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04.08.2014  
 

Atlas Bears the Weight for Smaller Buyers

Vineyard management company purchases 683 acres in Oregon

 
by Peter Mitham
 
 
calpers vineyard value
 
Atlas Vineyard Management owners Mike Cybulski and Barry Belli recently inked a deal for two parcels previously part of the CalPERS portfolio in Oregon.
McMinnville, Ore.—The unwinding and dispersal of the nearly 5,000 acres of vineyard properties formerly owned by the California Public Employees Retirement System (CalPERS) and its partners is complete.

Napa-based Atlas Vineyard Management Inc. announced this week that it had acquired 683 acres at two sites in the Willamette Valley. The properties include the Cooper Creek vineyard, a 300-acre property just west of Monmouth, Ore., and Fern Creek, a 383-acre property near Dallas, Ore.

The purchase is a first for Atlas, which manages approximately 1,900 acres on behalf of clients. A price was not disclosed.

The new acreage gives Atlas the opportunity to supply clients who previously purchased fruit from the vineyards it managed following the dismissal of Premier Pacific Vineyards Inc. as manager of nearly 5,000 acres CalPERS owned through Pacific Vineyard Partners LLC (see “California Fund Ditches Vineyard Managers”). 

“We have this huge customer base,” said Barry Belli, who co-founded Atlas with Mike Cybulski in 2012. “Two years ago we were supplying 1,600 tons of high-quality Pinot—mostly Pinot, but there’s some Chardonnay in there as well—to maybe 40 or 50 high-end Oregon winery clients.…There’s nothing to sell them anymore, and they’re looking for fruit. And we have the opportunity.”

 

 

calpers vineyard value
 
Source : CalPERS Annual Investment Report, 2003-13

Properties formerly owned by CalPERS and institutional investment firm Commonfund of Wilton, Conn., and managed by Premier Pacific—and subsequently Atlas—have been sold off in the past year.

The action kicked off a year ago with Jackson Family Wines’ purchase of 1,080 acres west of Salem, Ore., that had been formerly owned by Commonfund (see “California Cash Flows into Northwest”). The dealings continued, with Jackson Family Wines snapping up CalPERS’ holdings, and Precept Wine Brands acquiring the Yamhela vineyard and, earlier this year, Ste. Michelle Wine Estates acquiring Willakia.

With the purchase of these vineyards removing their fruit from the wider market, Atlas saw its opportunity to acquire properties with which it was familiar.

Belli and Cybulski were both veterans of Premier Pacific, overseeing its financial and vineyard operations, respectively. CalPERS’ dismissal of Premier Pacific in 2011 saw them set up Atlas, winning the contract to manage the vineyards they had helped develop a decade earlier.

“Mike was very involved with the selection and development of those two properties, so we have a very deep knowledge dating back to November 2007, when the properties were actually purchased,” Belli told Wines & Vines. “The timing was right, so we took advantage of that.”

The deals closed earlier this year, but Atlas waited to announce the acquisition until it had ordered vines for the properties and knew when development would be completed. While approximately 123 acres were readied for planting, complete with trellises, prior to the financial crisis, no vines were planted.

Belli said that will change in 2015, when the properties are planted 90% to Pinot Noir and 10% to Chardonnay, with a smidgen of Pinot Gris possible to satisfy a client in California. The new production could come on stream as early as 2017, with upwards of 240 acres potentially producing fruit from 2019 onwards.

The quality of wines made from Oregon fruit, and vineyards in the Northwest generally, is comparable with what vineyards in Napa are yielding, Belli said. But the lower cost adds to the appeal of the fruit.

The point is one Mario Zepponi, a partner at Santa Rosa, Calif.-based Zepponi & Co., made in conversations with Wines & Vines last year, and Belli said it’s one that’s going to continue to drive interest in the Northwest.

“You’re seeing a lot of these big guys looking at the financials and saying, ‘Should we plant another Sonoma vineyard and spend $115,000 an acre, or should we go to Oregon and invest maybe $50,000 an acre?’” Belli said. “You’re going to continue to see the big guys go up and make big programs and improve their overall mix and cost of goods.”

The payoff for the Northwest is not just in greater investment, but a higher profile for local vineyards and the wines their fruit produces, but also in jobs.

Atlas employs close to 10 people in Oregon, and it contracts for farm labor that it hopes to bring in-house in the future.

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