Farmland in Central Valley Gobbled Up by Developers : Growth: Huge suburb in Sutter County is grandest of plans. Speculation has driven up land prices there more than sixfold.

Even in a state where speculators make high art out of turning pastures into housing tracts, the plan to create a mega-suburb on 38 square miles of fertile Sutter County rice fields is audacious.

On this swampy land, turned deep green by winter rain, well-heeled developers envision four futuristic cities with enough streets, schools and stores to serve 150,000 people--more than double the farm county’s current population.

In quiet, little Pleasant Grove, the transformation would be remarkable. Today there is not even a coffee shop or stoplight here, just a smattering of homes and a firehouse, school, post office and graveyard.

What may occur here offers a revealing lesson in how California’s sprawling growth keeps spreading, and helps explain why so much valuable Central Valley farmland continues to vanish under the march of new suburbs.

The coming evolution of Sutter County is in part the work of financiers who see new houses as the most lucrative crop imaginable on these lands. But it also marks a choice by local officials and weary farmers to grab for a personal share of the bounty from California’s growth boom--even at the price of their county’s rural civility.

At the south end of the county, where farmers learned the value of a dollar through long days knee-deep in rice mud, real estate speculation has pushed up the value of farmland more than sixfold--from $2,500 in 1988 to $16,000 an acre now.

People at the north end do not share the benefits of the new economics, and many dislike seeing the farm life disappear. Clashes between the two sides has turned local politics ugly and made friends into foes.

“It can put an end to a way of life as we’ve enjoyed it,” said Jim Aken, a rice farmer who moved to the tiny settlement of Robbins in 1937. When the local Farm Bureau endorsed the development a few months back, he shocked his friends by quitting as a director.

If developers and boosters have their way, bulldozers could begin carving the first cul-de-sacs of Sutter Bay, the name of the project, after the next rice crop is gathered. There is no bay nearby, only a river and plenty of flat farmland, but the development group that includes Home Savings of America, the nation’s largest S & L, does not suffer from lack of imagination.

Glossy brochures and promotional videos promise that Sutter Bay will be a high-tech urban center in the midst of fields, a place where electric cars zip over specially designed paths, and state-of-the-art fiber optics support the latest in non-polluting industry.

Reflecting the developers’ dream that if they build it, a university will come, one of the promised new towns is to be called College Park.

Sutter Bay is the grandest of 17 projects that propose to build new towns on the floor of the Central Valley. In the past five years, developers have identified nearly 900,000 acres of farmland for subdivision tracts, the Department of Agriculture said.

State Resources Secretary Douglas Wheeler predicts that California’s population of 30 million will hit 40 million by 2000, mostly because of growth in the farm counties. “That next 10 million will be moving largely to the Central Valley,” Wheeler said.

The first visible signs of change here came in 1986, when Caltrans widened a stretch of California 99 from Sacramento to south Sutter County. About the same time, the value of rice crops sagged, in part because federal rice subsidies were reduced. Farmers in Sutter County and elsewhere began considering their futures.

When a pair of local land speculators came around offering what seemed like a good price for old rice fields, Robert Lawrence was motivated. Terminally ill and wanting to provide for his wife, Norma, he placed an unsteady signature on a contract pledging to sell 300 acres at $2,500 per acre. A month later, he died of cancer.

The buyers completed the sale in 1988 and immediately resold the land for $4,500 an acre. Norma Lawrence later claimed that she was duped, but the sale proved to be a landmark event. Hers was the first land in south Sutter County sold for speculation purposes, and prices have spiraled upward ever since.

Speculators bought up much of the land surrounding Pleasant Grove and resold it to Sutter Bay Associates, a partnership formed in 1989 by two Bay Area developers, Jonathan Cohen and William Falik, and a subsidiary of H. F. Ahmanson & Co., the parent company of Home Savings.

In 1990, the partnership made the biggest land deal ever in the south end of the county, paying $10.4 million for 900 acres, including part of the Lawrence spread--a price of $11,500 an acre. Today, values have hit just under $16,000 an acre.

In the developers’ eyes, the gamble in Sutter County seems safe given its location 20 miles from downtown Sacramento--the center of a fast-growing metropolitan area of 1.2 million people--and the prediction of 10 million new Californians this decade.

“Where are you going to put them?” Falik asks. “It’ll have to be in the Central Valley.”

Fifth-generation rice farmer Cliff Bennett welcomed the chance to sell. He calls rice the “most hated crop” in California, assailed for its thirst, the waste straw that fouls the air when burned, and the pesticides that drain into the Sacramento River.

Figuring that farming will be a money-losing venture by the time his sons are grown, Bennett accepted $3,000 an acre for some of his property.

“More power to them,” he said upon learning that land is already going for more than five times that amount. “My philosophy would be different if I had faith in the future of farming in California.”

More than 10,000 acres destined to be included in Sutter Bay are rated as prime farmland by farming experts. Development would result in “a very substantial loss of an irreplaceable resource,” said Janine Hasey, University of California extension farm adviser for Sutter and Yuba counties.

Ed and Wynette Sills worry about development jeopardizing the future of farming in California, and know they are not making any friends by speaking out as the only remaining large south county farmers who oppose the Sutter Bay project.

The Sills could make big money by selling. But they do well by their crops of organically grown rice, almonds and popcorn. Besides, they say the issue goes deeper than money. With a 2-year-old daughter and another baby on the way, they speak of the amenities of farm life--a small school, close friends, the tradition. Their way of life is worth keeping and passing down, the Sills say.

“It’s sad if land is just a deed,” Ed Sills said in the office of Pleasant Grove Farms, part of the family for half a century.

In the county seat of Yuba City, 30 miles to the north, opposition is more evident. Anti-growth forces gathered 6,000 names trying to place a referendum on the June ballot challenging the county’s support of the project. But the Board of Supervisors refused to place the measure on the ballot, setting up a court fight.

Slow-growth candidates are trying to unseat three county supervisors who endorsed Sutter Bay by voting to allow extensive development on about 26,000 acres of farmland in the south county.

But the supervisors who back the project argue that change is inevitable because of the county’s proximity to Sacramento and what they see as the declining future of farming.

“I’d love it if Sutter County could go back to the way it was when I was a kid,” said Larry Montna, chairman of the Board of Supervisors. But the county needs some replacement for the faltering farming industry, he said, and the developers promise “21st-Century technology” to entice high-end industry. “It’s jobs,” Montna said.

Residents who favor the project moved to seize control of the county’s long-ignored Republican central committee and maneuvered to gain influence on the local agency that tells property owners how much they must pay to maintain levees.

For all the trauma, it remains unclear whether Sutter Bay--with its four cities, marina, electric cars and university--will ever fully come to pass. For now, there is not demand for all the housing envisioned by developers.

Other developers hold detailed plans to create “new town” projects in Placer, El Dorado, Yuba, and Yolo counties, which all ring the Sacramento metropolitan area. In San Joaquin County to the south, there are proposals for five cities on farm and grazing land that would house 125,000 people.

Fred Yeager, Placer County planning director, worries that the Sacramento region will become “one giant suburban mess.” If Sutter Bay is built, he said, pressure will increase to allow more building on the county’s remaining grazing land.

“It can only drive up the price of food,” Yeager said, adding that “the bottom line is that most of us like to eat.”

From the speculators’ point of view, Sutter County is a safe bet even if politics derail the Sutter Bay project.

“If I hold the property for 10 years, I’ll make 10 times as much,” said Robert Leal.