A Dead Mall in Downtown San Francisco Might Become an AI Data Center

A Dead Mall in Downtown San Francisco Might Become an AI Data Center

A shuttered landmark gets an unlikely second-life pitch

The shuttered San Francisco Centre, the city's largest downtown mall, could become an AI data center. The San Francisco Chronicle reported exclusively on October 19 that Maryland-based advisory firm KG Growth Partners contacted the city's Department of Building Inspection in June to ask what permits an AI data center would need at 845 Market Street, the wing once occupied by Bloomingdale's. "I just wanted to see what permits we would need for an AI Data Center," its construction consultant wrote in an email obtained by the paper. As of the Friday before publication, no formal application had been filed.

The target is one wing: 350,000 square feet of ex-Bloomingdale's

KG is not bidding for the whole mall. Its inquiry covers roughly 350,000 square feet at 845 Market Street, the former Bloomingdale's space making up about one-third of the larger complex. CEO Jared Krieger told the Chronicle the model "is a conversion that keeps the ground floor and the public-facing levels of the building active and open, with the technical use in the upper floors and back-of-house space." He said the firm is working with an undisclosed buyer and "a known AI Lab."

A mystery buyer, a mystery lab, and a rooftop garden

Krieger described the concept as "an AI-controlled living space" developed with the lab partner, adding that its "proprietary AI design can utilize resources, such as dedicating water to a rooftop garden." That garden's output would go to a food-security nonprofit. Beyond those lines, almost everything material is undisclosed: the buyer's identity, the lab's identity, financing, power capacity, water use, and the prospective operator.

A separate $40 million deal for the Macy's-owned wing

The Bloomingdale's parcel is owned separately by Macy's. The Chronicle reported last month that B3 Investors, an arm of a Texas commercial real estate firm, was nearing a deal of about $40 million for that wing; the deal has not closed. B3 previously converted the dead Bayfair mall in San Leandro into a research and innovation campus. Ownership of the rest of the Centre is more tangled, including a ground lease with the San Francisco Unified School District. An early-year purchase attempt collapsed in July over ground-lease talks; the lease was later extended through 2082 at lower payments, and the property went back on the market.

Forty years of retail ends in foreclosure and a January shutdown

San Francisco Centre, open for nearly 40 years, was once the city's premier shopping destination. Westfield surrendered the mall to its lender in 2023; it was later sold at a foreclosure auction and the new owners ended the remaining leases. Nordstrom closed its five-story flagship in August 2023 after more than 30 years, plus its Rack store across the street in July 2023, on falling foot traffic. Westfield disclosed that the flagship's sales fell from $455 million in 2019 to $298 million by December 2022, with occupancy down to about 55% against roughly 93% across its U.S. flagship portfolio. Bloomingdale's and Nordstrom both exited in 2025, and the mall closed permanently on January 26, 2026.

A 45-day freeze just stopped every new data center in its tracks

KG's feeler landed just as City Hall hit the brakes. The Board of Supervisors unanimously approved a 45-day moratorium on new and expanded data centers in early October, and Mayor Daniel Lurie signed it on October 16. During the pause the Planning Department must study energy, water, air quality, land use and community impacts and draft long-term controls; the freeze can be extended for up to 22 months. The Planning Director told Supervisor Shamann Walton that the city has approved only two new data centers since 2001; market trackers count at least six.

Lurie's downtown vision leaves little room for server farms

Lurie has said he wants a downtown where people can work, live, play and learn, and a data center between Market and Mission streets strikes many as the opposite of that vision. NBC Bay Area reported pushback from the mayor's office. Still, the Chronicle quoted two City Hall and real estate sources as saying officials could be receptive to a plan that keeps the ground floor active: "There is an interest in just making something work."

Two projects are already frozen, and Oakland hit pause too

The moratorium has already frozen two projects: NOVVA's facility at 400 Paul Avenue in Bayview, which draws 9 megawatts and sought to expand to 36, and a 49.5-megawatt proposal for the Dogpatch waterfront. Oakland passed its own 45-day pause this month, and Monterey Park became the first U.S. city to permanently ban data centers. A separate KG-linked concept pairing a data center with tech offices on the Central Waterfront likewise has no formal filing.

One retail bright spot: Nordstrom Rack is coming back

Nordstrom announced in mid-October that its off-price banner Rack will return downtown in fall 2027 with a 51,500-square-foot, four-story store at 2 Stockton Street near Union Square. The return signals individual retailers still see a future downtown.

What decides it: a buyer, a permit path, and the freeze clock

For now the mall-to-data-center story is only an inquiry email: unnamed buyer, unnamed lab, no application, no financing or energy numbers. Three things decide what happens next: whether the roughly $40 million Bloomingdale's-wing deal closes and who stands behind it; what permanent rules the Planning Department writes once the 45-day freeze lapses, and any extension toward 22 months; and whether KG's mixed public-plus-technical reuse can win over a City Hall that wants foot traffic, not server racks, on Market Street. Until then it is a test of downtown's hardest question: if the shoppers won't come back, will the servers move in?