San Francisco's leaning tower of lawsuits

It's a story as old as cities themselves: prosperity comes to town and triggers a building boom. In modern San Francisco, rows of skyscrapers have begun lining the downtown streets and recasting the skyline, monuments to the triumph of the tech sector. Leading this wave, the Millennium Tower. 58 stories of opulence, it opened in 2009 to great acclaim, then the tallest residential building west of the Mississippi. Though priced in the millions, the inventory of posh apartments moved quickly. Yet for all its curb appeal, the building has, quite literally, one fundamental problem: it's sinking into mud and tilting toward its neighbors. Engineering doesn't often make for rollicking mystery, but San Francisco is captivated by the tale of the leaning tower and the lawsuits it's spawned. It's a story positioned -- albeit at an angle -- somewhere between civic scandal and civic curiosity, an illustration of what can happen when zeal for development overtakes common sense.

Millennium Tower CBS News

When the fog rolls in over San Francisco, the skyscrapers live up to the name. The TransAmerica Pyramid, long the gem of this skyline, now dwarfed, quaint as a cable car. The new Salesforce Tower stands as the tallest building in town. Nearby, Facebook just took out the city's largest lease on this building. And across the way, the Millennium Tower at 301 Mission Street: 645 feet of reinforced concrete wrapped in glass. Inside the $550 million construction, as advertised, lavish condominiums flush with amenities, attracting tech barons and venture capitalists. San Francisco royalty, former 49ers quarterback Joe Montana, bought here.

So did Jerry and Pat Dodson. Eight years ago, they paid $2.1 million dollars for a two-bedroom and planned to live out their retirement enjoying the sweeping view from the 42nd floor.

Pat Dodson: It's a wonderful location... Everything I had read indicated that it was the best building in San Francisco. It had won numerous awards. It had particularly won awards for construction, which was very important if you're thinking of moving into a high rise.

Jon Wertheim: Initially no buyer's remorse?

Pat Dodson: Absolutely not.

Jerry Dodson: No, not at all. I mean, in fact, buyer euphoria.

One feature the Dodson's hadn't counted on is the dozens of stress gauges dot the walls of the Millennium Tower's basement. They measure, in millimeters, the slow growth of cracks along the columns that rise up from the building's foundation.

Jerry Dodson shows contributor Jon Wertheim stress gauges in the Millennium Tower CBS News

Jerry Dodson: There's enough of them, a spider web of cracks, that you have to be concerned about what's going on underneath.

These cracks are one of the only visual clues that there's anything profoundly wrong here.

Jon Wertheim: These are the rounds you do now?

Jerry Dodson: Yeah, I've been told by structural and geotechnical engineers that I should be watching…

Both an engineer and a lawyer, Dodson makes daily rounds of the basement looking for signs of deterioration. It's a routine he's kept since the homeowner's association called a meeting of residents in May of 2016.

Pat Dodson: They just said we should be there and made us sign in, which alerted us at that time that there was something serious.

Jon Wertheim: So what was the nature of that meeting?

Pat Dodson: It was the first time we were told that the building was sinking and was tilting.

Engineers for the tower's developer have tracked sinking here since the day the foundation was poured in 2006. Nothing unusual about that. Here's what is unusual: their data shows the Millennium Tower sinking -- 17 inches so far -- and tilting 14 inches to the northwest.

Once news got out, local politicians seized on the story. And the very engineers celebrated for the building's design suddenly were being compelled to explain why the building was moving.

"Nobody has owned up to why this building is not performing."

When the Millennium hearings opened to public comment, it brought some livelier moments. This, after all, being San Francisco -- a city once described as 49 square miles surrounded by reality. Aaron Peskin has a certain vitality himself. A long time city supervisor, he starts most days with a swim in the Bay then meets constituents at a North Beach coffee shop, where the Millennium Tower is a popular topic. Peskin is leading hearings into what is causing the trouble.

Jon Wertheim: You subpoenaed some of the engineers involved with Millennium Tower. Why?

Aaron Peskin: We don't generally like to subpoena people. That power has not been used by the San Francisco Board of Supervisors for some quarter of a century.

Jon Wertheim: 25 years, you've never issued a subpoena before?

Aaron Peskin: That's correct.

