Updated Feb 17, 2024 - Business

Silicon Valley's next big thing: A new city

Illustration of a cityscape with a 100 dollar bill in the background surrounded by stars

Illustration: Sarah Grillo/Axios

A well-funded project to modify Solano County's master plan will soon begin gathering signatures to get on November's ballot.

Why it matters: If successful, this will be a significant step towards the project's ultimate goal of building an entirely new city. California Forever's architects — and the Silicon Valley billionaires funding it — believe their plan will cure the Bay Area's land use woes.

Catch up quick: California Forever is the brainchild of Czech-born former Goldman Sachs trader and entrepreneur Jan Sramek.

  • He came up with the idea after a yearlong exploration of improving housing availability within the city promised not to be an effective solution, he tells Axios.
  • He's since raised over $800 million from investors like Mike Moritz, Reid Hoffman, Marc Andreessen, John and Patrick Collison, Laurene Powell Jobs, Chris Dixon, John Doerr, Nat Friedman, Daniel Gross, and Andreessen Horowitz.
  • The company also quietly amassed more than 50,000 acres of land it bought from residents, suing some of them for price collusion.

The big picture: The project's pitch is that the new city will alleviate some of the Bay Area's housing problems and fill out the region connecting it to Sacramento.

  • Recently unveiled plans heavily borrow from New Urbanism, emphasizing walkable neighborhoods and a mix of housing (both for sale and rent) at varying prices.

Zooming in: Part of the plan is to bring in at least 15,000 jobs.

  • To achieve that, California Forever is in talks to get companies to open satellite offices there, says Sramek. He's reaching out to well-known tech employers and companies in industries like defense, aerospace, advanced manufacturing, and biotech that need space for facilities.
  • "It's not an expansion for the daily commute — it's an expansion where you might go once a week to see your team or something like that," he says.

Yes, but: Sramek admits that better train connectivity to the rest of the region will be a separate challenge that is much more out of its control.

  • "I think there should be a high-speed train between San Francisco and Sacramento.... If we were in Europe, you could be there in 45 minutes," he says.
  • While he says California Forever would nevertheless reduce vehicle miles traveled, it's hard not to have environmental concerns about a whole new city of people driving cars to San Francisco and back.

Between the lines: California Forever is a "risky real estate project" and, as such, its backers expect high returns, says Sramek.

  • But while the endeavor is much riskier in the beginning given the high level of uncertainty, it's expected to become more akin to a traditional real estate investment over the long term, according to a source familiar with the project.

And if this doesn't work? The group could develop the land piecemeal, says Sramek.

  • But, he cautions, it wouldn't be able to convince employers to set up shop there, nor be able to make the various community guarantees it included in its proposal.

The bottom line: Some Silicon Valley investors may have entirely written off the Bay Area, but others are doubling down and trying to reshape it via one of their most ambitious bets.

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