Land values cannot "fund" anything in a closed economy. They only add to someone's bottom line when the land sells or its productive capacity is utilized better. I see a rapid inflationary curve for anyone attempting to use them as a funding source.

Such a city could exist, but it would depend upon outside revenue, such as the jobs its residents have servicing businesses or some exported product. Sans either of those, it would then just become a high end apartment complex with amenities for high earning residents. It would not generate any actual "net" income itself and would be hard pressed to compete with more traditional residential areas.