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Over the past six years, a mysterious entity known only as Flannery Associates that was quietly scooping up nearly $900 million of farmland outside the Bay Area was hiding in plain sight.
It’s a team of some of Silicon Valley’s most well-known investors, according to a report by The New York Times, and they’re hoping to build a new city from scratch.
The outlet reported last week that the group bought nearly 80 square miles of farmland northeast of San Francisco by making unsolicited offers to land owners in the region. The group is made up of players like Marc Andreessen, Chris Dixon and others who are well-known in Silicon Valley.
The Times reported that the idea came about in 2017, when investor Jan Sramek began courting venture capitalists and tech company founders to begin acquiring land.
The plan, the outlet reported, was to “take an arid patch of brown hills cut by a two-lane highway between suburbs and rural land, and convert it into a community with tens of thousands of residents, clean energy, public transportation and dense urban life.”
News of the plan came as a bit of a surprise. For months, the Air Force was trying to identify who was behind the mysterious Flannery Associates, given the firm’s land holdings were nearby the Travis Air Force Base.
Tracts of land owned by the firm ran up to the fence of the base, yet for years no one knew who was fueling the purchases or anything about its intentions for the land.
At the time, an attorney for Flannery Associates claimed the company is controlled by U.S. citizens, but declined to name them. The attorney added that 97 percent of its invested capital comes from U.S. sources, with the rest coming from Irish and U.K. investors.
Still, the firm was scooping up tracts of land for prices that were multiple times its actual value, and the government grew concerned about not knowing the mysterious buyer’s intentions, according to multiple reports at the time.
According to The Times, the other investors behind Flannery include the co-founders of the fintech company Stripe, Linkedin cofounder Reid Hoffman, the founder of the Emerson Collective and others.
The buyers are hoping to avoid the difficulties of building new housing in existing California cities and at a time when home prices remain stubbornly high and out of reach for many.
For some, the investment may simply be a way to diversify assets. Andreessen himself has opposed housing in his backyard, according to public comments Andreessen and his wife made against a plan for multifamily housing in their town.
“I am writing this letter to communicate our IMMENSE objection to the creation of multifamily overlay zones in Atherton,” the Andreessens wrote, as first reported by The Atlantic. “Please IMMEDIATELY REMOVE all multifamily overlay zoning projects from the Housing Element which will be submitted to the state in July. They will MASSIVELY decrease our home values, the quality of life of ourselves and our neighbors and IMMENSELY increase the noise pollution and traffic.”
Developing in rural Solano County, California, might not be an easy prospect, either. The county has a slow-growth ordinance that The Times reported this week would likely need to be overturned by voters before any new city or exurb could be built on Flannery’s land.
That’s before any battles with state, county and local regulators. Development can take years due to zoning regulations and environmental review, so simply owning thousands of acres with few neighbors doesn’t make for quick and easy development.
The existing barriers are so steep that some professional developers doubt it will work.
“I hope they succeed,” said Mark Friedman, a longtime real estate developer in Sacramento, told The Times. “This just seems like a lot of tech guys with a lot of money and a ton of hubris diving into another business that they can’t possibly understand.”