Model City Monday 2/3/25
Things fall apart
Prospera Declared Unconstitutional
The Honduras Supreme Court has declared charter cities, including Prospera, unconstitutional.
The background: in the mid-2010s, the ruling conservative party wanted charter cities. They had already packed the Supreme Court for other reasons, so they had their captive court declare charter cities to be constitutional.
In 2022, the socialists took power from the conservatives and got the chance to fill the Supreme Court with their supporters, though this time it was routine and not fairly describable as “packing”. In September, this new Supreme Court said whoops, actually charter cities aren’t constitutional at all. They added that this decision applied retroactively, ie even existing charter cities that had been approved under the old government were, ex post facto, illegal.
Prospera’s lawyers objected, saying that the court is not allowed to make ex post facto rulings. But arguing that the Supreme Court is misinterpreting the Constitution seems like a losing battle - even if you’re right, who do you appeal to?
So the city is pursuing a two-pronged strategy. The first prong is waiting. Prospera is a collection of buildings and people. The buildings can stay standing, the people can still live there - they just have to follow regular Honduran law, rather than the investment-friendly charter they previously used. There’s another election in November, which the socialists are expected to lose. Prospera hopes the conservatives will come in, take control of the Supreme Court again, and then they’ll say whoops, messed it up again, charter cities are constitutional after all.
The second prong is international arbitration. When the conservatives approved charter cities, they signed international contracts promising their investment partners that Honduras wouldn’t go back on its word; if it did, they could be sued for damages. Prospera is suing for $10 billion, ~2/3 of Honduras’ annual budget. Observers say they have good lawyers and a strong case. Honduras has responded by backing out of its agreements and saying it won’t accept international rulings, but this only goes so far; the agreements say Prospera can sue to confiscate Honduran assets abroad if the government won’t cooperate. So far they seem to be holding off on this, probably because they’d rather do this the easy way by waiting for the conservatives to retake power, but the lawsuit is a strong argument for whoever wins in November to see things their way.
You might expect this instability to chill investment, but apparently not - this January, another funding round led by Coinbase raised an extra $30 million for the beleaguered city. They must have balls of steel!
It looks like a big part of investors’ hope for Prospera is biotech research and medical tourism. It hosted (and will host again) the Vitalia conference, and the Vitalia team are trying to build on it with Infinita, a charter city VC. I still think that Minicircle, the most famous biotech clinic currently in Prospera, is either confused or fraudulent, but hopefully they can eventually attract firms which are neither.
Neom Neom Neom Neom Neom
Neom, Saudi Arabia’s insane giant linear city project, has admitted they cannot actually build a giant linear city.
…sort of! The original plan for a 170 km Line by 2030 has been replaced with a more modest 2.4 km, focused on hosting the 2034 World Cup. Even a 2.4 km Line is extraordinarily ambitious, but here I am less than totally entirely 100% certain that it won’t happen.
To soften the blow, Saudi Arabia has announced even more bizarre subareas of NEOM with silly names, like EPICON:
And LEYJA:
And UTAMO (hey, I’ve read this Silmarillion chapter!):
They also fired the NEOM CEO, Nadhmi al-Nasr - known for abusing subordinates, threatening to kill people who disagreed with him, and saying that he “celebrated” when his workers dropped dead (which happened often!) The new CEO is Aiman Al-Mudaifer.
Last year, I predicted with 99% confidence that less than one kilometer of NEOM’s linear city would get built. I would still take this at even odds, but I regret my high confidence now - it sounds like they have a more realistic target that might, if they’re incredibly lucky, allow them to get something done.
Charter Cities In . . . America?
In 2023, Trump proposed building ten “freedom cities”.
As usual, he’s light on details, but says that the federal government owns lots of land, it’s mostly unused, and he wants to "hold a contest to charter ten new cities and award them to the best proposals for development".
I bet Charter Cities Institute has already tried to reach out to the administration on this. You can see hints of where they might go in Mark Lutter’s piece in City Journal. As usual, he bangs the drum of “agglomeration effects” - new cities only prosper if there is some reason for them to exist. If you build a city on the median patch of federal land - a random desert - you’ll have an uphill battle to make anyone move there.
He proposes some alternatives, of which the most controversial is the Presidio - a federally-owned historic fortress in the middle of San Francisco which is now mostly used as a park. But the government technically has the rights to the land, and if they wanted to, they could zone the whole thing for six-story apartments and add 120,000 people to SF. I don’t know which part of this is most likely to make San Franciscans explode with rage - the loss of their (admittedly beautiful) historic park, the Donald Trump involvement, or the prospect of actually building things in their city. It would be a blowup for the ages.
If Trump isn’t ready for quite that much of a fight, Lutter suggests other promising pieces of federal land, including the Lowry Range near Denver and Guantanamo Bay (!), which could:
. . . undermine the Communist regime by offering an easier exit than flight to Miami or Mexico, and help rehabilitate America’s image, given Guantanamo’s current association with the War on Terror’s excesses. With effective governance and a welcoming environment, a Guantanamo Bay site would powerfully demonstrate that the American model of capitalism can thrive anywhere.
