The Big Sink - Millennium Tower

How San Francisco’s ultimate power tower became “a modern-day La Brea tar pit” and, potentially, the city’s costliest real estate battle.

SAN FRANCISCO MAGAZINE NOVEMBER 2016

By Lauren Smiley and Eskenazi

Jerry and Pat Dodson’s problems with Millennium Tower—not of the sinking-into-the-earth sort, but of the social variety—started with a walk around the block. 

It was August 1, the day the news hit the front page of the Chronicle that the 58-story luxury condo building that the Dodsons called home was settling and tilting. Like many of her neighbors, Pat had only learned in May that the Millennium was in a different state than when she’d bought her unit back in 2009 for $2.1 million—namely 16 inches lower and listing several inches to the northwest. Suddenly, the warped, cracking sidewalk at the monolith’s base—like the leaks in the basement and the splintering interior ramp purportedly marbled over by the developer—signaled that something was amiss.

Within weeks, the Millennium would be surpassed in height by the ascending Salesforce Tower and 181 Fremont. But on that day, it was still the tallest building in SoMa, a flashy heavyweight champ draped in architectural awards. High within were the lairs of luminaries like Giants outfielder Hunter Pence (Pablo Sandoval, too, before he decamped for the Boston Red Sox). The late venture capitalist Tom Perkins lived in the penthouse with a steel Minotaur statue, and below were people who had served as a U.S. ambassador, or written a treatise about voting machines, or counted Kimye as friends. 

Millennium Tower.jpg

As Pat headed out for her walk, a TV reporter posted outside the main door asked if she would talk about the leaning tower of San Francisco. He added that the homeowners association (HOA) didn’t want people talking to the press. Pat’s ears perked up. “I’ll call my attorney,” she replied, and with that she dialed her husband of 34 years, Jerry.

Anyone who has an image of downtown high-rise dwellers as reclusive elitists cloistered from the civic fray surely hasn’t met the Dodsons. Pat, a vivacious 71-year-old, had been the director of casework for Representative Nancy Pelosi’s San Francisco office. (“Do what Nancy would want you to do” remains a guiding principle.) Jerry, a 69-year-old contrarian with a crown of gray curls, made a career as a government litigator suing U.S. Steel and the coal industry, and later took on Genentech on behalf of the University of California (billing up to $1,100 an hour in private practice, which helped finance the couple’s taste in real estate). Both are attuned to the value of the right press at the right moment, and they weren’t about to be squelched by the building’s resident power structure, or anyone else. 

So Jerry gave Pat the go-ahead to tell the TV reporter whom they see as the primary culprit: the building’s blue-chip New York developer. “The Millennium Partners did not build to bedrock, and that’s the cause of the problem,” Pat stated into the microphone, no nonsense, her bob neat, collar protruding from under her jean jacket. “They will lose in any court, I believe, if they fight this.” By “this,” she was referring to the new focus of Jerry’s in-home law practice: suing Millennium Partners on behalf of himself and allied residents.

After the TV appearance, the Dodsons quickly became the go-to public face of the building, offering a counternarrative to that of the developer and a contingent of more than 140 fellow residents who have opted to direct their legal rancor at the tower’s next-door neighbor, the deep-pocketed, taxpayer-subsidized Transbay Joint Powers Authority. The TJPA has poured billions into building a terminus for California’s high-speed rail project—an aspirational Grand Central Station of the West—which, Millennium Partners charges, has “recklessly” undermined the soil beneath the tower, causing the skyscraper to sink and lean and setting countless parties on a collision course of blame, scorn, and litigation.

But the Dodsons had been bucking that line ever since Southern California attorney David Casselman first showed up at an HOA meeting back in May, several months before the building’s woes would come out in the press. At the meeting, the attorney broached the legal option of suing the TJPA. Jerry Dodson argued that the residents should not be trusting the developer, or Casselman, who had also been representing the HOA in negotiations with Millennium Partners. Rather, they should be looking hard at why Millennium had allegedly never disclosed the building’s condition when residents were buying their units in the first place. “Why on earth would you not sue the party that’s responsible for the building sinking?” he asks. (The HOA itself initiated legal action against both the developer and the TJPA in August.)

As the Dodsons started speaking regularly in the news, Casselman charged right back, in an August mass email to the tower dwellers who’d signed up for his lawsuit, that Jerry, by talking in the press, had blown up the board’s attempt to “handle these matters in a discreet, professional manner.” (“I think Jerry is totally overreacting,” says one TJPA-suing resident. He compares Dodson to an apoplectic backseat driver screaming during a treacherous stretch of road, “You could get into an accident!”) Casselman contends that the publicity generated by Dodson’s accusations has only made life worse for his fellow tower dwellers, triggering an avalanche of unfortunate events: banks halting lending to would-be buyers, condo sales flatlining, Uber drivers pulling up and asking, “Is this building sinking?” 

The answer to that question is, sadly, yes. And the harsh truth is that the problems with the sinking, tilting Millennium had already been noticed by many knowledgeable parties around the city even while being hidden from residents who had invested millions—for some of them, their life’s savings—to buy in. In fact, City Hall staffers and construction professionals had been chatting about it for years. “Mil-lean-ium,” as one wag has taken to calling it, was “the worst-kept secret in town.”

