SAN FRANCISCO (CN) — San Francisco says the developer of the tilting Millennium Tower should have told prospective homebuyers that the luxury high-rise was sinking faster and leaning more than engineers predicted.
Details about lobby decor were in sales documents given to people buying condominiums in the 58-story building, but the developers kept quiet about how quickly the foundation was settling, despite a legal requirement to disclose the problem, the city attorney claims in superior court.
The developer's spokesman responded by saying that all disclosures that were required before and during the sales process had been made.
City Attorney Dennis Herrera filed a cross-complaint Thursday in the case started in August by a group of homeowners. The owners blame the city, along with several regional and state agencies, for damage to their condos. They blame some of the Millennium Tower's settling and shifting on excavation for a project to build a transportation hub next door. Any loss in market value caused by the sinking and tilting should be made up by San Francisco and the other government agencies involved in building the Transbay Transit Center, the owners say in their first amended complaint of Sept. 13.
Herrera says that before Mission Street Development began selling units in 2009, its own geotechnical engineer predicted that 6 inches would be the most the building would ever settle. However, "by February 2009, the Tower had settled 8.3 inches, more than 2 inches over the maximum amount previously predicted," the city says in its cross-complaint of Nov. 3.
"Before they had sold a single condo, Mission Street Development LLC knew their building had sunk more than it was supposed to in its lifetime — and that it was still sinking," Herrera said in a statement, "Yet they didn't tell the homebuyers as they're required to do under the law. It's that simple."
Herrera said that while multi-page written disclosures told would-be buyers that marble and granite in the condos may not exactly match samples, the documents were silent about how far the building had already slumped, and that the developer regularly received updates that "showed that the total level of the Tower's settlement was continuing to increase and that differential settlement was occurring."
"San Francisco alleges that, to the extent plaintiffs prove they have suffered a diminution in value as a result of the Tower's subsidence, MSD's [Mission Street Development's] failure to disclose the existing facts of the Millennium Tower's subsidence to plaintiffs before they bought their units is a substantial factor in causing the such diminution in value."
Herrera says the city specifically denies any liability, but if a court finds it liable, then Mission Street Development should pay any judgment, settlement or award on its behalf.
P.J. Johnston, the developer's spokesman, said the developer relied on renowned designers and engineers, and that during the sales process the building "had settled within predicted, safe ranges."
He sees Herrera trying to shift blame from the Transbay Joint Powers Authority, which is building the transit center next door and for which Herrera is legal counsel.
As with a separate superior court case filed in August, Johnston says that excavation by the Authority has caused 12 inches of unanticipated subsidence at the Millennium Tower.
"It is unfortunate that Mr. Herrera, who is also legal counsel for TJPA, 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," Johnston said.
He called Herrera's cross-complaint an effort by San Francisco "to duck its responsibilities and avoid paying for the harm caused by TJPA."
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.