Wednesday, September 14, 2016

San Fransicso supervisor says housing developer knew about Millennium Tower sinking more than they had projected before selling units

There is no paper trail showing why the city allowed tower builder Millennium Partners to sink the high-rise’s foundation piles 80 feet into the landfill, rather than 200 feet down to bedrock.  The tower will “most likely” sink an additional 8 to 15 inches into the landfill beneath it unless steps are taken to stop it.  The building’s 2-inch tilt to the northwest at its base could get worse as well.
A Millennium Gaffe or Millennium Greed? Designed by Handel Architects, engineered by DeSimone Consulting Engineers and constructed by Webcor Builders.

A San Francisco supervisor is launching an investigation into whether there was political influence in getting the Millennium Towers approved saying, the "housing developer knew before they sold their first unit the building was sinking more than they had projected." (KGO-TV)

By Vic Lee
Tuesday, September 13, 2016 06:30PM
SAN FRANCISCO (KGO) -- A San Francisco supervisor is launching an investigation into whether there was political influence in getting the Millennium Tower approved.

Supervisor Aaron Peskin and his staff reviewed 1,600 pages of documents from the San Francisco Department of Building Inspection and he said there are gaps in those records, specifically documents that addressed the sinking issue. "We're going to find out who knew what and when they knew it," Peskin said.

Those are overriding questions Peskin wants answered about the Millennium Tower's sinking.

It was reported last month that the tallest residential skyscraper in San Francisco, built in 2008, is tilting and sinking.

The towers have tilted two inches and sunk 16 inches so far, much more settlement than developers expected.

After reviewing the documents, Peskin says the rapid settling was no secret and there may have been political interference to get the project done. "The Millennium Corporation, a luxury housing developer, knew before they sold their first unit that the building was sinking more than they had projected," Peskin said.

The records, Peskin says, reveal that city building inspection engineers were concerned early on about the settlement.

A letter addressed to project engineers in February 2009, just a year after the building was completed raises many of those questions.

But the supervisor says the responses to the letter are missing from the records.

Nevertheless, just six months later the city gave the developers the green light. "On August 26, 2009, the city and county issues a final certificate of occupancy for those units we knew or should have known at that time that the building was sinking," Peskin said.

The Millennium Tower Homeowners Association issued a statement saying that they "find troubling the allegation that a public agency sought to keep secret the building's condition."

The homeowners association has launched its own investigation and considering a lawsuit.

The management arm of the Millennium Tower has yet to get back to ABC7 News.


Sinking Millennium Tower puts building agency on the spot

By Matier & Ross
Updated 5:13 pm, Tuesday, September 13, 2016

The luxury Millennium Tower, completed in 2008, is sinking and the development could result in a lengthy and costly legal battle. Tara Moriarty reports. Media: KTVU

San Francisco building department officials are being called before the Board of Supervisors to explain why the agency allowed the developer of the now-sinking Millennium Tower to avoid anchoring the condominium high-rise to bedrock, and why the city didn’t tell prospective homeowners about the structure’s unusual settling before anyone moved in.

Many of the more than 400 buyers paid several million dollars for their condos in the downtown tower. The homeowners association says it is considering suing the developer and the public agency building the Transbay Transit Center next door, which the Millennium’s owners have blamed for the tower’s problems, over the sinking.

Supervisor Aaron Peskin said Tuesday that the residents had “arguably been defrauded” — and didn’t rule out the city’s own culpability.

“We are going to get to the bottom of how this happened,” Peskin said at a City Hall news conference, complete with giant blow-ups of the 58-story condo tower and a potentially key city document showing that officials with the Department of Building Inspection were aware of the sinking problem in February 2009, two months before the agency gave the go-ahead for people to move into the high-rise at 301 Mission St.

Photo: MLS
Supervisor Aaron Peskin says he believes that the owners of the Millennium Tower knew of the sinking problem before they sold their first unit and that the city is obliged to “make it right.”

