Can California Ever Build Again? - EP 34 Jan Sramek

Today's podcast is not in our usual studio. We are in Solano County. I'm with Jan Šramek, who is— are you the CEO of California Forever? All right. So we're in Solano County. This is the home of California Forever. To just give some context for people who've never heard of it before, it's this long-running project basically to create a new city in California. And it's been backed, I think, to the tune of about $1 billion, has gone through some, some maybe downs and then some ups, some ups and downs and then now ups, just as to how people were feeling about this idea of building a new city in California, which, which we used to do all the time and then suddenly became a strange, difficult concept. But so I want to— obviously we're going to spend some time, get into all of this, the history of the project. Why you'd want to do such a thing, some of the journey and your background. But why don't— for people who've never heard of California Forever before, why don't you tell us what it is?

Yeah, it's great to be here. Thanks, Ashlee Vance. California Forever is a company that I founded 8 years ago to build the next great American city. And when I say the next great American city, I mean all of the things that you would find in one of the great cities in America. And so our focus has been on manufacturing and then more recently on shipbuilding. And so as of now, the city includes the proposed Solano Shipyard, which would become the biggest shipbuilding complex in America, the Solano Foundry, which is an advanced manufacturing park that we rolled out recently, and then incredible neighborhoods around it with 175,000 homes downtown, really focused on traditional American urbanism like you would find in San Francisco or Philadelphia or Chicago. And we're really doing this to create a place where California can build again. And so we're doing this to bring back a lot of the legacy that the state used to have and solve some of the biggest issues that California is dealing with. Place where companies can stay and grow in California, place where the next generation of Californians can afford to buy a home, and a place that brings back this sense of optimism that the state used to have that we would love to come back.

So a bit practical, solving some problems that the state and the nation face, and then a bit of symbolism on, on top of that. 100%.

Yeah, that's a great way to put it.

And how many people— what is— what's the, the goal for how many people would live here?

Yeah, so we own about, um, 68,000 acres, so that's about almost 110 square miles. For context, that's about 2.5 times the size of San Francisco. It's 5 times bigger than the island of Manhattan, 70% bigger than Washington, D.C. And the proposal for the city, which is on about 15,000 acres of that in the middle, is for 400,000 people. And then the land around that is used for advanced manufacturing, it's used for shipbuilding. There's a lot of land that right now is in a long-term strategic reserve, which could be used for energy generation. And then we would surround the entirety of that with a greenbelt of open space and agriculture. And so really allows us to master plan the entire area in total.

Jan, thank you for joining us. It's great to be here. Tell me where we are.

Uh, we are in Solano County, about an hour north of Silicon Valley, um, where, um, we're building a new city. And we're sitting at the southern edge of the holdings. So the land holdings is 100 square miles, basically between Travis Air Force Base and, um, what is the confluence of the San Francisco Bay with the Sacramento River. And we're sitting at the tip of the land holdings in a very old house that someone built here 50 years ago and overlooking the— actually overlooking Mount Diablo just by Walnut Creek.

This is just somebody's house that used to live here?

Yeah, my understanding is this was a fairly eclectic couple who built this in the '70s. I think they were— I want to say they were the descendants of one of the steel fortunes in the country.

Okay.

And they built this for entertainment and there's a lot of history in it. I think this wood and the ceiling comes from the original Yolo bypass when they were building that back during the gold rush, and so they reclaimed it, and there's a lot of history and that entertained, but then they sold it, I think, 40 years ago, and nobody's lived here for 40 years.

I was told there were cows and sheep.

They probably were the only inhabitants, but amazingly, the quality of the workmanship is kind of astonishing. You swing the door here and it's perfect. It hasn't moved in 40 years, which is pretty impressive.

Yeah, yeah, that makes sense. Okay, well, for people who've never heard of California Forever, give me the big idea, the big concept.

We are at the same time the most obvious and at least as of 2 years ago, the most controversial startups in California. And we're doing the things that companies have done for a long, long time. We're building We're building a new city. And so all American cities are basically new cities, at least by the standard of the world, right? I mean, we've been building cities for 10,000 years and all American cities are basically less than 300 years old. And in California, mostly less than 100 years old. And so about 8 years ago at this point, I set out to create a place where California could build again and build a city and that city could include manufacturing and homes and offices and today increasingly shipbuilding. But in some sense, the oldest idea in the world, which is when we run out of places to build, we should find a piece of land that isn't particularly good for agriculture or anything else in a good location and build there. And we've been able to find what I thought and what I think has been proven to be probably the best place to do this in America when you look at all of the different factors.

And just to help locate people, It's nearish Napa, nearish San Francisco. Help center us.

Yeah, I mean, we are basically in the middle of this, what has become the Northern California mega region. So this whole area between Sacramento and San Jose, actually between Tahoe and San Jose really, has become this mega region. There's about 14 million people who live in that region if it was a state.

4-0.

1-4.

1-4.

14. If it was a state, it would be the 7th largest state in America, and we are in the heart of it. And so we are basically equidistant to San Francisco and to Sacramento. So San Francisco, Silicon Valley is an hour, hour 20 from here. Sacramento is about an hour to the north. And then we are about, from here, we are about 35 minutes east of Napa. So it's in the very heart of this region. At this intersection of air and water and rail. And so the property that we own is on the one side, we have Travis Air Force Base, biggest, one of the biggest military installations in America, at least in terms of the Air Force. We obviously on the water, on the San Francisco Bay. And so it's this really interesting crossroads of Northern California where it all comes together. And by historical accident, there happens to be 100 square miles here that is a really great place to build and we haven't built it yet. And so it's kind of a miracle that the place even exists.

Yeah, I mean, and there's like, when you look at, I mean, it's been farmland historically or grazing land. Grazing land. Yeah, yeah. Because it's not the prime farmland. I mean, this is—

Yeah, I mean, people have tried to grow crops here and generally hasn't worked. And so it's— The soil is, my understanding is the soil is very heavy. There's a lot of clay in it. And so it doesn't really support crops. And so it looks, it's basically grazing land. It looks like the kind of quintessentially Californian. It looks like the hills that you drive through on the I-5.

Yeah.

From Sacramento to LA.

And I want to get into some of the evolution of this idea. I mean, you mentioned you've been at it for 8 years when you, because now political— the political climate has changed. Some things have changed. And, and I— you guys are talking about manufacturing and shipbuilding, and we're going to get into all that. When you first started out 8 years ago, was that fully the vision, or did you more want to just make a, a more modern, family-friendly type city in a region where we just can't seem to build any houses? And you saw it as like an opportunity to make, you know, kind of like an idealized community or, yeah, what was the very original vision?

Yeah, I mean, the original vision was to create a place in California where you could build and where you could build anything. And the reason for why, going back all the way to 2016, I decided that we would acquire as much land as we could is that You wouldn't necessarily even know what you want to build. I mean, this, this, this is a 40, 50-year buildout, right? And you can't exactly predict what you're going to need. And the origin of the idea was in when I landed in California in 2013, 2014. And at the time, there were 3 distinct things that it was very clear that we couldn't build in California. We certainly couldn't build housing, but we suddenly also couldn't really do manufacturing. I mean, it was the beginning of the onshoring, hardware startups were beginning to come in. I mean, I think Anduril was founded, what, 2017, 2016? Around there, yeah. And so that was happening, but it was very clear that you couldn't do that in California. But it was also even just office space. I mean, if you go at kind of, it sounds unbelievable, but in 2017, there was a cap on the amount of office space that you could build in San Francisco. And companies legitimately were leaving the Bay Area because people couldn't afford to live there and they couldn't build offices. And so the idea was, if we can acquire this extremely strategic landholding, then you won't always predict what you want to build there, but because of where it is and all of the access that it has, it will very likely support whatever we need to build. And that's kind of been proven out, for example, with the shipbuilding component of it, where That's become a thing in the last 2 years. When we bought the property, I knew that we'd be buying a bunch of land on deepwater ship channel, and I was like, well, maybe we'll build a port there one day, or who knows? But shipbuilding was not on my radar 8 years ago, but when it popped, we actually popped out. We actually had a place where you could do it really well. Yeah.

