{"id":26631,"date":"2023-05-21T12:17:24","date_gmt":"2023-05-21T19:17:24","guid":{"rendered":"https:\/\/occupysf.net\/?p=26631"},"modified":"2023-05-21T12:17:25","modified_gmt":"2023-05-21T19:17:25","slug":"san-franciscos-union-square-isnt-dying-its-transforming","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2023\/05\/21\/san-franciscos-union-square-isnt-dying-its-transforming\/","title":{"rendered":"San Francisco\u2019s Union Square Isn\u2019t Dying\u2014It\u2019s Transforming"},"content":{"rendered":"\n<p>Written by\u00a0<a href=\"https:\/\/sfstandard.com\/author\/kevin-truong\/\">Kevin Truong<\/a> Published\u00a0May 18, 2023 \u2022 SFStandard.com<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/sfstandard.com\/_next\/image\/?url=https%3A%2F%2Fsfstandard.com%2Fwp-content%2Fuploads%2F2023%2F05%2FFEATURED_UnionSqPrecipice-scaled.jpg&amp;w=3840&amp;q=75\" alt=\"\"\/><\/figure>\n\n\n\n<p>A composite image shows scenes from San Francisco\u2019s Union Square including, from top left clockwise, shoppers exiting Fendi at 195 Grant Ave.; the Coco Republic\u2019s store-closing signage at 55 Stockton St.; a classic car passing BVLGARI at 200 Stockton St.; and a person asleep on a park bench in Union square on May 13, 2023. | Jason Henry for The Standard<\/p>\n\n\n\n<p>Inside pricey furniture retailer Coco Republic in Union Square on a recent weekday, garish red, yellow and black signs advertising a liquidation sale clashed with the tony, understated vibes of $10,000 couches and a wall of decorative sailboats.<\/p>\n\n\n\n<p>The Australian company recently announced that it would close the location at 55 Stockton St.\u2014its first in the United States\u2014less than a year after its opening. In&nbsp;<a href=\"https:\/\/www.prnewswire.com\/news-releases\/coco-republic-to-close-downtown-san-francisco-location-and-commence-immediate-on-site-inventory-liquidation-301821667.html\" target=\"_blank\" rel=\"noreferrer noopener\">a press statement<\/a>, the company cited the economic conditions in Downtown San Francisco and the \u201csafety and well-being of our customers and employees\u201d as reasons behind the closure.<\/p>\n\n\n\n<p>Real estate sources say the underlying story is a bit more complicated. For one, Coco Republic was on a short-term lease after the company took over the property from Crate &amp; Barrel. Another challenge was that the retailer didn\u2019t have an effective strategy for marketing an unfamiliar brand to locals.<\/p>\n\n\n\n<p>Regardless, the announcement\u2014which followed news about the departure of nearby Nordstrom and Whole Foods locations\u2014led to another round of hand-wringing about the future of Union Square, long considered San Francisco\u2019s premier shopping district.&nbsp;<\/p>\n\n\n\n<p>Historically, Union Square has been home to a mix of luxury retailers such as Cartier and Chanel and mid-tier shops like Nike. More recently, though, the area has been the subject of relentless negative headlines that have included high-profile robberies, concerns about homelessness and street conditions, declining foot traffic and prominent store closures.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-datawrapper wp-block-embed-datawrapper\"><div class=\"wp-block-embed__wrapper\">\n<iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" title=\"Notable Store Closures in San Francisco&#039;s Union Square\u00a0\" src=\"https:\/\/datawrapper.dwcdn.net\/M2foq\/3\/#?secret=4GmHaYoxkd\" data-secret=\"4GmHaYoxkd\" scrolling=\"no\" frameborder=\"0\" height=\"794\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>\u201cWhat we&#8217;re seeing all over is others who are trying to define what San Francisco&#8217;s narrative is,\u201d Mayor London Breed said&nbsp;<a href=\"https:\/\/sfstandard.com\/business\/vacancy-ridden-street-near-sfs-union-square-gets-6m-investment\/\">at a press conference<\/a>&nbsp;this week announcing a $6 million investment in the beleaguered Powell Street corridor leading from Market Street up to Union Square. \u201cWe have to change the narrative, but we also have to change the conditions.