Peskin called a supervisors hearing for Sept. 22 at which he said he would ask building officials to testify about the city’s role in approving the Millennium. He also indicated he would explore whether officials had been pressured to approve the tower, though he gave no evidence that was the case.

“I am led to believe there may have been some level of political interference,” Peskin said, without elaborating.

Lt. Gov. Gavin Newsom was mayor when the Millennium Tower was proposed and then constructed from 2006 to 2009. “Frankly, I don’t have any idea what he (Peskin) is suggesting,” Newsom said Tuesday. “As a consequence, I can’t respond to it.”

The Millennium has sunk 16 inches since opening in 2009, far more than the 6 inches that the builder initially predicted. A geotechnical engineer hired by the homeowners association warned in May that the tower was still settling at a rate of about an inch a year. He said the tower will “most likely” sink an additional 8 to 15 inches into the landfill beneath it unless steps are taken to stop it.

The building’s 2-inch tilt to the northwest at its base could get worse as well, geotechnical engineer Patrick Shires said.

In a letter to Building Inspection Director Tom Hui in preparation for next week’s hearing, Peskin raised a number of questions about the Millennium’s construction.

He noted that among the 1,600 pages of documents on the project that the agency recently released to the media was a Feb. 2, 2009, letter to the tower’s consulting engineering firm from Raymond Lui, then the building department’s deputy director for plan review services, asking about the tower’s “larger than expected settlements.”

“What are the actual settlements now? What is the rate of settlements? Are the settlements still continuing?” Lui asked in the letter.

There’s no evidence of a response from the firm, DeSimone Consulting Engineers, in the hundreds of documents that the Department of Building Inspection released, Peskin noted.

Stephen DeSimone, the firm’s owner, told The Chronicle that his outfit had responded to the letter, telling the city that “the building was settling in accordance with the predicted settlement.” He added that such a determination “is not an exact science.”

Peskin also said there is no paper trail showing why the city allowed tower builder Millennium Partners to sink the high-rise’s foundation piles 80 feet into the landfill, rather than 200 feet down to bedrock.

Peskin also noted that in 2008, building inspectors repeatedly asked about the tower’s prefabricated frame but that “oddly, the subject of the structural foundation was not covered ... leading me to inquire whether or not there was a peer review of this critical aspect of the project.”

DeSimone told The Chronicle that two independent peer reviews had been performed on the plans, at the city’s insistence, before construction began.

Peskin also pointed to documents showing that in 2008, negotiations “appear to have been ongoing” to “expedite” safety inspections of the tower. “On what basis did the city feel it should expedite the issuance of temporary occupancy permits?” he asked.

Peskin asked that Amy Lee, acting director of the Department of Building Inspection when the Millennium was being constructed, appear at next week’s hearing of the supervisors’ Government Audit and Oversight Committee, along with agency officials Hanson Tom, William Strawn, Daniel Lowrey and Gary Ho. He said City Attorney Dennis Herrera will issue subpoenas if the five don’t agree voluntarily to testify.

Officials with the Department of Building Inspection did not respond to requests for comment Tuesday.

“One thing is incontrovertible — there’s enough evidence that clearly shows Millennium Partners absolutely knew before they sold their first unit in the building that it was sinking,” Peskin said in an interview. “And to that end, I believe the city has a responsibility, when there is a failure to disclose, to make it right for the people who got cheated.”

The tower’s homeowners association said it was notified of the problem only last year, well after the city apparently knew of the unusual rate of sinking.

Peskin declined to say how the city should “make it right” for the condo owners — including whether the city might be party to a lawsuit against the developer and its engineers.

P.J. Johnston, spokesman for Millennium Partners, said that suggesting the firm “asked for or received any inappropriate treatment by city agencies ... is simply outrageous.”

Johnston said the developer told the city in February 2009 that the sinking had surpassed expectations, but that at the time the drop was not severe enough to warrant informing prospective buyers.

“We informed the city that the building had settled beyond 6 inches — to 8 inches — and that it was expected to settle another 2 to 4 inches,” Johnston said. “We also informed the city that the building could absorb that (drop) without any harmful effect.”