Tom Perkins Grand Penthouse  Living Room by Ryan Associates 

Tom Perkins Grand Penthouse Living Room by Ryan Associates 

When work started on the Millennium a decade ago, word got out fast in the development community that the concrete tower—uniquely heavy for such a tall structure built on landfill and not anchored to bedrock—was having problems. “Construction guys are like everybody else,” says one major city developer. “We’re all gossipy—like little old ladies.” Another builder says he heard that an acquaintance was considering buying into the building when its units first went on sale. The developer told him about the rumors of sinkage: “He did a little homework, and, even in 2009, there was enough evidence. He backed out.” 

This question of who knew what and when is at the heart of the inquiries that are now roiling City Hall and occupying an army of lawyers and engineers up and down the state. And it’s opening the door for a political power play that’s likely to reverberate for years to come.

On the afternoon of September 22, Supervisor Aaron Peskin lifted a packet of papers to his graying mustache with a theatrical flourish in his City Hall office. He gave it a deep, suspicious sniff. The ink was still wet, the paper warm. “These have just been printed,” he said, playing the sleuth in a 58-story mystery series unspooling nightly on the news. The temperature of the document roused the lawmaker’s suspicion because the man presenting it to him—Tom Hui, director of the city’s Department of Building Inspection (DBI)—had failed to mention the existence of this seven-week-old report during several hours of persistent grilling earlier that day at a Board of Supervisors hearing. And yet here it now was, hot off the presses.

Recounting the incident one day later at a North Beach café, Peskin chuckled at the ridiculousness of the moment. Although, in a deeper sense, he wasn’t laughing. “This is getting to where somebody calls the FBI,” he said. “This ain’t funny.” Peskin’s suspicions of official misconduct start in the office of the DBI and trickle upward, perhaps all the way to the upper echelons of City Hall. These suspicions are not yet backed by hard evidence or (so far, at least) anything that one could construe as a political smoking gun. 

But Peskin does have a letter penned in 2009 by then–DBI deputy director Raymond Lui—a document that, in mid-September, the supervisor blew up to poster size for a televised press conference. In this letter, Lui grilled the Millennium’s engineer of record with eight separate queries regarding the building’s “larger than expected settlement.” Before the first luxury condo had been sold, the Millennium had already sunk 8.3 inches and counting, more than the 4 to 6 inches that originally had been predicted by the developer’s engineers for the building’s entire lifetime. “That, Mr. Lui, is quite the letter you wrote,” Peskin told him at the September hearing. “What got you to write it?” Lui calmly said he could not recall.

Despite clear evidence that DBI higher-ups had approved a building they’d been warned was sinking, the department’s representatives maintained that their on-the-ground inspectors hadn’t actually detected any sinking—and no higher-up appears to have clued them in. As the denials piled up at the hearing, dozens of Millennium residents seated in the Board of Supervisors chambers murmured and shook their heads incredulously: The “worst-kept secret in town” had eluded the two groups who could have benefited most from learning it—building inspectors and condo buyers. Instead, in August 2009, the DBI green-lit the building to begin sales. Moving trucks packed with Minotaur statues were soon pulling up out front.

September’s hearing was a transcendently bad showing for the DBI; an Internet video soon began circulating among city political junkies featuring a mash-up of Peskin’s sharply worded questions and clips from Hogan’s Heroes. (Peskin: “This is not adding up. Do you want to take another run at what you just said?” Sergeant Schultz: “I see nothing! I know nothing!”) The supervisor chalked up the DBI’s performance to “a combination of things ranging from fear to incompetence to malfeasance.” Mayor Ed Lee’s summation was, in its way, even harsher. Hours after the hearing, the mayor announced that DBI leadership changes were in store: City Administrator Naomi Kelly and Department of Emergency Management director Anne Kronenberg—neither of them with any experience in building or construction—would be brought on “to strengthen, if necessary, existing building codes and independent review processes for current and future high-rises.” 

For Peskin, the mayor’s underlying message was clear: “DBI is a hot mess.” The supervisor pledged that the September hearing would be the first of many. New information, he said, was already flowing his way: “Generally, what happens at moments like these is, people come out of the woodwork.”

Millennium tower  and the san franciso-oakland bay bridge

Millennium tower and the san franciso-oakland bay bridge

On a Monday morning in September, Jerry Dodson rushed into the Millennium’s 42nd-floor elevator and zoomed down to “L.” He’d gotten an urgent email from a tower neighbor who was being blocked from entering an HOA press conference on the ground floor. (The HOA claimed that the meeting was only for the press.) There, a clutch of reporters was listening to geotechnical engineer Patrick Shires as he explained how, at the behest of the HOA and the developer, his company was boring three holes down to bedrock to test how the soil was settling under the Millennium. Only the homeowners association has the legal standing to sue for construction defects of the entire building, which could force a fix. The state of the soil—how it’s compressing, and where—is an important clue to what’s going on and why.

