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City Drops Legal Hammer on Millennium Tower Developer

Just who will benefit if the city prevails remains murky.

 

It is, insists City Attorney Dennis Herrera, all very simple. The developer of the sinking Millennium Tower knew it was, in fact, sinking. Knew it for "at least a year." But that didn't stop them from hawking luxury condos "at a handsome profit." And all "without telling buyers, even though they were legally required to do so." 

But 1,900 pages of documents turned over as a result of the City Attorney's September subpoena regarding sales transactions from between 2009 and 2011 do not reveal any disclosures of the skyscraper's disturbing condition. There are laws against that. "They didn't tell homebuyers and are required to do so under the law," summed up Herrera. "It's that simple." So, he announced this morning in a City Hall press briefing, the city filed suit against the developer. 

And yet, nothing about a spectacularly heavy 58-story building sinking unevenly into bay muck and sparking rancor and litigation between its developer, its residents, the adjacent multi-jurisdictional government agency, and the city government itself is simple. 

Even the simplest question—who gets the money if you prevail?—didn't net an easy answer. "The damages are according to proof," responded Herrera. He's unsure how much money we're talking about here or what mechanism the court might hit upon to remunerate tower residents—if the city comes out on top. 

Also, the city isn't taking the straightforward path and suing the building developer under the state's unfair business codes. Instead, Herrera filed a cross-complaint on an extant suit by tower residents against the Transbay Joint Powers Authority, in which the city is also named as a defendant. Any money reaped by the city, Herrera said, would figure to benefit the plaintiffs—in this case, residents of the stricken tower. But, you know, it's complicated. "We'll have to see where things go." 

Also complicated: The city's suit isn't directed at Millennium Partners but, rather, at Mission Street Development LLC, an entity Herrera characterized as an "affiliate" of Millennium which was created to market and sell the units. 

This did not reassure litigious tower dweller Jerry Dodson, who attracted a scrum of media in the hallway following this morning's press conference. He worried that Mission Street Development LLC was a mere "shell" and the city was directing its efforts at an empty bag. Jerry's wife, Pat, also had trouble squaring Herrera's portrayal of the developer—making ill-gotten millions while keeping quiet about the sinking—with the city attorney's adamant claims that this did not constitute criminal activity. "What they did is absolutely a crime," she said of the developers. "They put 1,200 people in a vulnerable situation. We'll have to meet with the district attorney."

Predictably, Millennium's developer did not wave the white flag. Rather, spokesman P.J. Johnston accused Herrera of carrying the water for the TJPA, which Millennium Partners claims caused this mess by "recklessly dewatering" the soil beneath the 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," reads a portion of Johnston's statement. 

That statement claims that today's complaint "has no merit." It does not specifically address the one "simple" aspect of Herrera's contention: The developer knew the building was sinking and did not inform prospective buyers of this. 

"We've been clear all along that the focal point of this needs to be the responsible party," Herrera said. It's not the fault of the city, or its bumbling Department of Building Inspection, or the TJPA: "That is the developer." 

As Millennium Tower continues to sink and lean, area developers told San Francisco they expected an out-and-out Mexican standoff of lawsuits and a field day for attorneys and consulting engineers. "It’ll be the largest construction defect lawsuit in Northern California history short of the Bay Bridge,” predicted one veteran developer. “It’ll be a 10-year nightmare: a modern-day La Brea tar pit.”

This is not a comforting thought for those residing within the La Brea tar pit. "We live between two major earthquake faults," said Pat Dodson. "We need to do something, speedily." 

 

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