Ron Kott: This big plan kind of all of a sudden drops on everyone’s doorstep. We were all wondering who these people are. Now we know what they are, and now we’re wondering now what, you know?
Ericka Cruz Guevarra: But last Friday, the public finally learned who they were, and now they’re going to have to win over the hearts and minds of residents and lawmakers who are feeling a little skeptical.
John Garamendi: They need to know that they have thoroughly, thoroughly soured the entire Solano County by their eyes towards bullying of landowners, by their unwillingness to talk to anybody for more than four years now and then to come out with a pie in the sky development program that will have enormous impact.
Ericka Cruz Guevarra: So today we’re talking with Erin Griffith, one of the New York Times reporters who broke this news about the billionaires behind Flannery Associates and what we know about them. Stay with us.
Ericka Cruz Guevarra: Erin, can you take me back to 2017 when this idea of a new city was first planted? Who was behind this idea?
Erin Griffith: What we reported last week was that Michael Moritz, who was a longtime venture capital investor at Sequoia Capital, the top VC firm in Silicon Valley, was sending emails out to potential investors asking about this project. And that’s sort of the first thing that we have seen about this kind of seed of this idea. He is raising money on behalf of a different person, an entrepreneur named Jan Sramek, who is kind of this interesting figure. He was born in the Czech Republic. He came to the U.S. He’s a hotshot trader at Goldman Sachs, a rising star on Wall Street. But sometime in the mid 20 tens, he comes out to Silicon Valley to try to make it as a startup founder. He had a couple of startups that didn’t really take off, but at some point he connects with Michael Moritz and pitches him this idea on building a new city from scratch. And from there, Michael Moritz starts, you know, tapping his network of powerful, wealthy investor types to see if they’d be interested. The gist of the pitch that my colleague Connor Doherty and I saw and reported on is that this is going to be a brand new city.
Ericka Cruz Guevarra: And I know it’s sort of like has this utopian vibe. Can you describe a little bit of what we know about, I guess, the sort of vision for what kind of city this was going to be?
Erin Griffith: In this pitch, it’s a walkable city like, you know, comparable to Paris. And it’s this idea of we’re going to perhaps rethink everything from governance to building and construction. We’re going to start with a blank slate. We’re not going to have any of the sort of entrenched, intractable problems that many cities, but particularly in California, have had. And that has kind of held them back from being able to build the housing that we need and that has contributed to this terrible housing and homelessness crisis that the state has been dealing with for a long time now.
Ericka Cruz Guevarra: Since then, this idea really has taken flight. And I know a company called Flannery Associates has been very busy in Solano County. Can you remind us, what have they been up to? Exactly.
Erin Griffith: Yeah. So the company that he was pitching at, he didn’t name it in his pitch, but eventually it turned out to be a company called Flannery Associates, which has been aggressively snapping up mostly farmland in Solano County. They started out buying land at just like $5 an acre. But as the locals have caught on to like this, this is the same company that’s buying land from everyone. And they’re making offers and it has the price has gone up and to to $20,000 an acre. So they’re wildly overpaying, but they have bought a lot of land. It has caused a lot of confusion because they have remained a mystery. You know, up until last week, we didn’t know who Flannery Associates was or what they were planning to do. So lots of rumors and speculation and investigations into who is actually behind this.
Ericka Cruz Guevarra: You and your colleague have since broke the story about who is behind Flannery. How would you, I guess, characterize this group of people behind Flannery Associates, these people buying up all this land in Solano County?
Erin Griffith: It was a group of very powerful and very wealthy Silicon Valley investors. We have Michael Moritz, who I mentioned earlier, who was a journalist who became a venture capitalist as one of the most successful venture capitalists. He’s, you know, early investor in companies that, you know, like Google or PayPal.
Michael Moritz: You absolutely have to have as the guiding force of an abiding, enduring technology company, a person or people at the helm who have products in their DNA.
