In June, KG construction consultant Trenton Hartlaub asked the Department of Building Inspection what permits would be needed for an AI data center at 845 Market St. The address covers about 350,000 square feet formerly occupied by Bloomingdale’s. No permit application for a data center had been filed as of Oct. 16, and KG has not identified its client.

KG chief executive Jared Krieger said the concept would differ from a conventional server campus. He described a plan that would keep ground-floor and other public-facing areas active, with technical uses on upper floors and in back-of-house space. In a subsequent response, Krieger said the client was interested in developing the mall, including Bloomingdale’s, into what he called an “AI-controlled living space,” with a rooftop garden whose produce would be donated to a nonprofit serving people facing food insecurity.

The proposal is at an early stage, and significant questions remain, including whether the prospective buyer can complete a purchase and whether the site has the electrical capacity and other resources a data-intensive operation would require. Data centers have drawn opposition nationally over their electricity and water use and effects on nearby communities.

San Francisco Mayor Daniel Lurie last week signed a 45-day moratorium on approvals for new data centers, giving city staff time to assess their impacts and consider rules. The pause comes as the city, a center of AI development, weighs how to accommodate the industry while addressing concerns about infrastructure and community effects.

The mall, between Market and Mission streets near Union Square, has been closed since January after a wave of store departures. Its cavernous interior, limited natural light, divided ownership and complicated ground lease have made redevelopment difficult. A deal by developers Presidio Bay Ventures and Prado Group to buy the complex collapsed in July after negotiations over the lease with the San Francisco Unified School District failed. The lease was later extended through 2082 with reduced payments, and the property returned to the market.

The former Bloomingdale’s space is owned separately by Macy’s. Real estate sources familiar with negotiations have valued a possible sale at about $40 million, but Macy’s and Bloomingdale’s have not confirmed a buyer or said whether a transaction has closed. B3 Investors, a Texas-based firm’s real estate arm, was reported to be nearing a deal for the space and has also bid on the rest of San Francisco Centre. Neither B3 nor Macy’s confirmed whether B3 is involved with KG’s proposal.

The mall’s future has become a test of how San Francisco will repurpose a prominent but difficult-to-reuse property as downtown struggles with vacancies. Other ideas floated for the site have included a soccer stadium and a basketball facility. City officials have also sought a downtown with places to work, live, learn and gather—a vision that could be difficult to reconcile with a data center unless a project delivers meaningful public-facing uses.

The city’s planning department said in records that San Francisco has approved two new data centers since creating a zoning category for them in 2001. The category, “internet service exchanges,” also covers smaller telecommunications and network facilities, so it does not neatly track large, power-intensive AI operations. Planning Director Sarah Dennis Phillips has told Supervisor Shamann Walton that the city’s broad definition and conditional-use review allow officials to scrutinize projects that combine data-center functions with other uses, while leaving room to consider changes as the technology develops.