California
Tech billionaires postpone their plan for a new California city
Good morning. It’s Thursday, July 25. Here’s what you need to know to start your day.
Plans for a new California city are halted. Can trust be rebuilt?
A billionaires-backed plan to build a city from scratch in rural Solano County had been slated to go before the region’s voters in November.
But on Monday, county leaders and the initiative’s architect announced an agreement to pull it from the ballot.
The group, called California Forever, says it will now go through the usual multiyear process for would-be developments, which involves applying for necessary rezoning, conducting an environmental impact report and reaching a development agreement with the county.
An artist’s rendering of a neighborhood. Backers who want to build a green city from scratch began with secretive land purchases in Solano County.
(Sitelab Urban Studio / CMG)
The county and aspiring developers framed the decision as a chance to pause and reset after years of secrecy and mistrust. But critics say the tech billionaires’ vision is an ill-conceived plan that would do more harm than good.
First, a refresher
We first brought you the mysterious story of California Forever in August when a secretive limited liability company that spent about $800 million to purchase more than 52,000 acres in Solano County was revealed to be an ambitious project by Silicon Valley elites.
Proponents of the project used a limited liability company to buy up land from farmers in a vast swath of the county, stretching from Rio Vista, pictured, to the west, without telling anyone why.
(Godofredo A. Vásquez / Associated Press)
Their pitch: Build a new California city fueled by clean energy and filled with affordable housing and good-paying jobs. The plan is the brainchild of Jan Sramek, a former Goldman Sachs trader, who framed it as vital to boost California’s dismal housing supply and keep the state competitive as jobs and renewable energy move elsewhere.
Investors in the project include billionaire investor Michael Moritz, Emerson Collective founder Laurene Powell Jobs, LinkedIn co-founder Reid Hoffman and venture capitalist Marc Andreessen.
Once they were outed, the group changed its approach, initially dubbing its plan California Forever (with renderings that appeared to have been hastily created with artificial intelligence) before rebranding to the East Solano Plan. The group began gathering signatures to get a ballot measure before local voters in November that would change zoning rules, bypassing the typical process.
An artist’s rendering of a neighborhood in a proposed city in Solano County.
(Sitelab Urban Studio)
Going that route “was a mistake,” Mitch Mashburn, chair of the Solano County Board of Supervisors, wrote in the joint statement. “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.”
The group’s lack of transparency and accusations of heavy-handed tactics rubbed many politicians and residents the wrong way. They also sued farmers in federal court, which further incensed residents and elected leaders.
Speaking during a Tuesday meeting, Solano County Supervisor Monica Brown said that California Forever “operated in bad faith” and that she “will never trust anything that they bring forward.”
“Go somewhere else,” Brown said. “There’s 57 other counties. They might want you and your money.”
Critics say the plan is the wrong approach
Local opposition to the project has been swift and vocal, with some noting it breaks the prime rule of real estate: location, location, location. Critics point to the lack of road infrastructure, access to water and public transit.
“It is a huge waste of private and public resources to develop a new city in this location,” said Sadie Wilson, director of planning and research at Greenbelt Alliance. The nonprofit advocates for climate resiliency in Bay Area counties and is part of the Solano Together Coalition.
An aerial rendering of where the planned community by California Forever would fit into Solano County.
(California Forever)
Members have been focused on getting accurate information to voters about the East Solano Plan, Wilson told me, but are also cultivating an “alternative vision” for prosperity in the region that doesn’t rely on billionaires.
Wilson said the plan “flies in the face” of both climate resiliency and housing goals, which would be better served by strategically expanding housing in existing cities. Building the schools, roads, sewer systems and other infrastructure to accommodate the more than 500,000 people California Forever hopes would live in its new city would cost a lot — both in dollars and emissions.
The county commissioned a consultant’s report for the project, which found that creating the necessary infrastructure would cost tens of billions and generate well over 2 billion new vehicle miles traveled (the state meanwhile is working to reduce how much Californians drive).
What’s next?
In that joint statement, Sramek said his group will work with the county “to build a shared vision” and plans to “bring the full package back for approval in 2026.”
“We want to show that it’s possible to move faster in California,” he wrote in a statement.
“But we recognize now that it’s possible to reorder these steps without impacting our ambitious timeline.”
Mashburn acknowledged Sramek for his understanding and optimism, but also issued him a challenge:
“Use the Environmental Impact Report and Development Agreement process to prove to us how you’ll strengthen Travis AFB, how you’ll provide water, and how you will solve the transportation challenges. And show us the financial engineering that makes it possible to pay for billions of dollars of infrastructure, without increasing our taxes, and while delivering a net tax surplus to our county.”
California Forever’s decision to pull the ballot measure was “a major win” for the coalition, Wilson told me.
“They just backed out of this initiative because they knew they weren’t going to win,” she said, adding that she hopes the group will be more transparent about their endgame if they’re serious about mending things with county leaders and residents.
“It’s hard to come back from that lack of trust and that deception,” she said. But “this is certainly not over.”
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Have a great day, from the Essential California team
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Live Updates: Candidates face off in the CBS News California and San Francisco Examiner Governor’s Debate
Learn more about candidates’ stances on the issues in the California Governor’s Race interactive guide
CBS News California launched an interactive tool to help voters navigate this year’s gubernatorial race. The California Governor’s Race Candidate Guide features 20 hours of interviews with top-polling candidates to provide voters the opportunity to compare each candidate’s responses side-by-side on the issues that matter most to them.