Erin Griffith: Reid Hoffman, who co-founded LinkedIn. He’s been a venture capitalist now for a while. Marc Andreessen and Chris Dixon, who are two investors at the end and Horowitz firm. They’re both also entrepreneurs who became venture capitalists. Patrick and John Collison, the co-founders of Stripe, which is one of the most valuable startups in Silicon Valley. It’s a payments company. Laurene Powell Jobs, who is the widow of Steve Jobs and who runs this nonprofit called Emerson Collective. She’s also very active in Democratic politics. And then now Friedman and Daniel GROSS, who are two entrepreneurs who are now angel investors. Now, Friedman is notable because he also is the co-founder of California Yimby, which is a political group that has been pushing for a lot of effort for California to build more housing.
Ericka Cruz Guevarra: I know you tweeted these are sort of the boldface names of Silicon Valley. Can you explain what you mean by that?
Erin Griffith: Yeah, I mean, there’s just some of the most famous, partly because they’re among the most successful, but also because they are kind of thought leaders. You know, Marc Andreessen, he tweets, he blogs, he goes on podcasts. He has very strong and bold opinions.
Marc Andreessen: What you need is if you want to replace the elite that you have today, what you need to do is you need to have a better elite. And there’s only one way out if you don’t like the current oligarchic elite. That doesn’t result in just mass deaths. The only way out is a superior elite.
Erin Griffith: You know, Reid Hoffman is very well known.
Reid Hoffman: If you look at a lot of these companies that ten years ago were were ideas back on napkins in tiny and now are global transformational companies. This is the set of techniques that we’ve learned in Silicon Valley. In order to do that, and we would like to spread those techniques to as many places as possible.
Erin Griffith: I mean, he’s a big, big donor to presidential campaigns as well as a local Democratic. These are just like if you were going to name the most famous venture capitalist, these are the ones that everyone kind of in the industry holds up as the most well known ones, the most successful ones and the wealthiest ones.
Ericka Cruz Guevarra: I want to understand their motivation a little bit more here. Do we know anything about why an idea like this is something that would be of interest to this group of people?
Erin Griffith: These investors all have differing politics, but I think they all agree on the Silicon Valley idea of taking big swings. They’re like, why can’t we, you know, take the ambition and outside the box thinking that we apply to our businesses and use it to solve this problem that’s right in front of our eyes. I think there’s a little bit of that. There’s also just this perennial attraction to this idea of building a new city from scratch. It’s not a new idea. Y Combinator, which is a startup accelerator that’s here, had this whole program to the idea of building a new cities in the mid 20 tens. There’s another 100 millionaire in New York who’s trying to build a new city somewhere in the Nevada desert. There is some kind of strange attraction to just starting over with a clean slate and not having to solve some of the hard problems that are really deeply entrenched today in our existing cities.
Ericka Cruz Guevarra: I know Michael Moritz is actually also someone who has written some op eds about San Francisco’s plight in particular that I know got a lot of big responses for how he sort of painted problems in the city. And yeah, I imagine for these folks, it’s maybe more appealing to build a city in your image than it is to try and fix these problems that you see in cities like San Francisco that it almost feels like no one is able to fix.
Erin Griffith: Yeah, I think that that’s a part of it.
Ericka Cruz Guevarra: One question that I have been thinking about is, you know, if if this is an idea that they really believe in, that they think can help solve some of the these intractable problems that we see in California, why keep it a secret for so long?
Erin Griffith: Yeah, I think that’s a question a lot of people have had because that, I think, fostered a lot of skepticism or distrust because of all these years of not knowing. My understanding is that I don’t think they thought they would have been able to buy the land that they have. And it wouldn’t have it wouldn’t have worked if they had said who they are. I mean, they already have escalated the price they’re paying from very expensive $5 an acre to $20,000 an acre. So I think they believe that was part of the only way that this could happen. But again, I think we’re going to have to wait and hear from them. And now. Obviously flipping. The charm offensive mode.
Ericka Cruz Guevarra: That made my, I don’t know, my antennas tingle a little bit because I do imagine they have to be at least somewhat aware of the perception of them may be and what it might look like to to be billionaires coming into these like smaller communities. And I mean, I have to admit, I feel really protective of this place. As someone who is from Solano County, I mean, what reactions have you seen so far from locals?