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Yeah, I mean, I think we knew, so we obviously knew that it would be controversial when we announced it. I mean, you, for reasonable business reasons, you do buy the property quietly. And we said this is a group of American investors buying it as a long-term holding. Which is all true. And then if you propose to come to a community and say, we're going to build a major new city and a major new advanced manufacturing zone, obviously, and particularly if you're coming in as an outsider, people have concerns and we knew that that would be the case. We knew that it would be controversial. I think that there's also a really interesting timing component to this where I want to say I've been talking about abundance since 2016. And so what happened in some sense is there was a component locally here where people got to know us. They realized that we are not here to just do something for a year and then leave. We actually committed, we actually know what we're doing, we can actually bring the companies, we can actually bring the capital. So that's what's happened at the very local level. But then at the national level, obviously the vibe has shifted very profoundly in the last 2.5 years. And in some sense, what we said we're building hasn't changed. I mean, if you look at what we said the first time that we came out, we said we want to build a major new city and bring a bunch of employers here, particularly in advanced manufacturing and defense. Day one is what we've said. But we were so— I think as a country and particularly as a state, we were so caught up in this no-growth mindset and in this zero-sum mentality for such a long time that we kind of, when we introduced the project in late '23, mid-'23, we were still caught at the ending of it. And that's very profoundly shifted. And it's shifted in a really bipartisan way, right? I mean, you have, my perspective on this has been that when the left and the right agree on something, there's not a lot that they agree on, but when they do, there's normally a deep, profound truth at work. And so when you look at Ezra Klein on the one hand writing about abundance and Mark Andreessen writing about it's time to build and Tyler Cowen speaking about state capacity and, and Yoni Applebaum and all of other people, the fact that all of these people are saying something very, very similar in different ways means that there is a deep underlying truth at work, which is we de-industrialized the country for 50 years and we completely forgot how to build things. And that has decimated the middle class, made the country unable to produce the very basic things we need. And I think one of my colleagues put it the other way and he said something like, you're not a superpower if you can't make anything. You're just an outsourcing customer to someone else, basically. And all of that is very quickly coming back and we are, basically at the heart of all of these trends, which is what's happened over the last few months.

I mean, like you said, the climate has shifted. I remember when this got announced and there was a feeling, at least me, you know, I know a lot of the people who are invested and obviously like pro the idea. It felt kind of like hopeless to me in some ways because I thought you would get so much pushback against the optics of some of this. And then I just thought it's like, well, good luck anyway, even if you know what I mean. Even if, even if everybody was okay with it, like I tweet about the California high-speed rail all the time. It seems like even when we're trying to do something, we can't actually do it. And so, yeah, I just felt like you're battling California as a, as a thing.

Anyway. Yeah, I mean, my kind of original founding thesis here in 2016 was that the situation in California would get worse until it got better. And so when I looked at the structural forces that were making it impossible to build here, my sense was basically we had— this was the state for, I mean, for a century, this was the state that could build anything, right? This was the optimistic place in the country. We could, We could build factories. We built these amazing public works. The Golden Gate Bridge was built in 4 years. We built the Golden Gate Bridge in 4 years and then we were so excited about it that to celebrate it, we built Treasure Island. We built a 400-acre artificial island in the middle of the bay. And we did that in like 3 years to celebrate the completion of the Golden Gate Bridge.

Well, and we've talked about it, even just San Francisco and Los Angeles, two of the world's most iconic and productive cities have not been around Exactly, exactly.

By the way, there's photos of— not photos even, there's drawings of San Francisco before settlement. And you look at those pictures, they look almost identical to photos of the site. I mean, where we're sitting right now is de facto a— it's a quasi-peninsula. You have these windswept hills with grasslands on them, and it's surrounded by water on 3 sides. You look at original pictures of San Francisco kind of from an Oakland perspective, it looks almost exactly the same. You look at the pictures of people laying down and building Golden Gate Park. Golden Gate Park used to be sand dunes. There's literally photos of people with horses preparing Golden Gate Park to become a park, and they terraformed that whole place. The whole western side of San Francisco was sand dunes. And so, and this was all like, what, 100 years ago, basically? And so we've known how to do this. We just kind of forgot. And if I oversimplify, we basically started passing some well-intentioned environmental laws in the '70s and we just kept adding for 50 years. And it's, I say, having a glass of wine or two is a pretty good idea. Having 50 is not such a good idea. And that's kind of what we've did. Like all of these policies are generally well-intentioned, but we've just completely tied ourselves in knots. Unable to build anything, and high-speed rail is a prime example of that. Now, my sense was that it would get worse, but it would get so bad that it would inspire a counter movement. And I think Abundance is basically that. I mean, in 2016, it was very clear that under the current doctrine, it would be challenging to build this. But my sense is at some point people get fed up with their kids moving to Texas. At some point people get fed up with having a 2-hour commute because you can't build a factory in Solano County.

Well, people love California. They want to live here.

They want to live here and they want to believe in it. And I think, I think generally speaking, on most of these big social issues, we kind of overshoot and then we come back. And that was my theory of the case in 2016. And it's been satisfying to kind of see it play out over the last 2 years with everyone now suddenly talking about building.

It is funny because you and I met about like 2 years ago and then, and then yeah, I mean, I just this whole— when I first started coming here, it was still— it looked like politicians were going to block, try to do their best to block you guys from allowing this to happen. And then now, I mean, like you're talking about with the abundance movement and everything, it seems sort of obvious. When I first started coming here, I thought this was like the last, the last great test for California, because I could see the— I could see the optics part of rich people taking over thing, we don't trust them. That I felt like was against you. However, the other argument was like, okay, well, if the world's wealthiest, apparently most powerful people can acquire all— if they can't build a city in California in 2023, then like it's done, you know? Like, if you have every— if you have all sort of— not like limitless resources, but if you have this much of a push and you can't build something new, then like it's just never gonna happen again. And so I always felt like this was this grand experiment to see where the will actually was at.

100%. I mean, I think that there's two levels to the answer. I think the first one is, and people look, the community has recognized it. Who would you rather have build a city? A real estate developer or a private equity firm who's going to come in and need a bunch of dividends in 7 years and then toss it? And sell it to someone else and disappear who has no incentive to do it right and who has no incentive to bring in employers? Or do you want it backed by a bunch of people who care about it for reasons other than money and who have a 40-year horizon and who can actually do it right and who, by virtue of being in the tech and manufacturing ecosystem, can actually help bring companies here? And that's what we've basically said. And people have seen that. And by the way, most of the fantastic American cities, or many of them, were basically founded by wealthy families who decided to do it, who had care about architecture, for example, for reasons beyond money, right? Like people compare, people complain about architecture in American subdivisions. They're like, oh, this is bland and you shouldn't have some nameless corporation own it. Well, again, do you want a private equity firm or do you want basically a group of people who really care about it both at the team and at the investor level? And then I do think this is California's final and first test. It's a landmark moment, right? I mean, the high-speed rail has become a symbol. It is a symbol of California's failure. Every time someone wants to bash California, they universally will pick up high-speed rail and say, look at this progressive state that really cares about trains and they can't build it. I mean, Obama said it a month ago. He said some version of, I don't care what your ideology is. If you can't actually build whatever you believe in, it doesn't matter. It's irrelevant to the people that you're trying to influence.

Especially in the tech capital of the world, we can't even do what other people have done for decades.

China, in the time that we've been trying to build high-speed rail, China built like 22,000 miles of high-speed rail. And we've built zero. Yeah, not like 100, but zero miles of high-speed rail. And the company, the contract was first given to a French company and when they started in 2007 or whatever, and then in 2011 they returned the contract to the state of California and they said it is impossible to build here. We're going to go and build it in Morocco. I know, because that's easier. And that, that high-speed rail is operating in Morocco and we don't have a single, single station. But I do think this is California's final first big test. And I think that, I mean, the state desperately needs to show that we can build something. And I think we do need to. I think if we want Californians to feel proud about living here, if we want to, if we want employers to take California seriously and decide to come here, we need a an example that we can do stuff in California that is physical and big enough to overcome the stigma of high-speed rail. At some point, at some point, people talk about— everyone in Sacramento is talking about abundance right now. Well, at some point you have to stop talking about a book at expensive dinner parties in restaurants over expensive wine, and you have to be able to climb on top of a hill and look and point at the distance and say, hey, we built that. And there's a lot of good things that are happening at the state with, for example, the housing reform. But it's not a potent political message to resend the narrative to say we built 15,000 units of multifamily housing in 500 buildings across California. It's not a symbol, right? High-speed rail is a symbol because people can imagine what that looks like. And I think California needs a win. And when I look at the list of projects that can demonstrate that the state is back, I don't see another one. Like, what else is there that we can build that someone could go and campaign on it? Or you could have a national election and they could say California is back. This is it.

Yeah. I just want to put a little more meat around the vision for the city. Like, there's some parts that I think are easier to wrap your head around, which is shipbuilding, manufacturing. You want people to be able to like work at their jobs and live somewhere nice and maybe have that be close by each other, you know, in California over the last 20, 30 years. I mean, when I first started covering Silicon Valley, you, you could work at Sun Microsystems or Cisco or something like that. And we actually built the networking equipment in a factory nearby. I mean, you know, it's— the shift has happened pretty quick in some ways. And so So that part I get. Would you like just to paint a picture for people of what the city would look like? Are you trying to build— is it going to look similar to another suburban city? Is it going to be ultra futuristic and modern, or what do you have in your head for what you want it to look like? And I get that this is like a 40, 50-year journey.

