Silicon Valley billionaires put plans for new California city on hold

An aerial photo of cows grazing on a yellow hillside with windmills in the background.

July 22, 2024 5:05 PM PT

The tech billionaires backing a proposal to raise a brand-new city on the rolling prairie northeast of San Francisco Bay have agreed to pull their measure off the November ballot and will first fund a full environmental review of the project, officials announced Monday.

The pause — announced in a joint statement from a Solano County supervisor and the chief executive of California Forever, the group backing the development — marks a dramatic shift in what had been a relentless push to build a city from scratch in rural Solano County. Until recently, California Forever, whose roster includes tech giants such as LinkedIn co-founder Reid Hoffman and venture capitalist Marc Andreessen, appeared set on taking the proposal directly to local voters this fall.

In June, after the group spent millions of dollars on a signature-gathering campaign, the county registrar announced the measure had qualified for the November ballot, despite opposition from many local elected officials. At the time, Jan Sramek, the former Goldman Sachs trader who is leading the effort, said the measure was nothing less than “a referendum on what do we want the future of California to be.”

Then, on Monday morning, an about-face: California Forever announced it would withdraw the measure. Instead, the group will follow the normal county process for zoning changes for the nearly 18,000-acre swath of land proposed for development. That includes funding a full environmental impact review and reimbursing the county for staff time and consultants related to the venture, according to the joint statement issued by Sramek and Mitch Mashburn, chair of the Solano County Board of Supervisors.

While “the need for more affordable housing and good paying jobs has merit, the timing has been unrealistic,” Mashburn said in the statement. California Forever’s rush to the ballot without an environmental review and negotiated development agreement “was a mistake,” he added. “This politicized the entire project, made it difficult for us and our staff to work with them, and forced everyone in our community to take sides.”

In his portion of the statement, Sramek, chief executive of California Forever, stressed that his investment group remains committed to the project and feels an urgency to get it done. “For every year we delay, thousands of Solano parents miss more mornings, recitals and bedtime stories because they’re commuting two hours for work. They cannot get those magical moments back.”

“We want to show that it’s possible to move faster in California,” Sramek said. “But we recognize now that it’s possible to reorder these steps without impacting our ambitious timeline.”

He said his group would work with the county to complete an environmental review and development agreement over the next two years, then bring the package back to local voters for approval in 2026.

In an interview with The Times, Sramek said the decision to pull the ballot measure was made after it became clear that Solano County residents wanted a thorough environmental review process. He said he was confident the decision to “invert the order of the steps” — putting the environmental review and development agreement before taking the question to voters — would lead to a better outcome.

“It’s not going to affect the timeline,” he said. “In fact, it might accelerate it.”

The shift also gives California Forever time to reset with local residents after the group’s rocky introduction to Solano County politics.

The effort, launched under a cloak of secrecy, became ensnared in controversy last year amid unfounded speculation that the land buyers were foreign agents intent on espionage.

That’s because for years before proponents revealed their plans, they used a limited liability company called Flannery Associates to buy up land from farmers in a vast swath of the county, stretching from Rio Vista west toward Travis Air Force Base, without telling anyone why. News of the mysterious land sales, in an area so close to a crucial military installation, led some people to speculate it might be part of an effort by foreign spies to gain military secrets.

Last year, it was revealed instead as a bold plan to build a model city from the ground up and reinvent how housing is built in California.

In January, Sramek unveiled blueprints of the new community that call for tens of thousands of homes surrounded by open space and trails. California Forever showcased the community’s proximity to the San Francisco Bay Area, vowing the project would convert unused farmland into “middle-class neighborhoods with homes we can afford.” The city would be walkable, socioeconomically integrated and fueled by clean energy.

But the proposal garnered fierce early opposition from some local leaders, concerned the group was making an end run around the planning process, as well as environmental groups concerned about the loss of natural habitat.

Mashburn said his agreement with Sramek came after tough conversations about how the process had gone so far.

“We talked about Solano County, and we talked about the initiative, and we talked about the future, and the way things were going to look, and the processes that we would have to go through, and whether we wanted to do that amicably and have a county where neighbors weren’t fighting with neighbors,” Mashburn said.

“Much to his credit and to their credit, they agreed with that. That’s not an easy thing to do, for a leader to admit that you may have been wrong about something.”

The decision to pull the ballot measure came a day before the Board of Supervisors was scheduled to discuss a consultant’s report, commissioned by the county, on the potential fiscal impacts of the development and to vote on whether to put the initiative before voters in November.

The report, prepared by Stantec Consulting Services in Walnut Creek, questioned the financial viability of the proposed new city and predicted construction challenges that could lead to hefty deficits for the county. It estimated the price tag for constructing schools, roads, sewer systems and other infrastructure to support the new community at tens of billions of dollars.

In announcing the new timeline, Mashburn issued a challenge to the California Forever investors, calling on them to show how they would provide water, solve transportation challenges and navigate the “financial engineering that makes it possible to pay for billions of dollars of infrastructure” without increasing taxes.

Asked if he believed Sramek and his backers would eventually build their dream city in his county, Mashburn said he was skeptical it would turn out exactly as the tech titans envisioned.

“We’re starting over from scratch,” he said. “There are some incredible obstacles that have to be overcome.”