Real estate has long been the go-to investment for those looking to build long-term wealth for generations.
If you find yourself imagining what it would be like to build a city, you might play SimCity or other video games like it. But if you’re a billionaire, you don’t have to just pretend; you could actually do it.
In fact, the new thing for the modern-day titans of industry seems to be city planning — Bill Gates plans to build a 24,000-acre smart city in a remote part of Arizona, and Jeffrey Berns, a cryptocurrency millionaire, is planning a city on 67,000 acres in the Nevada desert.
The latest announcement comes from billionaire Marc Lore, former Walmart CEO and creator of Jet.com, (the sale of which made him a billionaire). Lore is planning a city of his own, likely in another desert locale, or in Lore’s words, a place “where the land [is] worth nothing, or very little.”
Besides building a futuristic city, Lore’s other plans to keep him busy after his Walmart retirement include advising start-ups and working on a reality TV show.
The features of Telosa
Plans for Lore’s futuristic city, named Telosa, which means “higher purpose,” will span 150,000 acres of American desert and will follow all of Lore’s rules. It will have the following:
- Eco-friendly architecture
- Sustainable energy production — atop its centerpiece skyscraper called the “Equitism Tower”
- Drought-resistant water system
- Aeroponic farms
- No more than 15 minutes from work, school, and amenities
- No fossil-fueled vehicles
- Autonomous vehicles
- Fair wealth creation
Renderings of Telosa look suspiciously like the 1960s Jetsons TV show.
Lore’s inspiration for Telosa comes largely from 19th-century progressive Henry George, who believed that landowners profited from what he called “unearned economic rent” that should be taxed away by the state, providing a surplus the government could use for public works. Few economists of the day supported this vision, arguing that such taxes would take away the incentive to keep sites valuable.
There’s also talk of creating a new constitution for Telosa. Since Telosa will be located in the United States, it’s unclear how this will happen.
Danish architect BIG signed on
Danish architecture firm BIG, led by Bjarke Ingels, designer of the Apple and Googleheadquarters, has signed on for Telosa. And so have many prominent and well-respected folks, such as Ellen Dunham-Jones, an urban design professor from Georgia Tech; climate and sustainability experts; and creatives.
Who wouldn’t like to imagine what a utopia would entail? But then reality sinks in. Telosa comes with an estimated price tag of $400 billion to $500 billion. Even for a billionaire, that’s a lot of scratch. Where will the money come from? Project organizers told CNN funding would come from “various sources” that would include you and me — through state and federal grants and subsidies.
Lore admits this project is a moonshot — a massive proposal that lures businesses and residents with the promise of jobs and economic growth but comes with a huge cost. Some refer to moonshot proposals as “ribbon-cutting syndrome” because of the great photo ops and headlines the projects create.
Under Lore’s plan, residents could own homes, but a foundation created by Lore would own all the land. Ruh-roh.
To be successful, Telosa needs lots of people to move there. And indeed, many of the first 50,000 seeds, as Lore calls them, will be young entrepreneurs with start-ups. Lore intends to lure them to Telosa with promises of funding through a venture capital firm Lore will create.
All this control by one person, which history shows leads to tyranny, will supposedly be OK in Telosa. It’s not sure how, but under the project’s motto, equitism, everything will work out.
The way the system will work is that every Telosa resident will pay taxes to build the city, even though they can’t own any of the land. Then, when the foundation that Lore creates accumulates a trillion or so dollars, it can start giving back to the people in the form of — you might have guessed — social services, affordable housing, education, and healthcare.
“Wow, that’s it!” says Lore. And “wow” is right. This futuristic city, according to Lore, will not be like our current economic system of growth because that leads to inequality (perhaps like how Lore is a billionaire).
The Millionacres bottom line
When a billionaire talks about the “wealth gap,” your antennae should go up. The statement might be a tad insincere, and maybe used as a diversionary tactic, since the current system worked just fine for them. In fact, during the pandemic, the wealth of billionaires has grown 60%. But on the flip side, the pandemic also caused more people to struggle to make ends meet, with an estimated 24 million not having enough food to eat.
At least the guy’s trying. But top-down city planning, where people can’t actually own real estate (land), can be a dangerous, slippery slope to go down, and several experts have spoken out against the project. For example, urban design professor at the University of Oregon Mark Giliem said, “I think this sounds dangerous.” According to Telosa team member Dunham-Jones, “The idea of supporting a million people on worthless land is a tough hill to climb.” And Sarah Moser, associate professor of geography at McGill University in Montreal, said this project has a success rate of “roughly zero.”