It's going to take 40 years to fully build it out. But at the same time, You can have people living in homes 18 months, actually 12 from when you break ground. So this can go really, really quickly. Even in California, people think California can't build. California can't permit. Once we've permitted something, it goes as quickly here as it does in Texas. But that aside, there's 3 big components to what we're building in the city. So there's a proposed shipyard, there's a proposed Solano Shipyard, there's a proposed place called the Solano Foundry, which is the biggest advanced manufacturing park—

would be—

in America. And then all around that, we have these incredible walkable neighborhoods. And we want the city to be this really interesting fusion of the new and the old. And the way that I would describe it is obviously a place like the Shipyard or the Advanced Manufacturing Zone is going to feel very futuristic in terms of what you make there, right? The industries we want to come here are the ones that have been invented in Silicon Valley. And then we let China build all of the actual products, right? So Robotics, drones, defense, I mentioned shipbuilding, all of those physical industries we want to have here. And so obviously those places will have a very futuristic sense to them. But then we want to balance that out with what is a very traditional American city plan when it comes to the downtown and to all of the neighborhoods around it. And so The places that I take inspiration from are these late 18th century, early 19th century traditional American cities like Manhattan and Brooklyn and Chicago and Philadelphia, or at a smaller scale, Charleston and Savannah, San Francisco, the older neighborhoods in San Francisco. And I think that there's something really powerful and super interesting about this fusion of the old and the new where Once this place gets going, it is going to feel like America's frontier. I think one of the things that we've lost as a country is the sense of a frontier, and this can very much feel like that. But then one of the challenges with that, I think, as a country we deal with is sometimes we don't do a particularly good job of painting the vision of what the pro-tech future can be. And some of that is just the physical description of it, right? I mean, you look at some of the descriptions of the future and it's glass towers and massive skyscrapers and it looks like Blade Runner or whatever. And you can have that in small pockets, but if that's the entirety of how you paint the city of the future, to most people that feels very cold and impersonal and not a place that they want to live in. And I think this combination of the new and the old could be really powerful. And that's what we're aiming for.

Because there's like, I've been to Shenzhen. I mean, part of it is amazing because you go and there's these massive skyscrapers and they've got LEDs on all the outside of the building at night. They'll these incredible shows, like there's a horse galloping, you know, from building to building across the whole thing. I do, I do also think though that like I'm not sure that the— I don't think that's necessarily the idealized version of where like the average American might want to— some people would want to live there, but I think some people, there is something about it that is Blade Runner-y and is maybe like attractive to someone like me, but, but maybe not.

Yeah, exactly. I think that there's a need to have the super futuristic high-rise tower part of, at least in some cities, we are not proposing to build it here, but there is a need for it, right? Like, it's novel to go there and live there for a while and maybe in your 20s, it's fun to go there for the weekend. Love going to New York and being on a 50th floor for the weekend. Do I want to live on a 50th floor? Particularly with kids? Not really. And I try that. And I think you actually see it. We've had this huge movement towards modernist architecture, which I think has been an absolute disaster and horrible for the country and for the world. And the parts that I find the best is you have these professors who will teach modern architecture and they'll be at universities and they'll talk about how traditional architecture is horrible and it's outdated and building it again is kitsch and we should never do it. And everything that you build has to be functional and sleek and tall and modern and glass. And then you look at, then you ask them, where do you live? And they live in like an 1880 row house in Georgetown over in the West Village. And so the revealed preference of even the people who spend their life designing these buildings is actually very often to live in places that are much more human.

And so, so you're kind of describing like when you talk about walkable and all this, I mean, you're talking about just a— I mean, I guess it looks a little bit conventional and just— yeah, in some sense. And, and, and you do stress the walkable part. So it's just that you would be in this community where you, you don't have to hop in your car for everything and kids are out playing in parks and things like that. Is that—

yeah, it's, it's, it's, it's, it's that it is that It actually has good design and fairly traditional architecture. I mean, part of the reason for why we have these fights over housing is that so much housing looks absolutely awful. You look at most of these new buildings that we put up that we call 5-over-1s, they all look the same and they look bad and they have this fake asymmetry in them and they try to look like they are 5 different buildings when they are not. And it's these gray, brown, indistinct boxes that look the same in LA and San Francisco and Dallas. And then everyone is surprised that people don't want that in their neighborhood. And I think it's— the standard is so low. I mean, if you, if you say, if in California what you want is you want to be able to live in a neighborhood where that is safe, where your kids can walk to school and you can walk outside to go have lunch or dinner or a glass of wine and you have a commute that is less than 20 minutes, however you get on the commute and the average person who makes the average salary can afford to live in that place. That should be table stakes. That shouldn't be like That's just foundational California dream, American dream. We are nowhere near enough being able to do that. I mean, there's maybe 1% of the housing stock in California that can provide that to people. I mean, I don't know, Santa Monica, parts of San Francisco, Berkeley, and the house in those places, other than like some small towns that are more remote, the average house in those places is like $4 million.

Yeah.

Like, how did we get to a place where that is somehow ambitious. That is very basic. But I think that the optimistic take on that is that if all we do, if all we do is a place that is something that would be very unexciting to someone 100 years ago, they'd be like, oh yeah, someone is building another traditional neighborhood like this one. And people would be complacent. I think it would be the hottest commodity on the market right now. Because we've screwed up the design of our cities so badly. Or at least I— let me qualify that. There is a need and there's a place for the traditional kind of suburban neighborhoods that we built. And some people really love living in them. The problem is if half of the population really wants that, the problem in California is 99% of the housing stock is that. I mean, it's like you look at most neighborhoods that are for sale in California and they all look the same. It's kind of like if 99% of restaurants served pizza. I mean, I love pizza, but at some point you want Thai and the Mexican and all of the other places, right? And we've just created— if you look at the diversity of products that you have in fashion and music and cuisine and entertainment and everything else that we do, and you compare it to the diversity of products that we have in housing, housing and kind of neighborhoods, it's 2 orders of magnitude less diversity. And that's crazy because you spend 40% of your income on it. So the biggest ticket item that we buy provides the least choice to people. And I think that the lack of choice is just deeply kind of un-American in some sense.

Okay, I want to get people to the status of the project and where we're going for it. But I want to do the backstory a bit first because it's crazy. You're Czech. That's right. And you said you came to the US in 2014?

2014, yeah.

And you grew up— I mean, we've known each other a little bit. You grew up in a pretty small Czech town. You're not—

700 people, yeah.

Yeah. And so what— I mean, two questions. Why does a Czech person care about California so much to go to the trouble of dedicating their life to this? And then tell me like a little bit of the journey of your background and then how you got to this project on day one. Yeah.

Yeah. So grew up in a very small town in a, in a entirely blue-collar family. So my dad is a mechanic, my uncles work with CNC machines and in factories, my My grandmother worked in a quarry and I mean like doing physical work in a quarry in a steel mill. And I was born 2 years before the wall came down. So I basically grew up in this very optimistic, in this kind of burst of optimism in Eastern Europe in the '90s, which was heavily driven by American culture, which was heavily driven by Californian culture at the time, right? So I grew up on this, diet of entertainment and movies that portrayed California as this deeply optimistic place that was on top of the world. And I wanted to come here in my teens, got a scholarship to go to school abroad. My mom asked me to not go to America because she wanted to see me more. So I went to the UK, so it was closer. So spent 10 years in the UK and in Switzerland and then eventually made it out here in 2014. I kind of think that the core of this idea really, I mean, it was literally the first time, the first weekend when I arrived in California in some sense was the foundation of this, where I remember, so grew up with this vision of California deeply wanted to place and build anything. I get on this super modern train in Switzerland, I go to a beautiful new airport in Zurich, I fly to San Francisco. This is before the airport had a makeover. So the airport doesn't look great. And then I get on BART to go to San Francisco and I literally couldn't believe it. I was like, what the hell is this? This looks like it's 50 years old and nobody's using it. And then I got off BART at Market and Powell.

Oh, like the Tenderloin.

And then basically almost at the Tenderloin. And so I landed in San Francisco and this is 2014. And it was a Saturday and I was like, what should I go? And I didn't know anyone at all. And it's like, what should I see in San Francisco? And Twitter just opened an office. So not only did I land on Market Street, and I was like, let me walk to the Twitter office. So I walk through the worst part of the city, through everything that was happening at the time. And it was just a cultural shock because I grew up, I mean, at the time Silicon Valley was on top of the world, right? This is the time when 100,000 young people are leaving New York every year to move to San Francisco. And it was before the media really kind of made that notorious all over the world.

Yeah, it was before the 2016 election.

