A billion-dollars-worth of farmland encircling US military bases in California has recently been purchased by a mysterious company. China is buying land around many US military installations in the mid- and southwest, Texas. Technically, this land is being bought by Flannery Associates. The origins of this company are attracting official attention and speculations abound. Does Flannery Associates have Chinese roots? Why is it interested in vast areas of land in the USA? And how might this impact the real estate market?
Meric Sentuna Kalaycioglu, 13 September 2023
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The Chinese military-linked spy balloon crossing US airspace has ignited a renewed push by US lawmakers to restrict Chinese ownership of American farmland. This dramatic episode saw the surveillance airship traversing the nation, hovering over US military installations, and eventually being shot down by a US fighter jet off the coast of South Carolina in February 2023. According to NBC 11 purchases by Chinese entities have been reported to the USDA from 1 January 2022 through 30 June 2023. What is alarming, is that these land purchases occur in the proximity to US military bases.
The White House and federal lawmakers in Washington have been actively exploring methods to curtail Chinese-owned businesses. This bipartisan push aims to limit China’s influence on American soil. Simultaneously, state legislators have embraced a novel approach aimed at safeguarding domestic investments from China: implementing restrictions on Chinese land ownership. This year alone, lawmakers in 33 states have introduced 81 bills seeking to prohibit the Chinese government, certain China-based businesses, and many Chinese citizens from acquiring agricultural land or property near military bases.
A dozen of these bills have already become law in states such as Alabama, Idaho, and Virginia. While many of these measures have been championed by Republican-dominated legislatures, many have garnered bipartisan support. This legislative surge marks a substantial increase from the past two years when fewer than 30 such bills were introduced, and only two became law. The newfound momentum this year can be attributed to the heightened alarm triggered by the Chinese spy balloon’s journey across the US.
In a recent development that has sent ripples throughout both political and military circles, US officials have initiated an inquiry into Flannery Associates, the entity behind a substantial land acquisition surrounding California’s Travis Air Force Base. The sprawling piece of farmland, spanning nearly 21 000 hectares, has raised alarm bells with authorities owing to its strategic proximity to the military base.
While the lawyers of the Flannery Associates have consistently affirmed its US ownership, dismissing the notion of foreign influence, government agencies have confirmed their scrutiny is focused on the company’s ownership, the source of its money and the reason for the land purchase.
The estimated value of this land amounts to an astounding USD 800 million. The investigation, spearheaded by the U.S. Air Force’s Foreign Investment Risk Review Office, has uncovered that Flannery Associates LLC has been acquiring land since 2018. Yet even after eight months of meticulous scrutiny, critical questions remain unanswered, namely, the ownership of Flannery Associates and the identity of the investors driving this massive land grab.
Congressman John Garamendi, a Democrat who represents parts of the San Francisco Bay Area close to where the Travis Air Force Base is located, publicly voiced his concerns that land acquisitions by Flannery Associates could be a national security issue and demanded more transparency. “It presents a major concern because we have no idea who the owners are. We smell Chinese money”, Garamendi said.
Meanwhile the U.S. Department of Agriculture has also taken a keen interest in the situation, intensifying scrutiny of the company. Their investigation revealed that most of the acquired land parcels had been originally designated for agricultural use.
As the rumors of foreign ownership began to circulate, Flannery Associates’ legal representative refuted speculations that foreign investment wields significant influence. The lawyer stated that an overwhelming 97 percent of the investment originated from US sources, with the residual funds stemming from British and Irish contributors. In a statement, Flannery Associates is described as a company owned by a group of US citizens looking to diversify their portfolio from equities into real assets, including agricultural land in western United States.
Back in 2019, a comprehensive report issued by the US Department of Agriculture (USDA) underscored a startling fact: China owned a significant amount of US agricultural land, spanning a vast 192 000 acres, with an estimated value exceeding USD 1.9 billion. A pivotal 2018 USDA report disclosed a significant trend. China’s agricultural land ownership in the US, as well as in other countries, had surged tenfold since 2009. This revelation further intrigues those investigating China’s expanding presence in the agricultural landscape.
In July 2022 the Chinese Fufeng Group’s wanted to purchase 300 acres of farmland for USD 2.3 million. This land was nestled within minutes of a US Air Force base in North Dakota which houses some of the nation’s most sensitive drone technology (Grand Forks Air Force Base). According to Fufeng, the land was bought to set up a milling plant. Both the Democratic chairman and the Republican ranking member of the Senate Intelligence Committee opposed the project. Citing national security risk the purchase was unanimously struck down in a bipartisan vote by the Grand Forks City Council’s decision in February 2023.
Prior to Fufeng’s venture in North Dakota, another Chinese firm, Guanghui Energy Co. Ltd’s, attempt to acquire 140 000 acres near Laughlin Air Force Base in Texas for the Blue Hills Wind Project raised concerns due to its owner’s ties to the Chinese Communist Party. This prompted local lawmakers to pass the “Lone Star Infrastructure Protection Act” prohibiting agreements with foreign-owned companies related to critical infrastructure.
As the debate on land acquisition around Travis Air Force Base continues, the public is now demanding answers. In the US House of Representatives, Representative Tony Gonzales and Senator Ted Cruz introduced legislation to halt the wind farm and restrict real estate purchases by Chinese, Russian, Iranian, or North Korean entities within 100 miles of US military installations or within 50 miles of military operations areas.
