City issues subpoena over sinking San Francisco luxury high-rise

[September 21, 2016]  By Curtis Skinner

SAN FRANCISCO (Reuters) - San Francisco's city attorney on Tuesday issued a subpoena to the developers of a luxury condominium high-rise that is tilting and has sunk more than a foot (30 cm), to determine if structural issues were appropriately conveyed to purchasers.

Some 400 residential units of the Millennium Tower, which opened in the heart of downtown in 2009, have been purchased, and City Attorney Dennis Herrera said he is worried the building's settling was not properly disclosed.

"I have serious concerns that the disclosures required by state law ... did not contain information about the settling of the Property," Herrera wrote in a letter to the developers, Millennium Partners.

P.J. Johnston, a spokesman for Millennium Partners, said by phone: "We would have made this information available to him irrespective of a subpoena, all he had to do was call."

The Millennium Tower is among the highest-profile buildings constructed amid San Francisco's real estate boom, though its sinking raises concerns about development on the city's seismically vulnerable downtown.

The Transbay Joint Powers Authority, created under state law to oversee the creation of the Transbay Transit Center nearby, said last month the building has sunk 16 inches (41 cm) - or 10 more inches than expected during its lifespan - and also that it was tilting.

The authority said the 58-story building is set upon a concrete platform with piles driven 80 feet (24 m) deep instead of reaching all the way to bedrock another 120 feet down.

Two residents filed a proposed class action last month against the developer as well as the Transbay Joint Powers Authority, which excavated near the tower for the transit center.

The lawsuit says the building is still sinking at a rate of 1 inch per year and would likely settle another 15 inches. It also alleged tilting at the building's base translates to a 15-inch tilt at the top.

The lawsuit said developers first disclosed the potential foundational problems in June 2015.

The authority has blamed the settlement on the developers for failing to anchor the building to bedrock, while Millennium has blamed the authority's excavation.

Johnston said many buildings in the area were built like the Millennium Tower and the building passed a seismic and structural safety study after settling was discovered in 2014. He said the homeowner's association was notified of the study at the time.

Johnston said preliminary results of a recently commissioned study showed the building is still safe.

(Editing by Matthew Lewis)

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