Tag Archives: Rep. John Garamendi

Local Leaders React to Tech Billionaires’ Bid to Build ‘Utopic City of the Future’ in Solano

Local stakeholders react to Flannery Associates 52,000 acre purchases

Public records show ‘Flannery Associates’ has invested $1B on land surrounding the Travis Air Force Base. | Graphic from FYI.

The secrecy and scale of the project have local leaders skeptical

The Reporter, by Nick McConnell, August 30, 2023

The Silicon Valley Elite Who Want to Build a City From Scratch

A mysterious company has spent $800 million in an effort to buy thousands of acres of San Francisco Bay Area land. The people behind the deals are said to be a who’s who of the tech industry.

From left, Michael Moritz, Reid Hoffman, Marc Andreessen and Chris Dixon, four prominent Silicon Valley investors, have backed Flannery Associates.Credit…Bloomberg; The New York Times; Clara Mokri for The New York Times; Getty Images; Reuters

The New York Times, by Conor Dougherty and Erin Griffith, August 25, 2023

In 2017, Michael Moritz, the billionaire venture capitalist, sent a note to a potential investor about what he described as an unusual opportunity: a chance to invest in the creation of a new California city.

The site was in a corner of the San Francisco Bay Area where land was cheap. Mr. Moritz and others had dreams of transforming tens of thousands of acres into a bustling metropolis that, according to the pitch, could generate thousands of jobs and be as walkable as Paris or the West Village in New York.

He painted a kind of urban blank slate where everything from design to construction methods and new forms of governance could be rethought. And it would all be a short distance from San Francisco and Silicon Valley. “Let me know if this tickles your fancy,” he said in the note, a copy of which was reviewed by The New York Times.

Michael Moritz, a well-known investor, wrote in a 2017 pitch, “If the plans materialize anywhere close to what is being contemplated, this should be a spectacular investment. | Alex Flynn / Bloomberg.

Since then, a company called Flannery Associates has been buying large plots of land in a largely agricultural region 60 miles northeast of San Francisco. The company, which has little information public about its operations, has committed more than $800 million to secure thousands of acres of farmland, court documents show. One parcel after another, Flannery made offers to every landowner for miles, paying several times the market rate, whether the land had been listed for sale or not.

The purchases by a company that no one in the area had heard of and whose business was a mystery have become the subject of heavy speculation and developing news stories, rattling landowners, local supervisors, the nearby Air Force base and members of Congress. Was Disney buying it for a new theme park? Could the purchases be linked to China? A deepwater port?

Flannery is the brainchild of Jan Sramek, 36, a former Goldman Sachs trader who has quietly courted some of the tech industry’s biggest names as investors, according to the pitch and people familiar with the matter. The company’s ambitions expand on the 2017 pitch: Take an arid patch of brown hills cut by a two-lane highway between suburbs and rural land, and convert into it into a community with tens of thousands of residents, clean energy, public transportation and dense urban life.

The company’s investors, whose identities have not been previously reported, are a who’s who of Silicon Valley, according to three people who were not authorized to speak publicly about the plans.

They include Mr. Moritz; Reid Hoffman, the LinkedIn co-founder, venture capitalist and Democratic donor; Marc Andreessen and Chris Dixon, investors at the Andreessen Horowitz venture capital firm; Patrick and John Collison, the sibling co-founders of the payments company Stripe; Laurene Powell Jobs, founder of the Emerson Collective; and Nat Friedman and Daniel Gross, entrepreneurs turned investors. Andreessen Horowitz is also a backer. It was unclear how much each had invested.

It is unclear how much the investors, who include Patrick and John Collison, the sibling co-founders of the payments company Stripe, have each invested in Flannery. | David Paul Morris / Bloomberg.

Brian Brokaw, a representative for the investor group, said in a statement that the group was made up of “Californians who believe that Solano County’s and California’s best days are ahead.” He said the group planned to start working with Solano County residents and elected officials, as well as with Travis Air Force Base, next week.

In California, housing has long been an intractable problem, and Silicon Valley’s moguls have long been frustrated with the Bay Area’s real estate shortage, and the difficulty of building in California generally, as their work forces have exploded. Companies like Google have clashed with cities like Palo Alto and Mountain View over expanding their headquarters, while their executives have funded pro-development politicians and the “Yes in my backyard” activists who have pushed for looser development and zoning laws in hopes of making it easier to build faster and taller.

