San Francisco's shuttered downtown mall is being eyed for an AI data center

Maryland-based KG Growth Partners quietly asked San Francisco officials about permitting to convert 845 Market St., the 350,000-square-foot former Bloomingdale’s portion of the shuttered San Francisco Centre Mall, into an AI data center. No formal application has been filed, but the inquiry arrived as Mayor Daniel Lurie imposed a 45-day moratorium on new data centers amid growing local and national concern over their heavy power and water demands. KG frames the idea as a conversion that retains active, public-facing ground floors while placing technical operations upstairs and says it is exploring a partnership with an unnamed AI lab to create an “AI-controlled living space” that would, for example, dedicate rooftop garden resources to nonprofits. KG insists the plan would not be a conventional suburban server farm and markets the concept as “AI-aligned, net positive” infrastructure.

Significant hurdles remain: the mall’s deep, windowless interiors make housing conversion difficult, ownership is split with a long-term ground lease held by the San Francisco Unified School District, and earlier buyers walked away after due diligence. A reported potential buyer, B3 Investors, and other suitors value the Bloomingdale’s parcel near $40 million, but financing, purchase completion, and the ability to secure sufficient electrical capacity are unresolved. City officials could entertain reuse that keeps street-level activity, yet a data center between Market and Mission would clash with downtown recovery goals; alternatives such as sports venues or R&D labs for “physical AI,” which also require robust power, have been floated.