California Forever gets huge setback after manufacturer chooses TX for $3.2 billion shipyard

SOLANO COUNTY, Calif. (KGO) -- A proposed $3.2 billion shipyard that supporters hoped would become a cornerstone of the California Forever development is instead headed to Texas, prompting renewed debate over whether California is doing enough to compete for major employers.

Defense technology company Saronic announced Thursday it will build its next-generation shipyard in Brownsville, Texas, rather than at the proposed California Forever site in southeastern Solano County. The project was expected to create an estimated 10,000 jobs.

California Forever is the billionaire-backed proposal to build a new city of up to 400,000 people in Solano County.

Supporters of the project called the announcement a significant setback.

"We've been ready and chomping at the bit to get going on this project. We've dreaded that this could possibly happen, but to find that California's lost out to Texas was a real gut punch," said Joshua Arce, executive director of the California Alliance for Jobs.

MORE: Here's a glimpse into Solano Co.'s proposed new city with newly-released blueprints, renderings

Arce's coalition represents more than 70,000 union workers and 2,000 companies. He said the loss extends beyond a single project.

"This is a major lost opportunity for California and the Bay Area -- 10,000 jobs out the door," Arce said.

In announcing its decision, Saronic said Brownsville was selected after a yearlong, nationwide search because of its workforce, infrastructure, logistics, land availability and room for future expansion.

The company added: "The state of Texas and city of Brownsville give us the foundation to turn vision into reality."

While Saronic did not specifically explain why it chose Texas over California, Arce argued the state's permitting process played a role.

"We know from the news today that Saronic pointed toward Texas as a state that was able to cut through red tape," he said.

Supporters are now calling on lawmakers to revive legislation they say would streamline environmental reviews and approvals for major manufacturing projects.

For local tradespeople, the announcement also carries personal consequences.

John Kowalski, a Pipefitters Local 343 member, said he hoped projects like the shipyard would create work closer to home for his family.

"This was a missed opportunity. I don't want to sit here and talk about me and missed opportunities for me and my family. It's more than that. It's generations," Kowalski said.

Not everyone agrees the project was California's to lose.

Jeff Deiss with Solano Together, and a longtime California Forever skeptic, said Brownsville already had advantages that made it a logical choice, including Saronic's Texas headquarters and existing infrastructure. He also argued California should not weaken environmental protections in response.

"We definitely want to streamline things and get things built in this state, but this is not the way to do it," Deiss said.

The announcement comes as Solano County has also faced other manufacturing job losses, including the planned closure of Valero's Benicia refinery and the shutdown of Anheuser-Busch's Fairfield brewery, costing more than 500 jobs.

Supporters of California Forever are also criticizing state Sen. Christopher Cabaldon, saying he was skeptical of the project and did not engage with Saronic leaders. Cabaldon's office disputed that characterization, saying California Forever tied the shipyard proposal to its broader housing development and ultimately cost Solano County the opportunity.

Arce said supporters hope lawmakers act before another major investment leaves the state.

"We know that if we're going to learn from this lost opportunity and avoid repeating in the future, we know we're going to need legislation that makes California just as competitive, if not more than any other state in the country," he said.