San Francisco Waterfront Site Targets AI Data Center

A little-known real estate company appears to be targeting one of San Francisco’s largest remaining privately held industrial sites for a massive data center project. Nestory Park Capital, which launched in late 2024 with a mission to convert underused properties into technology hubs, is reportedly interested in a four-acre parcel at 1215 Michigan Street. This location is strategically situated on the central waterfront, opening directly onto the Bay and sitting just a block away from the massive Dogpatch Power Station redevelopment.

The proposed facility would occupy approximately 160,000 square feet, a scale that has generated significant speculation among local real estate insiders. While the company has listed the project on its website without specifying the exact address, public records indicate that the firm and its lobbyist recently met with city officials to discuss permits for this specific site. This move comes at a sensitive time, as city leaders have proposed a temporary halt on approving new data center projects to assess their impact on the urban environment.

Quiet Moves Behind the Proposal

Nestory Park Capital is led by David Flaherty, a veteran of the property market, and the company has been operating with a low profile since its inception in El Sobrante. According to reporting by GN technics/ai (en-US), the firm has been quietly eyeing industrial assets that could be repurposed for high-density computing. The Michigan Street site is particularly attractive because it is one of the few large, open industrial plots left in the area, most of which are either already developed, controlled by the Port of San Francisco, or significantly smaller.

The exact status of the proposal remains murky. No formal plans for a data center have been filed with the city, and the property has not changed hands. The current owner, R.P. Stagg & Co. LLC, which has long housed a crane rental and heavy-hauling business known as Sheedy Drayage, did not immediately respond to requests for comment. Similarly, Nestory Park and its lobbyist, Boe Hayward, declined to discuss the specifics of the project, leaving the public to speculate on the timing and feasibility of such a large development in a residential-heavy neighborhood.

Shifting Urban Landscape and Zoning

This potential development is part of a broader transformation of the Dogpatch and Mission Bay areas into a hub for the artificial intelligence economy. The district has seen an influx of new housing, offices, and research facilities, including the expanding campus of OpenAI. Local political figures, such as Y Combinator CEO Garry Tan, have been actively advocating for changes to zoning and height limits to support this growth. Some proponents have even compared the area’s potential to Shanghai’s rapid modernization, suggesting that San Francisco could build a new 'Pudong' of technology and infrastructure.

However, the trade-off for this growth is significant. Data centers are energy-intensive and often generate substantial heat, which can strain local power grids and increase cooling costs for the surrounding neighborhood. The city’s proposed moratorium reflects concerns about these impacts, as well as the loss of industrial space that has historically supported the local economy. Balancing the demand for cutting-edge AI infrastructure with the needs of existing residents and businesses remains a complex challenge for city planners.

Competing Interests in the Bay

The Michigan Street site is not the only location under consideration for data center use in the area. Fifth Space, the developer of the nearby Dogpatch Power Station project, has indicated in recent filings that it plans to study the inclusion of a small data center on its own site. This suggests a growing competition for space and resources among developers seeking to capitalize on the region’s emerging status as a tech hub. The convergence of these projects could reshape the waterfront’s identity, turning it into a dense cluster of high-tech facilities alongside traditional housing and commercial spaces.

As the city grapples with these developments, the outcome of the Nestory Park proposal will likely serve as a test case for how San Francisco manages the influx of AI infrastructure. The decision will hinge on a careful weighing of economic benefits against environmental and social costs. For now, the site remains a quiet industrial lot, but its future may hold a loud and energy-hungry new chapter in the city’s story.