San Francisco’s long-standing holiday celebrations at Union Square are here to stay — and new housing could soon be part of the area’s future.

Last year, many locals believed they had experienced the final Christmas display outside Macy’s in Union Square, as the department store had been marked for closure within three years due to underperformance. However, Macy’s has since reversed that decision.

Both Union Square and its flagship Macy’s store are preparing once again for the festive season. “I’m really excited. I love seeing the tree in Union Square and all the wreaths in the windows,” said local resident Emily Garcia. “It’s a fun tradition and a big part of Christmas in the city.”

District 3 Supervisor Danny Sauter confirmed the change of plans: “Macy’s is staying — great news. They’re also exploring redeveloping the site for housing, which could be an ideal model for Union Square and downtown.”

Macy’s announced a partnership with San Francisco-based TMG Partners to evaluate the large property and consider other potential uses, including residential units. While converting a retail space into housing would come with significant challenges, city officials are working on incentives to make such projects feasible.

“Why can’t this be called home too? It should be,” said Marisa Rodriguez of the Union Square Alliance, noting that having more residents might have helped the district recover faster after the pandemic.

Rodriguez expressed optimism about Macy’s continued presence and the return of other retailers to the area.

Specific redevelopment plans for the Macy’s Union Square location have yet to be announced, but the company expects to share updates in the coming months.