A slew of companies have indicated in the past few months that they will exit locations in San Francisco’s downtown area, moves AT&T, Westfield and Nordstrom recently said they would also make.
Reports of AT&T’s closure of its San Francisco flagship, located at 1 Powell Street in the Union Square area, first came about late last week. That will take place in August, with the workers getting "offered jobs at one of the many other retail locations in the city," an AT&T spokesperson told FOX Business on Monday.
The AT&T spokesperson said consumer shopping habits were changing, something that warranted "serving customers where they are through the right mix of retail stores, digital channels and our phone-based care team."
AT&T is "proud of [its] continued presence in the community" via retail stores, including two not far from the soon-to-close flagship, and its "local investment in world-class connectivity with our 5G and fiber networks," according to the spokesperson.
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In the same month, Cinemark Holdings confirmed the doors of its Century San Francisco Centre 9 and XD movie theater in the Westfield San Francisco Centre mall would shut and stay that way permanently "shortly before the conclusion of its lease term." It chose to do so after a "comprehensive review of local business conditions," a Cinemark spokesperson said.
The Westfield San Francisco Centre itself will see turnover as well. Westfield previously confirmed to FOX Business that it and its partner, Brookfield Properties, had pumped the brakes on payments on a $558 million loan for the mall.
The company said the decision to "begin the process to transfer management of the shopping center to our lender to allow them to appoint a receiver to operate the property going forward" came due to "challenging operating conditions" in the area that had impacted sales, occupancy and foot traffic.
This week, 2024 presidential contender Florida Gov. Ron DeSantis visited San Francisco and noted the city's problems in a public video.
"We saw people defecating on the street. We saw people using heroin, we saw people smoking crack cocaine," DeSantis said. "The city is not vibrant anymore. It’s really collapsed because of leftist policies, and these policies have caused people to flee this area. They don’t prosecute criminals like they do in most parts of the country, and the wreckage is really sad to see."
In an interview with KTVU, San Francisco Mayor London Breem pushed back on DeSantis but acknowledged the issues, per SFIST.
In early May, Nordstrom revealed it would be closing its store in the Westfield San Francisco Centre and a Nordstrom Rack location, with the former’s operations ending in August and the latter’s in July. Chief Stores Officer Jamie Nordstrom pointed to the "dynamics" of downtown having "changed dramatically over the past several years," impacting foot traffic and operations, in a message to employees.
Another retailer, Gap Inc.-owned Old Navy, has plans to close a store in downtown San Francisco, too, this one on Market Street. A spokesperson previously told FOX Business that "the way we leverage flagship locations has changed" since the store opened and that it was exploring new downtown locations that "will better serve the needs of the business and our customers."
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San Francisco residents have also seen a flagship location for T-Mobile in the downtown area get shut down by the company.
A T-Mobile spokesperson told Fox News Digital in May that the comany "recently reshaped our nationwide retail strategy to better take care of customers," going on to say that "includes plans we’ve made in this area and a few others to move away from Signature Store format in some cities to instead serve customers through a nearby Experience store."
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Departures from downtown San Francisco haven’t been entirely limited to retail locations, with Park Hotels & Resorts recently saying it would stop paying its loan on two hotels, the Hilton San Francisco Union Square and the Parc 55 San Francisco, something that was "expected to result in ultimate removal of these hotels from [the company’s] portfolio," according to a press release.
CEO Thomas Baltimore said in a statement that his company "believe[s] San Francisco’s path to recovery remains clouded and elongated by major challenges." The challenges he mentioned include "record high office vacancy; concerns over street conditions; lower return to office than peer cities; and a weaker than expected citywide convention calendar through 2027."
FOX Business reached out to Breed’s office for comment.
Data published by the San Francisco Office of Economic Workforce & Development showed weekly office attendance in San Francisco for the week of June 7 averaged 45%, a level it has been hovering around for some time. For the quarter ending in March, the city’s office space vacancy rate came in at 26%.
Meanwhile, the total number of crimes reported in the city from the start of 2023 to June 18 was nearly 22,500, a 5.1% decrease compared to the same time frame in 2022, according to a San Francisco Police Department dashboard. Larceny theft, burglary, assault, rape and human trafficking numbers have gone down, whereas homicide, robbery, motor vehicle theft and arson have risen, the data showed.
Breck Dumas, Louis Casiano and Emma Colton contributed to this report.
