Is Union Square in bloom or a wilting flower?

Union Square gleamed on Saturday as, in its annual springtime tradition, thousands of people crowded into an hourslong line for a five-minute chance to wade through a manicured tulip garden meticulously arranged in the plaza. 

The celebration featured sparkling wine, tarts topped with edible flowers, and the promise of building bouquets from the 80,000 tulips spanning a brilliant spectrum of reds, yellows, oranges, and magentas. Drawn by viral social media posts, people in line came from all over the Bay to take part in the spectacle, and the square hummed with energy and sunny optimism about the city. 

But by the next day, when the vibrant blooms and snaking procession had dissipated, the brightest colors around came from the dozens of “For Lease” signs adorning empty storefronts up and down Powell and Stockton Street. 

There’s been a spate of good news for Union Square recently, including a handful of openings. Perpetually upbeat real estate agents report an influx of new lease interest. 

But the area still seems stubbornly stuck in its retail doldrums, with the latest data on vacancy rates hovering around the same levels as in 2022, with flagship tenants on their way out. Plus, the hollowed-out San Francisco Centre mall just a few blocks away functions as an enthusiasm sink due to its continuing dribble of bad news. 

Is the area really in bloom? Or does its near future show signs of wilting? 

One of the area’s biggest advocates insists that the toughest times are firmly in the rearview mirror. To be fair, it’s kind of her job. 

“We’re on the rise — new things are coming,” said Union Square Alliance CEO Marisa Rodriguez from an event space at the Westin St. Francis overlooking the festivities. She likened the successful tulip-palooza to a harbinger of the area’s upward trajectory: “This is just a symbol of our resurgence. We’re in a transition time, but it’s exciting. There’s renewal, rebirth, and growth.” 

Julie Taylor, a vice president at Colliers, has one unusual metric to measure growing interest in Union Square: her step counter. 

Recently, Taylor has been flitting between showings in the area, fielding interest from both Bay Area businesses and new-to-market or “out-of-state prospects.” That means regularly logging six to eight miles a day. 

“I’m getting a huge amount of inbound interest,” she said. “It’s like someone just turned on a light switch.”

Those interested outsiders are coming with a brighter perception of the city, she added, thanks in part to SF’s new mayor. On a more concrete level, showings are less awkward when there’s not someone sleeping next to (or in) the doorway she’s inviting someone to step through. “There’s been a significant improvement — like, all caps — in the conditions of the street,” she said. 

As news of the city’s struggles commonly made the news, some brands had “put San Francisco at the back of the shelf” for the past several years, she said. “Now, we’re being asked to the party again, which is great.”

For the first time in a while, it takes more than two seconds to tick through Union Square openings. Shoe Palace debuted in February, followed by luxe reseller Fashionphile in March. The former’s grand opening elicited the most hardcore fans to line up two days before in the hopes of scoring hard-to-nab sneakers, according to manager Chris Better.

B. Patisserie replaced Miller & Luxe, the Nintendo Store will open to much fanfare in May, and launch plans are in place for luxury menswear shop John Varvatos, photography haven Camera West, and a second Ross. Meanwhile, Oakland-based retailer Taylor Jay launched a cozy storefront late last year through the city’s Vacant to Vibrant program, which aims for more Union Square locations later this spring. 

Colliers’ Taylor hinted she’s working on new deals and is heavily scheduled with tours, but can’t name names yet.

Similarly, Alex Sagues from CBRE said he’s crossing his fingers that the neighborhood is nearing the tipping point for retail’s “herd mentality.” 

“I can think of four or five retailers that we work with that are all on the sidelines, ready to jump into Union Square, but they don’t want to be some of the first,” Sagues said. He cites a call earlier in the day with a “big, global retail brand” that asked to set up a tour in Union Square: “That’s the first time in five years they’ve said that.”

Then there’s the not-so-good news. 

Lingering over the neighborhood is the specter of Macy’s impending exit, coupled with reports that Saks Fifth Avenue, which adopted an appointment-only model last summer, could leave at the end of its lease. And that’s without mentioning the San Francisco Centre mall, which has dozens of empty stalls and a soon-to-shutter Bloomingdale’s that’s depressingly littered with naked mannequins selling for as little as $20 a pop.

Consensus is that the next iteration of Union Square will look different from its past, i.e. less department stores and more curated, smaller shops. 

What to do with all that yawning space? There’s no single answer, Sagues said, but it could be subdivided into smaller stores or transformed into experiential concepts, like San Francisco’s version of Meow Wolf’s Omega Mart or Japan’s TeamLab spaces. There are other models, too, like Netflix’s immersive experiences or the interactive “museum” concept, he said, like the made-for-Instagram Museum of Ice Cream or Color Factory.

Giving storefronts to small brands or artists has also shown signs of success. Taylor Jay, the founder of her eponymous shop, has seen steady sales and foot traffic from nearby hotel guests (which she’s helped along by handing out discount cards to concierge desks). 

She’s proud to be Vacant to Vibrant’s “guinea pig” in the area, but also looks forward to when other shops will join her Union Square cohort. 

Meanwhile, William O’Daly at Avison Young is on a mission to help furnish empty storefronts with art exhibitions, like a show by Karen Seneferu he arranged at 231 Grant St. The concept replaces the markedly empty windows at street-level.

“We’re in talks with two other locations right now, with three different artist groups,” he said. Making these partnerships happen in Union Square “provides this total change of pace,” and contributes to the “renaissance of art downtown.” 

He credits the city for bringing a wide swathe of free programming to the Square, like music, crafts, and exercise classes, meant to attract local visitors outside of special events.

On Sunday, a free juggling tutorial and an assortment of toys for kids elicited squeals of delight, while people sunbathed or chatted beside carts with games and books for the public. The company handling the programming, Biederman Redevelopment Ventures, often gets tapped to improve “problematic spaces” across the country like Bryant Park in New York and Exposition Park in Los Angeles, according to project manager Mark Hennon. 

O’Daly, who focuses on office leasing, has tracked an uptick in transactions and rates in the area, where he represents six buildings. Tech startups seem to have renewed interest in Union Square, and the “really tough market” of the last five years seems to be loosening its grip on the city.

The real estate cycle also continues apace. Lenders foreclosed on two buildings at 168 Sutter St. and 222 Kearny St. last year, with an auction scheduled for April 10. An appraisal of the properties marked a 75% decline in value, which could mean lower rents for tenants once a new buyer takes control. 

To help usher in Union Square’s comeback, the city also needs it to make it easier for new businesses to move in, Colliers’ Taylor said. Mayor Lurie has vowed to simplify the city’s draconian permitting process, though it’s still too soon to measure results. Allowing cars back on Market Street would also automatically make the area feel more active, she said. 

Unsurprisingly, she and other agents also mentioned the importance of safety (or at least the perception of it). California’s embrace of harsher punishment for retail theft was a step in the right direction for brands, Sagues said, but retailers still wish the square had more of a regular police presence. (On Monday, an attempted break-in spotted by an on-patrol officer left Chanel’s storefront damaged.)

Part of the focus behind the children’s programming is to transform Union Square into a place where parents feel comfortable that “it’s safe enough to have their kids there,” according to Hennon. 

For Rodriguez, one of the most annoying recent deterrents to Union Square’s revival is the litany of press when another store closes, without enough attention paid to the building momentum. 

“The concern today is that locals and Bay Area residents think that the stores are closed, that Union Square is closed. But it’s not. We’re very much open for business and ready to receive you,” she said. “You’ll be pleasantly surprised. So that’s the message: Come back. Come support us.” 

Reporting contributed by Sara Deseran