Update: City Sues Sinking Millennium Tower

November 4, 2016

Developers of San Francisco's Millennium Towers are facing a lawsuit filed Thursday by city attorney Dennis Herrera for failing to inform buyers that the building was sinking “much faster than expected.” The developer, Mission Street Development, reaped hundreds of millions of dollars in sales from the more than 400 units in the building, which was completed in 2008.

The 400-unit tower was sinking as early as 2009. Unlike other buildings in the area, Millennium m Tower is not anchored to bedrock but instead its cement slab foundation sits atop clay and sand. Besides sinking into the ground, the tower is also leaning towards the northwest.

“They went ahead and sold condominiums for a handsome profit without telling the buyers about the situation,” Mr. Herrera said. “This is every homeowner’s worst nightmare.”

P. J. Johnston, a spokesman for Mission Street Development, said the allegations by the city attorney had no merit and that the building had sunk within “predicted, safe ranges” during the entire sales process.

Johnston blamed the city’s construction of a neighboring railway station for the tower's sinking by removing water from the ground.  "Transbay Joint Powers Authority caused the building to settle beyond the 12 inches it was predicted to settle,” he said. Johnston also said the City of San Francisco is trying to its responsibilities and avoid paying for the harm caused by construction of the station.

In September the tower's homewoner association hired an engineer to reassure the public the building is safe. However, the engineer did say according to his estimates, the building could sink up to 31 inches.

A member of the city’s board of supervisors, Aaron Peskin, has questioned city officials as to why the building was approved for occupancy. Peskin has also asked whether the developer is playing down the severity of the problem. At a meeting in City Hall last week, Mr. Peskin read from a draft report prepared by Ronald Hamburger, a structural engineer hired by the developer to assess the building. The report concluded that parts of the tower, including the foundation, “had experienced significant stresses as a result of the settlement.” That observation was deleted in the final draft of the report.

"We are 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," Herrera said at a news conference Thursday. "That gave the developer an unfair advantage against competitors, and it cheated homebuyers out of information they needed to make an informed decision."

Herrera said an investigation showed that the developer knew by February 2009, before any condos were sold, that six inches was the maximum amount of settlement predicted for the 58-story tower by the projects geotechnical engineer. However, by the time the sleek, mirrored high-rise was completed around February 2008, it had already settled by almost six inches.

"Buyer beware doesn't cut it here," he said.