Exactly, exactly. And so it was just a cultural shock then, that first day. And then the second day, and this actually goes to the walkability piece of the story. I had spent 10 years living in these incredible, traditional cities like York and Cambridge and London and Zurich. Didn't have a car, didn't drive a car for 10 years. It was so bad that I felt that I forgot how to drive a car, so I had to rent a car the Sunday. I had a meeting on Sunhill the next day, so I rented a car on the Sunday just to drive it around to make sure that I could actually physically do it. And I drove around Silicon Valley and I had the same reaction that many people before me did, which is, where the hell is Silicon Valley? Like, we had We have these strip malls and we have these subdivisions. Like, where is it?

We got Quiznos.

Where is it? And it was kind of, because if you look historically, this combination of, like how many times did this combination of human capital and financial capital and creativity and openness to innovation and people from all over the world coming together happen? Like Florence, Paris, London, New York, Chicago, Bay Area, and maybe LA. That's, I mean, that's it, at least in the Western world. And every time when it happened prior to the West Coast, it created these gorgeous cities that stood for hundreds of thousands of years and they had public art and they had these institutions. And even in New York, I mean, people love to criticize the, the tycoons of the first industrial, the second industrial revolution, right? But you have Carnegie Hall and you have the Met and you have all of the beautiful buildings on Central Park and you can see where that money went and you can see what it made. Where is it here? It's not here. And so that first weekend was a cultural shock. And then I landed here. Kim Mai Kaffler is writing about borrowing owls in TechCrunch and the origin of the housing crisis. People are throwing rocks at Google buses. And I'm like, wait a second. I grew up in this place where there was no opportunity. You had to work for it. Everything was blue collar. There was no free lunch. And the whole world was trying to become Silicon Valley. And here people were upset that Google was creating good paying jobs. And sometimes it takes an outsider to look at it and be like, this is completely insane. Because it's the same as like you live in San Francisco for 6 years, I did, you get used to some of the challenges of the city, right? It takes that moment of arrival and that shock to be like, this is completely batshit crazy. This cannot be.

Well, you know, it curtailed the massage program.

Yes, yeah, exactly. And so I land here at that time and then San Francisco passes an office cap. Like you have, You have capital from all over the world wanting to come to San Francisco to build offices, housing, whatever. And the money is literally waiting outside of the city. And all they had to do is to say, okay, you can build. By the way, all of these jobs were union jobs. All of the offices in San Francisco are getting built with union labor. And they pass an office cap, like we don't want any more jobs here. It was just completely batshit crazy. It seemed like a bad dream. And that was kind of the foundational story. So for 2 years, this was an interest. And I went on this deep dive of how did we get here as a state and as a country.

And you're doing what? You're a business person.

I was working, I was running a small tech startup basically. It was in software and training and education.

Okay.

And then eventually we sold that and I had some time. And so I just kind of went on this deep dive and I went and read 500 books about the history of cities and real estate development and land use regulations in California and the patterns of just general development in America. Like how do we build new cities and how do governments work at a municipal level and what are all of the issues that cause these land use battles and CEQA and California environmental regulations. And it was an interest, but eventually it was an obsession. And the whole time the situation is getting worse. There's more and more money getting pumped into the venture ecosystem and more and more of it is just getting completely lost by basically paying for overpriced real estate. And then these companies are beginning to leave to Phoenix. This is the time when all of that is happening. I'm kind of like, wanting to scream. I'm like, guys, the whole world is trying to create, like, governments all over the world are pumping billions of dollars to create the next Silicon Valley, and we are killing it by just— and the only thing we have to let is let these companies build. It's insane. Then I decided to go and work on how we would build more in existing cities. So not from a regulatory reform perspective, but Can you buy buildings that have too much parking around them and then get the permission to build more offices, more manufacturing, more, uh, housing on it? Potentially, I was looking at, well, if we get self-driving cars, parking demands go down. Can you do that? But what that experiment did for about a year was I was more depressed at the end of it than at the beginning, because it was very clear that we had set up a system where you couldn't solve the underbuilding in just the existing cities. And then eventually in 2016, I, because I'd read about people building new cities all over America, right, for 200 years. So in 2016, I thought, well, wait a second, what if you built a new city at the edge of the Bay Area, somewhere close enough that you could get there, and then you brought a bunch of jobs there, both office and manufacturing, you build a lot of really high quality walkable neighborhoods. You could make a huge dent in the problem. And within seconds of thinking of that idea, I thought, you should do that, I should do that in Solano County because I had come through here to go fishing in Rio Vista about 4 months before that. And so I remembered driving through this gigantic open expansive area that clearly wasn't being used for prime farmland or crops. It wasn't forest, it wasn't something that people really were, um, um, very actively using. And, and that was the very beginning of that idea.

Okay. Since day one, the Core Memory Podcast has been supported by the fine people at E1 Ventures. They are a young and ambitious VC firm in Silicon Valley investing in young and ambitious companies and people. Thank you so much to E1 Ventures. For all your support. How did you hit on Solano County in particular?

So basically immediately when I thought of building a new city at the edge of the Bay Area, I thought of Solano because I had completely randomly come through here about 4 months before then to go fish in Rio Vista, which is a small town out here. And I remembered seeing this gigantic expansive area that was basically brown grass in the summer., and I thought that could be a really interesting place to do it. And particularly because I remember talking to a fishing guide on the river and I asked him, where does your wife work? And he said, Mountain View, which in morning traffic is an hour and a half easy, if not more than that. And he had a 2-year-old son and he said, well, I asked him, how does that work? And he said, well, she leaves at 4 AM in the morning to beat the traffic.

Wow.

And then we never see each other and we kind of overlap. And it was just, It was this insanity of you have these people here who want local jobs and you have these companies in Silicon Valley who want to stay in California and who want to build, whether it's office or manufacturing, and they are being pushed to Arizona. So the companies are losing, the residents in Solano County are losing, the state of California is losing. If you could just orchestrate it and put it here, everyone would win. There would be a win for Solano, a win for the Bay Area, a win for tech, a win for the country, by the way, because you can clearly innovate much faster if you don't have to get on planes to go to those places. And so that was the foundation of that.

Well, everything you said makes sense as to why you would want to do this. It's obviously insane for some Czech guy who's been in the United States for 2 years to be like, I'm gonna go make a new city.

Yeah, although I think, you know what, I think it's a— and I did feel insane. My third reaction, my first reaction was great idea. My second reaction 10 seconds later was, this is completely bullshit insane. And if it was a good idea, someone would have done it already. But now, 10 years later, looking at it with the benefit of hindsight, I think it's quintessentially American and Californian. I mean, you read these stories of how, I mean, obviously companies in the Valley, but also cities, I mean, they were generally founded by like some crazy guy who came from somewhere else in the world. And that's how all these stories start. And it doesn't feel like that when you're there at the beginning, but now that I look back, it kind of actually all makes perfect sense. My immediate reaction, my first reaction was, this is an amazing idea. This is the best site for it. My second thought immediately after that was, this is completely batshit crazy. Someone would have done this already. And then over the next 2 weeks, I basically oscillated between those 2 ideas about every 5 minutes, which as it turns out is really bad for your mental health. Particularly if you've just spent 2 years thinking about this problem or 3 years thinking about this problem. And so then I did the rational thing, which is I said, okay, let me prove that it's a bad idea. I basically wrote down every single reason that I could think about for why it was a bad idea. There's not enough water, there's an issue with the soil, the politics doesn't work, you can't build transportation infrastructure, whatever it is that you can think about. And then I just went and systematically tried to answer those questions for about 6 months. And I couldn't find the fatal flaw. Every one of them had either an engineering solution or actually it was a really good site. And then at the end of it, I still wasn't sure. So I thought, okay, if it's such a good site, someone must have done some kind of a long-range plan that at some point someone thought of what should go here.. And I remember from years ago reading about this study called the Future Development of the San Francisco Bay Area, 1960 through 2020. It was done by the U.S. Commerce Department and the Army Corps of Engineers. And, um, I read about it, but I never got it. And you couldn't get it online, but you could buy it on eBay. So I ordered it on eBay, one of the original binders from 1958, uh, and it was the longest 2 weeks to wait for it to arrive, but it did. And what they did is they mapped in the 9-county Bay Area where development go over that 60-year period of time in '58. And I remember sitting in my apartment and turning over these maps one by one. And you look at the '58 map and there's still orchards in Santa Clara. East Bay basically doesn't— almost undeveloped. And then I get to the '80s and the '90s and they really correctly predicted the growth of Pleasanton and Dublin and Walnut Creek. And so I'm like, okay, they're getting a lot of stuff right. And I get to 2000 and I'm looking at our area and there's nothing there. So I'm kind of getting depressed of like, okay, maybe this is a bad idea. And then I flip open the 2010 map and I remember I'm sitting there in 2016, 2017. And where I thought there should be a city, there's a city.

So they had—

They had exactly in the location predicted. It's crazy to the point where, where they had the origins of that city is where we've put the downtown of the city that we are putting in there. And we are not putting in there because they did. We're putting it there because it actually is the best place to do it with within those 100 square miles that we control.