Arriving, Dodson was also blocked from entering the room by the press conference’s handlers. (“I wasn’t planning on attending the damn thing until they told me I couldn’t attend,” he says.) To him it seemed like more secrecy from a board that had been rebuking his calls for transparency for months. Residents elect the members of three different “baby boards” governing different levels of Millennium Tower; those boards elect members to the Millennium Tower Association, known among residents as the “Center Board,” a nonprofit corporation that makes building-wide decisions and has a fiduciary duty to the building’s homeowners. Yet the Center Board hadn’t been telling members everything it knew: Residents weren’t informed that the HOA had hired Shires to look into the settling back in 2014, or that Millennium Partners had made a presentation to Shires and the Center Board about settlement issues in June 2015. It would be nearly another year before all residents got notice of a special meeting for homeowners on May 10. The 100 or so curious attendees were asked to sign a nondisclosure agreement before Shires explained to them that the homes that many thought were the city’s gold standard were tilting and sinking.

After the September press conference, Shires and the HOA’s hired spokeswoman, Evette Davis, led the media outside to where a drill was boring down into the sidewalk, pumping displaced water out of the SoMa earth like a turbocharged chocolate fountain. Soon a scrum of reporters drifted over to another free-flowing source of information: Jerry Dodson, tucked into a doorway, holding forth in full prosecutorial mode for 40 minutes regarding everything that stunk about how Millennium Partners and the HOA were handling this. All the while, Davis stood off to the side, her brow furrowed with evident displeasure.

Dodson’s conflict with the HOA had begun long before reporters were on hand to document it. At his first meeting serving on the association’s legal committee in the fall of 2014, he recalls, he heard a “mild allusion” to a problem with the building. Dodson demanded documents analyzing the building’s stability, he says. The acrimony escalated once the settling was officially revealed to residents in May 2016, at which point Dodson began voicing what would become his refrain at such meetings: that the board needed to hire a construction defect attorney, someone who would look at legal action against the developer itself. “Over and over again, in private and public meetings, I was told to shut up,” he says. 

Instead the board introduced Tarzana-based Casselman, a specialist in so-called inverse condemnation cases, or suing a government agency for damage to private property. The board invited Casselman to speak to residents at a special May meeting. “Lawyers in the building were pushing for other law firms [to be interviewed], but no one got this treatment,” says one resident present at the meeting. “Next thing you know, [Casselman] was in the club lounge with a box of business cards.”

Dodson resigned from the legal committee in June and went into full gadfly mode, starting a private website for residents chronicling the saga, reporting on meetings, and posting documents he tracked down. He wrote a blog post about going to visit former mayor Willie Brown, who he says advised him to hire the best construction defect attorney money could buy and offered to broker an intro to former secretary of state and Bechtel president George Shultz. (Helpfully, Brown also suggested that Dodson sponsor a contest for civil engineering college students to come up with unorthodox fixes for Millennium Tower.)

The Dodsons have many defenders in the building—one of them, who prefers to remain anonymous, calls them “our champions”—yet the pushback from other residents has made their “vertical neighborhood” no longer feel so convivial. “People are upset about the Dodsons because they’re unilaterally doing their own thing,” says one resident. “But the things they’re saying in the press affect everybody. This is not just their own house.” The backlash is the reason Jerry told a reporter not to take photos during a private tour through the tower’s Club Level dining room, gym, movie theater, and wine cellar. To be quoted in the press was one thing, but to be seen traipsing through the halls with a journalist was another. “I am so controversial in this building,” he later said.

But the most polarizing—and consequential—action from the Dodsons is still yet to come: the promised lawsuit versus Millennium Partners. Casselman, the attorney suing the TJPA, maintains that his strategy is the sounder one (not just because he believes the agency is the problem, but because inverse condemnation law allows residents to collect legal fees on top of any award, whereas suing the developer will steer up to 40 percent of any award to lawyers). Dodson isn’t buying his logic. “Why would you let [Millennium Partners] off the hook and continue to say, ‘We had nothing to do with it,’ and blame it on Transbay?” he vents. “You go after the party that’s responsible.”

glenn rescalvo of handel architects  designed millennium tower

glenn rescalvo of handel architects designed millennium tower

On the morning of September 20, an email landed in journalists’ in-boxes spotting them 63 minutes to make a date with Millennium Partners founding partner Christopher Jeffries. “This will be Mr. Jeffries [sic] only media availability,” the invite stated. The media dutifully showed up for a detailed presentation, aided by a PowerPoint featuring a slide that read, “We Did It Right.”

It was a tense affair for the developer—all the more so because, two hours earlier, he’d been hit with a subpoena from City Attorney Dennis Herrera. “I have serious concerns that the disclosures required by state law”—three-inch-thick binders distributed by the developer to buyers like the Dodsons prior to finalizing sales—“did not contain information about the settling of the property,” the city attorney wrote. The closing line of Herrera’s press release noted, significantly, that the investigation was being led by his Complex and Affirmative Litigation Unit. This indicated that the city attorney had an interest in suing the developer on behalf of the people of California, as former city attorney Louise Renne did with Enron in 2001. The city attorney, it seems, may be more eager to enter into a legal firefight with the developers of Millennium Tower than many of the tower’s own residents. 

Faced with this threat, Jeffries and his attorney Peter Meier went on the offensive. The TJPA, Jeffries said solemnly, had been “reckless,” sucking groundwater out from beneath Millennium Tower in violation of both written agreements and common sense, causing the skyscraper to settle into the bay mud sloshing beneath the streets of SoMa. Reporters were shown photos of supposed dewatering tanks on the site of the TJPA’s excavations; after an hourlong salvo directed at the TJPA, Jeffries told the crowd that “we are appalled that this situation has become one of finger-pointing.” 

