AI Datacenter Plan Floated for Boarded-Up San Francisco Mall

The mall, at the center of downtown renewal efforts, has been boarded up since January, after the COVID pandemic left vacant buildings, a worsening homelessness crisis and dwindling public transit—a combination many called a “doom loop.” Ideas floated for reopening it have included a multi-level sports complex, housing and more traditional retail. The AI datacenter proposal is another option, the Chronicle reported.

In emails uncovered by the Chronicle, KG Growth Partners asked San Francisco officials in June about datacenter permits on behalf of an unidentified potential buyer. Jared Krieger, the firm’s chief executive, confirmed the report but said the firm has not yet applied for permits “as we do not know if our client has won the bid to purchase.” He stressed that the proposed project would not be a “traditional server-based datacenter” but a “cohesive, community-based AI exhibit.”

The Chronicle reported the exhibit includes plans to turn the 350,000 sq ft property formerly leased by Bloomingdale’s into an “AI-controlled living space” with a rooftop garden. Krieger clarified by email that the “living space” plans do not include actual residences. He described the project as “a living exhibit of how AI technology can interact with community and public spaces,” with significant portions of the building remaining public facing. He said it would include “culture, design, retail, sports, and education spaces, along with a rooftop park.”

“As for concerns about foot traffic, this project is specifically designed to support the city’s vision,” Krieger said. “By dedicating the majority of the space to public use, culture, and retail, we are creating a destination that invites people downtown every day, directly supporting local businesses.”

The project may not have a straightforward path to approval. Backlash to datacenters has been rising across the US, and San Francisco—the center of the AI boom—is no different. In response to growing concerns, Mayor Daniel Lurie signed a measure last week putting a 45-day moratorium on data center development in San Francisco to allow the planning department time to research the impacts of data centers on communities where they are built. Lurie’s office did not respond to requests for comment regarding the Chronicle report. It is unclear how the potential downtown data center might be affected by the moratorium, as Krieger said it is “fundamentally different from a conventional datacenter.”

“We are proposing a regenerative urban energy center that recycles power and water, providing a clean energy supply and public benefits, rather than a sealed box that merely consumes from the grid,” he said.

Business owners downtown have long complained about the mall’s plight affecting the neighborhood ecosystem. The AI boom has brought money back to the Bay Area, and while the retail market in San Francisco at large has shown signs of recovery, businesses in the shadow of the shuttered mall say they are not seeing those effects.

Helen Nasser, who has owned SF Deli & Wine, a convenience store on the same block as the San Francisco Centre mall, for nearly 30 years, said she has watched nearby stores close since the pandemic and estimates business at her deli has plunged at least 60% since the mall closed. “I’m the last man standing,” she said. “I need the mall to come back or I’m not going to survive.”

Nasser started the deli with her husband, who died 20 years ago, and said she has tried everything—including repeatedly emailing the mayor’s office for help—to keep her business afloat. She was shocked at potential plans to open a datacenter in the mall building, saying it is the “worst thing [Lurie] could do for the neighborhood.” “We need the city to give back to the people—we need to utilize that space as somewhere families can go, where kids can go, and create something that brings foot traffic to the small businesses in the area,” she said. “If you put a datacenter there, you are going to kill us.”