The Numbers Behind a $19 Million Penthouse Build and LawsuitJuly 10, 2020
Having paid $11 million for the unfinished Grand Penthouse shell #2 atop “The Pacific” at 2121 Webster Street, a unit with roughly 3,800 square feet of raw interior space and a 1,520-square-foot terrace, back in 2016, William Wang is now suing the developer of the building, Trumark Urban, and its agents for fraud, misrepresentation and a breach of fair dealing among other complaints.
At the heart of the suit are two claims which were first raised back in 2018: (1) that the HVAC system for the penthouse was improperly designed and defective; and (2) that a required clearance for the building’s window washing equipment, which encroaches on the unit’s terrace, was misrepresented, resulting in a net loss of over 600 square feet, or roughly 42 percent, of the unit’s “unique,” “buildable” and “customizable” outdoor space as sold.
And having failed to settle the claims amicably, the suit is now seeking damages “well in excess of” $1.88 million dollars to make the plaintiff whole. But there’s a twist.
As an alternative to the requested damages, Mr. Wang is willing to return the completed unit to Trumark for the full amount that has since been invested in the unit since it was purchased, including all holding costs. And this is where it gets rather insightful and particularly interesting.
According to our accounting and review of the complaint, Mr. Wang has spent $7,831,980 building out the penthouse shell, which does include $383,871 in fixtures and furnishings and $707,000 in design fees, for a total investment of $18,831,980, not including an additional $712,242 in taxes, insurance and HOA fees that have been paid.
And should Trumark pursue the “rescission” route, the suit explicitly seeks any increase value that the build out has yielded, beyond the cost of construction, as well. We’ll keep you posted and plugged-in.
Comments from Plugged-In Readers
So plaintiff is offering Trumark the choice between paying him $1.3m, or paying him more than $8m *and* holding the bag on a penthouse on the downward slope of a housing bubble?
That should have read “well in excess of $1.88 million dollars,” including $580,000 for the HVAC fix and $1.3 million in diminished value, as since updated above. But in effect, yes.
I am not a lawyer, but I can’t see how Trumark does anything but dismiss the rescission option outright. If the plaintiff admits that the $1.88m will make him whole, then Trumark’s choices are really pay $1.88m or go to trial for the chance of paying less. They will surely think it unlikely a jury would find them guilty of fraud to the tune of 9x in punitive damages. And even in that highly unlikely case, I doubt the jury would even be empowered to revert the transfer of title, much less opt to do so.
Do you have a link to the actual filing?
This building was University of the Pacific Dental School. I seem to remember that the developer did an agreement with the school to move UoP to their new location on 5th Street.
I wonder if Mr. Wang’s claim of improper design of the HVAC has any merit. I wonder if any design flaws have been discovered at the UoP school on 5th Street. Of course, the design teams for the two buildings would probably be different.
Any Engineers Out There? “the HVAC system for the penthouse was improperly designed and defective”
How can the HVAC be improperly designed if you are purchasing an “unfinished Grand Penthouse shell” Isn’t it the responsibility of the buyers architects and engineers to design the HVAC?
I don’t think ‘building out’ the shell would include – or even allow – changes to the HVAC (beyond the usual necssary ductwork) since it’s an integral part of the building; unless of course each unit has it’s own dedicated system…and even then there would be limitations on what could be done, since vents, wiring/conduits, etc would have to pass thru other spaces in the building.
Not that the claim has merit, mind you.
Your speculations are twisted – as usual. If the HVAC is an integral part of the building – then would not every unit in the building be suffering it’s deficiencies? If the penthouse has it’s own dedicated system there wouldn’t be any vents passing thru other parts of the building – the system would be accommodated at the penthouse level.
According to the suit, the system installed by Trumark is “significantly undersized in mechanical cooling loads” and the electrical and gas allowances for the system are “grossly inadequate.”
Just curious if you know SS – are the two penthouse units divided along the north-south or east-west axis? If they are divided along the east-west axis, resulting in one penthouse having a long glazed south facing elevation – with no overhang or shading devices – that could result in a brutal heat gain.
There are actually four (4) Grand Penthouse units, each of which is a bi-level unit with a private corner terrace.
Are there any pictures of the interior? Would be curious to see given how much he spent on building it out.
$6,741,109 in construction costs sounds like good work if you can get it. Smh
It would be interesting to know who the engineer and sub contractors were? It is unusual for something as basic as load calcs to be wrong on a project that can afford good consultant.
Something doesn’t smell right here.
I agree w/ SFCitizen about investigating that UoP deal.
What doesn’t smell right? The UOP built a new building in SOMA and then sold their old building to a private developer.
Am I imagining things or did the buyer shell out well over $2,000 a sq foot? Then another $1,000 + for the build out? That’s crazy. SF remains (unlike New York) a city where in the “over several million” price range you can get A LOT for around $12-1500 a square foot; views, ready to move in condition, gardens and did I say VIEWS? What was the buyer thinking?
I never understood why people paid $2k+/sq ft prices in this building for not exciting views. From what I could tell the best view corner, the northwest corner, has like a tiny sliver of water and a tiny bridge whereas you could have really deep water and a huge bay bridge in your view for that price. I guess it’s the location but even the location is not right on the waterfront so I don’t know, I just don’t get it.
South views are incredible next door. I assume the same for these penthouses
I think the guy one day woke up to the fact he managed to spend the insane figure of $5,000 a Sq. Ft. and wants to bail and not take a big loss.
Looks like Mr. Wang is a serial wannabe architect-builder with a history of bad decisions and money issues.
Perhaps he simply discovered north bay views from nice old houses in Pacific Heights, not far from where he was. Or he finally figured out that people with his wealth (and much less) don’t generally buy in brand new developments at the southern edge of PacHts, across the street from public housing, however relatively nice it is. It may be that all he needed was an honest broker.
Having read the 33 page complaint but not its attached exhibits, this appears to be a damages case. Trumark has admitted liability for the window washing encroachment and the undersized HVAC system it provided. So the dispute is over the amount of the plaintiff’s alleged damages.
The complaint with exhibits are over 100 pages long and can be found at the SF Superior Court website, under online services, case search by name (last name, first name.) After locating the case Wang v. Trumark, click on case and then click on documents.
While the suit contends that Trumark has acknowledged the issues, we don’t believe liability has been admitted/assumed.
And IF the HVAC systems ARE deficient, Trumark would have the Mechanical Engineer’s Insurance to lean on, and doubtful they would eat the entire cost because of errors and omissions by professional design services, unless there is some record that they directed an engineer to design against their recommendations.
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