Residents and business owners in the McGuire Building in the Belltown neighborhood were told over the weekend that the building is not structurally sound and they need to move out as soon as possible. The building's owners, Carpenter's Tower, said it plans to demolish the building.

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Hundreds of residents and business owners who live and work in a modern, 25-story Belltown apartment building were told over the weekend to move out as soon as possible because of major structural flaws found in the building.

The building owner, a Seattle-based venture formed by pension funds and the local carpenters union, said it plans to demolish the high-rise.

The entity, Carpenter’s Tower, said it is too expensive to fix all the problems at the 272-unit McGuire Apartments at Second Avenue and Wall Street. Defects include corroding and rusting cables, defective reinforcements in the building’s exterior concrete and structural problems, the company said in a news release.

The McGuire, a $32 million project finished in April 2001, is safe for now, the company said, but residents were asked to move out before the end of the year.

The city of Seattle first learned of the building’s flaws and demolition plan a week and a half ago, when the owners showed city officials a March 2010 engineering report detailing the building’s structural problems, said Alan Justad, deputy director for the city’s Department of Planning and Development. Until then, as far as the city knew, the owners were repairing the building, he said.

“It’s unprecedented for us to have a new high-rise with modern technology have such serious problems so early in the life of the building,” Justad said.

He said the city does not inspect structural components of large buildings directly, but instead relies on a private report from a third-party inspection firm selected by the contractor. The firm and its inspectors must be certified by the Washington Association of Building Officials, Justad said. He said his department plans to review reports on the McGuire Apartments filed by Mayes Testing Engineers.

In 2008, Carpenter’s Tower obtained a permit from the city to fix problems with the building’s exterior concrete, but then discovered some cables were corroding, Justad said. The company X-rayed the building and found more problems.

Carpenter’s Tower — owned by Carpenters Union, Local 131 and the Multi-Employer Property Trust — said the problems can be traced to construction. In its news release, the company said load-bearing cable ends have corroded because they weren’t painted properly, and that builders also used the wrong type of grout, which allowed water to seep in.

Carpenter’s Tower sued the contractor, Bellevue’s McCarthy Building Companies, and the Seattle-based Hewitt Architects, in 2007, alleging negligence and failure to adhere to industry standards. McCarthy, a subsidiary of a Missouri company, in turn sued dozens of subcontractors. The court file contains thousands of pages of documents, and is scheduled for trial in September in King County Superior Court.

Attempts on Sunday to contact officials with Carpenter’s Tower, McCarthy, Mayes Testing and Hewitt Architects were unsuccessful.

The court documents indicate that problems with rust and water intrusion into the parking garage and street-level offices and businesses were noticed in 2004.

An investigator, Olympic Associates Company, then prepared a report detailing extensive water damage, rust and some concrete spalling or flaking. A piece of concrete fell from the building to the sidewalk in April 2006.

The lawsuit indicates that, as Olympic and Carpenter’s Tower continued to investigate, additional structural problems were found, including cracks in walls.

In 2008, according to the lawsuit, the building owner said repairs would cost $23 million. By January 2010, repair costs and financial losses were estimated at $80 million, more than double the cost of construction, according to a document filed by McCarthy’s attorneys in February.

The contractor, McCarthy, claims in the lawsuit that some of the damage has been the result of delays in repairs and the investigation.

Hewitt Architects, in its court filings, says Carpenter’s Tower’s claims against it are “a relatively minor portion of the issues in dispute.”

The company’s engineering report reviewed by the city showed that one-third of the building’s connecting tendons would have failed by 2019, which Justad said is very fast for a new building. Based on the report, city officials feel the building is safe for the year, including its ability to withstand an earthquake, but will monitor the building and move up the date if necessary, Justad said.

“We’re seeing things weren’t properly done,” he said.

For now, the apartment building remains swathed in scaffolding, and sandwich boards advertising leases at the McGuire Apartments were still out on the sidewalk Sunday.

Many residents said they had no idea anything was really wrong until they received a letter Friday from Kennedy & Associates, Carpenter Tower’s real-estate adviser.

The letter asked residents to attend meetings Saturday or Monday evening “about information discovered during recent engineering studies done on the McGuire Building and what we must do about it,” the letter said.

At the Saturday meetings, the company laid out incentives for people to move. Residents who move out by May 15 will receive three times their monthly rent, plus a moving allowance ranging from $1,500 to $2,500. The incentive payments, which decrease over time, end on June 30.

Resident Jessica Willis said once she read the letter Friday, she knew it was serious. Willis said she felt a little better once she heard about the money, but she still was unhappy about being forced to move out of her studio, where she has lived for a year.

“I love where I live,” she said. “I was planning on extending my lease.”

Hair-salon owner Quint Eby received a letter by FedEx on Saturday morning that cited a demolition clause in his lease. It said he must leave his street-level salon in 60 days. “It was completely devastating,” he said.

Eby has six years left on his 10-year lease, and said he still is paying back the roughly $250,000 he sank into his business. Carpenter’s Tower has not offered him any money, he said.

The building’s other businesses include the restaurant The Local Vine, a FedEx Office and a Seattle Crossfit health club.

The letter to Eby said the company would be in touch this week, and Eby was hopeful the building’s owners would offer him something.

“I just hope I don’t have to file bankruptcy,” he said.

Nicole Tsong: 206-464-2150 or; Mike Carter: 206-464-3706 or