Millennium Tower San Francisco buyers get that sinking feeling

SINGAPORE (Sept 27): Singaporeans who bought apartments in the Millennium Tower San Francisco back in 2009 may find the value of their investment sinking fast.

The 58-storey 419-apartment luxury condominium has reportedly sunk 16 inches into the ground, and is now tilting six inches to one side, according to the lawsuit filed by homeowners in a San Francisco court last month, giving rise to the property’s new nickname, “the leaning tower of San Francisco”.

According to US media reports, the suit alleged that the tilting was the result of a defective foundation. While homeowners continued to live in it, they said the tilting had affected the value of their property, particularly as the tilt at the top of the building was nearly 15 inches and could be worsened by earthquakes.

The suit also alleged that the building would continue to sink by another 8 to 15 inches, making a total descent of 31 inches possible.

This is not the first time Millennium Partners had encountered problems with the development. The building was completed in 2009 at the height of the global financial crisis, which sent sales into a tailspin as potential buyers had difficulties securing their mortgages. When the building finally opened, the developer had to lease out a portion of the units.

Around that time, Millennium Partners had set up an office in the city-state as there was significant interest from buyers in Singapore, Hong Kong, Taipei and Shanghai, according to partner Richard Baumert who spoke to The Edge in 2014 when he was in town to market another development in Boston.

At present, San Francisco’s city audit and oversight committee has taken over investigations regarding the sinking. The committee is focusing on the role of the city, including a February 2009 letter written by a building-department official which indicated that the city was aware of the sinking prior to issuing the certificate of occupancy in August that year. The letter had specifically mentioned the issue of “larger than expected settlements” of the building.

While Millennium Partners has been subpoenaed as part of the investigation into whether it had compiled with state law about disclosures of the sinking to homeowners, the developer maintained it was in compliance with state law, adding that the building was designed and constructed to meet city standards and all of its permits were properly obtained.

Millennium Partners has blamed the sinking on excavation and construction work done at the nearby Transbay Joint Powers Authority to build a transportation and housing hub, though the latter has refuted that claim, saying that the sinking had begun before it even started construction. — theedgemarkets.com.sg

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