KG Growth Partners explores AI data-center conversion for San Francisco’s shuttered mall

San Francisco’s shuttered Centre mall is drawing interest for an AI data center, with public space below and technical operations upstairs. KG Growth Partners has confirmed that an unidentified client is exploring a conversion. But the concept remains preliminary: no purchase is confirmed, and the city has paused approvals for new data centers for 45 days.

Public floors below, technical space above

The proposal surfaced through a June permitting inquiry obtained by the San Francisco Chronicle. KG construction consultant Trenton Hartlaub asked the Department of Building Inspection what permits an AI data center would require at 845 Market St. That address covers the roughly 350,000-square-foot former Bloomingdale’s portion of the mall, rather than the entire complex.

KG CEO Jared Krieger described a conversion that keeps ground-floor and other public-facing areas open, while assigning upper floors and back-of-house space to technical uses. He told the Chronicle that the client was interested in working with an unnamed AI lab. His description was of a mixed-use building, not a conventional suburban server farm.

The potential purchase may extend beyond the original inquiry. In a subsequent confirmation to NBC Bay Area, KG described a confidential client exploring acquisition of the entire mall for a data center and AI lab. The parcel-specific inquiry and broader purchase interest describe different scopes; neither amounts to a completed transaction.

An inquiry is not permission to build

No application to build a data center had been filed as of the Friday preceding the Chronicle’s October 19 report. Mayor Daniel Lurie told NBC he was unaware of the proposal and said the building remained for sale. He emphasized his hope for a buyer who would bring people downtown, without endorsing this concept.

Lurie signed the 45-day moratorium the previous week, giving officials time to study data-center impacts and consider regulations. The pause blocks city approval of new facilities. Separately, the proposed conversion faces a basic engineering question: whether the property can obtain the electrical power and other resources a data center would need.

San Francisco’s existing zoning category also reaches beyond AI computing. The Chronicle reported that its “internet service exchanges” definition includes telecom, fiber and cable exchanges. Planning Director Sarah Dennis Phillips said that broad definition, paired with a required conditional-use permit, lets officials scrutinize facilities combining data-center functions with other uses.

Downtown San Francisco has a vacancy problem in exactly this building type, and the premise is that reuse with a mixed public and technical program does more for the block than a dark box does.

Jared Krieger, KG Growth Partners CEO, in an email to the San Francisco Chronicle

A difficult building to reuse

The mall has been closed and boarded up since late January. Its deep interior spaces have little natural light, making housing conversion difficult. Split ownership further complicates a redevelopment: Macy’s owns the former Bloomingdale’s parcel separately from the rest of the complex, and part of the property sits on leased school-district land.

Those complications have already derailed another sale. Presidio Bay Ventures and Prado Group walked away in July after unsuccessful talks to renegotiate the ground lease. The lease was subsequently extended through 2082 with lower payments to help facilitate a sale, but the mall returned to the market.

KG is an adviser rather than the prospective owner or operator. Krieger said the firm does not buy properties or operate data centers; it helps projects secure grants, sponsorships and institutional or philanthropic partnerships. Any conventional investment financing, he said, would be arranged separately by the owner or buyer.