The practical need for more space has at times morphed into lofty visions of building entire cities from scratch. Several years ago, Y Combinator, the start-up incubator, announced an initiative with dreams of turning empty land into a new economy and society. Years before that, Peter Thiel, the PayPal co-founder and billionaire Facebook investor, invested in the Seasteading Institute, an attempt to build a new society on lily pad-like structures in the law-and-tax-free open ocean.

But while these ideas have garnered lots of attention and curiosity — lauded in some corners for vision and derided in others for hubris — they have been little more than talk.

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As Flannery began seeking property, it bought so much land, so fast, that it spooked locals who had no idea who the buyer was or the plans it had in mind. Catherine Moy, the mayor of Fairfield, Calif., started posting about the project on Facebook several years ago after she got a call from a farmer about some mystery buyer making offers throughout the county. In an interview, Ms. Moy said she had gone to the county assessor’s office and found that Flannery had purchased tens of thousands of acres.

John Garamendi, a Democrat who along with Mike Thompson, another Democrat, represents the surrounding region in Congress, said he had been trying to figure out the company’s identity for four years.

“I couldn’t find out anything,” he said.

Representative John Garamendi, Democrat of California, said he had been trying to figure out Flannery’s identity for four years. | Rich Pedroncelli / Associated Press.

On Friday, he said that had suddenly changed. This week representatives for Flannery reached out to him and other elected officials requesting meetings about their plans. That meeting is now being scheduled, he said.

“This is their first effort, ever, to talk to any of the local representatives, myself included,” he said.

The land that Flannery has been purchasing is not zoned for residential use, and even in his 2017 pitch, Mr. Moritz acknowledged that rezoning could “clearly be challenging” — a nod to California’s notoriously difficult and litigious development process.

To pull off the project, the company will almost certainly have to use the state’s initiative system to get Solano County residents to vote on it. The hope is that voters will be enticed by promises of thousands of local jobs, increased tax revenue and investments in infrastructure like parks, a performing arts center, shopping, dining and a trade school.

The financial gains could be huge, Mr. Moritz said in the 2017 pitch. He estimated the return could be many times the initial investment just from the rezoning, and far more if and when they started building.

“If the plans materialize anywhere close to what is being contemplated, this should be a spectacular investment,” Mr. Moritz wrote.

The Bay Area is among the country’s most expensive regions, even after rent and home prices fell after the pandemic. Economists and housing experts have for decades blamed a longstanding housing shortage and California’s inability to build enough to meet demand.

Mr. Moritz nodded to this in the email to the investor, arguing that “this effort should relieve some of the Silicon Valley pressures we all feel — rising home prices, homelessness, congestion etc.” He added that his group had secured some 1,400 acres for less than $5,000 per acre. The price per acre has since escalated, and the company’s most recent purchases have neared $20,000 per acre, according to court documents and people familiar with the matter.

The purchases burst into public view this spring when lawyers for Flannery filed a lawsuit in U.S. District Court, accusing landowners of colluding to inflate prices.

The group focused on Jepson Prairie and Montezuma Hills, an agricultural patch of eastern Solano County between the cities of Fairfield and Rio Vista, according to the lawsuit. This area is mostly unpopulated and covered with ranches, windmills and power lines.

ravis Air Force Base’s proximity to the land deals prompted speculation about the motives of the people behind Flannery. | Jim Wilson / The New York Times.

In November 2018, the company sent offers to “most landowners in this area,” the lawsuit said, and included incentives such as allowing sellers to retain income from wind turbines, as well as stay on the properties rent-free under long-term lease-back agreements. Over the five years, the company purchased some 140 properties from 400 owners, the lawsuit said.

This month, a lawyer representing landowners jointly filed a motion to dismiss the case. In July, three landowners said they had reached a potential settlement with Flannery. Other owners could not be reached for comment this week, or had declined to do so.

As the offers continued and prices escalated, landowners in Solano County started buzzing about who was buying so much land for so much money.

“They would come with an offer of four and five times over the market at the time,” Ms. Moy said. “They were deals that they couldn’t pass up.”

Flannery’s offers were creating multimillionaires across the county, but no one seemed to know what the mysterious company intended to do with land that now amounted to a large chunk of the entire county.

That changed last week, when residents started receiving texts and emails with a poll gauging their opinions on a number of questions. One asked them to rate the favorability of several names including “Joe Biden,” “Donald Trump” and “Flannery Associates.” Another question began with a description of a possible ballot initiative for a project that “would include a new city with tens of thousands of new homes, a large solar energy farm, orchards with over a million new trees, and over 10,000 acres of new parks and open space.”