Jon Wertheim: When you got them in here, what did you learn?

Aaron Peskin: Their answers were less than satisfactory. Nobody has owned up to why this building is not performing.

Frank Jernigan and Andrew Faulk show their 'marble' video CBS News

Some homeowners aren't waiting around to find out. Andrew Faulk and Frank Jernigan -- who worked at Google when it was still a start-up -- got all the answers they needed when they rolled a marble across their floor.

Frank Jernigan: We didn't do it but once, and this is what we got. We were shocked when that thing stopped, turned around and started rolling back.

Andrew Faulk: Back to where the building is tilting.

Jon Wertheim: The northwest side.

Frank Jernigan: I thought, "We don't know if this building's going to stand up in an earthquake." And so I became severely frightened of that.

Andrew Faulk: And we got out. We left, we left really most all of our belongings. We just left.

The couple sold their apartment earlier this year and moved to a two-story home in the Pacific Heights neighborhood.

Frank Jernigan: We sold it for approximately half of what it was valued at before this news came to light.

Jon Wertheim: You lost seven figures --

Frank Jernigan: Yes.

Jon Wertheim: On the sale of this apartment?

Frank Jernigan: Yes.

Andrew Faulk: That's right.

Frank Jernigan: I would say we lost $3-$4 million.

Speaking of astronomical figures, half a world away, in a suburb of Amsterdam, San Francisco's sinking tower came across the radar of Petar Marinkovic, an engineer who works with the European Space Agency to track earthquakes. Using signals from a satellite 500 miles above the earth, Marinkovic measures ground movements around fault lines. In 2016, he happened to be studying the Bay Area, when something caught his eye.

Marinkovic's chart of ground movements CBS News

Jon Wertheim: This is obviously downtown San Francisco. What do the green dots represent?

Petar Marinkovic: Green dots represent stable. No displacement, no significant displacement.

Jon Wertheim: Stable structures?

Petar Marinkovic: Stable structures, yeah.

Jon Wertheim: And the red dots?

Petar Marinkovic: Few red dots means something's going down. Something's settling. Something's subsiding. Something's sinking.

Jon Wertheim: Did you know what it was?

Petar Marinkovic: No.

Jon Wertheim: Had you heard of Millennium Tower before this?

Petar Marinkovic: No.

Jon Wertheim: Ever been to San Francisco?

Petar Marinkovic: No.

Jon Wertheim: What can you tell us about the rate of sinking?

Petar Marinkovic: It's in the ballpark of - between 1.5 to 2 inches a year.

Jon Wertheim: 1.5 to 2 inches a year?

Petar Marinkovic: Yeah, yeah.

And there's nothing to suggest the sinking and tilting are slowing down, much less stopping. But is it dangerous? As recently as this past summer, the city of San Francisco and its engineers asserted the building is safe, even in the event of an earthquake. Even so -- and this is a central theme to this saga: there are as many opinions about the trouble at the Millennium Tower as there are engineers in the Bay Area.

Jerry Cauthen, one of those local engineers, did not work on the tower but has worked on nearby projects.

Jerry Cauthen: There's a lot of things about this building that are unprecedented.

Jon Wertheim: Some sinking for buildings is acceptable, right?

Jerry Cauthen: Some is. They actually anticipated that, over the lift of the building, it would sink about four to five inches. That's like a hundred-year life.

Jon Wertheim: This is double and triple that.

Jerry Cauthen: Yeah. I don't think they -- they obviously didn't anticipate anything like this, close to it.

By 'they' Cauthen means Millennium Partners -- brand-name developers with high-end skyscrapers all over the country. Cauthen says their big mistake was building Millennium Tower out of concrete instead of steel.

Jerry Cauthen: Concrete is often cheaper. And it's just as good, but it is a lot heavier. And so you got to design your foundation and your sub-surface to support that higher weight.

What lies beneath the surface at 301 Mission Street is critical to the story. It fell to Millennium's geotechnical engineers to analyze the ground below and design an appropriate foundation. They went with a foundation driven 80 feet deep into a layer of dense sand. And the city approved the plan. Larry Karp is a local geotechnical engineer. He did not work on the tower either but specializes in Bay Area soil conditions.

Millennium Tower CBS News

Jon Wertheim: What is under the ground here?

