Local Bay Area & State

San Francisco Chronicle and SFGate.com Monday, October 12, 2020 Local Bay Area & State FRONT PAGE

Fix seeks to right leaning building $100 million project to repair S.F. Millennium

By J.K. Dineen

our years after the Millen- nium Tower grabbed international attention as the world’s most prominent sinking and Fleaning high-rise, the off-kilter condo tower is set to start a $100 million fix that residents hope will not only correct the engineering blunders of the past but restore values in the belea- guered building. Over the next few weeks, the scaf- folding will be erected at 301 Mission St. The sidewalks will be barricaded off. Pile drivers will start drilling the first of 52 concrete, 140,000-pound piles that will anchor the building to bedrock 250 feet below ground. The two-year

project will relieve stress on soils that Photo: Lea Suzuki/The Chronicle have compressed beneath the building, The Millennium Tower is set to start a $100 million fix to correct the engineering contributing to its unwelcome and un- problems and restore home values, which dropped when it was found the build- anticipated sinking. Disruption to cur- ing was sinking in 2016. rent residents is expected to be minor. “This plan halts settlement along Fremont and Mission Streets while al- lowing the building to level itself over ects without adequate scrutiny. ing. Values plummeted. Banks stopped time,” said engineer Ronald Hamburg- Perhaps the city’s poshest luxury lending to the few buyers willing to er of Simpson Gumpertz & Heger, who condo tower when it opened in April take a chance in the building. led the team that designed the plan. 2009, the Millennium became notori- The start of work on the foundation The long-awaited remedy will cor- ous in 2016 when engineers monitor- fix was made possible by a legal settle- rect an engineering flaw that swept ing its settlement discovered it had ment hammered out over two years, up some of the Bay Area’s richest resi- sunk 18 inches and was leaning 14 according to the Millennium Tower dents, including former San Francisco inches to the west. Association, the home-owners asso- 49ers quarterback Joe Montana. The The flawed foundation sparked law- ciation for the building. The mediation sinking building, and lax city oversight suits from residents against the de- was led by retired Judge Daniel Wein- of building methods, raised questions veloper, Millennium Partners, as well stein, Judge Ronald Sabraw and media- about whether San Francisco officials as the architect and engineers who tor Gerald Kurland, who assisted the were signing off on big-money proj- designed the concrete and glass build- parties in resolving all claims. (#S089062) Adapted from the October 12, 2020 issue of San Francisco Chronicle. © 2020 Hearst Communications Inc. For more information about reprints and licensing, visit www.parsintl.com. Millennium Partners spokesman P.J. prices in the building have bottomed Johnston said the developer, which has out, but units are still selling at 33% to built two other downtown condo tow- 50% what they would have sold for in ers, was determined to reach a deal that 2015. Lynn is representing the seller of was acceptable to all parties. a 900 square-foot unit in contract for “A lot of companies might have tried $1.59 million, or $875 per square foot. to tie this up in court for decades and The unit would have been fetched at skip town, but Millennium Partners about $1,500 per square foot in 2015. remained committed to this build- “All the downtown condo buildings ing, committed to the people who live have a COVID discount right now, but there and committed to San Francisco, Photo: Gabrielle Lurie/The Chronicle 2016 the Millennium Tower has a COVID A machine runs tests in front of the which is why we fought so hard to hold discount and a leaning tower discount,” leaning Millennium Tower in 2016. the mediation together and get a retro- Lynn said. “The leaning discount will fit done.” disappear, which will lead to consider- Details of the legal settlement have not able upside.” Fix seeks to right leaning building been made public. A statement from the Compass Real estate broker James homeowners association said that the pensive fix and worked out agreements Testa, who lives in the tower and has $100 million project to repair S.F. Millennium “project will be funded by the multiple with the property owners.” several listings in the building, said parties who settled the homeowner As part of the settlement, owners in the downtown condo market is soft but claims and their insurance companies.” the building were paid between 25% and “very savvy buyers have been calling The developer has blamed the sinking 40% of the value of their units before me because they realize the potential on eroded soil from the construction the revelations of the building’s design for appreciation.” of the adjacent Transbay transit center. flaws, according to residents. While the He said he expects several banks to The Transbay Joint Powers Authority, a payments varied based on unit type and start lending on the building again as public agency that built the transit cen- when it was purchased, the owner of a soon as construction starts on the fix. ter, was part of the settlement. two-unit building that would have sold “This has been such a long haul,” Tes- “The Transbay Joint Powers Author- for $2.5 million in 2016 would probably ta said. “It would be hard to compen- ity is part of the global settlement,” a have received a lump sum of at least sate us for the hell we went through, spokeswoman said, “however, contin- $625,000, and possibly more. but we are starting the fix and we are ues to deny, in the strongest possible Charles Gehring, a financial adviser all thrilled.” terms, that construction of Salesforce who has owned in the building since As part of the settlement, the HOA Transit Center caused excessive move- 2010, called it “a fair compensation.” receives ownership of two commercial ment of the Millennium Tower. The “My wife and I are happy,” he said. spaces on the ground floor, one occu- settlement does not determine who “It’s a period of renewal for the build- pied by Bank of the West and the other caused the movement of the tower or ing. There is a sense of relief but also by International Smoke, the restaurant assign any responsibility to the TJPA.” excitement for the future.” owned by celebrity chef Ayesha Curry. Supervisor Aaron Peskin, who held It will probably take a while for pric- With the settlement, the homeowners a series of hearings about the tower’s es to rebound, particularly with the will have the money to renovate com- problems, said that no city money emptying out of downtown because mon spaces like the owners lounge and was spent to pay for the fix or for the of the pandemic. Six units have closed kitchen as well as buy new furniture settlement. in 2020, all but one of those deals for the terraces and gym equipment for “The crazy chapter of the leaning finalized after the plans for the fix the club level, according to HOA Presi- tower of San Francisco is coming to were made public. There are 10 units dent Howard Dickstein. a close, and I have to say Millennium on the market, half of which have had “There are improvements that need Partners ended up putting their mon- price cuts. One unit that sold for $2.9 to be made that couldn’t be made dur- ey where their mouth is,” Peskin said. million in 2014 is currently listed at ing the litigation,” he said. “Significant “They could have dragged this out for $2.2 million. effort will be made to bring the building years but instead settled on a a very ex- Sotheby’s broker Gregg Lynn said back to the highest level of luxury.”