Food hall could fix Union Square
As a real estate and economic development professional who follows brick-and-mortar retail trends, I felt a sense of loss — but not surprise — when news broke of Macy’s impending exit from San Francisco’s Union Square.
The unique features of urban retail that drew crowds during the 2010s — buzzy city streets and sights, for example, or proximity to other retail and amenities like restaurants — were greatly diminished by pandemic-related closures. The retail apocalypse that largely affected suburban malls after the 2008 financial crisis has now clearly hit San Francisco.
Foot traffic downtown has fallen to 32% of pre-pandemic levels, according to data released by the University of Toronto last year. This has led many small stores to close and accelerated a pre-COVID trend toward more compact footprints for large stores in highdensity locations. At just 85,000 square feet, the Ikea store that opened on Market Street last year is roughly a third the size of the furniture retailer’s traditional format. Macy’s Union Square complex contains more than 400,000 square feet.
Luxury chains like Chanel and Yves Saint Laurent (located in a building that was part of the Macy’s complex before a previous downsizing) have taken more space in Union Square in recent years. But a store like Macy’s has a greater effect on the area’s vibrancy given its larger format, more accessible price points and tradition of community engagement. For example, Macy’s plays an important placemaking role during the holiday season when it sponsors the neighborhood’s famous Christmas tree, attracting customers and window shoppers alike. As enthusiastically demonstrated by the estimated 40,000 attendees of the Union Square Alliance’s Tulip Day event on Saturday, Union Square is a critical gathering spot and destination for the city and region.
With Macy’s preparing to depart the area, it’s critical to the regional economy that whatever replaces it can similarly appeal to a large and diverse community of shoppers and visitors.
Case studies from around the world show that a destination food hall would be the perfect way to repurpose some portion of the Macy’s space. It could even be lucrative enough to defray the costs of redeveloping the rest of the complex into smaller retail spaces, conference spaces or other uses while renewing the neighborhood’s vitality.
Eataly, the Italian marketplace and food hall chain, is this concept’s most high-profile proof point. Founded in Italy, Eataly closely adheres to the same formula in more than 40 locations in Europe, the Americas and Asia: an immersive cultural experience that co-locates multiple food and beverage options in spaces that can top 150,000 square feet. A single Eataly location places street food, coffee, fine dining, fast casual and specialty items under one roof and within steps of each other. The concept attracts 50 million visitors annually, many in the United States. The company has nine locations in the U.S., including in San Jose, and plans to open 20 more in North America during the next five years.
Given Eataly’s ubiquity and expansion plans, a downtown San Francisco location might not prove a unique enough draw to pull Union Square out of its slump. But as Chef José Andrés’ dizzying array of Spanish culinary offerings has demonstrated in his Mercado Little Spain at Manhattan’s Hudson Yards, an Eataly-like concept can be adapted to center many different cuisines and cultures. There’s ample opportunity for San Francisco to offer a differentiated retail destination by capitalizing on the city’s unique cultural mosaic.
The Macy’s complex is within a 10minute walk of the Philippine Consulate General in San Francisco and the SOMA Pilipinas Filipino Cultural Heritage District. What about a communityled, small-business-centered market showcasing the rich culinary traditions of the Filipino American community? Or perhaps a pan-Asian market, similar to Tangram in Queens, N.Y., that pays homage to the famous night markets popular throughout East and Southeast Asia? The incredible success of September’s Sunset Night Market and similar events in Chinatown highlight the strong demand for the concept in San Francisco.
Given the diversity of the city and the Bay Area, the possibilities are endless. And they are all but guaranteed to create an attractive, successful retail destination for visitors.
Mayor London Breed publicly recognized the problem that Macy’s impending closure presents and the many questions that need answers to solve it. Macy’s isn’t a tenant; it owns the complex. If the company sells its building, who will be the new owner? Would Macy’s be open to staying as a tenant in a smaller, subdivided space? What would it cost to meet the ventilation, energy and plumbing needs of a commercial food use conversion?
Answering these questions will demand leadership from Breed and a convening of stakeholders — Macy’s, District Three Supervisor and Board President Aaron Peskin, businesses and community organizations in and around Union Square, and potential buyers of the complex, to name a few.
At this critical juncture for San Francisco, securing a food-filled future for the Macy’s complex is essential to ensure the city doesn’t miss a unique opportunity for transformation and reinvention.