HANFORD – The most common question you hear about the new city proposed for southwestern Kings County is this: Where is the water going to come from?

But that’s just one obstacle facing Quay Valley, a conceptualized eco-friendly city that would rise from scratch out of the alkali flats along Interstate 5 in far southwestern Kings County.

The proposed site is several miles south of Kettleman City on the east side of the freeway.

The issue currently under review is funding: How will Grow Holdings LLC, the developers behind Quay Valley, raise the money needed to build roads and other needed infrastructure, pay for firefighting services, establish a police force?

To help get that question answered, Kings County supervisors recently approved an agreement with Empire Economics Inc. to do a $55,000, seven-week study on the economic feasibility of the proposal.

Grow Holdings will pay for the study, according to Greg Gatzka, Kings County Community Development Agency director.

Gatzka described the study as an unusual step triggered by the fact that the community development agency has never before faced a proposal quite like Quay Valley.

The proposed development is in the early stages of a multi-stage community planning process adopted by county supervisors in 2009, two years after Quay Valley was first proposed.

The process lays out all the conditions that have to be met before a new city can be created in Kings County in the 21st century.

Gatzka described Quay Valley as the first proposal to ever go through the new process.

“We have to make sure we cover all the bases,” he said.

One of those bases? How Quay Valley will pay for itself and avoid becoming a cost burden on residents and taxpayers who already live in Kings County’s established towns.

One of the objectives of the Empire study is to look at how much risk the county could be exposed to if Quay Valley financing doesn’t work out.

That’s no small question, according to Gatzka.

He said the county could be on the hook for keeping city services going if Quay Valley were to fold at some point after startup.

He said the applicant may propose bonds or other financial mechanisms to get the city up and running.

Gatzka said Quay Valley would likely start off as an unincorporated community with agreements stating that the county will provide law enforcement and firefighting services.

Then, at some later date, Quay Valley would theoretically incorporate as a city, which would give it the power to levy property taxes and sales taxes to fund its own operations.

Currently, there is no development on the site. The initial proposal calls for a city the size of 25,000 residents on about 8,000 acres.

“It’s going to have to make sense [financially],” Gatzka said. “The reality is that the county becomes the default backstop.”

If Quay Valley defaulted on bonds, for example, the county could be held liable, according to Gatzka.

“At the end of the day, if you have a half-built community, who is left to bear the burden?” Gatzka said. “It really comes back to the county, in my opinion.”

An outline of the feasibility study provided by Empire said the analysis will look at “macroeconomic factors,” which are regarded as “being the most significant determinants of the actual performance of Planned Communities.”

The proposal asserts that “millennials … have opted to reside in apartments within urbanized areas rather than seeking traditional single-family homes in suburban/rural areas.”

The proposal indicates that that pattern has “effectively reduced the traditional demand for single-family homes in suburban/rural areas.”

“Empire will perform a systematic analysis of how these recent shifts from prior development patterns have impacted urbanized areas of San Francisco and Los Angeles as compared to the suburban/rural areas of the Central Valley,” the proposal states.

Patrick Connor, president of Fresno-based London Properties, which has an office in Hanford, said he isn’t sure how land/housing values would be assessed in an entirely new community being constructed in Kings County out of nothing.

Connor said that housing prices have remained relatively stable in Hanford and Lemoore since the dog days of the recession in 2009, but he attributed that to the presence of existing employers/service-providers: Adventist Medical Center in Hanford, Naval Air Station Lemoore and the state prisons in Corcoran and Avenal.

The reporter can be reached at snidever@hanfordsentinel.com or 583-2432. 

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