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Half of shops have fled drug-ridden downtown San Francisco

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June 21, 2023 | 6:20 p.m

With crime rising and fewer shoppers on the city’s once bustling streets, major retailers are leaving their broken hearts in downtown San Francisco.

At least 22 big-name businesses have closed or announced plans to flee the Union Square area of ​​San Francisco since January 2022, including trendy retailers like Anthropologie, Banana Republic and Crate & Barrel, as well as the investment firm that owns two of the city’s largest hotels.

According to the San Francisco Standard, 47% of businesses in the area have closed since 2019.

Before Covid, around 203 retailers operated in and around Union Square; By May only 107 were left.

The commercial chaos is set to continue in the coming weeks, with brands including AT&T, Nordstrom, Coco Republic and Old Navy set to close more stores as early as July 1st.

The biggest casualty — the Westfield San Francisco Center — came last week when the mall’s operator cited “challenging” downtown conditions, including falling sales and occupancy rates, as the reason for the threatened churn.

In the past 18 months, 22 major retailers and hoteliers have fled downtown San Francisco. San Francisco commercial real estate woes are worsening as Westfield pulls out of its iconic Union Square mall, where sales have plummeted 35% since 2019.Getty Images

Westfield suspended payments on its $558 million loan for the 1.2 million-square-foot Market Street retail center and began transferring control this month, first reported in the San Francisco Chronicle.

The mall exit is the latest in a series of setbacks in the shopping district, where Nordstrom will close two stores this summer — an anchor in the mall and a Nordstrom Rack across the street — cutting nearly 400 jobs.

San Francisco’s only Crate & Barrel at 55 Stockton Street in Union Square closed in March 2022. It was subsequently replaced by a Coco Republic store, which is closing next month.David G McIntyre

Nordstrom officials made the announcements last month, blaming the “deteriorating situation” in San Francisco.

Westfield’s parent company, Paris-based Unibail-Rodamco-Westfield, said the closures demonstrated the “unsafe conditions for customers, retailers and employees” in the city center.

According to a May poll sponsored by the San Francisco Chamber of Commerce, about 77% of San Francisco residents believe the city is on the wrong track, and only 30% said they felt safe downtown at night.

Both Nordstrom and Nordstrom Rack are packing up their deals.David G McIntyre

Elsewhere in the area, the owner of two of the city’s largest hotels — the 1,921-room Hilton San Francisco Union Square and the 1,024-unit Parc 55 — announced plans last week to stop making mortgage payments.

Park Hotels & Resorts CEO Thomas Baltimore predicted a “dull and protracted” recovery in San Francisco and revealed plans to remove the hotels from its portfolio amid record office vacancies – 44.7% of pre-pandemic levels The Wall Street Journal reported Wednesday — and public safety concerns.

The Cinemark Century San Francisco, the Westfield Mall theater, closed after the final showing of “Transformers: Rise of the Beast” on June 15. According to an email from the company, the closure came as part of a “wide review of local business conditions,” SFGATE reported.

Some seasoned analysts believe the city’s ongoing commercial chaos may be just beginning.

Ken Woods, founder and chairman of Asset Preservation Advisors, said his team of municipal bond managers is backing out of San Francisco.

“We see, to some degree, an emperor without clothes,” Woods told the Wall Street Journal on Tuesday.

A Whole Foods location closed in April after just 14 months of operations.Getty Images

The grocery store was closed after syringes and hoses were found in the bathroom, the San Francisco Standard reported.David G McIntyre

And the city struggles with several downtown “open-air” drug markets, including in the Tenderloin neighborhood.

The group Mothers Against Drug Addiction & Deaths put up a giant billboard in Union Square last year that read, “Famous around the world for our brains, our beauty and now dirt cheap fentanyl.”

The rise in fatal drug overdoses in the city is now reaching a record 800 deaths, the San Francisco Standard reported Tuesday.

Westfield has suspended loan payments for its San Francisco Center mall.David G McIntyre

Police data shows that overall crime near the San Francisco Center mall increased slightly in 2023 compared to the previous year. Reported serious crime in the tenderloin increased by 1.4%, while theft increased by 5.6%.

Downtown Saks Off 5th has implemented a one-in-one-out system to better patrol for thieves, according to the Daily Mail, while a Folsom Street Target location has been keeping rows and rows of merchandise under wraps.

“Mothers Against Drug Addiction and Death” put up this billboard in Union Square.@ABCLiz/Twitter

San Francisco Mayor London Breed said the mall’s exit — where dozens of retailers including Godiva Chocolatier, Clarks, Kay Jewelers, Hugo Boss and Tiffany & Co. have already packed up — came as no surprise. The parent company announced plans last year to sell all of its malls in the United States.

Shops at the mall remain open as law enforcement officers, in coordination with Westfield security personnel, patrol the facility.

Parc 55 is one of two luxury Hilton properties to leave the area.David G McIntyre

A Whole Foods market in downtown San Francisco abruptly closed in April after being open for little more than a year. Widespread drug use and rising crime near the 6,000-square-foot store in the city’s mid-market area prompted the closure after syringes and pipes were found in the bathroom, the San Francisco Standard reported.

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