Undeterred, the TJPA pointed a finger right back. Agency spokesman Scott Boule claimed that by the time the TJPA began dewatering in 2013, the Millennium “had settled approximately 12.1 inches.” He emphasized that the tower is leaning away from the TJPA and its supposed “reckless” dewatering (and toward another construction site: Kilroy Realty’s project at 350 Mission Street). Boule noted that 350 Mission Street and various other adjacent properties have also been dewatering. The problem, he claims, is not the dewatering at all, but Millennium Tower’s “inadequate foundation.”

At his press conference, Jeffries stated—truthfully—that many large buildings in San Francisco don’t reach bedrock, and that his tower and its foundation conform to city codes. But he did not divulge that Millennium Tower is the tallest residential structure west of the Mississippi and, crafted of poured concrete, may be the heaviest, too. Concrete is both cheaper and far heavier than steel (the price of which can fluctuate sharply) and affords developers a chance to maximize the bang for their buck. Rather than requiring three-foot gaps between floors as steel structures do, concrete buildings require only a foot-wide slab. You can, lucratively, cram more units into a building this way—Millennium Tower features 58 stories in a 645-foot-tall structure; steel-framed 555 California, by contrast, is only 52 stories tall despite its 779-foot height. The weight adds up, though: One city structural engineer estimates that Millennium Tower may carry the bulk of a 150-story steel-frame building. 

What’s more, the heavy Millennium occupies a relatively svelte footprint, like a stiletto heel. “It acts like a javelin,” explains a developer. “The weight is pushing it down.” The tower, according to a report prepared by the engineering firm Arup and disseminated by the TJPA, is nearly five times heavier than any of the other structures abutting the TJPA, none of which are sinking. “It doesn’t take a rocket scientist to figure that if you build a super heavy building on friction piles on bay mud and sand,” says a veteran city developer, “something bad might happen.”

millennium tower (right) flanks  Jay Paul's 181 fremont

millennium tower (right) flanks Jay Paul's 181 fremont

When plans for the Millennium first landed at the Department of Building Inspection in 2002, fairly little new high-rise construction had sprouted downtown in 20 years. Nearly every building followed the voluminous building codes, which include the recipes for the city’s iconic Victorians as well as the first iterations of New York–style high-rise living. Even through the ’90s, high-rise development continued to cling to the old-money havens of Nob and Russian Hills and Pacific Heights. The “good buildings” were stately places like 2006 Washington Street, whose residents can peer behind the bush that encases Danielle Steel’s Spreckels Mansion. 

Yet at the conclusion of the first dot-com boom, plans for the Millennium and other neighborhood-transforming towers began inundating the DBI. Unfortunately, the city’s building inspectors were not equipped to monitor this new style of building. During Peskin’s September hearing, DBI deputy director Ronald Tom acknowledged that his department remains dependent upon the advanced engineering work of third-party contractors who are hired not by the city but by the developers. The Millennium, Tom said, was “one of the first tall, heavy buildings” to cross the department’s docket and, as such, was not subjected to the same level of outside peer review by academics and working engineers that similar structures now are. A longtime DBI staffer sums up the Millennium debacle thusly: The tower’s designers “fucked up the calcs.” And small wonder: “We’d never seen one like this before; we’d never seen a 50-story poured-in-place concrete building on compressed soil.”

And yet that’s not quite true. The city had seen one like this before—and rejected it. At around the same time Millennium Tower was moving toward approval and construction, developer Jack Myers submitted plans to erect a skyscraper at 80 Natoma, just two blocks away from the Millennium’s site. It would, like the Millennium, be a poured-concrete structure, though a daintier 52 stories instead of 58. As described by then–DBI director Frank Chiu in 2004, the proposed tower at 80 Natoma and the ground upon which it would have stood reads like a mirror image of the Millennium: It would be “thin relative to its height,” “built on soft soils that are subject to compression, and supported on short piles that wouldn’t reach the bedrock 190 feet below.” Also, it would be “an extraordinarily heavy structure.” 

Sans in-house rocket scientists, Chiu called in outside experts for detailed analysis on 80 Natoma. After a full peer review of the building, its foundation, and the soil, Chiu wrote that the experts had determined that “the building could settle an alarming and unacceptable 9–11 inches.” Based on the result of this peer review, the DBI halted the project. (Following a lawsuit, the city eventually purchased the property—which sits above the right-of-way for the proposed path of the high-speed rail tunnel—for $58 million.) For the Millennium—essentially across the street—a similarly rigorous peer review panel was not convened to evaluate the soil and foundation under the tower, and instead largely focused on its aboveground elements.

So why would the DBI pursue full peer review for one heavy, tall, thin building resting on sand and fill and not mandate it for another? Peskin asked about this discrepancy at his hearing. Hanson Tom, the city’s principal engineer, testified that he could not compel the recalcitrant Millennium Partners to submit to a full peer review—a potentially years-long process that can cost developers a fortune, especially if the ever-cranky engineers return bad news. And so the Millennium, unlike the proposed tower at 80 Natoma, simply skated through. The DBI claims it had no authority to force the developers of a structure that “followed the building code in effect at the time of submission” into including a geotechnical engineer on a peer review panel studying the subterranean elements of that project. This is an argument that many in the city, including Peskin, are loath to accept. “We are far from having gotten to the bottom of this,” he says. “The city had absolute authority to require peer review on every element of the project. But Hanson Tom was thwarted in that.”