\u201d<\/p>\n\n\n\n<p>The barrage of retail departures and negative news has many in the city wondering if a central hub for the city\u2019s economy is sliding into irrelevance. Looking closer, however, a picture emerges of a neighborhood in flux, indelibly transformed by a one-two punch of changing shopping habits and the Covid pandemic and evolving into something new.&nbsp;<\/p>\n\n\n\n<p>Kazuko Morgan, a retail broker for Cushman &amp; Wakefield, has worked in Union Square for some two decades. Her name can be found prominently listed on the \u201cFor Lease\u201d signs in empty storefronts; in fact, she was the landlord and tenant broker for the Coco Republic deal.<\/p>\n\n\n\n<p>\u201cI\u2019ve never seen a market this challenging in my life,\u201d Morgan said. \u201cBut that presents a tremendous opportunity for retailers and buyers because this historically has been one of the most expensive and toughest markets with such little inventory.\u201d<\/p>\n\n\n\n<p>The availability rate in Union Square is 23.5%, according to&nbsp;<a href=\"https:\/\/www.avisonyoung.us\/documents\/92610\/193511993\/Bay+Area+Retail_Quarterly+reports+-+Q1+2023+final.pdf\/c34976cd-1a4b-5406-17b9-868374e9531f?t=1682634462569\" target=\"_blank\" rel=\"noreferrer noopener\">a first-quarter retail report<\/a>&nbsp;from real estate firm Avison Young. That\u2019s higher than any other Bay Area submarket tracked by the firm, including West San Jose, Downtown Palo Alto and Downtown Walnut Creek. The researchers defined Union Square as the area bounded by Market, Turk, Taylor and Pine streets.<\/p>\n\n\n\n<p>Research from The Standard found massive turnover on the streets of Union Square since the pandemic. After examining historical membership rosters from the Union Square Alliance and other sources of merchant listings,\u00a0<a href=\"https:\/\/sfstandard.com\/research-data\/san-francisco-union-square-store-closures-pandemic-fallout\/\">The Standard estimates only 53% of the 203 retailers in business during 2019 are still operating storefronts in Union Square today.\u00a0<\/a><\/p>\n\n\n\n<p>Union Square Alliance CEO Marisa Rodriguez described a domino effect since the pandemic: Store and office closures related to the pandemic followed by civic unrest in 2020, mass looting incidents in 2021 and growing national attention on San Francisco\u2019s challenges with fentanyl and homelessness have eroded the district\u2019s reputation, she said.&nbsp;<\/p>\n\n\n\n<p>\u201cWe\u2019ve experienced booms and busts, but we\u2019ve never experienced those booms and busts and a pandemic together,\u201d Rodriguez said.&nbsp;<\/p>\n\n\n\n<p>Colliers retail broker Julie Taylor said Union Square is in a fallow period as the neighborhood shakes off the impacts of the pandemic that led to San Francisco shutting down \u201ctoo soon, too hard and too long.<\/p>\n\n\n\n<p>\u201cAnthropologie closed in Burlingame about six or seven years ago, and nobody freaked out about it,\u201d Taylor said. \u201cPart of that housecleaning is a really good thing. We are just at the point where we&#8217;ve cleaned up the closets, we moved the furniture, but the new stuff hasn&#8217;t arrived yet.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-luxury-matters\">Luxury Matters&nbsp;<\/h2>\n\n\n\n<p>Despite the negative headlines, there are signs that some of the world\u2019s most exclusive retailers see opportunity in Downtown San Francisco. Luxury brand Chanel circled the real estate market for years before pulling the trigger and purchasing the Williams-Sonoma building at 340 Post St. for $63 million in 2021.&nbsp;<\/p>\n\n\n\n<p>\u201cThere are leases pending. There are leases that are getting signed. And those tenants are taking the long view that it&#8217;s still San Francisco,\u201d Morgan said. \u201cIt is still one of the most important markets in the world.\u201d<\/p>\n\n\n\n<p>Retail boosters cite San Francisco\u2019s status as a gateway for travel from Asia as well as the city\u2019s high median incomes as drivers of tenant interest in the market.