Devon Zuegel

Esmeralda rests on the thesis that environments quietly govern behavior, from whether a visible phone gets checked to whether friends meet spontaneously or require a calendar invitation. Cheap space can also change what gets created: Devon Zuegel contrasts Manhattan restaurants that need rapid table turnover with roomy Nebraska diners, and relays one theory involving apocryphal California startup garages: warm, extra-cheap space attached to homes may have supported physical experimentation. “How do I shape my environment so that it shapes me in the ways that I want?”

Zuegel is building a modern California counterpart to Chautauqua, the roughly 8,000-person town whose nine-week summer season has combined lectures, workshops, theater, opera, and a symphony for about 150 years. Her version adds multigenerational, walkable living and shifts the culture from consuming expertise toward creating companies, art, and research. The model is peer-to-peer rather than “sage on the stage”: not merely hearing Jane Goodall speak, but having her live nearby and lead local children on an expedition.

Edge Esmeralda is both a prototype and a community-and-feedback layer for a town whose physical build will take years. The 30-day Healdsburg pop-up drew 1,300 people last year, anchors each day with an optional communal dinner, and lets attendees program an unconference themselves. Its best surprise—a volunteer-built set of solar A-frames that grew into a campsite and solar-powered night market—demonstrated how a well-designed “container” can turn deferred projects into collective action.

Local trust is being treated as development infrastructure, built before Zuegel’s team has even purchased the land. Edge was a multi-million-dollar event that brought thousands of visitors and millions of dollars of business into Sonoma County, while panels with the Healdsburg and Cloverdale city managers exposed prospective residents to regional concerns. One local preparing a “Don’t colonize Healdsburg” sign attended the first event, became the month’s most frequent participant, and ultimately volunteered—evidence for Zuegel that trust is “more like tending a garden.”

The walkability opportunity comes from a coordination failure: cars let each household trade access for more space, but those individually rational moves collectively thin out nearby amenities. Zuegel is “not anti-car”; she likens cars to horses—useful and enjoyable, but a poor object around which to organize an entire city. At Las Catalinas, 1,000 of 1,200 acres are reserved as rainforest, while the first car-free 20 developed acres already hold about 200 homes, 10 restaurants, and a hotel, showing how much land conventional vehicle circulation consumes.

Financing must match risk: Esmeralda strongly prefers all equity for raw land, may use equity or debt for infrastructure, and expects conventional mortgages to become useful once finished homes can fit lenders’ boxes. Debt holders receive interest but none of a project’s extraordinary upside, making them structurally conservative and comp-dependent; early leverage also puts a “ticking clock” on years of approvals and construction before cash flow. Fee-simple lots and zero-lot-line homes preserve an unusual urban form while simplifying ownership for mortgage lenders.

The economic case may be strong, but the capital-duration mismatch and infrastructure budget are the gating constraints. Zuegel thinks Chautauqua homes sell for roughly 2x nearby homes and says comparable town builders have produced large returns, including on an IRR basis, yet conventional real-estate funds often need capital back in five to seven years while towns can require 10, 15, or 20. Even basic roads and utilities are “astronomical”; a 10% infrastructure overrun might separate a successful project from failure, while patient capital could turn Esmeralda into an existence proof for a repeatable category.

🔗 Original source & video: Devon Zuegel: How To Create A New Town - [Invest Like the Best, EP.413]