Silicon Valley magnates, including Reid Hoffman, LinkedIn’s co-founder, and venture capitalist Marc Andreessen, have been implicated in an aggressive land acquisition strategy in California. Flannery Associates, the company they back, is accused of using forceful tactics to secure nearly $1 billion worth of farmland in Solano County, with the aim of creating a utopian city, according to a recent legal document.
The court filing alleges that Flannery Associates paid exorbitant prices for vast areas of farmland, resorting to coercion against local inhabitants resistant to selling their land. Tactics allegedly included terminating leases, evicting non-compliant locals, and instigating expensive lawsuits, leaving landowners with the choice of facing hefty legal charges or succumbing to the sale proposal.
The document claims that the company manipulated families, misrepresenting their intentions about Flannery’s offers, hoping to exert pressure on those unwilling to sell. The defendants cite an instance where the company allegedly employed a “divide-and-conquer” strategy, acquiring a share from a family member willing to sell and then suing the remaining members.
The allegations arose from an ongoing federal lawsuit initiated last year by Flannery against multiple landowners. The company accused them of infringing the Sherman Antitrust Act by working together to inflate their property prices.
Local politicians, including John Garamendi, Democratic Representative of California, have openly criticised Flannery’s clandestine efforts to acquire the land. Much of this land surrounds the strategic Travis Air Force Base, a crucial economic and military centre. In August, Garamendi denounced Flannery for employing what he termed “strong-arm mobster techniques” to secure the land, including manipulating family members against each other.
The opaque manner in which the company pursued this land acquisition has drawn further criticism from authorities. This led Garamendi and fellow Democrat, Representative Mike Thompson, to request a federal investigation into the matter.
Flannery alleges that the purported price-fixing conspiracy led to the company paying $170 million more than the fair market value for the land. The company is seeking $510 million in damages, triple the alleged overcharges.
Flannery’s spokesperson did not immediately respond to requests for comment. However, a representative told Bloomberg that the company has “specific evidence” of the landowners participating in a price-fixing scheme and is open to negotiating settlements with the remaining defendants.
Flannery and its parent company, California Forever, recently publicised artistic impressions of their utopian city project. They have proposed plans to locals for a city reliant on sustainable energy, comprising tens of thousands of new homes, a sizeable solar energy farm, over a million new trees, and more than ten thousand acres of new parks and open spaces. Jan Sramek, a former Goldman Sachs trader, heads the project.