Ms. Moy cited poor infrastructure, including the two-lane highway bisecting the region that she said was already clogged by super-commuters driving to the edges of the Bay Area and beyond. The area is also prone to regular droughts and is at high risk for wildfires.

“It seems very pie in the sky,” she said.

Investors Bought Nearly $1 Billion in Land Near a California Air Force Base. Officials Want to Know Who Exactly They Are.

[Note from BenIndy Contributor Nathalie Christian: Apparently, Solano officials have long wondered about the identities of those behind Flannery Associates, the group that invested $1 billion in 5 years to become Solano County’s largest landowner. The group has successfully outbid anyone else interested in this land, raising serious concerns and prompting everyone from environmentalists to national security buffs to sit up and take note. If you have more information on this matter that you can share with BenIndy, please email benindy@beniciaindependent.com with your tip. This article leaves us with more questions than answers.]

Flannery Associates’ purchases near Travis Air Force Base have alarmed local and federal officials

Flannery Associates, an investment group, has purchased at least 20 parcels of land near Travis Air Force Base in California. | Heide Couch/US Air Force.

Wall Street Journal, By Kristina Peterson, Jack Gillum and Kate O’Keeffe, July 7, 2023

WASHINGTON—Government officials are investigating large land acquisitions near a major air force base northeast of San Francisco, concerned that foreign interests could be behind the investment group that purchased the land.

At the center of the probes is Flannery Associates, which has spent nearly $1 billion in the last five years to become the largest landowner in California’s Solano County, according to county officials and public records.

An attorney representing Flannery said it is controlled by U.S. citizens and that 97% of its invested capital comes from U.S. investors, with the remaining 3% from British and Irish investors. Flannery previously told Solano County the entity “is owned by a group of families looking to diversify their portfolio from equities into real assets, including agricultural land in the western United States.”

“Any speculation that Flannery’s purchases are motivated by the proximity to Travis Air Force Base” is unfounded, the attorney said.

The Air Force’s Foreign Investment Risk Review Office has been investigating Flannery’s purchases of roughly 52,000 acres, including around Travis Air Force Base, according to people familiar with the matter. But the office, which has been looking into the matter for about eight months, has yet to be able to determine who is backing the group, one of the people said.

Note: county data is as of June 6 from the Solano County assessor. Sources: Solano County property records; federal court filings. Brian McGill and Jack Gillum / The Wall Street Journal.

“We don’t know who Flannery is, and their extensive purchases do not make sense to anybody in the area,” said Rep. John Garamendi, (D., Calif.) the top Democrat on the House Armed Services Committee’s readiness panel. “The fact that they’re buying land purposefully right up to the fence at Travis raises significant questions.”

Garamendi and Rep. Mike Thompson (D., Calif.), whose districts include the area where land has been bought, have asked for an investigation by the Committee on Foreign Investment in the U.S., a multiagency panel that can advise the president to block or unwind foreign acquisitions for security concerns.

The U.S. Agriculture Department also has inquired about Flannery’s ownership, according to correspondence reviewed by The Wall Street Journal. Nearly all of the land is in unincorporated parts of Solano County, and most of it is zoned for agricultural use, records show. Several of the parcels include wind turbines.

The Journal found that at least 20 parcels surround Travis, known as the “Gateway to the Pacific” and home to the largest wing of the Air Force’s Air Mobility Command, which provides planes to refuel other aircraft and those to transport military personnel and supplies, including munitions used in Ukraine following Russia’s invasion.

The Flannery attorney declined to provide more details about Flannery’s investors. Local and federal officials also say they have been unable to learn the identities of those in the Flannery group.

Rep. John Garamendi (D., Calif.) has asked the Committee on Foreign Investment in the U.S. to investigate Flannery Associates. Mariam Zuhaib / AP.

Flannery’s statement that it is U.S.-owned can’t be confirmed or denied by federal agencies at this time, a congressional aide said. Cfius, which is led by the Treasury Department and includes the Departments of Defense, Justice, State and others, declined to comment.

If Cfius takes up the case, the Treasury Department could subpoena Flannery to get more information about its backers, but people familiar with the panel, whose operations are confidential, have said they couldn’t think of a time when the department had used that authority.

Acquisitions around Travis Air Force Base have raised security concerns among Solano County officials, who have been trying to determine the investors in Flannery and their plans for the land for years, said Bill Emlen, the county administrator.

