Downtown San Francisco is facing a wave of closures as major retailers and hotels abandon the area. Since January 2022, 22 well-known businesses, including Anthropologie, Banana Republic, and Crate & Barrel, have either closed or announced plans to relocate away from Union Square. This exodus has been fueled by a rise in crime and a decline in shoppers. According to the San Francisco Standard, nearly half of the businesses in the area have closed since 2019. The situation is expected to worsen, with AT&T, Nordstrom, Coco Republic, and Old Navy set to close more stores starting from July 1.
The Westfield San Francisco Centre, a major casualty of the retail decline, recently announced its departure due to “challenging” conditions downtown, including declining sales and occupancy rates. Over the past 18 months, a total of 22 major retailers and hoteliers have fled San Francisco’s downtown area. Additionally, Westfield has stopped making payments on its $558 million loan for the Market Street retail hub and has begun transferring control of the property. This setback comes as Nordstrom prepares to close two stores in the mall, resulting in nearly 400 job losses.
The closure of these businesses is a result of the deteriorating situation in San Francisco, which has prompted concerns over safety and customer experience. A survey conducted by the San Francisco Chamber of Commerce found that 77% of residents believe the city is heading in the wrong direction, and only 30% feel safe downtown at night. The owner of two of the city’s largest hotels, Hilton San Francisco Union Square and Parc 55, also announced plans to stop making mortgage payments due to the record office vacancy and public safety concerns.
Even the entertainment industry has been affected, with the closure of the Cinemark Century San Francisco theater. The decision was made following a review of local business conditions. Analysts predict that this commercial chaos is just the beginning, with investors like Ken Woods, founder of Asset Preservation Advisors, backing away from San Francisco.
The city’s crime rate has been on the rise, particularly around the San Francisco Centre mall and the Tenderloin district, where open-air drug markets have become prevalent. Mothers Against Drug Addiction & Deaths erected a billboard in Union Square highlighting the city’s struggle with drug addiction and overdoses. The reported number of major felonies in the Tenderloin has increased, along with cases of larceny theft.
Although the departure of the Westfield mall was not a surprise, San Francisco Mayor London Breed acknowledges the impact it will have on the city. The mall’s parent company had already planned to sell all of its malls in the United States. Currently, stores in the mall remain open, with increased security measures in place.
In addition to the retail closures, a Whole Foods Market downtown closed abruptly due to widespread drug use and rising crime in the area. The discovery of syringes and pipes in the store’s bathroom was the final straw leading to its closure.
The situation in San Francisco highlights the city’s struggle with crime, drug addiction, and declining business conditions. It poses significant challenges for the future of retail and tourism in the downtown area.
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