And so they got all the stuff right. And then external forces had stopped the simulation from continuing.

Yeah. You know, yes. But also they didn't predict it would start until about 2010. And so they— I mean, in some sense, what we're doing is taking of these very old plants and dusting them off and then breathing new life into them. And obviously, we're modifying what— nobody could have predicted in '58 that we would want to be building here something that is focused on manufacturing or something that's focused on shipbuilding or that it would have an East Coast European flavour to it. But the idea of this being a great place to build was there very much in the beginning. I think it got delayed by some of that kind of California anti-growth bad dream that we are waking up from right now. But they even got the timing right.

Were you married in 2016?

No, I was dating, I was dating Nefi, who's now my wife, but I was dating her and I remember bringing her out here actually.

What kind of conversation?

It was interesting.

I got an idea.

She knew that, I mean, I explained 2 years obsessing about it and nonstop talking to her about it. And so she, and she was a great intellectual partner in walking through it. But I remember bringing her the first time and she kind of looked at the scale of it and she was like, are you sure this is not too much? But she very quickly grew converted.

You've been thinking about this for a couple of years. You start to put some shape around it. At some point you have to get a lot of money to make something like this real. I keep trying to picture in my head being in your shoes and walking into somebody like a Marc Andreessen's office and being like, "I've got an idea. I'm going to create a city." And I can understand that some of those people are actually inclined that way, obviously. But it still seems like a difficult discussion to not seem like a crazy person as you're you're presenting this idea and it's not— it's clearly not your typical startup.

Yeah. I mean, you know, Mark actually got it within about 5 minutes.

What did you do? You just started knocking on doors, being like, hi, I'm Jan. Yeah, I mean, I didn't have a network.

I knew a couple of people and you know how it— you know how it goes with these things. But no, the, the very first time that I tried to raise money for it from bunch of different people, nobody would invest. I mean, people generally said, yeah, this is a good idea, but there must be some reason for why this wouldn't work. And it was too crazy, right? The benefit you have if you're raising money for a SaaS company, you're like, the product is crazy, but the business model exists, and I've seen this work before. Nobody has built a new city in America since the 1960s.

Right. Well, you're going to get rich from some product, or you know what I mean? It's like, I want you to give me a lot of money for this crazy idea. You know, maybe you get some land, but it's unclear.

Yeah, it was, I mean, it was like raising money for a, it must have been like trying to raise money for a health tech startup in 2000s, 2010s, right? People just weren't doing it. No, so the first time people just said no, and, but I was so convinced it would work that I basically decided that I had to prove it. And so what I did is I took everything I had and I borrowed way too much money, probably shouldn't have been allowed to borrow personally, not a company, because nobody would lend to a company. And I used it to go and tie up the initial few parcels of land that were listed on the market. And then I used it to do some, basically hire experts who would validate what I was telling people. So I told people there's enough water or the politics works or this is how you would solve this problem, or there's no issues with the soils. The soils, in fact, are really great for building.

Stuff.

I'd been able to get a set of feasibility studies done, and with all of that, I was then able to go and raise money. But it was a tight— I remember I started tying up the first properties in the summer of 2017, and I had to raise $10 million by— it was like January 18th of the next year, otherwise I would lose all of the money that I had invested in deposits and feasible disclaimers and whatnot. And so I had 4 months and it was a very stressful 4 months. My wife at the time, my girlfriend, she would say I was not a very pleasant person to be around these 4 months. But no, we got it. I got it done. And I think we closed the round on January 16th.

Who were the first couple of people that bought in?

The very first two were Charlie Songerst and Patrick Collison.

Okay, so that gives you a little momentum and some belief and some hope.

Yeah, I mean, they were two of the early ones, and then there was probably about, I think it was about 8 or 10 people who basically did the first $10 million raise. Mark was one of the people. Mike Moritz was another one who was in the early days. Nat Friedman was in that first round as well. Patrick, a few other people.

So then, you know, if this is going to work and you're going to have to buy more land and you're going to have to do this secretly, you're going to have to figure out how to do that. I mean, do you just tap on some expert in creating like a string of shell companies? How do you even begin to figure out how to buy and secretly?

So I had done that. I mentioned earlier, kind of gone on this deep dive, and so I'd done a bunch of that as part of that over the preceding 2 years of looking at how other people had done big, large-scale city building. And a good example of that is Columbia, Maryland, which is a planned city that was built in the '60s just outside of DC. Actually, fascinating similar story, A— I want to say an Austrian immigrant comes to the US, spends 4 years quietly assembling parcels outside of DC. There's massive speculation that it's the Soviets buying land outside of DC. Project is announced, huge opposition from everyone. How dare you? Within 2 years, that completely flips. Today, one of the most beloved neighborhoods to live in outside of DC, one of the safest communities in DC, tons of jobs, very similar story, right? I tried to find experts in kind of land assembly. Turns out that there aren't any. I mean, it's such an unusual thing to be doing that happens so infrequently. And so I learned what I knew about it from basically reading historical accounts of how people have done it, both in kind of rural settings as well as people had done it in Manhattan, for example, to put together parcels for big skyscrapers and so on. But a lot of it was eventually, a lot of it was thinking from first principles about how to do it here.

Well, because you must want to protect your identity, but then you must also want to buy the land at a certain rate where word of mouth is not— yeah, I mean, it seems like there's so many strategic things that are going on.

Yeah, no, there's, um, I mean, I think the biggest foundational decision that I made was some people, the natural inclination for people when you do something like this is to say, I'm going to go and set up 17 different shell companies and they're all going to kind of pretend to be buying something in that area. And that would be the natural inclination for anyone. And I decided for a bunch of different reasons that it was a bad idea in this case. My view was we would set up one company, we would be open about the fact that we're buying, and we would pay a premium, obviously. We knew we would be asked about who is this. The view that I took was we would say this is American money, and we would say this is a very long-term hold, and we will not comment on what it is. I felt that was much more likely to be successful than setting up a bunch of shell companies and it worked much better than I think it would have otherwise. But we took a very unusual approach to land assembly in that regard.

So my experience, I mean, even if you have that initial pool of 8 or 10 investors, my experience as a reporter, the second more than one person knows anything, keeping something a secret does not work. How were you even, even among the people who wanted this to happen, who appreciated the secrecy, I'm still surprised that you were able to go whatever it was close to 8 years, I think.

Yeah.

Yeah. I mean, how— this happens all the time, man. I mean, startups doing pretty secret stuff, it just always leaks. And it's always like a lot of times it's a lawyer, it's a money person. I'm still— I still don't even understand how you were able to keep that group so tight.

Yeah. I mean, I think so. Some of it started by I didn't want to just raise money from kind of random people from a scattershot approach. And that wasn't just because of the confidentiality, right? I wanted to raise money from people who clearly saw that this was a commercial investment, but they also cared about it for reasons other than money. And the reason other than money is different for different people. I mean, people like Nat and Patrick care a great deal about urbanism. Someone like Marc Andreessen cares a great deal about cares about building stuff again in America and manufacturing. Someone like Laurene Powell Jobs cares about sustainability and economic opportunity and so on. So people have different reasons, but that was part of it. And then within that, it was having a small number of investors and it was explaining clearly the importance of keeping this confidential. We kept the teams pretty small. For each of the kind of investor groups that came in. I began every time that I would meet up with any of the investors to kind of give an update, I basically began with a sermon/admonition of, you remember that meme from Lord of the Rings, keep it secret, keep it safe?

Yeah.

I had that meme at the beginning of every presentation and then at the end, when I would meet them. And it was just explaining, like, for an early-stage social media company, the key thing to not screw up is product-market fit. And for this effort, for the first 7 years, the most important thing was just protect the confidentiality of the endeavor. And so I would just overcommunicate and tell people over and over and over again, this is really important. And I would say, look, every company says that confidentiality is important. Everyone says it. This is on a different level and you have to treat it as such. And there was a— and it worked basically.

You committed to this. I remember the basics of the story, but I think even your in-laws, your family didn't know what you were doing, right?

Yeah. I mean, I— No, look, it was a real commitment for, we had, my wife and I got married in 2019 and we had 12 people at our wedding. And the reason why we had that is I would, because obviously you can't go to all of your friends and say, oh, I'm building a new city an hour outside of San Francisco, right? To your point, someone is going to get drunk at some party and tell someone, even if they are very well-intentioned. And so for 7 years, I would tell my people, my friends, most of my friends, I am helping some families invest their money, which is true, but it's not the entire truth, right? And so when we got married, I didn't want to throw this big party and all of my friends come in and everyone's like, how is life and how are you doing? And then you have to tell them some stupid story. And so we delay that and then we wanted to throw a bigger party later, but then COVID happened. So we still have to do that. But yeah, there was a lot of personal sacrifice that went into it.

Did your in-laws think you were maybe possibly a spy?

