Tech industry investors spent roughly $900 million buying land to build a dream city in a rural part of the Bay Area. It could be years, though, before they can do anything with it.
Conor Dougherty reported from Los Angeles, and Shawn Hubler from Sacramento.
Jan Sramek was 15 years old the first time he tried to get a government to do something he wanted. Back then, he was an internet- and science fiction-obsessed teenager growing up in Drevohostice, in the Czech Republic.
The problem was his town of 1,400 people had only dial-up internet service. He persuaded the local government to pay an internet service provider to bring the town a broadband connection. He was even paid a commission for it, Mr. Sramek wrote in “Racing Towards Excellence,” a sort of self-help book for ambitious young adults he co-wrote in 2009.
The next campaign for Mr. Sramek could be more profitable. It could also be longer, harder and, in all likelihood, nastier.
In a state where land politics are so difficult it can take years to build a duplex, it could be a decade of process before a shovel is even lifted for the project.
That kind of timeline will most likely test the patience of investors — including the venture capitalists Michael Moritz, Marc Andreessen and Chris Dixon, as well as Reid Hoffman, the LinkedIn co-founder, venture capitalist and Democratic donor, and Laurene Powell Jobs, founder of the Emerson Collective — who are used to the fast and lightly regulated world of technology.
After that comes a gantlet of environmental rules, inevitable lawsuits and potential tussles with the state’s Air Resources Board, the Water Resources Control Board, Public Utilities Commission and Department of Transportation — not to mention the local planning commission and board of supervisors who oversee land use in Solano County.
Some experienced developers say the project’s chances are so remote that they will be stunned if it comes to fruition. “I hope they succeed,” said Mark Friedman, a longtime real estate developer in Sacramento, “but this just seems like a lot of tech guys with a lot of money and a ton of hubris diving into another business that they can’t possibly understand.”
Mr. Sramek declined to comment on Monday, and a spokesman referred to an earlier statement from the project’s financial backers: “We are excited to start working with Solano County residents and elected officials, as well as with Travis Air Force Base.”
Over the past five years, the group has used a company called Flannery Associates to spend some $900 million buying tens of thousands of acres of agricultural land throughout Solano County, on the northern eastern edge of the San Francisco Bay Area. The purchase of so much land by a company whose business and intentions were unclear had stoked fear throughout the region and prompted two members of Congress to start federal investigations.
That nobody in the company tried to assuage those fears — most likely because they were worried that revealing themselves would increase the price of land — has created a long line of annoyed elected officials.
“We got the F.B.I. and Treasury involved,” John Garamendi, a Democrat and congressman from the area, said in a recent interview. Even though representatives from Flannery had reached out to his office for a meeting, he said, he didn’t know who they were or what they were doing until The New York Times revealed it to him last week.
Now Flannery is scrambling to move from stealth to charm mode. It has hired political consultants and approached supervisors, the governor’s office and members of Congress. Eventually, the group is likely to appeal to voters with a full-blown political campaign focused on economic development.
Though it’s solidly within the Bay Area, Solano is the poorest county in the region. The household income of $87,770 is about two-thirds of the $141,562 median income in Santa Clara County, the heart of Silicon Valley. It is also a geographic jumble that includes parched farmland and Travis Air Force Base, the U.S. military’s busiest airport and gateway to the Pacific, along with cities like Vallejo, a blue-collar city that has become a refuge for construction and service workers priced out of the inner Bay Area.
Flannery’s purchases are concentrated in the county’s undeveloped eastern half and consist of a checkerboard of plots. Some portion of that land appears to be slated for the hypothetical city, whose precise location isn’t yet clear. The rest could be used as political chips to create conservation programs, green energy projects and recreational amenities in an attempt to curry favor with politicians and voters.
Whatever campaign Flannery ends up running is also likely to involve promising jobs to voters in cities like Vallejo and Fairfield in exchange for allowing it to build on barely populated farms some 45 minutes away.
On Sunday in Rio Vista, a town of 10,000 people along the Sacramento River, residents were still absorbing the prospect of billionaires turning a stretch of open fields into a new city. Many were relieved to know the identity of the area’s mystery land buyer but were also fearful about the proposal’s potential impact.
“There’s not a lot of people,” said Ashley Morrill, 40, who works at a sports shooting range in an unincorporated community called Birds Landing. “There’s a lot of windmills. It’s out in the middle of nowhere. You can’t get public utilities out here. There’s no public water or sewer.”
Some in the area were still reeling from the secrecy that had veiled the land sales. Theories had ranged from wind farms to a new Disneyland to an imagined plot involving Chinese intelligence and a new port.
“A real estate agent came to my house on Christmas Day in 2018 with an offer to buy my property,” said John Sweeney, who lives in Denverton, an unincorporated community next to Travis Air Force Base. “At the time, land out here was selling for under $2,000 acre, and they offered $10,000 an acre.”
Mr. Sweeney said he didn’t sell, but he passed the offer to his father-in-law, who did. After the deal closed, he started tracking Flannery’s purchases on Facebook.
Now residents have new questions: How does a city spring to life from a single property owner? Will the proposal raise adjacent land prices? Will it lead to gentrification in what is now a pastoral town?
David Townsend, a Democratic consultant with decades of experience in land use issues in Northern California, said local opposition would also most likely be significant in an agricultural county where many longtime residents had moved to escape development and traffic.
“What happens in these things is, people show up in red T-shirts yelling that a bunch of rich guys who don’t even live here want to put 20,000 more cars on our roads, and what do we get for it? A couple of parks?” Mr. Townsend said, adding: “Something like this could take years and years.”
Category: Technology
Source: NYTimes Technology