Those running to succeed Gov. Gavin Newsom as California’s next chief executive offered their thoughts on more than a dozen issues, including homelessness, housing affordability, gas prices and environmental policy, immigration, healthcare, crime and public safety funding, and the state’s ongoing insurance crisis.
Here’s what to know about the CBS News California/San Francisco Examiner Governor’s Debate format
The format of the CBS News California and San Francisco Examiner Governor’s Debate on Thursday will allow candidates to question each other directly.
Candidates will also participate in segments in which they address real-world issues California voters may face in their daily lives. The Californians who will be featured include a working single mother pursuing education; a couple struggling to achieve homeownership; and a scientist warning of the long-term consequences of inaction on climate change.
This structure for Thursday’s debate differs from the previous face-off hosted by CBS News California stations, which comprised three segments focused on affordability, accountability and social issues that lasted roughly half an hour each.
Becerra, Hilton, Steyer lead field in latest polling on California governor’s race
An Emerson College poll released the day before the CBS News California and San Francisco Examiner Governor’s Debate showed Xavier Becerra leading the field with likely voters surveyed at 19%, followed by Steve Hilton and Tom Steyer both receiving 17%. Chad Bianco came in at 11%, followed by Katie Porter at 10%, Matt Mahan at 8%, Antonio Villaraigosa at 4% and Tony Thurmond at 1%. Twelve percent said they remained undecided.
In a CBS News/YouGov poll last month conducted before the April 28 CBS California Governor’s Debate, Hilton received support from 16% of likely voters polled, with Steyer and Becerra following at 15% and 13% respectively. Bianco came in at 10%, Porter received 9%, Matt Mahan and Antonio Villaraigosa both received 4%, and Tony Thurmond received 1%. The survey also found that a significant 26% of those polled were undecided.
California’s June 2 primary is an open primary where the top two vote-getters, regardless of party affiliation, advance to face off in the November general election.
By Dan Walters, CalMatters
This commentary was originally published by CalMatters. Sign up for their newsletters.
Two decades ago, when California got serious about reducing or even eliminating carbon dioxide and other greenhouse gases, its political leaders weighed two potential tactics about industrial emissions.
The state could impose direct facility-by-facility limits, generally favored by climate change advocates. Or it could set overall emission reduction goals that would gradually decrease and auction off emission allowances, assuming their costs would encourage reductions.
The latter, known as cap-and-trade, was favored by corporate interests as being less onerous and was adopted, finally taking effect in 2012.
Since then, the California Air Resources Board has conducted quarterly auctions of emission allowances, collecting a total of $35 billion dollars so far, which, in theory, is being spent on projects that would reduce emissions.
The revenues have varied from year to year, but they have generally increased as the emission caps have declined. Since reaching a peak of $8.1 billion in the 2023-24 fiscal year, however, auction proceeds have been declining.
Roughly half of the money has been given to utilities to minimize cap-and-trade’s impact on consumer costs. However, the program has been widely criticized as a de facto tax on gasoline and other fuels, which were already among the most expensive of any state.
The remaining revenues have been deposited into a Greenhouse Gas Reduction Fund that governors and legislators have tapped for various purposes, not all of them connected to emission reductions. In a sense, it’s been a slush fund.
Last year Gov. Gavin Newsom and the Legislature overhauled the program in two bills, Senate Bill 840 and Assembly Bill 1207. The program was extended, it was renamed as cap-and-invest and new priorities for spending auction proceeds were set.
Notably, the state’s cash-strapped and long-stalled bullet train project would get a flat $1 billion a year, rather than the 25% share it had been getting. Project managers hope that lenders will advance enough money to complete its first leg in the San Joacim Valley; the plan is to repay the loans from the $1 billion annual cap-and-invest allocation.
Early this year, the Air Resources Board released new regulations to implement the legislative changes but faced criticism that they would increase consumer costs. That led to a revision in April that softens the rules’ impact — most obviously on refiners who have been threatening to leave California — but environmental groups are very critical.
The April version would also sharply reduce net revenues from emission auctions, according to the Legislative Analyst’s Office, providing barely enough for the $1 billion allocation to the bullet train and another $1 billion for the governor and Legislature to spend. Other programs that have been receiving cap-and-invest support, such as wildfire protection and housing, would probably get nothing.
The program has been tapped in recent years to backfill programs that a deficit-ridden state budget could not cover, so the projected revenue drop would exacerbate efforts by Newsom and legislators to close the state budget’s yawning gap.
“The (Greenhouse Gas Reduction Fund) is a relatively small portion of the overall state budget, but it has been a noteworthy source of funding for environmental and other programs in recent years,” the state Assembly’s budget advisor, Jason Sisney, says in an email. “Collapse of its revenues would change the state budget process noticeably. The state’s cost-pressured general fund seemingly would be unable to make up much, if any, of a significant (Greenhouse Gas Reduction Fund) revenue decline at this time.”
When Newsom presents his revised budget this week, he may reveal how he intends to cover the cap-and-invest program’s shortfall, particularly whether he will maintain the $1 billion bullet train commitment that project leaders say is vital to continuing construction of its Merced-to-Bakersfield segment.
It could boil down to bullet train vs. wildfire protection.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
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