New owner proposes condos atop I. Magnin building

After decades as one of Union Square’s premier shopping destinations, the landmark I. Magnin building on Geary Street may soon have a new offering: condos.

A year after Macy’s sold the building, which it long occupied, at 233 Geary St. for $250 million, the new property owner is proposing to convert the building to a mashup of retail, office space and housing.

The plan from owner Sand Hill Property Co. calls for 21 condos on the top three floors, as well as a rooftop deck. The basement and lower three floors would remain retail, while floors four through eight would be office space. Under the new plan, the amount of office space would jump from 50,000 to 90,000 square feet and the amount of retail would drop from 150,000 to 65,000 square feet.

The latest vision for the property comes as Union Square retailers have been shedding space, leaving the city to grapple with how to make sure the area remains a popular destination that continues to funnel vital tax dollars to City Hall.

Those retailers shedding space include Macy’s, which sold the I. Magnin building as part of its plan to dump unwanted stores amid the nationwide retail downturn. In 2016, Macy’s sold its men’s store at 120 Stockton St. for $275 million to Morgan Stanley and partner Blatteis & Schnur. Those new owners are planning a partial office conversion of the upper floors.

Upscale department store Barneys New York is closing its flagship store at 77 O’Farrell St., and the Forever 21 store in the same building has already shut down.

Supervisor Aaron Peskin, whose district includes Union Square, said that Sand Hill has not approached his office about the changes. Peskin said that while he has been focused on maintaining Union Square as “the premier retail destination in San Francisco,” he is not against allowing some housing in the mix.

“The notion of injecting housing in Union Square is intriguing,” he said. “I’d like to learn more, and hope at some point the property owner will come in and show me their plans and ask for advice about outreach and the appropriate folks they should be talking to.”

Sand Hill Property, based in Palo Alto, has built several billion dollars worth of retail complexes, hotels, office buildings and residential properties, but the I. Magnin building purchase was its first in San Francisco commercial real estate.

Sand Hill’s application for the I. Magnin property, initially reported by Socket Site, states that the developer wants to “preserve what makes the architecture iconic and to enhance and modernize what is not.” The developer also would like to modify the building’s exterior, increase the size of the storefront windows and “reintroduce” windows on the top residential floors.

Completed in 1905, the Beaux Arts style structure was originally filled with medical offices and other commercial uses. It was remodeled as a department store in 1946. In 1996, a year after the I. Magnin store closed, Macy’s expanded its Union Square store into the upper floors of the building.

Karin Flood, executive director of the Union Square Business Improvement District, said that it makes sense to add residents to Union Square because they would boost foot traffic to the area.

“We welcome other uses in the district on the upper floors, which we are having a hard time filling with retail,” said Flood. “When you invite in other uses, particularly residential, you have more people out and about, 24/7, frequenting our shops and restaurants.”