Dive Brief:

• The cost to fix the settling-related damages to and stop the further sinking of San Francisco’s 58-story Millennium Tower could be greater than the coverage of the developer’s insurance policy, as well as those held by the architect, structural engineer and general contractor, according to Bloomberg.

• There are concerns that the policies may not cover the damages as the building’s defects could have invalidated the coverage. City officials have asked developer Millennium Partners to provide further details on how the sinking tower will hold up if there is an earthquake.

• So far, the unprecedented sinking has been credited to the building’s hefty concrete frame combined with the fact that its piles are at least 100 feet short of stabilizing bedrock. Other similarly piled buildings in the city feature a lighter metal frame, Bloomberg noted.

Dive Insight:

The situation facing owners in the building seems to be getting more dire by the day and news that the developer’s insurance coverage may not cover the cost to amend the damage caused by the settling is set to add to their woes, despite city inspectors recently judging the building safe to live in.

It is understood that the tower, which has settled 16 inches so far, could sink nearly double that amount, while it also slants 2 inches from its base with more movement expected.

Last month, a group of 20 homeowners in the tower filed a lawsuit against the developer amid claims that it knew the building was settling at a quicker rate than forecast and did not reveal the issue to buyers.

In September, Millennium Partners said water drainage from construction activity on a nearby $4.5 billion transit center site was the cause of the sinking. The claim has been refuted by transit officials who said it was instead due to the piles failing to reach bedrock.

In response to the building's settling, San Francisco Mayor Ed Lee has asked city officials to tighten local building codes, add an independent review process for projects and alter San Francisco's high-rise earthquake safety plans for the next three decades.

Work is now underway to rectify some of the problems caused by the settlement, along with measures to address the building’s movement. City officials are set to inspect the building again on Feb. 6.

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