Unfortunately there are multiple ways to read the phrase “bringing immigrants to Guantanamo Bay”, and so far the Trump administration isn’t choosing the cool one.
California Eventually
California Forever, the ambitious planned city an hour north of San Francisco, is on hold.
They had originally planned to fight NIMBYs in the November election via a ballot initiative which would give them the right to proceed. But after polls suggested they might lose, they instead struck an agreement with the county to delay two years and run through the usual set of environmental impact assessments. The County Supervisor wrote:
I think it signals [project lead] Jan Sramek’s understanding that while the need for more affordable housing and good paying jobs has merit, the timing has been unrealistic. I want to acknowledge that many Solano residents are excited about Mr. Sramek’s optimism about a California that builds again. He is also right that we cannot solve our jobs, housing, and energy challenges if every project takes a decade or more to break ground.
But announcing last year that California Forever would seek a vote on the November 2024 ballot, without a full Environmental Impact Report and a fully negotiated Development Agreement, was a mistake. This politicized the entire project, made it difficult for us and our staff to work with them, and forced everyone in our community to take sides.
Delaying the vote gives everyone a chance to pause and work together, which is what is needed.
Opponents seemed optimistic that this would give them time to crush the project, or at least frustrate the investors enough to make them go away.
But in the past few days, the situation has changed. Suisun City, a nearby small town, has announced that it is considering annexing the California Forever land. Since the project was previously blocked by laws restricting building on unincorporated land, getting annexed by a city - and maybe running their project under the Suisun City banner - would solve many of their problems. Suisun City is struggling financially, and it would make sense for them to offer legal protection in exchange for money. The city mayor sort of halfway-kind-of-denies that’s what she’s doing, but California Forever is unpopular among Suisun City voters - if the story were actually false, I would expect her to make stronger denials.
You Had Me At “Dragon King”
In 2021, Art Finch proposed that Bhutan turn the village of Geluphu into a cool high-tech charter city that would create jobs for Bhutanese youth and prevent them from emigrating. Finch, a South-African-American entrepreneur with Bhutanese connections, got the highest levels of the government to listen to his idea. Then something went wrong. Based on this thread, it seems like a Facebook video about the project went viral, the Bhutanese people had the usual qualms about Thiel-backed billionaire startup Silicon Valley whatever stealing their precious sovereignty (of course it was Thiel-backed), and the deal fell apart.
So far this is the story of every promising charter city, but what happened next was a little different - the Dragon King of Bhutan (of course they’re ruled by a Dragon King) announced that Bhutan would build their own version of the city, without Silicon Valley help. Thus Geluphu Mindfulness City Special Administrative Region. Construction started in 2023.
The target population is one million (Bhutan’s current largest city, Thimphu, has a population of only 100,000, and is famous for being one of only two national capitals without traffic lights). The projected cost is $100 billion with a b (Bhutan’s current GDP is $3 billion/year).
So how are they going to do this? Bhutan’s usual strategy is to play off neighbors India and China against each other, seeing which of them will give it more money in exchange for its friendship. Some American investors also seem interested. But it’s not even clear what industries would be involved - proposals include agribusiness, hydroelectric power, and - the last refuge of every desperate poor country - cryptocurrency (you can see some extremely meaningless PR statements about industry involvement here)
Still, the aesthetics will be top-notch:
Bhutan says they have partnered with the Bjarke Ingels Group of landscape architects as well as McKinsey - I feel like whichever Bhutanese official decided to replace Thiel with McKinsey got the short end of that trade.
As for Art Finch, he expresses skepticism in the direction Bhutan is taking his idea, saying that:
“It is ‘my prayer’ as Bhutanese say, that the not entirely happy people of Bhutan will get the opportunities they deserve in a country with a fully realized version of the project. I do not believe this project is shaping up that way for now and I pray dialog can improve this.”
But he seems to have landed on his feet - his website now advertises an Investment & Innovation Startup Zone in Sri Lanka.
Elsewhere In Model Cities
1: Without even a site picked out, Praxis has received another $525 million from VCs (for context, 4x more than Prospera’s latest raise). Dryden Brown must be the most convincing person in the world.
2: British actor Idris Elba announced his plans to build a film studio in the charter city of Fumba, Zanzibar.
3: Devon Zuegel, who previously ran the pop-up village Edge Esmeralda, plans to build a permanent “walkable village” + resort called Esmeralda in Healdsburg, California (90 minutes north of SF)
4: Kanye West has announced interest in building his own charter city in the Middle East. I was about to object “…but didn’t he get cancelled for anti-Semitism?” which would have been the dumbest sentence in ACX history. Really, Scott? You can’t run a vaguely statelike organization in the Middle East if you’re too anti-Semitic? I don’t know why any of you still take me seriously.
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