Silicon Valley's next big thing: A brand new city
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.
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.