&nbsp;<\/p>\n\n\n\n<p>Other well-known brands have started to make moves in the square. Saint Laurent relocated from its location at 100 Geary St. to a larger space at 90 Grant Ave., Bottega Veneta expanded its flagship store at 124 Geary Ave. and Banana Republic is moving its flagship to 152 Geary St. as part of its repositioning as a premium brand.&nbsp;<\/p>\n\n\n\n<p>But while the luxury segment doubles down in parts of Union Square, mass-market retailers like H&amp;M and Uniqlo, which rely on sales volume and foot traffic to make their numbers, have closed.&nbsp;<\/p>\n\n\n\n<p>Camera data from the Union Square Alliance showed pedestrian traffic in the first four months of the year was up by 27% compared with the same period last year. March 2023 saw a post-pandemic high of 1.17 million visitors for the month, but that\u2019s still \u201cconsiderably below\u201d 2019 numbers, according to a Union Square Alliance representative.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-datawrapper wp-block-embed-datawrapper\"><div class=\"wp-block-embed__wrapper\">\n<iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" title=\"Union Square Monthly Pedestrian Traffic\" src=\"https:\/\/datawrapper.dwcdn.net\/LvRas\/2\/#?secret=jykELqvewL\" data-secret=\"jykELqvewL\" scrolling=\"no\" frameborder=\"0\" height=\"450\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Union Square, which is also home to around 12,000 hotel rooms, is banking on tourists\u2014particularly monied&nbsp;<a href=\"https:\/\/sfstandard.com\/business\/chinese-tourism-still-lags-but-sf-travel-officials-expect-big-spenders-when-they-return\/\">international travelers from China<\/a>&nbsp;and elsewhere\u2014coming back and opening their wallets.&nbsp;&nbsp;<\/p>\n\n\n\n<p>\u201cI think the impact of office workers on the kinds of shopping that predominates in Union Square is vastly overstated,\u201d said Michael Berne, president of retail consultancy MJB Consulting. &#8220;The far larger piece is tourists.&#8221;<\/p>\n\n\n\n<p>International travelers spent $3.7 billion in the city last year\u2014up from $1 billion in 2021 but below the $5.1 billion spent in 2019. But there are signals of a tourism rebound,&nbsp;<a href=\"https:\/\/t.co\/VCZS9X71dx\">namely, San Francisco International Airport traffic reaching levels<\/a>&nbsp;that haven\u2019t been seen since March 2020. Tourism officials are eagerly awaiting the return of international tourists who tend to stay for longer and spend a lot of money.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Eric Mendell, the co-owner of Burlingame-based Kerns Fine Jewelry, signed a lease in October to launch two adjacent Rolex and Patek Philippe watch stores at 255 and 259 Post St. slated to open in the first few months of 2024. Mendell said he\u2019s betting on the two brands\u2019 historical cachet drawing in all types of visitors.&nbsp;&nbsp;<\/p>\n\n\n\n<p>When he told colleagues that he was planning on opening a luxury watch store in San Francisco, he said, \u201c95% of the people looked at me as if I was crazy.<\/p>\n\n\n\n<p>\u201cAs time has moved on, the consensus now is that it was a ballsy, good move,\u201d Mendell said. \u201cAlthough there are still people who think I\u2019m crazy.\u201d<\/p>\n\n\n\n<p>Even though entrepreneurs like Mendell are betting on a bright future for the district, the string of bad headlines has had a chilling effect on Union Square\u2019s recovery. A number of deal negotiations have faltered or have been on pause because of the negative news emerging out of the city, brokers said.<\/p>\n\n\n\n<p>\u201cThe general sentiment I hear is quite a bit more negative than what I\u2019m seeing on the ground,\u201d said CBRE retail broker Laura Sagues Barr.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-ground-level\">The Ground Level&nbsp;<\/h2>\n\n\n\n<p>Tourists and visitors dotted the district&#8217;s central plaza on a recent sunny afternoon, sipping iced coffees and taking photos of the cascading flowers installed in the park for a promotion&nbsp;<a href=\"https:\/\/visitunionsquaresf.com\/union-square-in-bloom-2\" target=\"_blank\" rel=\"noreferrer noopener\">called Union Square in Bloom<\/a>.