Ghirardelli Square’s past catches up with its future

Ghirardelli Square has a rich history and is one of the most-visited tourist attractions in San Francisco.
Ghirardelli Square has a rich history and is one of the most-visited tourist attractions in San Francisco. mcrisostomo@sacbee.com

Ghirardelli Square was founded on the cocoa bean. In 1852, Italian entrepreneur Domenico Ghirardelli opened a confectionery company that calls itself “America’s oldest continuously operating chocolate-maker.” And, really, who doesn’t like chocolate?

Ghirardelli was involved in the chocolate trade in Uruguay and Peru until the lure of California’s gold fields brought him here in 1849. He struck out and fell back on his expertise as a chocolate merchant.

That led to a series of ever-more successful stores around San Francisco, culminating in the mother lode when he moved the manufacturing piece of the business into the Pioneer Woolen Mill building on the northern end of the waterfront in 1893. It and the surrounding brick-and-beam buildings (and some that would be erected in later years) became what is now the 10-structure Ghirardelli Square.

Ghirardelli’s sons took control of Ghirardelli Chocolate following their father’s death in 1894, and it’s been bought and sold several times since. Past owners include Golden Grain Macaroni, Northwestern Mutual Life Insurance and the Quaker Oats companies. The Swiss-based international chocolate-making conglomerate Lindt & Sprüngli has owned it as a subsidiary since 1998.

The physical square itself is divided between a retail emporium owned by the Jamestown real-estate development company of Atlanta, and the Fairmont hotel and resort chain’s four-star private residence club.

Two of the square’s most defining moments came in the 1960s. First, the then-owner hired redevelopment specialists to restore, fortify and expand the debilitated buildings. Then he “recycled” them into a shopping-dining complex that was hailed at its opening in 1964 as the nation’s first “adaptive-reuse project.” It became a model for others redevelopment projects that followed.

Top restaurants and upscale shops were quick to occupy the retail space from the mid-1960s into the 1980s – as many as 40 of them in the peak years. Locals became regulars at the Mandarin, Paprikas Fono, Magic Pan, Gaylord India, Modesto Lanzone and Señor Pico – A-list restaurants of the day. The plaza was home to musicians and singers, while magicians and acrobats shared nearby sidewalks with jewelry makers and mimes. For out-of-towners, the scene was like a pop-up fair.

The square’s second defining moment came in 1967, when Ghirardelli Chocolate Co. moved its manufacturing facility to San Leandro. That left five brick factory buildings mostly vacant for years, looking like haunted houses looming over the plaza.

The square steadily declined, plagued by indecisive revolving-door ownerships, back-and-forth lawsuits, broken leases, empty storefronts and confusing construction delays. Essentially, it lost its core identity.

Then, in 2002, the real estate investment firm JMA Ventures bought the five buildings, did a makeover and opened Fairmont Heritage Place in 2008. It’s a private residence club that sells one-tenth fractions (35 nights) in 49 one-, two- and three-bedroom luxury condos (four additional units are single ownerships).

“We’ve sold 220 fractions, with 200 to go,” said sales executive-realtor Jeremy Holman. The current buy-in is $220,000 to $269,000, but “we rent out some of the unsold portion for $800 to $1,600 (a night), depending on the season and what special events are happening in town,” he said. “The occupancy rate is 85 percent.”

Sixty percent of the owners live within 100 miles of their “second homes,” Holman said. “They’re people who have an affinity for San Francisco, whether it’s someone who does business here regularly or people with family in the Bay Area.”

As part of the deal, owners have access to some 450 properties in 70 countries through Fairmont’s affiliations with Raffles, SwissHotel and Registry Collection properties.

Another sea change came in 2013, when half the storefronts were vacant. Jamestown stepped in and paid $54 million for the 100,394 square feet of retail space, followed by $15 million in improvements.

“We came in with the goal of emphasizing local San Francisco and becoming a more family-friendly destination,” said Jamestown spokesman Thomas Sandlin. “We’ll always be a place for tourists, but we also want San Francisco natives to enjoy the square again.”

Allen Pierleoni: 916-321-1128, @apierleonisacbe

Related stories from Sacramento Bee