County report cited billions of dollars in costs
California Forever CEO Jan Sramek, left, talks to reporters during a press conference on Wednesday, Jan. 17, 2024, at Veterans Memorial Building in Rio Vista, Calif. California Forever unveiled details of its proposed ballot initiative at the press conference. (Dai Sugano/Bay Area News Group)
By ETHAN BARON
July 22, 2024
Days after a Solano County report slammed a plan backed by Silicon Valley billionaires to build a utopian new city from scratch near Fairfield, the company behind the “California Forever” project has scrapped the ballot initiative it was to put to county voters in November.
The report released late last week by Solano County said the proposed new city of 50,000 — possibly up to 400,000 decades from now — would likely cost the county billions of dollars and create substantial annual financial deficits, while slashing agricultural production, damaging climate-change resilience and potentially threatening local water supplies. The project, according to the report, “may not be financially feasible.”
A map of proposed residential development is displayed as California Forever CEO Jan Sramek, left ,talks during a press conference in January at Veterans Memorial Building in Rio Vista, Calif.Ê The company has scrapped the ballot initiative it was to put to county voters in November after an unfavorable Solano County report on the new utopian city plans. (Dai Sugano/Bay Area News Group)
County supervisors on Tuesday were set to consider the report, then vote on whether to approve California Forever’s contentious plan to rezone 17,500 acres of farmland for the city or let voters decide in November.
Instead, California Forever, led by CEO Jan Sramek, will withdraw the ballot measure — approved last month for the November election — and seek approval to amend the county’s general plan and zoning through typical county processes, California Forever said in a website update Monday morning.
“It’s good news,” said Kathy Threlfall, who turned down two offers from the project proponents to buy her 240-acre ranch just northwest of the Sacramento River. “They have pursued an all-or-nothing approach, and apparently it hasn’t really worked out for them.”
Kathy Threlfall looks over her ranch in Rio Vista, Calif., on Friday, Sept. 1, 2023. A group of Silicon Valley billionaires are planning a utopian city in Solano County, which includes her parcel; however, she’s not willing to sell. (Ray Chavez/Bay Area News Group)
California Forever, which spent more than $800 million buying more than 60,000 acres of mostly agricultural land near Fairfield, earlier last week issued its own study claiming the new city would create billions of dollars in economic activity and tens of thousands of jobs for the county. Marketing materials have depicted utopian scenes of a Mediterranean-style community, with walkable neighborhoods and a mix of businesses from retail shops to technology company offices.
The proposal is funded by billionaire venture capitalists Marc Andreessen and Michael Moritz, LinkedIn co-founder Reid Hoffman and businesswoman Laurene Powell Jobs. It’s been embroiled in controversy since its real estate arm, Flannery Associates, sued holdout landowners for $510 million, claiming they conspired out of “endless greed” to inflate prices.
The lawsuit and Sramek’s at-times combative approach toward critics added to the furor over the potential loss of agricultural land and nature areas, questions about water supply and changes to the region’s rural character.
Mitch Mashburn, chair of the Solano County Board of Supervisors, on Monday said it was a “mistake” for California Forever to put its plan to voters without a full environmental impact report and fully negotiated development agreement.
“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,” Mashburn said in a Facebook post.
Sramek said California Forever would work with the county on the environmental report and development agreement over the next two years, then seek approval from county supervisors in 2026.
“With this process, we can build a shared vision that passes with a decisive majority and creates broad consensus for the future,” Sramek said in a statement on California Forever’s website.
The county’s report, issued July 18, said infrastructure such as roads for the project and public facilities like schools and parks, plus related expenses, would cost an estimated $6.4 billion for the first phase of development and nearly $50 billion to complete the new city.
The report said costs to the county and the local fire-protection district would outstrip revenues, leading to millions of dollars in deficits every year. The now-withdrawn California initiative gave no clear indication of where the money would come from.
Construction, according to the report, would lead to years of “lower traveling speeds, decreased roadway safety, and increased incidence of significant injury and fatal accidents.” Loss of farmland would cut agricultural production by an estimated $6.7 million annually, the report said. It is unclear where California Forever would get needed surface water for the new city, the report said.
Sramek said by phone Monday that the county’s report did not have much to do with California Forever’s withdrawal of the ballot measure. The company’s polling showed widespread support for the new city, but a majority wanted an environmental impact report before it went ahead, Sramek said.
California Forever has said its first phase would provide homes for about 50,000 residents by the late 2030s and at least 15,000 new jobs paying more than $88,000 a year. Its own report, released July 16, said the project would create 53,000 to 87,000 permanent new jobs in the county and a $44 million to $54 million tax surplus for Solano County by 2040.
The ballot measure included a requirement that the costs of creating the city would be paid off through tax revenue generated by the development. Thus, infrastructure, public facilities, and services “must be constructed and operated at no cost to Solano taxpayers, except for those who live in the new community.”
Sramek said the county’s report underestimated revenue from sales taxes and property taxes that, when corrected, would switch the projected deficit for the county to “an overwhelming surplus.” California Forever will work with the county so numbers in any future reports “reflect the benefits of this project for everyone,” Sramek said.
California Forever said it has acquired water rights and has ground and surface water on land it has bought, including almond orchards it would convert to grazing pastures. Water recycling will add to supplies, and California Forever would buy water privately outside the county, the company said.
Mashburn said California Forever must confirm to county officials how it would provide water and solve transportation challenges.
“And show us the financial engineering that makes it possible to pay for billions of dollars of infrastructure,” Mashburn said, “without increasing our taxes and while delivering a net tax surplus to our county.”