$1B Silicon Valley-backed utopian city ‘California Forever’ facing national security probe: pols
A planned utopian city in California continues to face a high-stakes probe by a US national security panel – and state politicians still aren’t satisfied that the secretive project isn’t linked to China.
Since 2017, a little-known firm called Flannery Associates has stealthily bought up nearly $1 billion in land next to Travis Air Force Base, sparking alarms on Capitol Hill that a foreign entity could be backing the project for nefarious purposes.
Similar concerns arose last year after a Chinese firm bought 300 acres of land near an Air Force drone base in North Dakota.
In August, Flannery tried to calm nerves by revealing its backers included US tech tycoons such as LinkedIn co-founder Reid Hoffman and venture capitalist Marc Andreessen.
The group has said the land’s proximity to Travis was unintentional and outlined plans to develop a picturesque city featuring sustainable energy, a pedestrian-friendly layout and good-paying jobs.
Nevertheless, the US Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) – an interagency panel responsible for vetting business transactions for potential national security risks – is still actively reviewing the project as of this month, a pair of California lawmakers told The Post.
Rep. John Garamendi (D-Calif), who previously blasted Flannery for using “strong-arm mobster techniques” to acquire land from local farmers, told The Post that the firm’s explanation to date is “only half of the story” – and claimed the project bears the hallmarks of a “patient” foreign investment scheme.
“To say it’s ‘American money’ is not a complete explanation of who is the investor,” Garamendi said. “I’ve been around long enough to understand the way foreign money – legitimate and illegitimate – is invested in the United States. Usually in an LLC, in a real estate transaction.”
Flannery Associates was originally registered as an LLC in Delaware, which does not require an ownership disclosure. The project’s organizers describe California Forever as Flannery’s parent company.
Flannery has rankled Solano County residents with vaguely-defined plans to build the city on patches of dry, unincorporated farmland that is pockmarked with wind turbines and abandoned gas wells and is known to lack enough infrastructure to support a large population.
Catherine Moy, the mayor of Fairfield, Calif., said the feds are “still investigating” the situation and were “not 100% that China is not behind funding on this.”
“CFIUS, they’re still going forward with their investigation. You can trust but verify, especially with things like this,” Moy said. “A couple of the investors already are very connected with China, business-wise.”
The CFIUS probe was first reported by CNN in August – weeks after it emerged that Garamendi and fellow US Rep. Mike Thompson (D-Calif.) had asked the panel and the FBI to investigate the matter.
The duo noted that Travis is a critical military transport hub known as the “Gateway to the Pacific” that serves as a key conduit for shipments to Ukraine, among other key functions.
“My concerns with the land acquisition in Solano County have always been on national security and food security,” Thompson said in a statement. “Their rapid acquisition of land around Travis Air Force Base caused concern about who was making the purchases and their ultimate goal.”
A spokesperson for Travis Air Force base confirmed that “senior officials are actively supporting all involved federal and Solano County agencies regarding the land purchases.” The spokesperson referred further questions to the Treasury Department.
The Treasury Department did not return multiple requests for comment.
When reached for comment, a Flannery Associates spokesperson said the project has “no other foreign investors” beyond those it has disclosed.
The firm has said its investors are passive and have no role in day-to-day operations.
“While most area electeds have taken an open-minded approach to the opportunity our project presents for local jobs, investments, homes for middle class families, and clean power, a couple of local politicians are unfortunately and irresponsibly spreading rumors and misinformation to insinuate that California Forever is a not an American company,” the spokesperson said.
“We have complied with all government inquiries and provided documents (including all investment agreements and subscription agreements) that unquestionably prove that over 97% of our invested capital comes from U.S. investors, and that the remaining less than 3% comes from UK and Irish investors (Patrick and John Collison, with smaller stakes held by Charles Songhurst and Thomas Mather),” the spokesperson added.
So far, the list of publicly-disclosed Flannery investors includes Hoffman, Andreesen, his investment firm Andreesen Horowitz, former Sequoia Capital partner Michael Moritz, Stripe co-founders Patrick and John Collison, Chris Dixon, John Dooer, Nat Friedman, Daniel Gross and Laurene Powell Jobs, the prominent philanthropist and widow of Apple co-founder Steve Jobs.
Moritz spent nearly four decades at Sequoia Capital and helped spearhead the venture firm’s expansion into China before exiting last June. Sequoia Capital itself has not been linked to Flannery Associates or the “California Forever” project, though the House Select Committee on China recently revealed it was probing the firm’s investments and business interests in China.
Moritz did not immediately return requests for comment.
A Sequoia Capital spokesperson confirmed that the firm had received the select committee’s letter about the probe, was “reviewing it and will respond.”
Flannery CEO Jan Sramek has scrambled to downplay the project’s ties to the tech industry, describing it as a “city of yesterday.”
Its website specifically rejects the notion that it is building a “tech utopia” and said Flannery is “not proposing a pie-in-the-sky ‘utopian’ fantasy.”
Critics, including Garamendi and Moy, argue that Sramek and his team are merely trying to reframe the project due to local backlash.
“The story has changed,” Moy said. “Any credibility he was trying to earn after being secretive for five years is being lost because he’s changing the story now. That’s what happens with people who you can’t trust.”
