Few cities across the U.S. were as battered by the pandemic as San Francisco. Its once vibrant downtown corridor has undergone a brutal transformation over the past few years.
Once-bustling shopping districts and tourist hubs like Market Street and Union Square are now dotted with boarded-up windows and “For Lease” signs. Fewer visitors and lots more unhoused people stroll the sidewalks.
Legacy retailers have been fleeing for years.
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In 2023, Nordstrom closed its 312,000-square-foot flagship store in the Westfield San Francisco Centre on Market Street. Now, the retailer is looking to return — albeit in a very different format and new location. The Seattle-based company has applied for city approval to open a Nordstrom Local store in a vacant storefront at 1919 Fillmore Street, in the city’s Pacific Heights neighborhood.
Fillmore Street is still bustling, with fewer empty storefronts and a more vibrant restaurant and bar scene than you’ll find in many other parts of the city.
There are dozens of upscale boutiques, but no department stores.
In this environment, you’d think the return of an iconic brand like Nordstrom, even a Nordstrom Local, the chain’s small, modern format, would be greeted as a positive sign.
But in San Francisco, things are rarely that simple.
Nordstrom’s flagship San Francisco store on Market Street closed in 2023.
Image source: Sathapornnanont/Shutterstock
Nordstrom has a NIMBY problem
Nordstrom Local is not a traditional retail store, let alone a department store. It’s a 1,648-square-foot concept space offering online order pickups, returns, tailoring, and personal styling. Picture a showroom model that bridges e-commerce with typical retail.
There are just six Nordstrom Local locations nationwide, all in Los Angeles and New York. Bringing one to San Francisco would mark a small, but symbolic, step toward revitalizing the city’s troubled retail sector.
At a June 5 meeting, the San Francisco Planning Commission will weigh whether Nordstrom should receive “conditional-use” authorization to open the Fillmore Street location. While the storefront has been vacant since before the pandemic, city zoning laws restrict what’s known as “formula retail” — chain stores with 11 or more locations — from opening without a lengthy and costly permitting process.
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Some local residents oppose Nordstrom’s potential arrival. They argue that the company’s presence, even in its stripped-down Local format, doesn’t align with the community’s character.
“This street has historically been home to local retailers such as Mio, Mudpie, Sue Fisher King, and Cielo,” wrote one resident in a letter to the commission, according to an opinion article in The San Francisco Standard. Another suggested Nordstrom consider Laurel Village, a nearby shopping area with more parking, rather than bringing additional traffic and potential double-parking to Fillmore.
It’s a reaction that might seem surprising in a city desperate to fill empty storefronts and bring back foot traffic.
Formula retail laws are a double-edged sword
San Francisco’s formula retail ordinance, first passed in 2006, requires conditional-use permits for businesses with 11 or more global locations. While intended to protect local merchants, the rule has become a barrier for many national brands that could otherwise anchor and reinvigorate struggling commercial corridors.
According to a recent study by Maven Commercial, brands that pursue the permitting process often wait more than seven months and spend at least $25,000 in legal and consulting fees — a high barrier for even well-resourced companies. That’s a win for land-use attorneys, but bad news for landlords, city tax coffers, and job seekers.
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Nordstrom’s proposal highlights this contradiction. A well-regarded brand wants to invest in San Francisco, fill a vacant space, and offer a modern retail concept — yet city policy may block it entirely.
Some city leaders are beginning to question whether these rules still make sense.
Supervisor Myrna Melgar, a former Planning Commission president, is drafting legislation that would ease restrictions for big-name retailers seeking to move into spaces previously occupied by another chain. The idea: If a CVS leaves and a Target Express wants in, why make it so hard?
Related: Nordstrom makes change sure to anger customers
“We’re making it difficult for the exact businesses we want to attract,” Melgar told The San Francisco Standard. “These stores often act as anchors that bring people into neighborhoods.”
Mayor Daniel Lurie, who campaigned on making San Francisco “open for business,” hasn’t commented on the Nordstrom Local proposal specifically, but his administration is backing broader permitting reforms, also per The San Francisco Standard. One such effort, PermitSF, is reviewing how the city approves all kinds of business activity, potentially including changes to the formula retail ordinance.
Until then, Nordstrom’s fate on Fillmore Street remains uncertain.
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