Oh, yeah. They couldn't quite figure it out because I would tell them I'm working to buy something, something. And they were like, what is he doing? And does it really make sense? And yeah, it was a long 7 years.

OK. And you were talking about in Colombia, they thought he was doing stuff for the Soviets. I mean, that starts to come back here in the more modern twist, which is people start to think, or at least, I don't know if people, maybe a couple people start to spread the idea that China is buying up all this land and they don't know that you're behind. There's some group buying land. And so that started to become this, I don't know if it's a meme, this idea that was traded around here.

Yeah. I mean, that started happening, I want to say in 2021, probably, but a couple of years before we eventually announced the project. And it really started because China did buy a piece of land outside of the Grand Forks base in North Dakota. And so then people made the assumption that this was happening here as well.

Because you've got Travis.

Because we've got Travis here. And look, we knew that if you— I knew that if you're going to go and buy 100 square miles around in, I mean, anywhere in America, but particularly outside of Silicon Valley and next to a military base, people will want to know about it. And my assumption from the beginning was at some point someone from the government, broadly speaking, is going to call me and say, "Who are you and why are you buying this land?" And that happened. I mean, we got called in 2020, it's probably 2021 or 2022. So just around the time.

So it took the government like kind of 4 years-ish? Yeah.

I mean, look, it's not slow, right? And we didn't, In the first couple of years, we didn't really buy much close to Travis. That happened later. So it took a year or two. But eventually we got a call from the Treasury, basically. We have a group in the Treasury called CFIUS. Committee on Foreign Investment in the United States. And they basically tasked with making sure this doesn't happen. And so they called us in 2021, 2022 and said, said, you guys are buying land, tell us who you are and why you're buying it. And so we told them, and I flew to DC and met with them and said, this is the list of investors. Here are the passports. Here is the full list of investors. We have no Chinese money. We have no Russian money. In fact, we are 97% American owned by design, by the way. I knew this would be important, and that's why we didn't take any money from anyone from Europe.

Shady Irishmen.

Yeah, we have a couple of shady Irishmen and Charlie Songers. Is British. But other than that, it was— we have 97% is American. I have a US passport, have had it for a long time. The average S&P 500 company is 40% owned by foreigners. This company is more American than any listed company in America right now by design. And so we kind of— we turned over the evidence and that was that. Obviously, people kept speculating because it— or the media kept because it's a story that sells. But the government knew for years and years and years who was buying.

I feel like the media— when did the media— when was the first time anyone did anything?

I mean, in the local community, about a year into us buying, people knew that someone was buying land and they didn't know who it was and people would be speculating about it. And by the way, we told the— we did the same thing with the local community. When we heard, we said, This is a group of American investors and we're buying it as a long-term holding and we're not going to be discussing the purpose beyond that. In the local community, I mean, people— this was known for years that someone was buying. By the way, we paid, I think on average, we paid about 4 times market value. We put almost $1 billion into land. Most of the land was owned by people who lived in Solano County. I think we bought from 700 individual owners. So we minted 700 millionaires, who on average sold us property for 4 times what it's worth. And so that gets sometimes lost in the story as well.

And lots of these, I think, were families where the parents or grandparents had owned the land and then it was just sitting here, right? And the children in a lot of— I mean, tell me if I'm wrong, but I think the children in a lot of cases didn't know even what to do with it.

Yeah, I mean, it was a combination. So that was a lot of it. A lot of it was kind of land that had been at some point owned, that was then passed down to generations, and now you had 12 people who each owned 8%, and they had been maybe leasing it, but they were not living on the land. A lot of people actually— there were a bunch of homesteads in this area that had been abandoned, and so we'd spent a lot of time over the last 2 years really cleaning up a lot of the abandoned buildings here. And then you had some, there was also a good number of people where the owner was maybe 65, they had been ranching, but the kids didn't want to do it. And generally, the deal that they structured that a lot of them liked to do was to say, I want to keep ranching for the next 10 years, then I want to retire. My kids don't want to do it. Why don't I sell it to you? You guys give me a 10-year leaseback, I can keep doing that and then kind of retire over time. And those have been very popular and people have been pretty happy.

You must have felt like a spy or something at some point.

A little bit sometimes. A little bit.

Maybe like a little James Bond-y or—

I wish it was as exciting as being a spy of that kind.

Like the accountant version or something?

It's something like that. Exactly.

And then, okay, so is As the families, so they're getting a good price on this land and in some cases didn't even know what they would do with it. Did you have any people that were more hardline and they're like, we're not going to sell you this key square that I know you need?

Yeah, I mean, we had some people who didn't want to sell and I mean, there's probably, I mean, we own about maybe 80% of this area depending on exactly where you look. And there's a bunch of people here who didn't want to sell and they haven't sold and they continue to live on the land and ranch it. Where we're building the city, we own 99% of the land and the rest of it is generally kind of rights of way and so on. And then similarly down here and where we're proposing to build a shipyard, we own all of the land basically. So we've been able to acquire enough and everything else.

Okay. And then I'm going to mess some of this up because I forget the sequence of events, but I remember like kind of a bigger news story breaking either in the San Francisco Chronicle or the New York Times.

It was the Times, yeah.

The Times. And so now like the the cat's out of the bag. And then I remember the politicians doing the China stuff and some of the pushback. And then there was like this legal part of this where you guys were trying to push forward, I think, with your proposal of what you wanted to do. And you had to get the local communities probably to, to like sort of allow that to go forward. And then I remember it looking kind of bleak because it seemed like they were not going to let you even begin to— it seemed like they were going to block you from— you definitely weren't putting anything in the ground. It was like, you guys can't even— we're not even going to let you continue to think about this, was the way I remembered it.

Yeah. I mean, so basically, yeah. So it was introduced and then there's two main ways that you can build this. And this is going to get a little technical, but it's useful context. Context. So you can build a new city as a what's called an unincorporated community, which basically means the county governs that. It's outside of an existing city. One day it can become a city, but it starts out that way. That's how a lot of things in California start. Or you can build it as an extension of an existing city. And because none of the existing cities in the beginning told us, hey, we want to build this as part of our city, we have kind of defaulted to we're going to build it as a new unincorporated community in Solano County. Now, there's a long tradition here of if you're trying to do that in Solano County, you must bring it to the voters for approval. So there was sometimes there was a sense in the media of we were trying to go to the voters with a ballot initiative to bypass some local government. That was never the case. They have a rule in place here that you must first go to the voters before you can even engage with the of the county. And so we started doing that, and what we learned throughout that process were two things. Number one was people didn't like the idea of this being its own brand new city. It kind of fed into this narrative of like, we are not team players and we want to do our own thing. So that was one thing that was happening, and that caused a lot of the controversy. And then at the same time, several of the existing cities came to us and said, said, hey, this is a good idea, particularly after the first kind of 6 months when we were able to explain what we're doing. And they started to say, you know, this is a good idea. If you guys did it as part of an existing city, you would have a lot of political support for this. We just wanted to help one of the existing cities. And so as a result of that, what we did about in the middle of 2024 is we said, okay, we're happy to do it as part of an existing city. And we pulled the ballot initiative. And what that did is, number one, it showed that we care about building the physical footprint of it, but we don't have to kind of have our own thing. We can be a player within the bigger ecosystem. And then because it was a ballot initiative, it really kind of forced everyone to take a side. Are you a yes, are you a no, instead of a pragmatic discussion about what do you like about it, what do you not like about it. And so the moment that we pulled it, the tone completely shifted because the media fed this narrative of the tech guys are going to come in and they're going to run a ballot initiative to crumb it down. And that was never the idea. We're running the initiative because people wanted us to run it, because the rule is there in place. And so the moment we pulled it, it changed. And then what you've seen over the last year is Two of the cities have voted 6 different times to basically proceed with the annexation. It's called an annexation when an existing city takes it. And then most recently, with a place called Susun City, which is this—

Yeah, I drove through it.

Yeah, really interesting place. It was one of the oldest cities in Solano County. It used to be the center of commerce. It had a little harbor. The rail used to go through it or still goes through it. And then it kind of got surrounded on all sides by other cities that grew around it. Very proud tradition. And so what happened is they kind of had been looking for a solution for a bunch of their issues with where to grow. And then they looked at this and said, this is the perfect solution for us. And so we've now worked with them for the last few months. We've signed what's called a reimbursement agreement 2 months ago, which basically says we are going to fund them hiring the whole consultant team to evaluate this. And what they've said in that reimbursement agreement is that they are looking to take essentially the plan that we had in '24, and instead of making it its own thing, they would annex that into Sisuun City, make it part of Sisuun City. And so that's what's happening right now. And I think they are, they've stated publicly that They are looking to publish the draft environmental document for this in Q1 of '26. And so it's now— Okay, this is about 6 months from now.

Yeah.

