Vallejo warns California Forever could be ‘detrimental’ to city’s economic development

VALLEJO – Vallejo city officials warned in a draft letter to the county Board of Supervisors that a billionaire-backed proposal to build a new city in eastern Solano County could interfere with the city’s ability to recruit city staff, slow down economic development, and have an adverse impact on residents’ property values.

At the Vallejo City Council meeting on Tuesday, Assistant City Manager Gillian Haen, who is serving in City Manager Andrew Murray’s position while he is on vacation, said that she had worked with city department heads to develop an overview of potential impacts to the city from the proposed development. 

“California Forever may have large impacts if they're planning on using any city infrastructure or using any city water,” Haen said. “They're proposing potentially 400,000 residents and 15,000 jobs that could cannibalize jobs that would otherwise be captured here in the city of Vallejo. We're looking at redeveloping Mare Island, the waterfront and the downtown in particular and this impact to those areas could be very detrimental to our city's economic development, growth and revenues for our future.”

On June 25 the county Board of Supervisors voted to prepare a report on  California Forever’s East Solano initiative that, if approved, would rezone 17,500 acres of agricultural land for purposes of building a new city between Fairfield and Rio Vista. 

After the county registrar confirmed that California Forever had submitted the number of signatures needed to qualify for the ballot, the supervisors had three options: to approve the initiative in its current form, to place the initiative on the ballot for voter approval or to order county staff to produce a report within 30 days examining impacts of the initiative. 

Once that report is completed the county then has 10 days to approve the initiative without changes or they can submit it to voters.

State law outlines several issues to be examined in the report, including impacts to agricultural and vacant lands as well as fiscal, infrastructure and transportation impacts. The law also allows supervisors to request specific areas of examination. Supervisors Erin Hannigan and Wanda Williams both requested that the report consider impacts to the existing cities in the county.

Haen said that although the traffic impacts and water need to be studied and may result in significant impact to the city, the majority of the impacts that city experts highlighted related to financial and economic development concerns.

Haen said that, as a disadvantaged city, Vallejo would be positioned to bear the brunt of negative impacts and less likely to reap the benefits touted by the developers of the proposed city. 

“The project absolutely could weaken the housing market in Vallejo by creating a huge substantial supply of housing in our same region,” Haen said. She added that reduced home values would negatively affect property tax revenues and sales taxes could also decline if residents are drawn to the new city to do their shopping.

Haen also pointed out that developers on Mare Island envision 15,000 jobs and over 10,000 housing units but the project could face even more delays due to economic conditions that might arise from California Forever’s proposal.

California Forever’s East Solano initiative includes a commitment to invest a total of $200 million in the downtowns of the seven existing Solano County cities for every 50,000 residents that move to the proposed city. California Forever CEO Jan Sramek anticipates that it will take 15 years for the new city to reach a population of 50,000. 

The initiative indicates that the capital will be invested across the seven cities according to each city’s share of the county’s population. 

The initiative also provides for a commitment of $400 million to support the construction of affordable housing and to provide down payment assistance for residents of the county or those working on the project to purchase a home in the new city. 

The dispersal of both the affordable housing benefit and the downtown benefit is linked to occupancy rates in the new city and the benefit amounts are renewed every time the new city reaches population milestones of 50,000 residents until the city reaches its full buildout population of 400,000. 

Haen also said that portions of the land that California Forever purchased are designated as habitat conservation areas which can be preserved through conservation agreements to compensate for habitat loss related to a development project. The reduction in the availability of habitat conservation areas produced by the East Solano plan could make it more difficult for development projects in Vallejo and other parts of the county to secure necessary mitigations.

The City of Vallejo’s water system supplies several communities in the region, including the city of American Canyon and Travis Air Force Base. Haen said that additional pressure on this system would certainly impact the city of Vallejo.

In a recent press release, California Forever officials said that existing water rights and the current water usage on the 60,000 acres that the company owns is already adequate to support 100,000 residents. The company plans to secure supplies for the remaining 300,000 residents through water purchases that do not displace agricultural uses, California Forever’s Head of Infrastructure and Sustainability Bronson Johnson said in a recent interview with the Vallejo Sun.

The initiative requires the company to conduct an environmental review of the project in line with the California Environmental Environmental Quality Act standards. That review will include a water assessment detailing how the developers will supply water to the project but this report would only be produced if the project is approved.

The city’s statement also included concerns about the ability of the five-member Board of Supervisors to govern an unincorporated city that will nearly double the county’s population. Sramek points to other successful unincorporated cities and plans to levy taxes for the new community through Community Facilities Districts created under the state’s Mello-Roos law. 

Sramek said that the initiative includes a plan to compensate the county for initial administration expenses related to the project and argues that the increased property tax revenue will benefit the entire county. 

Vice Mayor Mina Lorea-Diaz and Councilmember Cristina Arriola said that the list of concerns that staff raised in the draft statement covered the issues that they had written down in their notes in preparation for the meeting. The council directed staff to complete the comments and provide each councilmember with a final draft of the document to review and sign.

According to City Attorney Veronica Nebb, the county requested that the city submit impact comments by July 11 so it can be included in the County’s report to the Board of Supervisors at the July 23 meeting.