What’s not at question is where things will go from here: sideways. Everyone is going to sue everyone. Residents are gearing up to sue the TJPA; Dodson is promising to lead a suit against Millennium; the HOA has initiated legal action against builder Webcor, Millennium, and the TJPA; the city may sue Millennium; Millennium may sue the TJPA; and, if Millennium claims dewatering is the source of its woes, it may additionally sue all the adjacent properties that also dewatered. “It’ll be the largest construction defect lawsuit in Northern California history short of the Bay Bridge,” predicts a veteran developer. “It’ll be a 10-year nightmare: a modern-day La Brea tar pit.”

bamo designed  interiors for millennium tower client

bamo designed interiors for millennium tower client

For certain parties, however—most notably Supervisor Peskin—the Millennium fiasco also presents an opportunity. For the ambitious parliamentarian, this is a chance to wade deep into city building rules (his happy place) while, in the words of one City Hall fixture, “looking like Eliot Ness.” As an added bonus, he gets to cause grief for some of his least favorite entities: rapacious developers, the spendthrift TJPA, and “Oh, by the way, it doesn’t hurt that it causes pain for Gavin Newsom,” notes a veteran political operative. At his first Millennium-themed press conference, Peskin issued a “very serious allegation”: that a decade ago “there was some level of political interference” with DBI officials.

And yet nobody has solidified the charge that then-mayor Newsom or anyone in his inner circle leaned on the DBI to grant Millennium’s approvals. DBI insiders, in fact, claim that top-down pressure is applied less overtly. The Mayor’s Office “will never tell you, ‘You must sign, no matter what,’” says a longtime department staffer. “They say, ‘Hey! This is an important project. Can you put this guy closer to the top of the list?’” Like deep beneath the ocean, pressure at the DBI is amorphous, constant, and exerted from all sides. “There is always some pressure,” admits 29-year department veteran Hanson Tom—who testified that the “deficiency” in city strictures that allowed the Millennium to skimp on peer review ultimately inspired him to tighten the rules (by which time the tower was both ascending toward the heavens and sinking into the earth). 

Still, even without rock-solid evidence of political interference, Peskin has navigated into a target-rich environment. He’ll get credit for whatever malfeasance or ineptitude he uncovers and dodge criticism for whatever he doesn’t. He’ll also be acting as an avenging angel on behalf of wealthy tower dwellers, who could be a useful asset if he chooses to run for future office. “If 20 percent of what Peskin is alleging is true, [the media] will report he saw it coming,” continues the operative.

What’s more, say observers, the Millennium campaign helps return Peskin to his activist roots while revitalizing the outsider status that he first rode into office as part of a wave of discontent with Mayor Willie Brown in 2000. “If he wants to recapture that magic, bringing back these examples of developers running roughshod over San Francisco could be politically advantageous to him,” notes a city political consultant. “If Aaron wants to be mayor, and I believe he does, standing up to perceived corruption in City Hall would be a powerful platform.” 

Whether or not the city will be forced to strengthen its building codes—and some developers hope Peskin’s crusade will force just that—the Millennium meltdown will create new demands from buyers. “People who can afford to spend millions on condos are going to ask [about going to bedrock]—and if they don’t, their attorneys will,” predicts a condo developer. 

City structural engineers have long pined for a safety rating of sorts, something that discerning types could use to determine how sound a building is. Skeptics predicted it’d take a good-size earthquake to jolt people into thinking this way. Now maybe it won’t.

As for the Millennium, realtor Joseph Lucier of Sotheby's International Realty, who has clients residing in the tower, thinks the problems will hurt the resale of midsize units, of which there is ample inventory throughout SoMa—but likely won’t affect the highest-end units. “There’s only so many penthouses in San Francisco,” he says. “And when you get into that category of individual, I don’t care how nice they are, there’s a bigger-than, better-than sense to their assets.” Also, penthouse seekers are all-cash buyers, so banks refusing to lend on the properties is a moot point for them. Lucier figures that ultimately the tilting and sinking—when fixed—will become a blip in the building’s history. “If the Transamerica sunk and tilted in 1978, and it was fixed by ’81, would that deter a tenant now?” he asks.

But that seems a distant hope for the people still inside. Casselman, the TJPA-suing attorney, says one of his anxious clients already sold at a loss and moved out. The Dodsons had hoped to pass on their unit to their adult son, but now, Pat says, “I won’t let him spend the night.” More than 150 homeowners have sought property tax reassessments—with some reporting the value of their property as $0.

One resident who didn’t want to be identified was remarkably sanguine about the financial repercussions: “These people have shitloads of money—what are they complaining about? It’s an investment. I may lose money, but such is life.”

His insouciance doesn’t seem to be shared by many. Numerous residents don’t think they have two years, let alone decades, before the building’s systems begin failing: The elevators may tilt out of alignment; the plumbing may burst. So incensed is Nina Agabian, a UCSF professor who lives in the building, that she wrote a Chronicle op-ed demanding that the city halt Millennium Partners’ other S.F. construction project—the 47-story luxury condo tower and adjacent low-rise housing the future Mexican Museum—as an incentive to force a fix.

