Macy’s Recruits TMG for Union Square Flagship Redevelopment

One of San Francisco’s most prominent developers has been tasked with reimagining Macy’s Union Square flagship.

Macy’s, Incorporated, which also owns Bloomingdale’s, formed a joint venture with TMG Partners, headed by veteran developer Michael Covarrubias, to explore a redevelopment of the retailer’s 600,000-square-foot store at 170 O’Farrell Street, the San Francisco Chronicle reported. Macy’s announced the closure of the store last year, but it has remained open as a buyer of the site has yet to emerge.

As part of the venture, TMG will work with Macy’s to study potential new uses for the property, including adaptive reuse and upgrades that would cater to downtown’s workers, residents and visitors. The discussions are still in their early stages, and no closing date for the store has been set.

The partnership with TMG is “part of Macy’s ongoing strategy to evaluate compelling options for its real estate portfolio,” Macy’s said in a statement. Details on potential plans and next steps for the Union Square site are forthcoming, according to the Chronicle.

“We are wildly excited,” Covarrubias, a developer with four decades of real estate experience, said about the deal. He noted that his team sees great potential “for that building, in that place, at this time,” though Macy’s and TMG are still figuring out the “right choice of uses” for the property.

“There are a lot of creative things that we have been thinking about,” Covarrubias said, adding, “Housing is important for downtown.” Also, TMG could take advantage of the site’s current zoning and proceed with commercial uses like offices, laboratories and institutional space, retail, light industrial, arts and entertainment.

Union Square has seen several stores close their doors since the pandemic, but the area could be in the midst of a comeback. Uniqlo, which vacated a large space there during the pandemic, is moving back into a new spot nearby. Zara is gearing up to open a new flagship down the street from its previously closed location.

TMG’s efforts with the Macy’s complex aren’t TMG’s only project aiming to breathe new life into downtown. The developer is in the process of buying the Metreon mall, and in September, the San Francisco-based firm purchased a historic office building at 149 New Montgomery Street that it plans to revamp for tech and artificial intelligence tenants.

— Chris Malone Méndez