Vacant Urban Retail Finds Second Life in AI Infrastructure Demand
KG Growth Partners, a Maryland-based financial advisory firm, filed a permit inquiry in June to convert a 350,000-square-foot portion of San Francisco’s shuttered Centre mall into an AI data center. The firm is working with an unnamed partner interested in the former Bloomingdale’s space. KG’s CEO Jared Kreiger told the San Francisco Chronicle the project would keep ground floors active and open while reserving upper floors for technical use, partnering with a known AI lab to create AI-controlled living space with features like rooftop gardens for nonprofit food programs.
The inquiry arrived just as Mayor Daniel Lurie signed a 45-day moratorium on new data center approvals, directing the planning department to study their impacts. San Francisco Centre closed in January 2026 after Nordstrom and Bloomingdale’s both exited in 2025, leaving high vacancy. Presidio Bay Ventures and Prado Group had planned a retail and commercial conversion but walked away in July over ground lease negotiations. Other proposals have included a soccer stadium and a multi-level sports complex with a members-only club.
The data center pitch reflects growing competition for urban real estate between traditional uses and AI infrastructure. Developers nationwide are repurposing vacant retail, industrial, and even office buildings to meet surging demand for computing capacity near population centers. Power and cooling requirements make these conversions complex, but the premium rents data center operators pay can exceed what struggling retail centers generate. San Francisco’s moratorium suggests cities are beginning to weigh infrastructure needs against neighborhood impacts as AI firms chase scarce urban sites.
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