The Dodsons are keeping the pressure on. After crashing the HOA’s press conference, Jerry invited a TV reporter up to his condo for a sit-down interview. The newsman had an idea: With the camera recording, Dodson placed a few golf balls on his living room floor. One by one, they rolled to the northwest.

Star Designers Leave Their Imprint on New San Francisco Developments

Mansion Global - September 24, 2016
By Rebecca Bratburd

In San Francisco, the luxury condominium market has slowed down, yet still looks bright. Every year since 2012, the overall average sales price has increased year after year, according to Sotheby’s. However, in the second quarter of this year, the average sales price year-over-year for condominiums dropped 2.2%. The average sales price for a condominium in the second quarter of 2016 was $1.29 million compared with $1.36 million in the second quarter of 2015.

In that same time frame, Paragon Real Estate’s second quarter market report stated: “Very generally speaking, the market for more affordable homes is stronger than that for luxury homes; the market for houses stronger than that for condos; and the market for luxury condos cooling most distinctly.”

Still, properties like 181 Fremont—the city’s new super premium development —continue to emerge.

And it’s not unusual to see expensive materials worked into the interior design of these developments, as well as unique and value-adding amenities from private lounges, clubs, upscale libraries, and fully-equipped gymnasiums. Concierges, often available 24-hours a day, are typically standard and ready to assist residents in myriad ways.

Here are some new developments on the market this fall:

 

181 Fremont

181 FREMONT

181 FREMONT

181 Fremont is the most premium building that has come to the market in San Francisco, period. Serving as what will likely be designer Orlando Diaz-Azcuy’s swan song, according to Joseph Lucier of Sotheby’s International Realty, residences start on the 54th floor of the mixed-use building.

Luxury condos occupy the top 17 floors of the 801-foot tower, which annexes to the forthcoming Transbay Transit Center. There, residents will not only find 11 different transit systems but also a 4.5-acre rooftop park. Views include the elevated park and the SoMa cityscape on the lower floors, and sweeping views of the Bay Bridge, San Francisco Bay, and Treasure Island from the upper floors. Inside, rich and luxurious materials are ubiquitous, like marble from Italy, wood from New Guinea, and brass door handles from France. Sales opened to the market in May, and construction is set to complete in 2017.

Joseph-Lucier.jpg

Number of units: 55 units and an additional 12 suites, akin to hotel suites for purchase by residents
Price range: Studios start at $1 million-plus; two-bedrooms start at $3 million
Developer/architect: Jay Paul/Heller Manus Architects
Apartment sizes: Studios, junior one-bedrooms, one-bedrooms, two-bedrooms, and five penthouses—four half-floor units (up to 3,500 square feet) and one full floor unit (up to 7,000 square feet)
Amenities: Parking, bike storage, fitness center and yoga room, four lounge spaces, a library, conference room, bar and catering kitchen, and concierge
Website: 181 Fremont

 

The Harrison, 401 Harrison Street

The Harrison

The Harrison

Amenities stand front and center at the Harrison—from personal grocery shoppers to Uncle Harry’s, an exclusive residents’ club with live entertainment. The residential building stands at 49 stories and is perched upon Rincon Hill, giving it considerable elevation above the water and views of the Bay Bridge and San Francisco Bay. Detailed and layered Old World design are featured in the residences, common areas and amenities, thanks to interior designer Ken Fulk, who notably designed Facebook executive Sean Parker’s lavish wedding in Big Sur.

Sales for one-bedroom and two-bedrooms are underway now, and three-bedrooms are not yet available.

The Harrison

Number of units: 298
Price range: One bedrooms range from $800,000-$1.6 million; two bedrooms range from $1.2 million-$1.7 million; three bedrooms will be available, but the number of units and price range have not yet been released to the market
Developer/architect: The Mark Company/Maximus Real Estate Partners/Solomon Cordwell Buenz
Apartment sizes: One bedroom, two bedrooms, and three bedrooms. The top floors are uniquely spacious because of higher ceiling heights
Amenities: An on-site concierge team called The Harrison Attaché, attended lobby, valet, and a lounge on the 49th floor called Uncle Harry’s, a two-story library in the lobby, outdoor heated infinity pool, fitness center
Website: The Harrison

 

The Pacific, 2121 Webster Street

The Pacific at 2121 Webster Street

The Pacific at 2121 Webster Street

The Pacific is the first luxury doorman building to be constructed in the neighborhood in over 30 years. Individual units are bound to feel spacious with 11.5-foot ceiling heights, floor-to-ceiling windows, and views of Alta Plaza Park. Residents have the option of choosing between standard apartment dimensions, or for an even homier vibe, residents can spring for townhouses with three levels or three bedrooms from the row house collection with additional baths. Outside, plenty of restaurants and shops are a half block away on Fillmore Street.

Sales of townhouses began late last year, and units in the main building began selling earlier this year for move-ins later this year.

