Purchase of vacant land near San Francisco Air Force Base
Expected astronomical profits from new town development
To address the housing shortage in Silicon Valley, USA, IT industry giants and venture capitalists are pushing for the construction of a new city.
Former Sequoia Capital Chairman Michael Moritz, who promoted attracting a new city in Silicon Valley. [Image source=Bloomberg]
On the 28th (local time), The New York Times (NYT) reported that prominent figures in the US IT industry, including Reid Hoffman, co-founder of LinkedIn, are promoting the construction of a new city on a pastureland in the western United States. The planned site for the new city is a vacant lot around Travis Air Force Base, located northeast of San Francisco.
This area was originally almost a wasteland and, due to its location near the Air Force base, was known as virtually abandoned land.
However, its advantage lies in being only about an hour's drive from San Francisco by car.
Investors like Hoffman have been secretly purchasing land in this area since 2017 through a development company called Plenary Associates.
They acquired a vacant lot larger than Seoul over five years. The amount invested is reported to exceed 800 million dollars (approximately 1 trillion won).
Their goal is to build a new city in this area that can house tens of thousands of people. By providing eco-friendly energy and perfect public transportation, they aim to solve the housing problems of IT workers employed in Silicon Valley and San Francisco.
However, during the secret land purchases without disclosing their goals, misunderstandings arose that China was behind the project. There were speculations that the land, which had no value, was bought at a high price to spy on the nearby Travis Air Force Base.
When local politicians demanded an investigation into the land buyers, the federal government also got involved. In response, they recently revealed the new city development plan and began contacting residents. They plan to soon start cooperation with residents, officials, and Travis Air Force Base.
For the new city development to succeed, the land use must first be changed to residential. The media predicted that, due to California's complex regulations, a resident vote will be necessary.
If they succeed in changing the land use and developing the new city, it is expected to generate astronomical profits.
Michael Moritz, former chairman of Sequoia Capital, known as the "Midas touch of Silicon Valley," said at the start of the investment in 2017 that even just succeeding in changing the land use would yield profits several times the initial investment.
Among the investors in this new city development is also known to be Laurene Powell Jobs, wife of Apple founder Steve Jobs.
Silicon Valley, home to IT companies such as Apple and Google, has seen housing prices soar due to the tech boom and the rapid increase in employees. As a result, Silicon Valley has long suffered from a severe housing shortage.
People who could not afford the soaring rents sometimes lived in camper vans to manage their living and accommodation. Because of this, companies have made efforts to prevent talent loss by donating to solve the problem or building employee housing and supplying it at prices lower than the market rate.
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