It really was a produce market district with lots of wholesalers. It was already established by the 1920s (anyone have a better date?) and was " the heart of Italian San Francisco, dominated by families from Genoa and the Italian-speaking canton of Switzerland, Ticino." [source]
In the early 1960s, it was identified as a blighted region when the SF Redevelopment Agency decided that some condos would go much better in this area. So the produce market was displaced and in its place lie the Golden Gateway complex (4 residential towers and small townhomes), One Maritime Plaza (aka Alcoa Building), and SG Walton Park. One archway from the market was left standing and forms the West entrance to the park.
You can see lots of historic pictures of the market here (including before and after of the park arch).