Erin Griffith: I think people are, you know, naturally skeptical as you would be in such an unusual situation like this. I think maybe a little baffled. And, you know, I think there’s a little bit of fear. They wanted to live there for a reason, you know, because they don’t want to live in a city. And so I think people are worried about maybe being priced out. And if you can imagine putting yourself in the position of these local officials who for years have been trying to figure out who this group is and had no idea, you know, it’s it’s a little awkward.
Ericka Cruz Guevarra: Local officials have mentioned several barriers to this idea. Fairfield Mayor Catherine Moyer told KQED that resources are going to be a huge deal. Like water and transportation, Moy says the single two lane highway in the area, Highway 12, just isn’t going to cut it for a new city. It’s notoriously deadly and would be difficult to expand because of existing protective species laws. Then there’s Congressman John Garamendi, who says Flanary is going to have to earn the trust of people in the area, especially farmers, some of whom are being sued by Flanary on accusations of colluding to jack up the price of their land, not to mention his concerns about what this is going to mean for Travis Air Force Base, which is now surrounded by Flanary owned land on three sides. So the people behind Flanary have got a lot of work to do if they want to win the hearts and minds of Solano County residents. But Erin says in the tech world, people have had a much more positive reaction to this news.
Erin Griffith: It’s very interesting. Silicon Valley is a place where you can essentially go to a party and say, I’m going to build a new city from scratch and people will take you seriously and maybe even give you $1,000,000,000 to do it, you know? So I think people admire the ambition and are like, yes, it seems like a huge long shot, but. Good for them for trying. And I and I hope I hope they succeed. I think people are very curious about it. And there’s a lot of people who are interested in urbanism and new ways of doing things and, you know, bringing innovation to our cities. So I’ve heard, you know, from tech people who are are very curious and and interested and even want to work on it, which is, I think, different than the broader skepticism that I’ve that I’ve seen from non-tech people.
Ericka Cruz Guevarra: You report on venture capital. You’re familiar with the people behind Flannery, which most people who maybe aren’t in the tech world aren’t as familiar with. So how do you, I guess, foresee this group of people exercising their money and also their power to build the city in this place where honestly, I think a lot of people aren’t used to. I mean, one, the attention and then two big billionaires rolling through with big ideas like this.
Erin Griffith: These are tech titans of industry who all have very strong opinions. Oh, that is a very, very different world than politics. And, you know, dealing with people’s livelihoods in business, everything comes down to the bottom line. And things are a lot more emotional when it comes to your town and your life in the way and the way that you live. So yeah, they’re going to have to like really embrace some of that, like politics and soft skills kind of things. And they’ve already, you know, they’ve hired people in Sacramento to help do that. They’re going to dangle things like local jobs, you know, infrastructure, parks, other kinds of amenities, and hope that that will be enough to convince people that this is a good idea. It could work or it could backfire spectacularly. And maybe they’ll sell the land. I think that they believe that they will succeed where others have failed. But yeah, it’s it’s a wild one.
Ericka Cruz Guevarra: Well, Erin, thank you so much for for joining us and sharing your reporting with us. I really appreciate it.
Erin Griffith: Yeah, thanks for having me.
Ericka Cruz Guevarra: A representative with Flanary, told KQED that the company plans to launch a ballot initiative in Solano County to help speed up development. There are going to be many, many more political fights about this in the months and maybe even years to come. That was Erin Griffith, a reporter with The New York Times, covering startups and venture capital. At the top of this episode, you heard from Rio Vista Mayor Ron Kott and Congressman John Garamendi. Thanks to KQED and Alex Phinney and Billy Cruz for that tape. The interview you heard with Michael Moritz was from PBS. The interview you heard with Reid Hoffman was from CBS This Morning, and the clip of Mark Andreasen was from the Upstream podcast with Eric Kornberg. This 30-minute conversation with Erin was cut down and edited by senior editor Alan Montecillo. It was produced by Maria Esquinca to shout out to the rest of the podcast team here at KQED. That’s Jen Chien, our director of podcasts, Katie Sprenger, our podcast operations manager. We get audience engagement support from César Saldaña. And Holly Kernan is our chief content officer. If you liked this episode, consider sharing it with your homies. Word of mouth is the best way to help us grow. The Bay is a production of KQED in San Francisco. I’m Ericka Cruz Guevarra. Peace.
