Try 1 month for 99¢

It was a stunning vision of a green city of 150,000 residents rising up out of nowhere, transforming a remote swath of land in southern Kings County into a state-of-the-art combination of waterways, parks, solar-powered homes and businesses.

Los Angeles entrepreneur Quay Hays assembled an impressive team of planners and top executives to make it happen.

That was in early 2007.

Even then, with the real estate boom in full swing and easy loans seemingly growing on trees, the city to be known as Quay Valley was an edgy concept.

Now the proposal's fate is even more uncertain.

The land is still an empty, pancake-flat stretch of alkali soil near Interstate 5 that, on hazy days, looks like the center of an endless flatness. The original company promoting the project - Kings County Ventures - has disbanded. There are a few preliminary plans still on file with Kings County.

Officials wonder what has happened to the entire proposal.

"The application for the Quay Valley project has been inactive for approximately a year and a half," said Greg Gatzka, director of the Kings County Community Development Agency.

Project applications normally expire after six months of inactivity. This one is being left a little longer on the books because it's such a huge concept.

Hays said in a telephone interview he remains interested in seeing the development happen.

But the obstacles have multiplied.

The biggest hurdle is water. State law requires that new cities demonstrate they have enough water to survive a five-year drought.

The original plan called for buying up water rights attached to 22,000 acres of land then owned by McCarthy Family Farms in the Angiola Water District. But there's a problem. According to court documents, McCarthy has already sold the land to Sandridge Partners, a Bay Area real estate company that also farms thousands of acres in western Kings County.

Remember Sandridge? That's who sold $73 million in Kings County-based water rights to the Mojave Water Agency last year in a much-publicized deal. Sandridge partner John Vidovich said he intended to partially make up for the lost water by buying up surrounding water rights on marginal agricultural land. He wasn't kidding. It turns out that the property the Quay planners were counting on for the proposed city's water has been sold to Vidovich.

GROW Land and Water LLC - Quay Hays' latest organization - filed a lawsuit in December alleging that it was entitled to buy the property when McCarthy sold it to Vidovich. The lawsuit asks for hundreds of millions of dollars in compensation.

Court documents indicate that Vidovich has already built canals to convey the water - reportedly a combination of Tule River, Kings River, California Aqueduct and groundwater sources - to his cropland.

When asked what would happen to the Quay Valley concept if the lawsuit fails, Hays said, "We haven't really thought about it. I don't have an answer."

Connected to the lack-of-water hurdle is the problem of financing. Kings County planners originally pegged the cost at $10 billion, though some estimates put it as high as $25 billion.

Hays and his partners were hoping to attract some serious venture capital to bankroll the project. That was just before the housing bubble burst, the lending market dried up and development virtually stopped.

"I would think it would be pretty tough today," said Chuck Rigsbee, senior vice president at California Bank & Trust in Fresno. Banks are under scrutiny from regulators and credit remains tight, he said.

"To go out and speculate on a new town, I think it's just a pipe dream at this point," Rigsbee said.

"It's a lot better scenario than it was two years ago," said Hays, when asked about the financing prospects.

New commercial developments have to demonstrate 90 percent occupancy contracts before they can get loans, Rigsbee said. Quay Valley's original plan called for building commercial development first and then attracting residents in phases.

That was always one of the main challenges Quay Valley planners had to overcome: How do you construct a full-blown city in an isolated place, complete with all the necessary services, before a single resident lives there? And how do you get people to come?

The project never cleared several key hurdles, including a financial feasibility study, a detailed infrastructure plan and the water issue, Gatzka said.

And even if it cleared those initial hurdles, the proposal would surely face environmental opposition.

Initially, residents would likely be commuting from surrounding towns, the nearest of which - Lemoore and Hanford - are at least 30 minutes away. That presents problems that would conflict with California's landmark global warming laws, which require a return to 1990 emissions levels by 2020. In practice, that means new development has to minimize commuter pollution by constructing development close to shopping and commercial areas or and/or providing other offsets.

"It's going to be awhile before new development of that size looks attractive in California," said Cynthia Kroll, a senior regional economist at University of California, Berkeley.

Hays doesn't seem to be letting go of the idea. He said he's more "excited about it than ever."

But translating his visionary dream into hard reality seems more unlikely than ever.

"I'm sure they found it was not a good time in terms of the market," Kroll said.

The reporter can be reached at 583-2432. To comment on this story, go to www.HanfordSentinel.com.

Subscribe to Daily Headlines

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.
Load comments