Retailers are leaving the once mighty Union Square as San Francisco struggles with empty offices, ... [+]
There will be no summertime love-in. And more than hearts are being left in San Francisco.
Instead, the city’s downtown retailing community already appears locked in a doom loop, with Nordstrom
Offices empty during the pandemic have stayed vacant thanks to the popularity of remote working, in turn depreciating real estate values, reducing City Hall tax receipts, squeezing public service budgets, triggering more residents and businesses to depart, so shrinking the tax base further.
And while the City authorities are attempting to push through legislation to make planning quicker, encourage pop-ups, hasten retail-to-office conversions and beef up policing, the reality is that many of America’s biggest retailers have already closed their doors.
Mayor London Breed has insisted that the city is not in a doom loop, yet more than two dozen retailers have left during and since the pandemic and this month Nordstrom pulled the plug on its two stores at Fifth and Market streets, including its flagship at the Westfield mall.
This week Australian furniture retailer Coco Republic, which had invested significant capital in its showroom off Union Square, abruptly announced it would close its store less than a year after it opened across from Macy’s.
It cited the safety of its shoppers, along with a significant fall-off in foot traffic.
“We could not be more disappointed to be shuttering, but ultimately, the safety and well-being of our customers and employees is our highest priority,” said Anthony Spon-Smith, Coco Republic’s creative director and founder.
With its closure, the entire west side of Stockton between Market and O’Farrell has emptied after T-Mobile left its two-floor showroom earlier this year.
These are yet more tough blows for the city amid a string of big name departures including Amazon
Around a quarter of storefronts in Union Square, the city’s premier shopping district, are vacant and retailers have repeatedly listed public safety, theft and homelessness as they shut up shop.
The temporary shuttering of the city’s largest Whole Foods at 8th and Market in April rocked the city, with The San Francisco Chronicle reporting that shoppers witnessed rampant theft and the death of a person who overdosed on fentanyl and methamphetamine in a store bathroom.
San Francisco's office-vacancy rate soared to a record 27.6% at the end of 2022, as workers and ... [+]
In 2021, downtown luxury retailers Louis Vuitton, Burberry, Bloomingdale’s were among retailers ransacked during a night of looting.
City officials have pledged to streamline permits to allow more flexible uses around retail space, including allowing more office uses in Union Square’s upper retail floors — which would also allow entertainment and co-working companies in ground floor spaces.
Kate Sofis, executive director of the city’s Office of Economic and Workforce Development, has insisted that the city still hopes to support a broader reimagining of the mall’s upper floors.
However, there has been a historic drop in workspace requirements and such conversions are typically complicated and costly, especially with high construction costs and labor shortages.
Additionally, the city has launched a program to entice pop-up businesses to fill empty storefronts through a combination of grants, permit help and assistance for utility expenses. The Vacant to Vibrant program seeks to provide up to $8,000 to businesses, with about 33 vacant spaces and 150,000-sq-ft thought to be available.
Ever optimistic, City officials have speculated that lower rents could encourage businesses previously priced out, but Westfield squarely blamed an inadequate response to crime for the spate of closures, calling out “unsafe conditions” and “lack of enforcement against rampant criminal activity.”
There was a fatal shooting at a Walgreens opposite the $67 million, 312,000-sq-ft Nordstrom flagship recently and, announcing its departure, Nordstrom said downtown San Francisco had “changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully.”
Doom loop or not, the remaining retailers on the streets of San Francisco, home to the headquarters of Levi’s and Gap among others, will need more convincing that the city still has something to offer.