Macy’s Partners with TMG to Reimagine Union Square Store

Macy’s has entered into a partnership with TMG Partners, a prominent real estate development firm based in San Francisco, to explore future possibilities for its Union Square department store. This move follows Macy’s announcement last year about plans to close the flagship location as part of a broader strategy to streamline its operations across the country. As of now, the store remains operational, continuing to serve customers with a diverse selection of merchandise, including apparel, beauty products, and home goods.

The collaboration is described as being in its early stages, focusing on a strategic assessment of the 650,000 square-foot property. According to a press release issued by Macy’s, the partnership aims to explore adaptive reuse options that could cater to the evolving needs of office workers, residents, and visitors in San Francisco. The objectives include enhancing the store’s appeal and integrating it within the local community.

Michael Covarrubias, the chairman and CEO of TMG Partners, noted that discussions between the two companies have been ongoing for about a year. TMG was brought on board to leverage its extensive experience with historic properties, such as The Landmark at One Market, a significant renovation project in San Francisco. Covarrubias emphasized the importance of the Union Square location, stating, “Macy’s and TMG are doing it together because it’s their building, and they feel the importance of what it means to San Francisco.”

Potential uses for the Union Square store could range from retail and restaurants to housing and experiential attractions aimed at drawing various visitors. Covarrubias mentioned a successful technology-rich attraction in Japan as an example of what could be implemented, suggesting that the goal is to create an environment that captivates people from both near and far.

While Macy’s continues its operations, it is also hosting its annual holiday events in Union Square. This includes the popular “Great Tree” display, supported by the cryptocurrency firm Ripple, and the Holiday Windows pet-adoption attraction in collaboration with the San Francisco Society for the Prevention of Cruelty to Animals. Additionally, the ice skating rink in the plaza is set to open for the winter season.

TMG Partners is also pursuing the acquisition of the Metreon shopping center, located near Union Square. Covarrubias highlighted that this venue has strong anchor tenants like the AMC movie theater and Target, which are performing well. He believes that enhancing the Metreon’s event space and other features could contribute positively to the area’s revitalization.

San Francisco’s downtown has faced significant economic challenges since the onset of the COVID-19 pandemic, including shifts in shopping habits and high office vacancy rates linked to the rise of remote work. Macy’s previously closed its Bloomingdale’s store just a few blocks away at the San Francisco Centre mall. In contrast, some local businesses, such as a patisserie in the square, have reported success, indicating a mixed recovery landscape.

Covarrubias expressed optimism about the potential for further property acquisitions as the city works towards revitalization. He noted the importance of legislative support, referencing a state law passed last year that allows San Francisco to create a downtown financing district to facilitate tax incentives for converting underutilized office spaces into residential units.

He stated, “We like the concept of more housing downtown,” expressing confidence in the city’s willingness to support development projects. Covarrubias remarked on the positive attitude of city officials, saying, “A city can make a project infeasible by dragging it down, or it can make it feasible by helping it up. And The City is not only motivated, but are showing that they want these projects to get done.”

As Macy’s and TMG Partners begin their collaboration, the future of the Union Square store remains uncertain yet filled with potential, reflecting broader trends in urban development and retail adaptation in a post-pandemic world.