Your spot looks really good, but according to Google it's a "Wildlife area", so politically it's not likely to be easy to get approval to turn into a city.

For me, proximity to Silicon Valley is not a priority. My suggestion is to use land in NW Oregon in the coast range. Most of it is very rugged, but there's some sort-of-flat land in the general vicinity of Saddle Mountain that's currently used to grow lumber. It's close to the beach but far enough not to be in the tsunami zone, and close to highway 26. Water is unlikely to be an issue, and it's close enough to Portland that it's not totally isolated, yet far enough away not be be a suburb.

I think one of the downsides of trying to establish a tech-hub city in the middle of nowhere is that tech hubs tend to have a symbiotic relationship with universities, and the latter are hard to create artificially.

Another good option! I've always wondered why NW Pacific US coast is very underutilized. How is the climate like there? Pretty much the same as Portland?

I agree with you that there needs to be a University to create a tech hub, but I think that's the easiest to take care of if YC and big tech companies are behind this plan.. You can easily convince big name universities to start satellite campuses or even better you can start your own! UCSF Medical Center at Mission Bay is a perfect example that you can build a world class research center if you pump enough money to it.

Weather is similar to Portland, but as you get closer to the coast you get less temperature extremes. The coastal mountains do get snow in the winter, though, due to elevation. There's probably more rain.

I think in general people don't build there because it's harder/more expensive to build on hilly terrain, there aren't many jobs in the area, roads are relatively sparse, and though the landscape is beautiful in general, the way it's logged means there's little species diversity and the land always looks like it has a bad haircut.

I'm sure there are hundreds of other plausible sites we could find by spending a little time with Google Maps. Most of them will have something wrong with them, otherwise cities would have been built there already. However, some of the problems may be features in the right context. For instance, hilly terrain might deter real-estate developers from trying to build 100-houses-at-a-time developments and encourage the kind of people who are willing to make the effort to use the geography to their advantage.