How Mark Zuckerberg Bought a City Block, Gavin Newsom Sold the Grid, and 10,400 Families Got the Bill
By L.M. Marlowe February 19, 2026
On January 28, 2026, Governor Gavin Newsom stood beside Mark Zuckerberg and announced a gift—fifty million dollars from Meta to Sacramento State University. The money would go toward demolishing three state-owned buildings on Capitol Mall and replacing them with student housing, STEM labs, and a brand-new Artificial Intelligence Center. Newsom called it an investment in California’s talent pipeline. Zuckerberg said he was proud to call California home. The mayor said it would bring life back to downtown Sacramento.
Nobody mentioned the people who used to live there.
The three buildings slated for demolition sit at 800 Capitol Mall, 751 N Street, and 801 Capitol Mall. They are the former headquarters of the Employment Development Department, the EDD Solar Building, and the State Personnel Board. They’ve been called “underutilized” and “excess state property” in every press release since 2023. But before they were state offices, they were something else entirely. They were homes.
In the 1950s, the Sacramento Redevelopment Agency used eminent domain to acquire roughly 15 square blocks in the West End neighborhood. It was a working-class, multicultural community, with families, apartments, and small businesses. An apartment building called The Wallis stood at 9th and Capitol. The agency demolished it, along with everything around it, in what was publicly described as a “slum clearance project.” They replaced the homes with government offices and called it the Capitol Mall Project. One local historian put it plainly: the battles of that era were between buildings and people. The buildings won.
Now, seventy years later, the buildings are being demolished again. This time, the demolition is being funded by a man whose company spent seventy-two billion dollars on AI infrastructure in 2025 alone, and who has warned that 2026 spending will be “notably larger,” with analysts projecting annual capital expenditures exceeding one hundred billion dollars. Fifty million to knock down some old offices and put an AI center on public land in the state capital is not philanthropy. It is a down payment.
And the governor who handed him the keys just blocked the only legislation that might have asked him to pay for it.
Healthcare workers crafted the Billionaire Tax Act of 2026. The Service Employees International Union proposed a one-time, five-percent levy on the assets of approximately two hundred of California’s wealthiest residents — people collectively worth around two trillion dollars. Mark Zuckerberg is one of them. The revenue would offset a projected one-hundred-billion-dollar shortfall in the state’s healthcare infrastructure caused by federal cuts to Medicaid and insurance subsidies. Nearly 900,000 signatures were needed to place the measure on the November 2026 ballot.
Gavin Newsom opposed it. In January 2026, he told reporters he would “do what I have to do to protect the state.” By “the state,” he meant the billionaires in it. Two days later, he stood next to the billionaire he had just shielded and accepted his fifty-million-dollar check on camera.
The healthcare workers who proposed the tax cannot feed their children on talking points. They cannot take them to the doctor on a whim. They are watching the governor oppose one president while serving the financial interests of another class entirely. Newsom has spent two years positioning himself as Donald Trump’s foil, the Democratic Party’s 2028 frontrunner, the man who will save America from authoritarianism. But you cannot save a country from oligarchy by standing on a stage funded by an oligarch, demolishing public land to build his AI center, and calling it affordable housing.
Let us be specific about what is being built and what it costs — not in dollars, but in watts.
Meta’s AI infrastructure is not theoretical. The company is constructing data centers at a pace that dwarfs anything in corporate construction history. At Davos in January 2025, Trump described being shown plans for a Meta facility he called “Manhattan-sized,” with a price tag of $50 billion. Meta’s capital expenditure for 2025 was seventy-two billion, seventy percent more than the prior year. For 2026, the company has signaled even more. These are not server farms. They are cities of machines that consume electricity on an industrial scale.
And that electricity has to come from somewhere.
In California, it comes from the grid managed by the California Independent System Operator (CAISO). And the grid is breaking. Data centers operating within CAISO’s service territory are running at approximately double their kilowatt allocation. The design specification is 3.33 kW per node. The actual draw is 6.66 kW and climbing. The difference — the excess — is not being absorbed by the companies pulling it. It is being offloaded to residential ratepayers through inflated tariffs, constrained supply, and fraudulent capacity reporting.
This is not a theory. It is arithmetic.
In Altadena and Pacific Palisades, where over 13,000 homes were destroyed in the January 2025 fires, Southern California Edison is charging survivors between $20,000 and $40,000 to reconnect to the grid. The original estimate was eight thousand. That is a four-hundred-percent increase. It is not inflation. It is a signal that the utility does not have sufficient capacity to serve residential customers because it has been diverted to data centers. The grid is not broken. The grid has been allocated.
Eighty percent of those fire survivors, more than 10,400 families,
remain unable to rebuild. Fewer than 2,600 permits have been issued over the past year. These are not bureaucratic delays. These are energy constraints disguised as permitting problems. You cannot reconnect a house to a grid that does not have room for it. You cannot rebuild a neighborhood when the watts that would power it are already flowing to a rack of GPUs computing the next large language model.
Zuckerberg gets a ribbon-cutting on Capitol Mall. Ten thousand families in Los Angeles receive a reconnection bill they cannot afford for a grid drained to feed his machines.
And here is where the circle closes.
The land at 801 Capitol Mall — where Meta’s AI Center will stand — was taken from families by eminent domain in the 1950s. The state called their neighborhood a slum and bulldozed it. They built government offices and called it progress. Those offices sat there for seventy years, slowly emptying as state workers shifted to remote work during the pandemic. By 2023, the buildings were classified as “underutilized”—the same word, dressed differently, that had once been used to describe the homes of working people who happened to live where the government wanted to build.
Now, a billionaire is paying to demolish the buildings that replaced the buildings that replaced the neighborhood. And what goes up in their place is not a neighborhood. It is not truly affordable housing. It is an AI Center with some dormitory beds attached, built on state land, funded by the richest company in the world, announced by a governor who blocked the only proposal that would have asked that company to contribute to the public good through taxation rather than through philanthropic theater.
The people who were cleared from the West End in the 1950s were never compensated. The land just changed hands, from families to the state, from the state to Meta. Each transaction was called something different. Urban renewal. Adaptive reuse. Public-private partnership. Talent pipeline investment. But the trajectory is always the same. The land moves upward, toward money and power, and the people who were on it before are told they should be grateful for the progress.
Meanwhile, the grid that powers all of it, the grid that should serve the people who live on it, who pay into it, who depend on it to keep their lights on and their homes habitable, is being consumed by the very infrastructure being built on their former land.
The data centers pull double their allocation. The utilities bill the people for the difference. The governor announces more construction. The billionaire writes it off. The fire survivors wait for a permit.
And on Capitol Mall, they demolish another building and call it the future.
This is Part 1 of the CAISO Series. Part 2 will address the $25 billion double-kW overcharge in detail, including the 4.83 MW Jitter identified in PJM/ERCOT telemetry and the 111-Day Whistleblower Window (September 28, 2025 — January 16, 2026).
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