Ex-Goldman trader building new California city will need to appease local opponents

THE mystery surrounding a project to convert farmland into a new green city in California is finally being unravelled. The would-be “mega-city” is the brainchild of a novice developer, backed by some of Silicon Valley’s most prominent names.

But despite the heavyweights behind the project, it has already been embroiled in legal tussles, and is being greeted by suspicion from talkative neighbours in and around Fairfield, a city in Solano County about 80 km north-east of San Francisco.

On Friday, the New York Times reported that more than 100 unexplained land purchases by an entity called Flannery Associates were made by Jan Sramek, a 36-year-old former Goldman Sachs trader backed by $800 million from some of the tech’s industry’s biggest investors.

These include Sequoia Capital’s former Chairman Mike Moritz, LinkedIn co-founder Reid Hoffman, venture capitalists Marc Andreessen and Chris Dixon, Laurene Powell Jobs, and others. 

According to the Times, Moritz pitched a kind of urban development that could involve novel methods of design, construction and governance – all within driving distance of San Francisco and Silicon Valley.

Sramek did not respond to requests for comment. Representatives of the investors, including Andreessen and Dixon, either declined to comment or did not respond to requests.

“We are proud to partner on a project that aims to deliver access to good-paying jobs, affordable housing, clean energy, sustainable infrastructure, open space, and a healthy environment to residents of Solano County,” Brian Brokaw, a spokesperson for Flannery, said in an e-mailed statement.

“We are excited to start working with residents and elected officials,” he said, adding that the company would begin meetings early next week.

Deja vu

Flannery’s project is far from the first time a group of wealthy elites have decided to build a city in their own vision. 

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Elon Musk, the world’s richest person with a net worth of US$221 billion according to the Bloomberg Billionaires Index, has been buying up land east of Austin, Texas, to build a town for employees of Tesla, SpaceX and the Boring Co.

Victoria’s Secret billionaire Les Wexner built up New Albany, Ohio, from a tiny community outside of Columbus into one of the state’s toniest addresses. And Larry Ellison, the world’s fourth-richest person with a US$129 billion fortune, has bought 98 per cent of the island of Lanai, and transformed it to be a paradise for the super-rich.

Now, in California, Flannery is coming under scrutiny after a four-year spree during which it snapped up parcel after parcel of agricultural land, often at above-market prices.  

According to records filed with the California Secretary of State’s office, Flannery listed its business as agriculture, and was incorporated as an limited liability company in Delaware. Earlier this year, local media reports noted that Flannery had acquired a total of 52,000 acres, making it the largest single landowner in Solano County.  

Locals on guard

Flannery drew further scrutiny in May, when it filed a lawsuit against a group of local landowners, alleging they colluded to fix prices and overcharge the company as it attempted to buy property. As part of the lawsuit, Flannery disclosed it has been buying rangeland properties in Solano County since 2018, cumulatively spending more than $800 million. 

In the suit, Flannery claimed that some of the “conspirators” paid between US$470 and US$2,800 an acre for their properties, but were not satisfied when Flannery offered US$15,000 an acre. Instead, “they countered Flannery’s offers by demanding even higher payments”, according to the complaint.

Lawyers for the landowners want the case thrown out, arguing federal antitrust law does not apply to individual landowners’ sales of real estate.

Among those alarmed is US Representative John Garamendi, a Democrat whose congressional district includes Travis Air Force Base, which has become nearly encircled by Flannery-owned parcels.

Garamendi asked the Treasury Department, the FBI and the Air Force to investigate whether the buyer was linked to a Chinese company that in 2022 attempted to purchase land outside of Grand Forks Air Force Base in North Dakota. That sale was denied after the Air Force deemed the company a threat to national security.  

Last week, Garamendi said his office was contacted by Solano County residents, who received a poll by text message and phone, asking for their views on the development of “a new city with tens of thousands of new homes, a large solar energy farm, orchards with over a million new trees, and over ten thousand acres of new parks and open space”.

In an interview on Friday, he said California’s complex zoning and development process makes it unlikely that Flannery will be able to pass a voter-backed initiative needed under state law to build thousands of housing units, roads, sanitation water and other infrastructure on land currently used for agriculture and wind power. 

“Any developer who had any sense at all would not have spent four years secretly buying up land and suing local landowners,” he said. “They would have spent four years working with local community interests to develop a proposal that is beneficial to the communities and the state.”

Prodigy

That developer has now been revealed as Sramek. Early in his career, he was named a “rising star” by Financial News, a UK-based publication covering finance and banking. Just 22 at the time, he was a trader at Goldman Sachs. Sramek was the youngest person to make the list, according to press reports at the time. 

He co-authored a book called Racing Toward Excellence, billed as a “succinct, approachable manual on how to get more done”. In the book, first published in 2009, he describes growing up in a one-bedroom house in Moravia, in a village of 1,000 people in the Czech Republic, according to a profile in New York Magazine’s Intelligencer.

An Olympic hopeful in handball, Sramek turned down offers from multiple hedge funds to become an emerging-markets trader at Goldman Sachs, Insider reported in 2009.

After a half-decade founding and running startups in San Francisco, Sramek had a stint at payments provider Stripe where he worked on “special projects” as an external accountant, according to eFinancialCareers.com.  

In Racing Toward Excellence, Sramek wrote that he would send a quote from Ayn Rand to his “younger self”: “The question isn’t who is going to let me; it’s who is going to stop me?”

The residents of Solano County may have an answer for him.