San Francisco Halts Data Center Bids Amid Mall Proposal

The city has enacted an interim zoning moratorium as developers eye the former San Francisco Centre site for hardware use.

Updated on Oct. 21, 2026 in Data Centers

Isometric editorial illustration of a server stack with cooling pipes, symbolizing urban data center infrastructure policy. — San Francisco officials have imposed a 45-day moratorium on new data center project approvals to evaluate urban infrastructure and zoning impacts. AI Illustration. Upload story photo >

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San Francisco officials have introduced a 45-day moratorium on new data center approvals to study potential urban impacts. The measure arrives as KG Growth Partners pursues a bid to convert the former San Francisco Centre at 845 Market Street into a computing hardware facility.

Why it matters

The city paused approvals to modernize 2001-era zoning codes regarding energy and water use. Developers face additional complexity from a 75,675-square-foot land lease held by the San Francisco Unified School District that remains in effect through 2043.

Data centers accounted for 4.4% of U.S. electricity consumption in 2023, with the Lawrence Berkeley National Laboratory projecting this will grow to between 6.7% and 12% by 2028.

The players

Daniel Lurie

He is the Mayor of San Francisco who signed the interim zoning moratorium on new data centers.

KG Growth Partners

This investment group submitted a bid to convert the San Francisco Centre into a computing hardware facility.

San Francisco Unified School District

This educational entity holds a long-term lease on 75,675 square feet of land underneath the San Francisco Centre.

Lawrence Berkeley National Laboratory

This U.S. Department of Energy research facility projects future electricity consumption rates for data centers.

The details

Developers are attempting to brand the proposed project as a regenerative urban energy center. The city is using the current pause to specifically analyze how high-intensity computing facilities might affect local infrastructure and neighborhoods.

2001: Original data center codes were written.
2023: Data centers consumed 4.4% of U.S. electricity.
July 2026: The Prado Group and Presidio Bay Ventures dropped a previous purchase.
October 6, 2026: Supervisors approved the moratorium.
October 16, 2026: Mayor Daniel Lurie signed the moratorium.

The Tech Race

The push to repurpose retail spaces into high-density computing infrastructure highlights a shift in urban utility requirements. This trend replaces legacy commercial spaces with facilities designed to meet the ballooning power demands of modern hardware deployments.

Local residents and businesses may notice changes in neighborhood zoning requirements as the city re-evaluates the energy and water load of these facilities. This pause ensures that any new high-density computing projects undergo stricter scrutiny regarding their impact on local utility availability.

The takeaway

Urban centers are increasingly forced to balance the high power needs of AI infrastructure with existing community land use agreements. Developers must navigate complex legacy leases and new regulatory frameworks if they hope to repurpose failing retail assets.

What happens next

The 45-day interim zoning moratorium signed by the Mayor will expire in late November 2026, forcing a decision on the future of data center regulations in the city.