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The Millennium Tower in San Francisco opened in April, 2009.1 The building offers a 20,000 sq. ft. "amenity complex" that includes a large fitness center, an indoor pool, and a wine cellar, among other things,2 and in 2012, Worth Magazine included it on its list of the world's ten best residential buildings.3 While the building was still under construction, units were sold for an average price of almost US$2 million.4 Unfortunately for the buyers of these units, and unbeknownst to them, the tower had settled into the ground more than anticipated before construction was even completed.5 Moreover, the settlement has not been even, which has resulted in the building being tilted.6 The settlement has not stopped,7 and the building has become notorious as a flawed project. While the building is still inhabitable,8 concerns remain about its stability.9
Property values throughout San Francisco have skyrocketed in the past decade. One chart published by the Paragon Real Estate Group that reflects Case-Shiller data for "Bay Area High-Price-Tier Houses" indicates that values within this category of homes increased by 80 percent between 2012 and 2017.10 Unfortunately, the buyers of residential units in Millennium Tower did not receive the enviable luxury home or prime real estate investment for which they bargained. As the building's settlement problem remains unresolved, many residents have begun to sell for a loss.11 A web of litigation has ensued, with fingers being pointed by everyone involved.12 This paper aims to unravel the web of litigation and determine who might ultimately bear the brunt of the liability, with particular emphasis on what remedies might be available through a recovery by the Homeowner's Association (the HOA). The HOA filed a lawsuit on March 29, 2017, which laid out a series of allegations against several individuals and corporate entities involved in the project.13 This paper addresses many (but not all) of the defendants implicated in that suit and the claims against them. The ongoing nature of this case means that information is limited to what has been released by the media or uncovered in the public record. Therefore, assumptions and speculations are made throughout the paper for purposes of analysis.
The Project
Concerns regarding the unusually intense settlement of the tower arose as early as 2009, before any...