The plan, unveiled by Mayor Daniel Lurie at a press conference on Tuesday, envisions a district encompassing at least 1M square feet of retail shopping space.
Central to the plan is SB 395, a bill introduced by State Sen. Scott Weiner and backed by the mayor, that would amend an 80-year-old state law that ties available full-service liquor licenses to population by county, effectively capping their numbers.
New restaurants and bars currently have to pay about $200,000 to acquire a full-service liquor license in San Francisco on the secondary market. Weiner’s bill aims to make up to 20 new full-service licenses available in the new downtown retail district at affordable rates.
“Creating new, more affordable licenses will allow new businesses to open and attract tourists and locals alike to our amazing downtown,” Weiner said, in a press release. “By bringing more nightlife downtown, we can help transform it into a 24/7 community neighborhood that San Franciscans deserve.”
Weiner’s bill empowers San Francisco to designate the downtown retail district in an ordinance and authorizes the state Alcoholic Beverage Control authority to issue up to 10 new licenses in the first year after the district’s creation and up to five new licenses in each subsequent year. The new licenses would not be transferrable outside the downtown retail district.
The specific boundaries of the retail district have yet to be determined. Representatives of local business groups who attended Tuesday’s press conference included the Yerba Buena Partnership, which includes the Moscone Center, Metreon mall and the San Francisco Museum of Modern Art, and the Union Square Alliance, the San Francisco Business Times reported.
The rise of remote work during the pandemic, which emptied out downtown office buildings in San Francisco, spawned a retail exodus in hollowed-out neighborhoods. The epicenter of the exodus was the Union Square area, where safety concerns were cited by several large retailers as the reason they were closing stores in the past two years.
The largest downtown mall, the San Francisco Centre, is more than half empty and facing a foreclosure auction. The 1.2M SF mall has been under receivership since former owners Unibail-Rodamco-Westfield and Brookfield handed the keys back to lenders in 2023 after stopping payment on a $558M CMBS loan backed by the property.
The San Francisco Centre was appraised last year at $290M, a drop of nearly $1B from its 2016 valuation of $1.2B. The mall is down the street from Macy’s 400K SF Union Square store, a century-old flagship which is slated to close.
Last month, Macy’s-owned Bloomingdale’s announced that it will shut its 339K square foot store at the San Francisco Centre at the end of March. The mall’s other anchor, Nordstrom, closed its 312K square foot store in 2023 after 35 years at the location.
Last week, luxury day spa Burke Williams announced it would be closing its outlet at the San Francisco Centre, citing continuing safety problems in the area.
The decision to close the spa was due to “the city’s failure to address growing safety concerns and deteriorating conditions in the downtown area, which has made it impossible for the spa to continue operating,” the retailer said in a statement.
“Increasing crime, including break-ins, thefts and violent incidents near the spa, has made it clear that the safety of staff and clients must come first,” the statement said.
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