Is the Network State — an online movement that uses cryptocurrency to fund self-governing micro-communities — coming to Cloverdale?
That speculation, fueled by a Nov. 12 Substack post by the account The Nerd Reich, became a flashpoint Wednesday night during a joint meeting of the Cloverdale City Council and Planning Commission. The groups gathered for a presentation from the Esmeralda Land Co. about its proposal to redevelop the long-stalled Alexander Valley Resort site.
Esmeralda, a Bay Area-based developer founded by Devon Zuegel, wants to transform the 266-acre property on Cloverdale’s south end into a new mixed-use neighborhood with homes, public parkland, restaurants, retail space, multiple hotels, and a conference and event center. Zuegel said the plan scales back what has been approved on the site for the past two decades and adds a public park that would be gifted to the city.
Housing and hotels: a scaled-down vision
The development would offer 166 detached single-family homes, from one-bedroom starter homes to four-bedroom models with accessory dwelling units. The average single-family home would be about 1,582 square feet.
Plans also call for 239 attached “village flats” — studios to three-bedroom apartments — and 200 “active living senior” units, from studios to two-bedroom apartments. Home prices would range from $600,000 to $4 million, according to Esmeralda documents, which note that pricing would shift with the housing market.
The resort component would include three separate lodging concepts: a 120-room resort hotel with two restaurants, a 64-room boutique hotel and a 16-unit apartment-style resort building.
A spa, fitness center, racquetball club, Japanese-style hot spring and more than 21,000 square feet of retail space round out the concept.
The development’s components would be linked by what Zuegel called “the necklace” — a bikeable, walkable trail designed to encourage movement throughout the community.
“The goal is not just to make it walkable and bikeable, but to make it welcome to the entire Cloverdale community,” Zuegel said. “That’s one of the things we really care about. We want this neighborhood to be part of Cloverdale.”
Skepticism boils over
But many Cloverdale residents — and some council members — said the project feels anything but inclusive.
Several speakers pointed to Zuegel’s past participation in Network State-related conferences and her appearance on a 2024 podcast with Jan Sramek, the founder of California Forever — a Silicon Valley-backed initiative to build a new city in Solano County — as reasons for concern. Others, including Council member Marjorie Morgenstern, said they were troubled by the lack of information about who is funding the development.
That unease was clearest during public comment.
“The way I see your project, I see it as a facade,” resident Angela Cordova told Zuegel. “Are you putting up a smoke screen … in our community? Are you trying to pull a fast one?”
Zuegel acknowledged she joined a Network State event via Zoom in 2024 but said she wasn’t “deeply aware of the movement.” She described a network state as “trying to get autonomy” — a goal she said has nothing to do with Esmeralda’s proposal.
Both she and Esmeralda partner and Director of Development Michael Yarne said the project has no plans for political autonomy and instead aims to fold itself into the fabric of Cloverdale.
“There’s no effort to secede that I’m aware of,” Yarne added.
To demonstrate that, the developers outlined features they say would connect the project to the rest of Cloverdale: extending trails into downtown, expanding the city’s free bus line to reach the site and adding a sculpture walk that ties into existing public art in town.
“I love the sculpture walk in Cloverdale and would love to extend it and have it be a link that connects this project into the rest of the town,” Zuegel said.
They also addressed the investor-transparency issue directly. Zuegel denied circulating rumors that the project was backed by prominent tech figures associated with efforts to build autonomous or privately governed communities — among them Palantir Technologies co-founder Peter Thiel, “Network State” author Balaji Srinivasan and Pronomos Capital, a venture firm that funds charter-city projects overseas.
Esmeralda, she said, has 19 investors — most of them Bay Area residents who “want to see a different pattern of development happen. Some of them intend to live there once it’s built.”
Environment, water and ‘the Twinkie’
The developers said they intend to partner with local nonprofits and agencies to restore portions of the property damaged decades ago when the site housed a lumber mill. One part of that effort involves removing a large mound of mill waste — what the developers call “the Twinkie” — which contains roughly one million cubic feet of soil mixed with wood waste and stretches about a half-mile long, a tenth of a mile wide and roughly 18 feet tall.
“Our intention is to remove and/or resculpt parts of the Twinkie in order to allow the Russian River to flood into the property,” Zuegel said.
Once the mill waste is removed, the land will be able to function as a natural floodplain, creating habitat for birds, fish and other wildlife.
Developers also outlined water-management plans, including stormwater capture and aquifer recharge, anticipating future reductions in water availability if the Potter Valley Project is decommissioned.
“There are going to be some really innovative approaches on the east side park,” Yarne said.
Don Seymour, an engineer with Sonoma Water, said aquifer recharge could be “very beneficial,” but noted that designing and demonstrating the benefits would require “significant field investigations and hydrologic/hydrogeologic modeling.”
Fiscal impacts: a major revenue stream for the city
According to a draft fiscal and economic study commissioned by the developer, the project could generate nearly $80 million for the city over the next decade through impact fees and sales-tax revenue.
Project construction, according to the study, could generate $2.5 million in one-time sales-tax revenue and $77.5 million in impact fees. Once the hotels open, the study estimates they would bring in $2.2 million a year in transient-occupancy taxes, which go directly into the city’s general fund.
The development is also projected to create about 480 jobs, including retail and service positions, and could carry an assessed value of roughly $945 million upon completion.
“Today, the entire site only generates $80,000 in property tax,” Yarne said.
Under county allocation formulas, the city would collect 22 cents on every new property-tax dollar while the remaining 78 cents would be distributed to county agencies.
Esmeralda does not yet own the property and remains in its due-diligence phase with Diablo Commercial Properties, the agent for owner Spight Properties II LLC.
The developer plans to return to the Planning Commission on Jan. 13 to submit its entitlements package — the set of planning requests needed before a sale can be finalized and building permits can be pursued.
If the project stays on schedule, the City Council would take up the proposal Feb. 11, with a second hearing and possible final approval Feb. 25. All dates are tentative.