Larry Karp: What is under the ground here at the surface is rubble from the 1906 earthquake, brick and sand and debris, everything you could imagine is down here.

You have to go 200 feet below the Millennium Tower, through layers of history in the ground -- below landfill from the time of the gold rush, sand, mud and clay -- to reach solid rock or bedrock. Karp says the fact that the tower's foundation isn't anchored in bedrock -- well, that's a problem.

"Everybody is afraid to tell the truth. Because if we get to the bottom of this, they are worried that it is going to, in some ways, slow down the building boom that is happening in San Francisco."

Larry Karp: For a big, heavy building, a concrete building, those foundations have to go deeper. For a building like this, they have to go to bedrock.

Otherwise, he says, the structure will sink into less sturdy layers of sand and mud. And because it doesn't sink or settle uniformly, you get tilting.

Larry Karp: Look at the whole line.

Karp told us he can see the tilt from the middle of Mission Street a few blocks away. We couldn't see it so we asked Jerry Cauthen if he could.

Jerry Cauthen: No, I don't. It's very hard to see. It's not enough of a tilt to see. This is not like the Leaning Tower of Pisa.

And there it is: the inevitable comparison to that greatest engineering gaffe of them all. Not the landmark any present-day developer wants to be associated with. Millennium Partners declined our request for an on-camera interview but pointed out their tower was built to code. They blame their neighbors, specifically construction of the Transbay Terminal -- San Francisco's answer to Grand Central Station -- right next door. Transbay declined an on-camera interview too but told us Millennium had already sunk 10 inches before work began on their project.  And right on cue, here come the lawyers. Lawyers for Millennium Partners, for the Transbay Terminal next door, for the tower's structural engineers, and geotechnical engineers, for the architect and the builder, for the homeowners association and for the city, and yes -- even for Joe Montana. There are 20 parties to various Millennium Tower lawsuits and counting.

Jerry Dodson: It takes a half hour just to take attendance of the lawyers in the courtroom. I mean, literally.

Jon Wertheim: That's a lot of billable hours.

Jerry Dodson: Lotta billable hours.

Courtroom circus aside, we asked Aaron Peskin -- the city supervisor -- simply: what's going on here?

Aaron Peskin: Everybody is afraid to tell the truth. Because if we get to the bottom of this, they are worried that it is going to, in some ways, slow down the building boom that is happening in San Francisco.

Jon Wertheim: Time is money in construction, and we don't want to stop this frenzy.

Aaron Peskin: Absolutely. Absolutely.

This drama has hardly had a chilling effect. Everywhere you look in downtown San Francisco, they're building another skyscraper. And the latest must-have amenity for all these new constructions: bedrock. In what might be the first act of building on building bullying, tech giant Salesforce stuck it to Millennium via Twitter.

Aaron Peskin: "Bedrock, baby."

Jon Wertheim: You think that was in reference to what's going on across the street?

Aaron Peskin: I don't think it was in reference. I know it was in reference 'cause I know the people who built that building.

The city still doesn't require all skyscrapers to go to bedrock but it has made some changes to prevent another tower from leaning. More review of foundations for new tall buildings, for one. As for the Millennium Tower, on this, almost everyone agrees: it needs to be fixed.

Jon Wertheim: What do we do with a tilting, sinking building?

Jerry Cauthen: I've heard freeze the ground, in perpetuity, freeze the ground.

Jon Wertheim: Perpetually freeze the ground under this building?

Jerry Cauthen: Perpetually freeze the ground. They've talked about removing 20 stories from the top of it to reduce its weight.

Jon Wertheim: What -- what do you think of that, lopping off--

Jerry Cauthen: God I hope they don't have to--

Jon Wertheim: Lopping off the top 20 stories?

Jerry Cauthen: Shoo, that sounds like a horrible mess. I think more likely the surest way is to get it on piles to rock.

Bedrock. There may be no avoiding it. The parties are in mediation debating just how to drill down to bedrock under an existing skyscraper with a thousand people living upstairs. And then, there's the indelicate question: who pays for all this?

Aaron Peskin: I am hopeful that the city and Millennium and the homeowners association will implement a fix in the near term and fight about the money later. But time's ticking.

Produced by Nathalie Sommer. Emily Hislop, associate producer.

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