Real Estate

Union Square Crisis: Supervisors Demand Revamp as Vacancies Hit 20.6%

San Francisco's Union Square faces a 20.6% retail vacancy, prompting calls for a cohesive revitalization plan amid major store closures.

By Tal Alexander

5/16, 11:33 EDT

Key Takeaway

  • Union Square faces a crisis with a 20.6% storefront vacancy rate, prompting San Francisco supervisors to demand a more effective revitalization plan.
  • High-profile exits like Macy’s and Shreve & Co. underscore the urgency for innovative solutions, including pop-up stores and food trucks.
  • Despite over $1.5 million invested since 2022 in improvements and events, officials are challenged to create an environment that attracts both businesses and visitors.

Union Square's Retail Reckoning

In a striking turn of events, San Francisco's Union Square, a historic shopping district known for its vibrancy and luxury retail, is facing an unprecedented challenge. The announcement by Macy’s to close its flagship store, followed by the departure of Shreve & Co., a jeweler with a 172-year legacy in the city, marks a significant shift in the retail landscape of Union Square. These closures come against the backdrop of a record-high retail vacancy rate of 7.9 percent in San Francisco, with Union Square experiencing a staggering 20.6 percent storefront vacancy in the first quarter alone, as reported by Cushman & Wakefield.

A Call for Revitalization

The response from city officials to the rising vacancies has been a mix of initiatives aimed at revitalizing the area, including investing over $1.5 million since 2022 in efforts to attract businesses, improve streets, enhance security, and host events. Despite these efforts, the effectiveness of the city's strategy has been called into question by local supervisors, who are advocating for a more cohesive and rational plan to breathe life back into Union Square. The challenge is compounded by looming budget cuts and the need for innovative solutions to activate street life, such as temporary pop-up stores and food trucks, as suggested by Supervisor Myrna Melgar.

The Bigger Picture

The situation in Union Square is reflective of broader retail trends and challenges facing urban centers. The pandemic has accelerated shifts in consumer behavior, with a significant impact on tourism and foot traffic, which are crucial for the health of retail districts like Union Square. The closure of major stores such as Macy’s and Nordstrom, which have been anchors in the city's retail environment for decades, underscores the urgency for a strategic vision that addresses the evolving dynamics of retail and urban development.

A Path Forward

The call for a larger vision for Union Square by city officials and stakeholders highlights the need for a multifaceted approach to urban revitalization. This includes not only enhancing the physical and safety aspects of the public realm but also adapting to the changing retail landscape through flexible and innovative uses of space. The focus on creating an environment that attracts people and meets the needs of a diverse urban population is crucial for the resurgence of Union Square as a vibrant retail and cultural hub.

Management Quotes

  • Myrna Melgar, Supervisor and Committee Chairperson:

    "It seems like our business plan for this area just is not working now."

  • Ahsha Safai, Supervisor and 2024 Mayoral Candidate:

    "[Asked city officials to return later with a] larger vision for Union Square."

  • Aaron Peskin, Board of Supervisors President and Mayoral Candidate:

    "It is a collective imperative to move away from the ‘throw-the-spaghetti-on-the-wall-and-see-what-sticks’ to a plan that is rational."

  • Dean Preston, Supervisor:

    "Still unsure what the longer term plan is if stores like Macy’s are not Downtown."

  • Sarah Dennis Phillips, Executive Director of the Office of Economic and Workforce Development:

    "The plan, No. 1, is to create a really great environment... How do we make our streets great? How do we make sure the spaces are safe? And how do we make them places that people want to be?"