High crime, low traffic have retail . .
Beset by rising crime and fewer shoppers on once-busy city streets, major retailers are leaving their broken hearts in downtown San Francisco.
At least 22 big-name businesses have closed or announced plans to flee the area around San Francisco’s Union Square since January 2022, including trendy retailers like Anthropologie, Banana Republic and Crate & Barrel, as well as the investment firm that owns two of the city’s biggest hotels.
Since 2019, 47% of businesses in the area have closed, according to The San Francisco Standard.
Some 203 retailers were operating in and around Union Square pre-COVID; as of May, only 107 were left.
The commercial chaos will continue in coming weeks, with brands like AT&T, Nordstrom, Coco Republic and Old Navy shuttering more shops as soon as July 1.
The most significant casualty — the Westfield San Francisco Centre — came last week as the mall’s operator cited “challenging” conditions downtown, including sagging sales and occupancy rates, for its looming exodus.
Westfield stopped making payments on its $558 million loan for the 1.2-million-square-foot Market Street retail hub and began transferring control this month, as first reported by the San Francisco Chronicle.
The mall’s exit is the latest in a series of setbacks in the shopping district, where Nordstrom will shutter two stores — an anchor in the mall as well as a Nordstrom Rack across the street — this summer, slashing nearly 400 jobs.
Nordstrom officials made the announcements last month, blaming the “deteriorating situation” in San Francisco.
Chaos ‘ahead’
Westfield’s parent company, Paris-based Unibail-Rodamco-Westfield, said the closures demonstrated the “unsafe conditions for customers, retailers and employees” downtown.
Some 77% of San Francisco residents believe the city’s on the wrong track and just 30% said they felt safe at night downtown, according to a May survey sponsored by the San Francisco Chamber of Commerce.
Elsewhere in the area, the owner of two of the city’s biggest hotels — the 1,921-room Hilton San Francisco Union Square and 1,024-unit Parc 55 — announced plans last week to stop making mortgage payments.
Park Hotels & Resorts CEO Thomas Baltimore predicted a “clouded and elongated” recovery in San Francisco while revealing plans to remove the hotels from its portfolio amid record office vacancy — 44.7% of pre-pandemic levels, The Wall Street Journal reported Wednesday — and public-safety concerns.
Cinemark Century San Francisco, the Westfield mall’s movie theater, shut down following a final June 15 screening of “Transformers: Rise of the Beast.” According to a company email, the closure came amid a “comprehensive review of local business conditions,” SFGATE reported.
Some seasoned analysts predict the city’s ongoing commercial chaos could be just beginning.
Ken Woods, founder and chairman of Asset Preservation Advisors, said his team of municipal bond managers is backing off San Francisco.
“We’re seeing an emperor without clothes to a certain degree,” Woods told The Wall Street Journal on Tuesday.
Felonies rise
The city has also been dealing with several “open-air” drug markets downtown, including in the Tenderloin district.
The group Mothers Against Drug Addiction & Deaths put up a massive billboard in Union Square last year that read: “Famous the world over for our brains, beauty, and now, dirt-cheap fentanyl.”
Overall crime near the San Francisco Centre mall has slightly increased in 2023 compared with last year, police data show. Major felonies in the Tenderloin swelled by 1.4%, while larceny theft surged 5.6%.
San Francisco Mayor London Breed said the exit of the mall was not a surprise. Its parent company revealed plans last year to sell all its malls in the US.