And so this thing is now kind of proceeding at full speed and they've been great partners so far.

Okay, so all that is on the up and up. Are you still frustrated? I mean, you know, these environmental— all this stuff takes so much time. I mean, I guess this is just the nature of something like this, I would feel. Frustrated, I think, on some level of this.

Yeah, I think that there is— So I think there's issues with how— There's a bunch of issues with how land use in California works. For something of this scale, I can actually— I think you can make an argument that if you're building an apartment building in San Francisco, you shouldn't have to do an environmental impact report. And in fact, the state It literally just passed a law in June that made that the case. If you're going to build a city for 400,000 people, I actually am sympathetic to the argument that some environmental analysis should be done. And we're doing that right now. We're doing this gigantic— it's probably going to be the biggest environmental impact document in Californian history, thousands and thousands of pages.

Congratulations.

It's going to be riveting reading for anyone who wants to read it. But I'm sympathetic to the people that say that you should do something like that. But I do think that there is this really unique window right now that is the subject of a lot of discussion in the local community, which is— so this is— we've now had a bunch of companies who basically come out and said publicly and told elected officials manufacturing companies, so both shipbuilders and manufacturing companies who say this is the best place to do manufacturing in California. If we are to do anything in California, this is where we would do it as a result of the proximity to the Valley, as a result of the size of the site, as a result of the fact that we're building these amazing neighbourhoods right next to it, how we've designed it, the fact that you can do both advanced manufacturing and shipbuilding, and obviously one of them is a supplier to the other. Then you have this huge moment where we just passed reconciliation. There's $150 billion in reconciliation for defense. There's $29 billion for shipbuilding. There's $25 billion for Air Force. A lot of that money is going to companies that need to build new facilities. Many of them, by the way, headquartered somewhere in California, often in Silicon Valley. And then you have this on top of reconciliation, this massive wave of tariff and onshoring driven investments. And so there's this unique moment in time right now. And a lot of these companies are coming here and telling the local community, we want to come to Solano, but we need to be able to break ground very quickly. And so there's a bigger debate that's happening right now about, not about waiving any of the environmental studies, but about How do we reshuffle the process where we can actually allow a company that wants to create thousands of jobs in Solano County to break ground next year or in early '27? And so that's a big debate that I think is— and it's a bigger debate that's happening in California right now as well. Right. I think a good example of that is so Apple just announced $600 billion in investments in manufacturing in America. Apple is a quintessentially Californian company. It says it on the back of the phone. Do you know how much of the $600 billion is going into California?

Probably none.

I think there's one company on the list that is— they announced 6 big ones. I think it says Kentucky, Texas, Texas, Texas, Texas, Texas, Texas, and California. So I would guess less than 5% of it is going to California. And I think— and that's not because Apple doesn't want to invest in California. That's because if they have to go through 5 years of permitting to build a facility or even worse, if their suppliers have to do that, they just won't do it. And so as a state right now, we have to decide, do we want these generational investments in California? Because there is a path dependency to it, right? Like once a place becomes the manufacturing cluster, There's a window of opportunity when these investments are made and then it closes and people have made them and they're going to invest around their existing facilities. I think that's a big debate that's happening right now at California at all levels about how do we go back, which is part of the abundance agenda and the build agenda.

Yeah. There's another part to it that you and I have talked about, which this is not— it's not like this is crazy or out of the realm of possibility, any of this. SpaceX started in the middle of Los Angeles, right by LAX, roughly like 2002, 2003. Tesla had the benefit of taking over an existing auto manufacturing facility, but started in the heart of Silicon Valley. I think they're probably the two most iconic and successful and transformational US manufacturing companies of the last 20 years, you know, so this happened in California at a time when you're supposed to not really be able to do that. But we had the two biggest success stories were here. And then obviously subsequently Elon's moved a lot of his growing ambitions to Nevada, to Texas, to different states and is not like really building new stuff in California. So I mean, this is just to say it's like, I don't know, sometimes California gets this reputation, that everything's already lost and people don't even realize basic stuff like LA is a massive manufacturing city and just this huge aerospace, automotive, all types of manufacturing power. And so, yeah, I mean, if you just can put the right conditions around some of this, we have the talent and the will and the ability California still employs more people in manufacturing than any other state in America.

It's not even close. But we are not getting any of the new facilities, right? And we still lead at the cutting edge. I mean, even for the companies that you mentioned, a lot of the cutting edge stuff is still in Hawthorne and in the Bay Area for Tesla. And then you look at what's happening in El Segundo and that whole ecosystem, right? Some of the most dynamic new companies are still in LA. But right now we have this really unfortunate industrial policy where we invest all of this money as a state in some of the best universities and research universities in the world. We incubate these companies here, they start here, and just at the point when they start raising tons of money and investing, when they would be creating the very jobs that build the middle class Because some companies start in El Segundo and they hire 50 engineers and software and hardware engineers and the kind of the more blue, the more white-collar talent. And just at the time when they go and they raise $400 million, by the way, often from people in the Bay Area. So you've got a Californian company that raises a bunch of money from other Californians that is now about to go and build a facility that's going to create hundreds of construction jobs and then hundreds of permanent jobs and exactly the kind of jobs that basically anyone can get with some determination and training that pay enough to go and build a middle-class life on the back of it. That thing is the thing that we sent to Texas.

Oh, I see it again.

Which is just feeding the insanity of this huge self-inflicted loss on the state.

When you look like Anduril's based in Southern California, they're going to build their massive new factory in Ohio. You've got companies like Archer that spent a decade making air taxi in California. I think they're building in Mississippi. I see it all over the place. It's always— it's Mississippi, it's Ohio, it's Texas, it's Georgia, Alabama, doing exactly what you said, which is, is we just did all the work to get this product to be viable and took all the risk and proved it out. And then now it's going to go get made somewhere else.

But the great irony is because we've done this work over the last 2 years, when you go and you talk to the founders and CEOs of those companies and you ask them, did you want to stay in California? Almost universally they say yes. And they will give you these painful stories of we looked at all of these sites and we looked at how long it would take to get permits. And we looked at availability of power or availability of workforce housing, and we really, really wanted to stay and we couldn't make it work. Before Elon put the Gigafactory in Nevada, they had a site under contract in Patterson in the Central Valley. A bunch of the people who work in, who live in that area in Stockton and Merced and that whole area,. Do you know what they do in the morning? They get up in a car and they drive 2.5 hours to the Bay Area. Tesla could have put a huge factory there that would have employed thousands of people, but they couldn't get the environmental permitting to— they couldn't get the environmental permitting to break ground quickly. And I think the story goes is as he's dealing with the environmental permitting, the mayor of Sparks, or one of the cities in Nevada, is texting him, showing him pictures of earth-moving equipment, moving dirt on the site for the Gigafactory. And that's the same for these energy companies. They want to stay in California. By the way, it's a huge loss for the country as well when you separate production and R&D by that much. You look at most of the breakthrough products that we built. The Boeing 747 was built 20 miles from where it was designed. Tesla, they made that first car in Fremont, right? Do you think, I mean, do you think they would have been able to iterate so quickly if R&D was in the Bay Area and the first factory was in Texas? Maybe no. And so I think if your engineers need to get on a plane to go to Ohio and then come back, that's a 3-day trip. Here, If we can build a cluster here, you spoke about Archer. The moment that you have VTOL, we are no longer an hour 20 from Menlo Park. We are 10 minutes or 15 minutes. I mean, imagine having R&D in Cupertino or in Menlo Park, and then you get on a VTOL and you land here in 15 minutes. You can come, you can do R&D, you can inspect the production line, you can adjust things and go back. That's how China does it. That's why those ecosystems in Shenzhen or Guangzhou work that well is because you have that proximity. And that's why this has such a potential to radically improve the productivity of the whole manufacturing base in California if we can make it work.

Okay, just a couple last questions. I mean, I'm looking out the window and all the surrounding area. I mean, things like power. There's a lot of infrastructure that would need to be built. To make all this work. Give me your— give me your— everything goes as well as possible. What does this look like in 3 years?

I mean, from the moment when we get a permit to build, we— it's about 12 to 18 months until the first person can move into a finished home. So it's a lot faster than you think. And then I mean, if you look at the growth of these cities, I mean, they generally end up being demand constrained. And the demand is here. I mean, there's infinite demand for companies who want to come here, who want to build. There's infinite demand from people who want to come live here. I mean, we're looking out over this bay. We were on the phone with a shipbuilding company on Monday, and they are looking at scaling production very rapidly for the Navy. And they were asking us, how quickly from breaking ground could you have a finished pad where you could be building that? And I think our engineering team came back and said, if you started building in these, basically these mega tents that people have used, I mean, SpaceX has used them in Boca Chica, right? We could have that temporary tent up in 4 months. We could have a finished pad with infrastructure ready in a year. And so again, even in California, the building is fast. The permitting is the bottleneck. And so it really is up to, I mean, up to us, but up to the local community and the broader stakeholders of how quickly can we clear the pathway so that we can break ground. But the companies are there, the capital is there, the demand is there. It's about Can California take advantage of the current moment or are we going to let it pass and watch these companies, watch this investment, watch our kids move to Texas?