County supervisor Mitch Mashburn said if Flannery intends to develop the land, it would make sense for the group to engage with local officials—but it hasn’t.

“The majority of the land they’re purchasing is dry farmland,” he said. “I don’t see where that land can turn a profit to make it worth almost a billion dollars in investment.”

A spokesperson for Travis said that its officials and other Air Force offices “are aware of the multiple land purchases near the base and are actively working internally and externally with other agencies.”

In a recent federal court filing, Flannery Associates said it is a wholly owned subsidiary of Flannery Holdings, a limited liability company registered in Delaware. LLCs registered in Delaware don’t have to publicly disclose the identity of their owners.

Use of LLCs to purchase land is a common practice. Nearly one in five homes were purchased by investors in early 2023, including LLCs and other corporate entities, according to data compiled by real-estate firm Redfin of more than 40 of the largest U.S. metro areas.

“While I can see Cfius being interested in who owns real estate near a military base, the fact that a property’s ownership is opaque does not mean anything nefarious is going on,” said Rick Sofield, an attorney at Vinson & Elkins who used to run the Justice Department’s Cfius team.

In May, Flannery filed a price-fixing lawsuit in federal court in California, alleging that landowners had colluded against it to drive up prices, in some instances overcharging Flannery and in others refusing to sell their properties.

Attorneys for the defendants didn’t respond to requests for comment or declined to comment. Flannery settled with one group of defendants in late June and filed notice of a contingent settlement with another group of defendants Thursday.

The 52,000 acres Flannery now owns in Solano County is spread out over more than 300 parcels, a Journal analysis of property records shows. The company said in court filings that it has invested more than $800 million in its acquisitions and acknowledged paying prices of “multiples of fair market value.”

A plan by a Chinese-owned company to develop land near Grand Forks Air Force Base in North Dakota was halted after the Air Force said it posed a national security risk. Lewis Ableidinger / WSJ.

Flannery has offered various explanations for its purchases over time. In 2019, Flannery attorney Richard Melnyk said in an email to a Solano County official that Flannery planned to work with local farmers and might explore “new types of crops or orchards,” he said, ruling out any cannabis operations.

In its May price-fixing lawsuit, Flannery said it planned to use the land for renewable energy and related projects. The entity has allowed many sellers to continue farming or remain on the land and collect income from wind turbine leases for the remainder of the lease, according to court filings.

In a June 5 email to Emlen reviewed by the Journal, Melnyk said Flannery was considering leasing “a substantial portion” of its land to olive growers, including some near Travis Air Force Base.

“Nobody can figure out who they are,” said Ronald Kott, mayor of Rio Vista, Calif., which is now largely surrounded by Flannery-owned land. “Whatever they’re doing—this looks like a very long-term play.”

Flannery’s holdings near Travis raised concerns similar to those sparked by a Chinese-owned company’s plan to develop land 12 miles from the Grand Forks Air Force Base in North Dakota. The plan was halted after the Air Force said it posed a national security risk, and lawmakers have continued to introduce bipartisan legislation restricting foreign ownership of U.S. farmland or increasing transparency around these acquisitions.

The Chinese company’s U.S. arm said at the time the planned facility wouldn’t be used to spy on the U.S.

Flannery told USDA in June that it didn’t need to register its holdings in Solano County because no foreign person “holds any significant interest or substantial control” of Flannery, according to a letter provided by the group’s attorneys.

Hello/Goodbye Party in Benicia for U.S. Reps. Garamendi & Thompson

Progressive Dems of Benicia invite you to say hello to John Garamendi, our new US Representative, and to offer thanks and goodbye to our longtime US Rep. Mike Thompson

By Progressive Democrats of Benicia, June 17, 2020

Hello/Goodbye Party – Sunday, June 26

Mark your calendar to attend a Hello and Goodbye Summer Social on Sunday June 26, from 2 to 4.  We will welcome our new U.S. Rep. John Garamendi and say goodbye to Benicia’s longtime U.S. Rep. Mike Thompson.  It will be held right here in Benicia, at the Veterans Memorial Hall, 1150 First Street, across from the Gazebo.  (See info about tickets below.)

Both Thompson and Garamendi will remain in Congress – the change is due to a redrawing of California Congressional Districts.

The party is also a fundraiser for our fellow Democratic Club the United Democrats of Southern Solano County. This is a great opportunity to connect with these important legislators and our fellow Democrats. Ticket information below, purchase your ticket(s) here.