Throughout the controversy, Millennium Partners has said the building is structurally sound. The company and the homeowners association are launching a new seismic study to determine how the high-rise would react in an earthquake, Johnston said Tuesday.

“Safety is everyone’s top concern — appropriately so — and it is important to be able to reassure everyone that the building is seismically safe,” Johnston said.

Millennium Partners conducted an earthquake safety study in 2014. Johnston said that nine-month study “found there was no issue of safety,” and he predicted the new study would produce similar findings.

The Millennium Tower is located on landfill, just off the bay’s original shoreline. It sits on a concrete platform, with piles that were driven 80 feet into dense sand, but well short of bedrock.

Johnston said the sinking had “leveled off” when the construction was completed in 2009 — but started up again when digging began for the new Transbay Transit Center going up across the street.

The Transbay Joint Powers Authority, the public agency constructing the transit center, has denied causing the problem.

Peskin also wants to know whether other downtown high-rises were approved without going to bedrock.

“We have to make policy decisions as to whether or not we are going to allow these kind of friction piling systems under very heavy, very tall buildings,” he said.


A brief history of the sinking Millennium Tower
From star athletes to a bonkers penthouse, a look back at the luxury tower currently in crisis
By Brock Keeling Aug 1, 2016, 12:22p

Before it made headlines for rapidly sinking into the earth, the tony Millennium Tower was known as a gorgeous bellwether of the Yerba Buena neighborhood’s refocus on growth and unbridled luxury. Sleek and cool, it’s widely considered a far more aesthetically thoughtful structure compared to its residential counterparts—e.g., One Rincon Hill, the Infinity Towers, just to name two.

Surrounded by Mission, Fremont, and Beale Streets, the skyscraper was finished in 2009 and is currently the tallest building in San Francisco to include residences. Though described as 60 floors, it is technically only 58 (the 13th and 44th floors are missing due to, ironically enough, superstition).

Designed by Handel Architects, and engineered by DeSimone Consulting Engineers and constructed by Webcor Builders, it’s also home to Michael Mina’s lauded RN74 restaurant. Millenium Tower construction, 2008. Photo: David Werner

In 2010, Dan Goodwin (a.k.a. Skyscraper Man) scaled the exterior in order to draw light to fire safety (and himself). He was arrested shortly after the stunt.

Also in 2010, the powers that be reportedly noticed that the Millennium had started to sink—to the tune of 10 inches. While the effects of gravitational pull are normal for any high-rise, this amount of drop, it seems, is not normal. (For comparison, the Petronas Twin Towers in Malaysia, formerly the tallest buildings in the world, sank only a half inch since their 1998 completion.) View from the $9.45 million penthouse. Photo via Jacob Elliott

Over the years, a handful of local notables have called 301 Mission home. Two years ago, 49ers icon Joe Montana sold his pad in the blue-grey building. And earlier this year, a noted San Francisco Giant purchased one of the property’s swankiest condos for a cool $4.25 million.

While each unit can fetch anywhere from $1.5 - $5 million, the penthouses are sights to behold, outshining the lower units. This over-the-top two-bedroom stunner hit the market in 2015 for $9.45 million. And Silicon Valley bigwig Tom Perkins’ place has become the stuff of ostentatious legend.

Currently, the city’s most expensive one-bedroom is located inside the troubled structure, asking a whopping $3.8 million.

As for today’s breaking news, it’s not only bound to have an effect on nearby towers nearing completion—the ultra-luxe 181 Fremont, which we should point out is drilled 260 feet into the bedrock—but will have two neighbors battling it out for years.

According to today’s story in the Chronicle, "The Millennium's engineers anchored the building over a thick concrete slab with piles driven roughly 80 feet into dense sand" as opposed to drilling piles into more secure bedrock, which was a cost-cutting measure.

Yet according to the Millennium, new Transit Center construction is to blame.

With the Millennium Partners and the Transbay Center fighting each other in a game of blame-placing, this Leaning Tower of Yerba Buena will turn into a Hatfield-and-McCoy San Francisco real estate battle for the ages.