KG Growth Partners Eyes San Francisco Centre for AI Hub

The proposed data center project arrives as city officials weigh a 45-day moratorium on new facility approvals.

Updated on Oct. 19, 2026 in Data Centers

KG Growth Partners Eyes San Francisco Centre for AI Hub

Live Poll

Should vacant retail malls in your area be converted into data centers?

In June 2026, KG Growth Partners inquired about a permit to convert 350,000 square feet of the vacant San Francisco Centre mall into an AI data center. Following the inquiry, Mayor Daniel Lurie implemented a 45-day moratorium on new data center approvals in the city.

Why it matters

The proposal highlights efforts to repurpose massive downtown properties that became vacant after the departure of major anchor retailers. City leaders are balancing the need for economic revitalization against concerns regarding the rapid expansion of technical infrastructure.

The proposed project spans 350,000 square feet of mall space, utilizing AI-managed resource systems and rooftop agricultural facilities. The design separates operations by reserving ground-level floors for public use and upper tiers for data equipment.

The players

Daniel Lurie

He serves as the Mayor of San Francisco and is responsible for implementing the current moratorium on data center developments.

KG Growth Partners

This investment firm submitted the initial permit inquiry to transform a portion of the San Francisco Centre into an AI-focused facility.

The details

Developers aim to reuse the mall space to address high downtown vacancy rates caused by the closure of major tenants like Nordstrom and Bloomingdale's. While KG Growth Partners seeks to host an AI data center, other groups such as Urban Land Development and TMG Partners have suggested converting the site into a sports complex.

Nordstrom and Bloomingdale's closed their respective mall locations in 2025.
The San Francisco Centre mall officially closed in January 2026.
KG Growth Partners requested a permit for the data center in June 2026.
A purchase agreement for the mall was terminated by developers in July 2026.
Mayor Daniel Lurie signed a 45-day moratorium on new data centers in October 2026.

The Tech Race

This project reflects a broader trend of repurposing vacant retail real estate to support the massive infrastructure demands of AI development. It positions San Francisco as a testing ground for how municipal governments regulate the footprint of technical facilities in dense urban centers.

The potential conversion of the mall could significantly alter downtown foot traffic patterns and local land use for residents and shoppers. The city-wide moratorium effectively pauses these plans, providing a window for officials to set standards that may dictate how such facilities integrate with neighborhood public spaces.

The takeaway

The struggle to fill large vacant retail spaces illustrates the intense competition between tech-driven industrial use and community-focused redevelopment goals. Residents should watch for upcoming policy updates that will determine if commercial real estate favors data infrastructure or public recreation.