He said that the Transbay Joint Powers Authority project’s “dewatering of the underlying soils” and “excavation and construction” had led to the tower’s continued settling.

“It is unfortunate that Mr. Herrera, who is also legal counsel for (the authority), has chosen to take the focus off finding a fix for the building and is instead attempting to divert attention from the real culprit here — a government agency that has behaved recklessly, caused damage to a previously existing building, and still refuses to take any of the steps that are necessary to fix the problem,” he said. “Our top priority is to accurately assess the damage TJPA’s work has inflicted; halt that damage rather than allow it to continue unabated as TJPA has vowed to do; and work with the homeowners to fix the building. We would hope that Mr. Herrera, TJPA and the City agencies with responsibility would join in that effort and also make it their top priority.”

Transbay Joint Powers Authority, however, has said the sinking started before the terminal’s construction began.

In documents, the city agency said: “It is therefore clear that the Towers’ extreme weight, combined with its inadequate (short pile) foundation, is the sole cause of the excessive settlement and tilt.

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