Number of units: 76
Price range: One bedrooms start at $1.495 million; two-bedrooms range from $2.295 million to $3.095 million; three-bedrooms range from $3.495 million to $4.195 million; penthouse and grand penthouse pricing is available upon request
Developer/Architect: Trumark Urban/Handel Architects; Renown designer Jay Jeffers designed three custom residences
Apartment sizes: One-bedroom, two-bedrooms, three-bedrooms, three-level townhouses, four penthouses and four two-level grand penthouses. The penthouse collection homes come as custom shells with no framing, drywall, fixtures, or flooring.
Amenities: Valet parking, concierge, guest suite, yoga garden and fitness studio, penthouse level observatory lounge for homeowners, guest suite
Website: The Pacific

Published in Mansion Global September 24, 2016

By Rebecca Bratburd

TECH-TONIC SHIFT

Luxury High Rise Living Redefined

By Joseph Lucier

When the Four Seasons Residences first came available for sale in 2001 as a re-purposed office building, few of the city’s high-end residential agents gave the project much notice. Shockingly after all, it was on Market Street! The St. Regis Museum Tower refined the model a few years later nestling up to SFMOMA at 181 Minna Street followed by Millennium Partners doubling down their bet on the neighborhood and building the first luxury “resident-only” Millennium Tower at 301 Mission Street in 2009. Downtown certainly had come a long way since 1984 when pioneer Ned Spieker developed the city’s first mixed use office/residential building (32 units) at 611 Washington Street across from the Transamerica Pyramid and home to Tommy Toy’s fashionable Chinese restaurant.  

four seasons  (far left),  706 Mission  (center),  St. Regis Museum Tower  (far right)

four seasons (far left), 706 Mission (center), St. Regis Museum Tower (far right)

"It would be highly recommended to take a serious look at this constrained market niche for an excellent long-term investment"

Fast forward to 2016…two more ultra-luxury residential projects are underway this year signaling the maturation of the Yerba Buena+SOMA neighborhood and firmly establishing this new hub of sophisticated living in San Francisco. Between these two buildings, 181 Fremont Street, Jay Paul Company’s mixed-use office/residential tower, and the Millennium Partners 706 Mission Street residential tower, 258 more units will be added to the existing stock of 660 residences at the Four Seasons, St. Regis and Millennium. Most important to note is Millennium Partners decision to reduce the number of units in 706 Mission by 17% allowing for larger units that cater to families and increase the stock for proper residences as opposed to the glut of 1300-1600 sqft units. The 2018 completion date of Salesforce Tower and the Transbay Terminal coupled with the continued march of Class A office development will forever shift the nexus of city living, culture, and commerce from the traditional slopes of Pacific Heights and the venerable corridors of the Financial District to the Yerba Buena+SOMA hub.

An astute investor would be advised to know that only 17% of the aforementioned full service concierge condominiums measure over 2500 sqft. It would be highly recommended to take a serious look at this constrained market niche for an excellent long-term investment and the exciting prospect of living in San Francisco’s singularly true cosmopolitan neighborhood.

 

Eric Friedman - Ryan Associates

The Devil is in the Details

For over three decades Ryan Associates have built exceptional homes in San Francisco, the Napa Valley and beyond.  Having had the pleasure of representing a number of these properties for sale, CaenLucier reconnects with Eric Friedman of the San Francisco based firm to discuss highlights of past and current residential projects, a look behind the scenes at the art of fine building and the ins and outs of working with architects, designers and his noteworthy clientele. 

CaenLucier: You have worked with Ryan Associates for over two decades.  How has the profession of high end renovations grown/changed over the years?

Eric Friedman: I don’t think we’re able to print houses yet, but there’s plenty of amazing modeling software out there that really helps to communicate design intent as well as solve the possibility of certain construction problems. We commonly use software to program the CNC router that make perfect parts every time, but for the most part we still make things by hand.

CL: What sets Ryan apart from other builders in the Bay Area?

EF: I think if you talk to our subcontractors they will tell you that there are many fine builders in our community, but Ryan is a league apart.  They’ll tell you that we do all of the things required to help them be successful enabling them to do their best work.  We’ve worked really hard to forge these mutually beneficial subcontractor relationships, but ultimately our design partners and clients are the winners.

CL: What are the most common mistakes clients make when interviewing a general construction firm to build their home?

EF: The danger that clients face is not understanding the consequences of hiring their team piecemeal.  They have to understand their motives and goals for the project and then need as much coaching as possible in unifying those interests in building their team. The traditional point of view of the owner is that you hire the architect first. The traditional approach works just fine if the architect believes, as we believe, that collaboration is a fundamental part of a successful project. One of the keys to our success has been our ability to team build on the client’s behalf.  It’s really a question of drawing out from the client what their top priorities are, what their design instincts are, and then start to match the correct design partners and resources.

CL: San Francisco has many talented designers and architects.  Who are a few of your favorites to work with?

EF: Our interest is in working with architects and designers who are invested in the collaborative process and who value the services we provide. We’re not attached to working with starchitects.

CL: How would you describe the perfect Ryan Associates client?

EF: The perfect Ryan client is clear around their goals, is invested in everybody being successful and wants to have fun along the way. It helps if they don’t think of themselves as a builder, designer or tradesperson.  Clients who understand they’re in a rarefied territory and rely on our expertise really get the best performance from us. 

CL: What is the most fun part of your job?

