Sinking Millennium Tower puts building agency on the spot

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.

The Millennium Tower at 301 Mission St. has sunk 16 inches since it opened in 2009 and is tilting 2 inches to the northwest. The Millennium Tower at 301 Mission St. has sunk 16 inches since it opened in 2009 and is tilting 2 inches to the northwest. Photo: Michael Noble Jr., The Chronicle Photo: Michael Noble Jr., The Chronicle Image 1 of / 54 Caption Close Sinking Millennium Tower puts building agency on the spot 1 / 54 Back to Gallery

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.

San Francisco Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Matier can be seen on the KPIX TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or email matierandross@sfchronicle.com. Twitter: @matierandross