&nbsp;<\/p>\n\n\n\n<p>A French tourist in a Golden Gate Bridge baseball cap was sunbathing and waiting for his family to finish shopping at Victoria\u2019s Secret. A young group of Norwegian travelers chatted, smiling after a meal at the Cheesecake Factory. A gleaming Rolls Royce idled in front of the Tiffany &amp; Co. location at 350 Post St.&nbsp;<\/p>\n\n\n\n<p>But even in the central plaza, there are vacancies. San Francisco\u2019s Recreation and Park Department put out a&nbsp;<a href=\"https:\/\/sfrecpark.org\/1687\/Union-Square-Cafe-or-Recreational-Conces?mc_cid=43f82b650d&amp;mc_eid=ea2522f354\" target=\"_blank\" rel=\"noreferrer noopener\">request for proposals<\/a>&nbsp;earlier this year for two concession operators in the square itself.<\/p>\n\n\n\n<p>Police and security guards are highly visible, though deployment is&nbsp;<a href=\"https:\/\/sfstandard.com\/business\/city-leaders-to-lock-down-union-square-ahead-of-holiday-shopping-season\/\">down from a surge during the Christmas shopping season<\/a>. Retailers say they\u2019ve been heartened by the appearance of officers doing patrols on foot.<\/p>\n\n\n\n<p>Union Square houses the San Francisco Police Department\u2019s only Mobile Command Center, a vehicle that is specifically meant to deter flash mob-style thefts from happening.&nbsp;<\/p>\n\n\n\n<p>Behind closed doors, there is grumbling from tenants around Union Square about shoplifting, homelessness and dealing with people in the throes of mental health crises. And while many of the larger merchants can weather the ups and downs of a muted economic recovery, smaller businesses are often left behind.&nbsp;<\/p>\n\n\n\n<p>The owner of Spectacles of Union Square, who said he didn\u2019t want to be named, peeked his head out of his door.<\/p>\n\n\n\n<p>\u201cHow do you think I fucking feel? I own a small business in San Francisco,\u201d he said when asked about the current situation. \u201cI have to keep my door locked during business hours.\u201d<\/p>\n\n\n\n<p>On the far end of Maiden Lane, Iron Horse Cocktails caps an alley marked by vacant storefronts. Only a few high-end boutiques remain, many of which are open by appointment only.&nbsp;<\/p>\n\n\n\n<p>Angela Voloshyna, the bar\u2019s owner, opened Iron Horse in 2017 and said business boomed for a while: A regular clientele of office workers was bolstered by shoppers patronizing other stores nearby. But the pandemic hit, and Voloshyna was forced to close two of her four bars in the city.&nbsp;<\/p>\n\n\n\n<p>Now with business back to around 70% of pre-pandemic revenue, she considers herself fortunate. She said she\u2019s appreciative of the community ambassadors who greet visitors and monitor the crowd, and the cleaning and other services provided by the Union Square Alliance, but the problems being faced by the city go far beyond what one group can contend with.<\/p>\n\n\n\n<p>\u201cI think they do everything in their power, but the government of the city needs to do some work as well,\u201d Voloshyna said. \u201cIt feels like a Band-Aid on a big wound.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-reshaping-the-square\">Reshaping the Square&nbsp;<\/h2>\n\n\n\n<p>In the post-pandemic haze, it\u2019s easy to forget that a larger conversation about the transformation of Union Square was already taking place&nbsp;<a href=\"https:\/\/www.bizjournals.com\/sanfrancisco\/news\/2018\/02\/21\/retail-office-conversions-downtown-sf-space-crunch.html\" target=\"_blank\" rel=\"noreferrer noopener\">before the pandemic<\/a>.<\/p>\n\n\n\n<p>Sales growth had started to stall, retail vacancies had started to creep up, and the same conversations about e-commerce eating into brick-and-mortar sales were taking place.