Do you think it was— I mean, there's sort of the Trump of it all and then there's this, like you said, I mean, a little more bipartisan wanting to reindustrialize the US. Like, I remember 2 years ago when you and I first started hanging out, I have to confess, you know, like in my heart I was like, this seems like a good idea, but I'm not so sure this is going to happen. Whereas now I feel like I see a much clearer path. Did you— did you have a couple of dark moments a couple of years ago and this seems dependent on some of this political will, and I never know how long that lasts. Yeah.

Yeah. I mean, I think I expected this would get controversial. I said that. I mean, we kind of told this to the team. I told this to everyone. I said, look, this is a huge change to the county. Obviously, we had to buy the land in secret. You've got the investor component of it. This is going to be a big controversial discussion. I think some of the vitriol around it surprised me. And that was probably the biggest difference is like, it's kind of, I hadn't been in politics before. And so I was surprised at the extent to which people will just make complete complete lies and kind of fake arguments and just bad faith claims about the whole thing. But the thing that we had from the beginning that actually kind of insulated me from a lot of the otherwise could have been dark moments is, you know, what's the most surprising thing about this is I fully expected that as we announced it, I would have— because I live here, I live in Solano County, And so I would have incidents where like we would be at a restaurant or something and people would come in and they would be like, you assholes, this is a terrible idea, you shouldn't be doing this. And sure, we had town halls where someone yelled at me, but I've been approached by people hundreds of times at this point when I'm somewhere out in the public. There were like 2 times when someone was, and it wasn't even like 2 times someone said like, hey, I don't really like that idea, but nice to meet you. The other times, universally positive. And that's the most surprising thing where in some sense I was expecting some heated discussions. But even in the times when someone started approaching me and I was like, oh, I'm not sure how this is going to go, it would be a delightful surprise. It would be people who would come in and they would say, I served at Travis Air Force Base and I'm a veteran and I live here and I love this community, but my kids live in Nashville and I never see my grandkids. Said, don't let anyone tell you otherwise, what you guys are doing is great, and it's going to be fantastic. And that was consistent, by the way, also from a bunch of the elected officials from the beginning, where there was an atmosphere of fear that was created where people felt afraid of backing this in the public. But behind closed doors, the vast majority of people had been supporting from the beginning, but You needed to kind of build the coalition where people felt like they could say that publicly.

So did you ever have a moment where you're like, we're fucked?

I don't think so. I mean, I had moments when I was annoyed. I had moments when I was upset that, like, someone who told us that they would support it didn't say that, didn't back us up. Or I had moments when we would screw up some kind of a comms roll-up, or I was upset that we— that was before Julia's time. She had nothing to do with that. So I was upset that we kind of screwed up execution, but I don't think I've had a moment where I was like, this isn't gonna work. I mean, obviously you adjust There were moments where I felt it might happen faster or it might happen longer, but part of how I was able to raise the money is I was my own biggest skeptic all the way in the beginning. I mean, I told you, I spent 6 months trying to prove myself that I was wrong. And I am pretty good in arguing this kind of stuff. And so by the time that I spent 6 months brutalizing myself over, is this a good idea? I kind of felt like I had gone the idea maze and I was so convinced that it would work. And the same reason for why, and a big part of the reason was political from the beginning, right? And so when we had investors, prospective investors who were skeptical, that's how I was able to convince people because I had kind of done that exercise. And so then even during campaign where it was controversial and people are calling us names and so on, I would look back at the the fundamentals of it, I'd be like, this is going to improve lives for, in a really direct way, for hundreds of thousands of people and indirectly for millions of people. And all of the arguments that the opposition is making are basically bogus. And so I don't know how long it's going to take people to realize this, but they are going to come to that conclusion because there's no other good solutions. I mean, a good example of this is people in Solano County, including elected officials, have been talking about how much of a huge problem it is that more than half of this county gets in a car every day and they drive 2 hours to work. And then they never see their kids. There's health issues, there's cost issues, all of these things. In 40 years of working on this, do you think the situation has gotten better or worse?

Worse. Worse. Yeah.

And so the idea just makes too much sense. I mean, at the bottom of it is this is a good idea. This is the right place for it. It's the right product for it. It's the right focus with the manufacturing. And we have an incredible team of people who are working on it from the planning to the business side to bringing the companies here. And then we funded it with people who care about it and who want to be invested in this for the next 40 years. And so ultimately, this is going to happen. The thing that I kind of get upset or annoyed about is I just think it would be a huge waste to miss this unique moment when there's a wave of investment that wasn't here 5 years ago, by the way. If we had announced this 5 years ago, it would be a lot harder to get companies to say, hey, I want to come and build a factory here. But right now they are here. And so I just hope that we don't waste the moment because California as a state, we've tied ourselves in knots over process. And if we can build something spectacular while following all of the California values, all of the environmental regulations and clean air and water and all of that, but just do all of that faster so that we capture that investment and also get going. I mean, I think that the last thought that I had is I once had to promise my wife that our first kid would go to school in the new city, and she's 4 years old, so I'm running out of time a little bit. And my wife is a very harsh arbiter, and so I'm definitely on the clock. But no, look, I think that as a country, we lost the sense of frontier. And I think that it's going to be an amazing thing for California and for America to again have a sense of frontier. And there's nowhere better where to put it than in California and in the Bay Area. And just for the people, I think about my kids a lot. We have 3 kids now. I just think about how deeply optimistic it would be to grow up in a place like this, right? Like you, as a kid, because you kind of soak in all of that, right? So imagine you growing up in a place and when you're 5 years old, there's like 5,000 people living there. But then every year, 5,000 people move in and you see the city rise around you and you see these companies and then you start hearing the stories about like this is, one of the things that turned the story of California, and this is this optimistic place, and you see a whole city grow up around you, I think you can't help it but be a really optimistic human, right, that believes that we can do things. And you don't have to live there to do that, even just to come and visit and to see that, I think would be spectacular. And so just very selfishly, I want that to start happening as soon as possible because building is a lot more fun than planning.

That seems like a good spot to end. I will do the very last question that maybe I should have asked as the first question. Why is it California forever?

Because I think California is this— I think for 150 years the state stood for something. I think it was the symbol of a new frontier of optimism, a place where people could come from all over the world and build a new life. And then in the course of that, I mean, California invented the modern world, right? Like you think about all of the stuff around us, it was basically invented here from radio and TV to satellites and planes and microchips and the internet and iPhones and now AI. Like basically we live in a world that was invented by California. And then by the way, when we are And then all of the entertainment that we consume was basically built here. And so for 150 years, the state was this symbol of optimism. I mean, if you go anywhere in the world and people ask you, where are you from? You get a different reaction than if you say, I'm from California, than if you say, I'm from America. The word meant something. And I think that the world is better for it. I think that if the If the computer industry or if the software industry was invented in Sweden, the world would be a worse place.

I do.

I don't mean to pick on Sweden, but pick anywhere else in the world. But there was a sense of optimism and then you had this frontier spirit that was imbued with the counterculture and it was something really special that happened here. And then, by the way, It didn't happen in some northern part of this country where it's dark and cold. It happened in a natural paradise outside of Napa and Tahoe and the ocean. It's a complete fluke of all the way back to the Big Bang that California exists. What are the odds, right? You replay the history of the world. What are the odds that the future of the world is being invented in this natural paradise at the end of a continent where people from all over the world landed on the East Coast and they crossed the continent and then they landed here and there was kind of nowhere else to go further west. So they invent Silicon Valley and they invent Hollywood. And then the word becomes synonymous with sunshine and optimism and opportunity. And then it kind of starts going away in the last 15 years. I mean, that is it's still the brand of California, but it's slipping away. Like, if you ask someone in London or New York what comes to mind when you say California, a lot of times they will now say homelessness and nobody can afford to live there and people are leaving. And I think it would be such a shame if we screw it up. I do. I think there's nowhere else like it. And so that's why it's California forever. I think it will be It would be a great honor if this company got to play a part in bringing some of it back.

Cool. Well, seems like a fantastic spot to end the podcast, and then I have the pleasure of we get to go cruise around. Let's go see it. See everything. So thank you so much for your time.

I'm excited to show you next. Dankeschön.

The Core Memory Podcast. The podcast is hosted by me, Ashlee Vance. It is produced by David Nicholson and me. Our theme song is by James Mercer and John Sortland, and the show is edited by the John Sortland. Thanks as always to Brex and A1 Ventures for making this possible. Please visit our YouTube, and podcast channels to get more of what Core Memory makes. Thanks, y'all.