EF: I get to work with a range of incredibly talented and gifted people who inspire me on a daily basis.  Architects, engineers, all the makers and builders, but especially my co-workers for whom I have unlimited respect. It’s a really good feeling that comes when putting in an honest day working with our crew.

CL: Tell us something we don’t know about Ryan.

EF: We’re known for doing the big house on the hill, but our core business is the $1m to $5m remodel.  We are in the service business and are set up to do small projects and service work.  We want to take care of our clients’ homes forever regardless of the need.

CL: What is your most favorite project that you are working on right now?

We’re doing a modest but lovely 2,500 square foot bridge-to-bridge apartment on Russian Hill in a somewhat disintegrating 90 year old building.  The clients are so happy and excited that the good feeling has permeated the dozens of people that have contributed to the effort. It may or may not get published, however we’re very proud of what we’ve built.

TASTEMAKERS

Inspired Design Enhances Daily Life

By Joseph Lucier

San Francisco has always been known as a city of bold moves, be they social, political, or found in our noteworthy personalities around town, but restraint bordering on insipidity seems too often plague San Francisco's architectural landscape.  Love it or not, fervent opposition is a native trait of the City's residents, but it has been hurdled before to yield landmarks known the world over.  The Transamerica Pyramid, designed by architect William Pereira in 1969, comes quickly to mind as detractors during planning and construction sometimes referred to the design as "Pereira's Prick". John King of the San Francisco Chronicle summed up an improved opinion of the building in 2009 as "an architectural icon of the best sort - one that fits its location and gets better with age."  Yet where is the opposition found today towards “safe bets” that developers deliver to planning and, thus, usher to the marketplace when current economic opportunities could equally fuel cutting edge design, top quality materials, and high caliber construction meant to inspire buyers and residents alike?

This high/low conundrum begs the proverbial question between developers and consumers of who is the chicken and who is the egg.  While we were all Millennials at one point, albeit as Baby Boomers, Gen Xers or Gen Y, who likely entered the market without a well-defined sense of taste, the question remains; can the risk of higher investment for quality materials coupled with exciting architectural design be delivered by developers and applauded by consumers?  In the late 1990’s the architect David Baker and Holliday Development redeveloped the Clock Tower building at 461 2nd Street as uniquely designated “live/work” lofts.  This 1907 building, originally constructed for the Max Schmidt Lithograph Corporation, offered a new product to buyers who excitedly embraced the exposed brick and timber components and were introduced to open plan New York loft living. Not only was the live/work designation tenaciously fought for by the developers, these lofts were cool!  The market responded positively leading to further investor confidence with the 1996 redevelopment of the Oriental Warehouse at 650 Delancey Street, ultimately adding more high quality housing stock of lasting integrity.

David Baker's innovative  clock tower lofts

David Baker's innovative clock tower lofts

Fast forward to 2014 with Stanley Saitowitz’ 8 Octavia Street rising from a triangular lot left bare after the destruction of the Central Freeway.  Saitowitz is a big thinker and a bright spot in the city’s architectural discourse.  He feels that "architecture is a frame, an open field which facilitates the dreams and desires of the inhabitants. In this way architecture can be viewed as an instrument, a way to extend the exuberant parts of life, a tool for liberation." In an ocean of floating milk toast that the SF Planning Department often unwittingly finds itself wading through, 8 Octavia gave the City an opportunity to embrace the shock of the new. DDG's (the developer) investment of economic and intellectual capital paid off hopefully inspiring future sentinel attempts to stave off less inspired designs imposed on residential marketing firms.  With 47 units and a ground floor retail component, 8 Octavia had the ability to spread out risk on the balance sheet, but what is to be done to support San Francisco’s tastemakers burning desire to express a bold move residing on a singular property?

stanley Saitowitz design  at 8 octavia

stanley Saitowitz design at 8 octavia

As the ante moves up in the world of luxury single family home redevelopment, we re-engage the chicken vs. egg paradox with all of the eggs falling into one basket.  I certainly applaud any developer who puts on his investor’s cap to accurately assess the economic factors and consumer tastes required to make a profit, but tastemakers must unflaggingly resolve the uncertainty of being rewarded for a project that rigorously takes on new design theory, uses exotic (and expensive) materials, and boldly informs the market on what THEY consider important. Do we really have to see yet another $8mm+ spec house with a bowling ball plan entertaining level punctuated with a Carrera marble kitchen island leading to a wall of glass Nano doors with no sense of progression, no mystery, and therefore, no true allure and passion? Please say no!  Real estate agents wave their hand to the tune of hundreds of thousands of additional dollars saying that the developer “offers a blank canvas” for the new buyer to make the property their own.  Let us encourage developers to play offense and personally take on these blank canvases instead of kicking them down the road to the marketplace.

uninspired formula  developer product delivered to 2015 market

uninspired formula developer product delivered to 2015 market

I believe there is a market for the tastemakers who are willing to risk investment and inform San Franciscan's on what is chic and how inspired design can enhance daily life.  Baker and Saitowitz have shown that we collectively await developers willing to show us what can be and what we can embrace.  Developers willing to harness the winds of innovation, creativity, and technology, the true lifeblood of the San Francisco Bay Area, will be patiently rewarded by those seeking the allusive framework of high quality design and construction during these interesting times.