<\/p>\n\n\n\n<p>Rodriguez said the crisis in San Francisco\u2019s Downtown allowed the Union Square Alliance to lobby for planning code changes to \u201cright-size\u201d the amount of retail space in the neighborhood that she says were long overdue.&nbsp;<\/p>\n\n\n\n<p>\u201cPre-pandemic, we started seeing signs that the country was overbuilt for retail,\u201d Rodriguez said. \u201cI think it is clear that we had room to be other things, as well as retail.\u201d<\/p>\n\n\n\n<p><a href=\"https:\/\/sfgov.legistar.com\/LegislationDetail.aspx?ID=6123944&amp;GUID=86F0968C-D3BB-47EA-A390-EA811AE606BB&amp;Options=ID%7CText%7C&amp;Search=zoning\" target=\"_blank\" rel=\"noreferrer noopener\">Legislation co-sponsored<\/a>&nbsp;by the mayor and Board of Supervisors President Aaron Peskin put forward zoning changes to allow for more flexibility and uses in Union Square.&nbsp;<\/p>\n\n\n\n<p>Among other changes, their proposal opens up residential and office uses for floors above ground level. It also expands the definition of ground-floor retail to allow more tenants, such as entertainment businesses and flexible retail workspaces, to move in. The alliance\u2019s&nbsp;<a href=\"https:\/\/api.visitunionsquaresf.com\/app\/uploads\/2023\/03\/USqA_Strategic-Plan_Full-03.20.23.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">strategic plan<\/a>&nbsp;also includes the use of alleys for entertainment and programs, sanitation and safety improvements and investment in the expansion of luxury retail.<\/p>\n\n\n\n<p>Not everyone thinks it will be enough.&nbsp;<\/p>\n\n\n\n<p>\u201cThey should have done this five years ago,&#8221; Morgan said. &#8220;OK, great, we\u2019re allowing office? Well, look where the office market is right now.\u201d<\/p>\n\n\n\n<p>But signs of new life are emerging.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/sfstandard.com\/_next\/image\/?url=https%3A%2F%2Fsfstandard.com%2Fwp-content%2Fuploads%2F2023%2F05%2FINLINED08_UnionSqPrecipice.jpg&amp;w=3840&amp;q=75\" alt=\"\"\/><figcaption class=\"wp-element-caption\">Pedestrians walk on Powell Street near Union Square in San Francisco on May 13, 2023. | Jason Henry for The Standard<\/figcaption><\/figure>\n\n\n\n<p>At the former Macy\u2019s Men\u2019s Store at 100 Stockton St., high-end Japanese-Peruvian restaurant brand Chotto Matte is scheduled to open in the summer. On the fourth and fifth floors of the building, tech-oriented co-working and events space Convene is opening its first San Francisco location in October.&nbsp;<\/p>\n\n\n\n<p>\u201cIt takes our residents to come back Downtown to shop and eat. It takes people having their friends and relatives come here. It takes companies to get people back to work in their offices,\u201d Morgan said. \u201cEverybody needs to play a part in turning this around.\u201d<\/p>\n\n\n\n<p>Kevin Truong&nbsp;can be reached at&nbsp;<a href=\"mailto:kevin@sfstandard.com\">kevin@sfstandard.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Written by\u00a0Kevin Truong Published\u00a0May 18, 2023 \u2022 SFStandard.com A composite image shows scenes from San Francisco\u2019s Union Square including, from top left clockwise, shoppers exiting Fendi at 195 Grant Ave.; the Coco Republic\u2019s store-closing signage at 55 Stockton St.; a classic car passing BVLGARI at 200 Stockton St.; and a&#8230; <a class=\"continue-reading-link\" href=\"https:\/\/occupysf.net\/index.php\/2023\/05\/21\/san-franciscos-union-square-isnt-dying-its-transforming\/\"> Continue reading <span class=\"meta-nav\">&rarr; <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[622],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/26631"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=26631"}],"version-history":[{"count":1,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/26631\/revisions"}],"predecessor-version":[{"id":26632,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/26631\/revisions\/26632"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=26631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=26631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=26631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}