Not a Sinister But a Hopeful Sign

(WSJ map)

Seven weeks ago we posted our take on the mysterious Flannery Associates that had bought 52,000 acres near Travis Air Force Base.

Personally, I think that the land purchases have been too extensive ($800 million) to be for a [Chinese] spying operation. More likely the ultimate goal is development; residential costs in Vacaville and Fairfield are all much lower than in the San Francisco Bay Area and expansion near there makes sense.

It also wouldn't be surprising if the buyer was a tech giant which has long-range plans to build a "company town" complete with offices, manufacturing, and houses. Far from being a concern, proximity to Travis AFB would be a plus if the hypothetical tech has aerospace elements.

My predictions were close to the mark.

Tech Leaders Emerge Behind Plan to Build New City Near California Air Base

A group of high-profile Silicon Valley entrepreneurs and investors emerged Friday as backers of a group that plans to build a new city in Northern California, after its purchases of land around an Air Force base had raised national-security concerns among U.S. officials.

Flannery Associates said Friday it planned to construct a new housing development in the area...

The group’s investors include a high-wattage list of technology entrepreneurs and investors, according to a person familiar with the group. They include LinkedIn co-founder Reid Hoffman; former Sequoia Capital partner Michael Moritz; and venture capitalists Marc Andreessen and Chris Dixon, who are general partners at Andreessen Horowitz.

Other investors include Patrick Collison and John Collison, co-founders of Stripe, a payments processor to internet companies; Laurene Powell Jobs, a philanthropist and the widow of Apple co-founder Steve Jobs; and Nat Friedman, the former chief executive officer of GitHub.

The $1 billion spent so far is small potatoes compared to the combined net worths of the billionaires named as purchasers. That said, it will take multi-billions more, plus a time horizon of at least two decades to see just the initial returns from this project.

We will likely find that the investment is being made by trusts for the benefit of the billionaires' children and grandchildren, with the development profits escaping estate taxes.

Additional comment: California is not totally lost if some extremely wealthy people still regard California as a place to make money from very long-term investments.