Location: Near Sandy Bay New Zealand.
Population: About 2157.
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Before the Lights left Earth, humans had never lived in the area which became Sun Valley. It is located south of the crescent shaped beach where Jack had built the second settlement in a valley which has a higher than average number of sunny days. The city was the idea of Walter and a few of his friends from the second settlement. They wanted a place where they could research the Lights technology without interference or interruption. When they decided to build a city, many other scientists and artists from the settlement decided to join them.
The city is fairly small with a handful of research buildings and homes for the people living there. Jack has described the city as being what he hoped the rest of the world would have looked like after the rebuild. The buildings are works of art, the landscape is beautiful, with the interiors laid out to allow any size of experiment or artwork.
Most of the research into manipulating and using short matter happens at Sun Valley, since Walter was the one who discovered that most of the hidden areas in the other cities were built from short matter. He had brought the material they were made from back to Sun Valley before Jack had decided to block off the hidden areas because of the disaster in Vancouver. This left the city as the only place with a large amount of short matter to experiment with.