Macy’s at Stonestown could be closed under new plan
A plan to shut down the Macy’s department store at Stonestown Galleria in San Francisco and replace it with a mix of retail, restaurants and a multiplex movie theater has been filed with the city by the building’s property owner.
General Growth Properties is seeking city approval to reconfigure the existing 286,000-square-foot building into a mixed-use venue with up to 12 movie screens, a grocery store, and a collection of eating and drinking spots.
“We filed a preliminary application and are working through our plans, but it’s a little premature to disclose the overall vision,” said David Cuthill, vice president of development for General Growth Properties. “Stonestown is a great asset in a great location, and we see this as an opportunity to help take it to the next level.”
The proposal comes as Macy’s, like other brick-andmortar department stores around the country, is closing stores to save money as customers increasingly shop online. The retailer shut down 40 stores in 2016 and has laid out a multiyear plan to close another 100.
Macy’s has not announced plans to close its Stonestown store, but it did sell the building to General Growth Properties, which owns and operates the rest of the Stonestown complex, in January for $41 million. That sale came two months after it sold its Union Square men’s store to Morgan Stanley for $250 million.
Macy’s declined to com-
ment, but real estate sources said that the Stonestown store will likely close in midto late 2018 to make way for the reconfiguration of the building.
Stonestown, which opened in 1952, is the oldest shopping center in Northern California and has been reinvented throughout its 65-year history. It was originally a strip of unenclosed stores, which Chronicle architecture critic Allan Temko described in 1987 as “soiled stucco storefronts” that were “ugly, cheaply built and open to fog and wind from the sea.” It was enclosed in the 1988 as part of a $50 million renovation.
Macy’s has been at Stonestown since 1996, taking over the space that had previously been home to the Emporium after its parent company bought the Emporium the year before.
Daniel Sider, senior adviser for special projects at the San Francisco Planning Department, said that the proposed changes “speak to (the) general nature of brick-and-mortar retail right now.”
He said that property owner GGP had met with planning staff.
“The Stonestown Macy’s is an interesting place, but I’m not sure it’s representative of the future of retail,” Snider said. “As one huge box retail leaves, that creates opportunities for a series of smaller retailers.”
There has been an increase in applications to convert retail space to other uses, including medical clinics, co-working centers and housing, Sider said.
And while historic movie theaters with one or two screens have been going dark, the Bay Area is seeing a string of new theaters offering cushy reclining seats and full-service dining. Several of these operators, including the Alamo Drafthouse, which opened a theater on Mission Street in San Francisco in 2015, are actively looking for space in the city.
“There does seem to be a future for specialized movie theaters, despite Netflix and wide-screen TVs,” Sider said.
For now, GGP doesn’t seem interested in developing the 4.5-acre back lot at Stonestown, a parcel that various owners have looked at developing in the past. Two decades ago, a plan to construct 441 housing units there was dropped because of neighborhood opposition.
Jeff Badstubner, a retail broker for commercial real estate firm JLL, said he has looked at the Macy’s space with several interested clients. He said the prospective occupants — which include a chain of upscale bowling alleys — are intrigued by the chance to have a large chunk space in a dense urban neighborhood with strong public transit, a university with 30,000 students next door and what is essentially a sixlane highway in 19th Avenue.
“What it offers is really big floorplates — you can’t find spaces that size in San Francisco, so retailers get excited,” Badstubner said.
The movie theater industry “continues to expand” he said, with new projects in San Mateo, Concord, San Ramon, Newark and Sunnyvale.
“People still want to go to the movies, but you have to enhance the experience a little bit,” he said.
Entertainment like movies and bowling will lure more people to the mall, which will benefit the rest of the tenants.
“Everybody has to feed off of each other,” he said.
Target just opened a 32,000-square-foot store in the former Sports Authority space at Stonestown, one of 30 “small format” stores the retail giant plans to open this year. Other stores in the mall include Apple, Nordstom and Trader Joe’s.
Supervisor Norman Yee, who represents the Stonestown area, said he thinks the plan will be generally supported in the neighborhood. In addition to the multiplex, that part of the district could use a food court with small local vendors and a supermarket, he said.
“I think it’s great,” Yee said. “We live in a time when a lot of retailers are not making it and have all this leftover space. The question is: Do you try to force another retailer in or try to be creative and see what the community wants? It seems like they have reached out to the community and come up with a vision.”
“As one huge box retail leaves, that creates opportunities for a series of smaller retailers.” Daniel Sider, senior adviser for special projects at the San Francisco Planning Department