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Homeowners at San Francisco Sinking High Rise Sue Developer

by Kristin J. Bender
Thursday Mar 30, 2017

A homeowners association representing property owners at a downtown San Francisco high-rise sued the developers on Wednesday for failing to tell residents the condominium tower was sinking at an unexpected rate.

The Millennium Tower homeowners association's lawsuit is the latest suit filed in a high-profile dispute over the sinking building that opened in 2009. Lawsuits involve the developer, the city and owners of the multimillion-dollar condos.

But Daniel M. Petrocelli, the lead attorney representing the homeowners association, says California law gives homeowner associations sole authority to pursue damages for structural repairs and retrofits. So he says a fix can only be accomplished through the HOA's lawsuit.

"This is the only case that secures all the money it will take to fix the building and fix it once and for all," said Petrocelli.

The high-rise that opened its doors in 2009 has been dubbed the Leaning Tower of San Francisco. It has sunk about 16 inches into landfill and is tilting several inches to the northwest. The sinking has been uneven, creating a 2-inch tilt at the base and a roughly 6-inch lean at the top.

A dispute over the building's construction in the seismically active city has spurred numerous lawsuits involving the developer, the city and owners of its multimillion dollar condos.

Wednesday's suit comes just a few months after a group of 20 homeowners at the 58-story condominium tower sued developer Millennium Partners and multiple city agencies, alleging that both the builder and public officials knew about, but failed to disclose to buyers, evidence that the luxury high rise was sinking at an unexpected rate.

The claim was filed against developer Millennium Partners, the San Francisco Department of Building Inspection, the city attorney and the Transbay Joint Powers Authority.

"We are disappointed and puzzled that the HOA board now is shifting gears to a disruptive strategy that leaves us no choice but to defend ourselves against false claims. The factual allegations in the Complaint are false, and we look forward to refuting them," said P.J. Johnston, a spokesman for Millennium Partners.

Separately, San Francisco City Attorney Dennis Herrera claims the building's developers knew about the problems but did not disclose the information to potential home buyers as required by law.

Herrera filed a lawsuit against Mission Street Developers LLC in a cross-complaint of a previous lawsuit filed by homeowners against the Transbay Joint Powers Authority. The authority is building the new Transbay Transit Center next door.

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 tower by the project's geotechnical engineer. However, by the time the sleek, mirrored high-rise was completed around February 2008, it had already sunk by almost six inches.

The developers have said the allegations by the city attorney have no merit. Spokesman PJ Johnston has said developers complied with all state and local laws regarding disclosure to potential buyers.

When the Millennium Tower opened, it became a haven for the well-heeled, and all 419 condos quickly sold out. Tenants have included former San Francisco 49er Joe Montana, the late venture capitalist Tom Perkins and Giants outfielder Hunter Pence.

The building has a sprawling indoor lap-pool, a health club and spa, an in-house cinema, and a restaurant and wine bar run by celebrity chef Michael Mina. Penthouses have sold for more than $13 million.

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