Napa, Calif. -- The latest disappointing news to residents and fans of Copia in Napa Valley may turn out to have a silver lining for wine producers. Financially challenged Copia plans to expand its education programs and open satellite campuses with wine bars and stores. The move may provide additional promotion and education about wine around the country, starting in San Francisco.

The bad news for Napa Valley is that the large and underutilized wine, food and art center in downtown Napa is almost surely going to be downsized. Copia CEO Garry McGuire says the nonprofit organization will sell its building and campus by the end of the year, and then either lease back part (the first floor) or move to smaller spaces.

The organization has a debt of $78 million, and prospective buyers are already dealing with a 50 percent write-down in value according to a knowledgeable source close to the organization.

The new CEO offered a rare, "No comment," when asked if he had a buyer. Among the possible buyers is the city of Napa, which could use the site for a civic center, but financing it would be challenging.

One result of the development is that Copia is not scheduling any outside events after Dec. 31. The popular off-season Mustard Festival tourist promotion has had to relocate its big public showpiece, the Mustard Marketplace slated for March 14 and 15, away from Copia.

It will move 10 miles away to the Robert Mondavi Winery, which is sponsoring the Mustard Marketplace and also serving as host winery for the entire 2009 festival. The Mustard Festival will shortly announce details, but organizers admit the change was made at least partly because of uncertainty about the future of the Copia campus.

McGuire says that Copia's new efforts, such as kitchens and production of video and multimedia for the web, will be at the franchised for-profit center to be opened in San Francisco.

The headquarters of the nonprofit Copia Foundation -- and, so far at least, Julia's Kitchen restaurant and the expanded Cornucopia gift store -- will stay in Napa, if not necessarily in the existing building. McGuire says Copia Napa will also have a large wine bar, but arrangements for such a site seem to be on hold until plans are settled.

McGuire says the Ferry Building or the Sony Metreon Building are likely sites for the San Francisco branch of Copia. It will have a large wine bar and teaching kitchen. Copia in Napa only has a demonstration kitchen, which is not suitable for popular hands-on cooking classes. That is also the only room wired for video production.

McGuire adds, "San Francisco could attract 4 million visitors a year. Here, we can only expect 150,000. The model of events and classes isn't enough to support this." McGuire has whittled costs down to cover operations -- Copia was losing up to $5 million per year before he became CEO -- but the center does not throw off enough revenue to finance interest on the debt, much less repay it.

McGuire was brought in to solve Copia's problems. So far, he has started making the website a destination instead of a calendar, commissioned a huge amount of web content, and is about to launch sales of wine and other items on the Internet. He closed Copia four days a week and laid off staff to save cash while he seeks a permanent solution. A major need is to shed the large debt, and McGuire has proposed various possible ways to raise money, including a retail center on the property, a branded hotel and another development.

The concept for Copia was conceived by Robert and Margrit Mondavi, who provided generous support for the project. It was launched just after the terrorist attacks of September 2001, and has been plagued by external factors including the dot-com bust, economic upheaval, and weak tourism numbers. It has, however, contributed to a construction boom in downtown Napa, including support for a massive if delayed project to tame the unruly Napa River.

Nearby complementary businesses, such as the fledgling Oxbow Public Market, a new Westin Hotel and a proposed Ritz Carlton will suffer if Copia closes or relocates from the site. The popular summer Farmers Market probably won't return to Copia either, but the nearby Wine Train station has offered its ample facilities as an alternative.