The Millennium Tower at Mission and Fremont streets has reportedly been sinking beyond initial projections and it is also leaning northwest. (Wesaam Al-Badry/Special to S.F. Examiner)

SF sues developer of sinking Millennium Tower

In the latest development in the saga of the sinking Millennium Tower, City Attorney Dennis Herrera filed a lawsuit Thursday against the developer for failing to disclose to condo buyers that the building was sinking beyond expectations.

The Millennium Tower homeowner’s association in August filed a lawsuit against The City and other parties over the sinking. Herrera’s lawsuit, which a cross-complaint filed as part of that case, seeks damages from the developer for failure to disclose information about the sinking.

“The developer, Mission Street Development LLC [an affiliate of the developer 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,” Herrera said.

“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.”

He added, “This is every homeowner’s worst nightmare.”

The homeowners lawsuit was filed in August against the developer, The City and the Transbay Joint Powers Authority seeking damages for “serious diminution in the value of the units.” More than 160 homeowners have also filed assessment tax appeals with The City claiming their units could now be worth as little as $0.

Herrera’s cross-complaint seeks unspecified damages for The City that would be determined by the court in an effort to shift blame exclusively on the developer.

PJ Johnston, a spokesperson for the Millennium Tower developer, said the required disclosure laws were followed.

“In 2008 and throughout the entire sale process, 301 Mission had settled within predicted, safe ranges,” Johnston said. “Mission Street Development LLC … complied with all state and local laws concerning the disclosure of information to prospective buys.”

He also blamed the building’s later excessive sinking on the Transbay Transit Center excavation and dewatering of soils in the area, which the agency overseeing that project refutes.

“The city attorney’s action today has nothing to do with protecting public safety, the building, or its residents. Instead, it’s an effort by the city of San Francisco to duck its responsibilities and avoid paying for the harm caused by TJPA,” Johnston said.

According to Herrera’s lawsuit, “by the time the Tower was completed in and around February 2008, it had already settled some 6 inches; and that by February 2009, the Tower had settled 8.3 inches, more than 2 inches over the maximum previously predicted.”

The building is now said to have sunk some 16 inches.

A series of hearings called by Supervisor Aaron Peskin over the sinking tower and recently obtained public records have revealed that Department of Building Inspection officials were aware of the sinking beyond initial projections as far back as 2009.

The lawsuit further states that since Feb. 2009 the developer had continued to receive data “that the total level of the Tower’s settlement was continuing to increase and that differential was occurring.”

Before filing the lawsuit, Herrera subpoenaed the developer for the disclosures and received some 1,900 documents in which the sinking issue was not revealed to the condo buyers, which was revealed in disclosures ranging from April 2009 to May 2011, he said.

Meanwhile, The City plans to assemble a peer review panel to examine Millennium Partner’s recently completed engineering report by Ronald Hamburger, which claims the building is safe. City Administrator Naomi Kelly and Department of Emergency Management Director Anne Kronenberg are leading that effort.

Kelly’s spokesperson Bill Barnes told the San Francisco Examiner on Thursday that they will have contracts with between two and four independent experts to review the report and other tall building safety issues in the area within two to three weeks.

After that, he said that group would take between 45 and 60 days to release initial findings.

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