Northwest Wine Industry Funds Research
Washington and Oregon vineyards and wineries fill gaps in government support
Washington state grapegrowers and wineries recently pledged $7.4 million toward construction of a new wine science center adjacent to Washington State University’s Tri-Cities campus in Richland. The center, with an estimated price tag of $26.2 million, will consolidate the university’s viticulture and enology teaching and research activities at one location.
WSU quietly launched a fundraising campaign for the center last summer, and the industry’s new pledge—via the Washington Wine Commission—represents a significant boost to funding efforts. The cash will be collected through a $2 per ton assessment of grape production (about $9 per acre in a typical year) and a two-cent-per-gallon assessment on wine. The assessment will continue until retirement of a bond to be offered by a public development authority that Richland’s city council established to undertake the center’s construction.
A board will be appointed to oversee the authority and the bond offering will follow shortly after, according to wine commission chair Kent Waliser, also general manager of Sagemoor Vineyards in Pasco, which has approximately 900 acres of vines in production.
“The industry is going to have a world-class research and teaching facility in the center of Eastern Washington, in the center of grape production and winemaking,” Waliser said.
Together in Richland
Research and teaching facilities are currently split between WSU locations in Pullman and Prosser. The new Richland center will bring those together and include a 45,000-square-foot research facility and teaching winery built to LEED (Leadership in Energy and Environmental Design) standards.
WSU secured a pledge of $250,000 from Northwest Farm Credit Services for the center as well as $100,000 from Ted and Joy Baseler and another $100,000 from Tom and Anne-Marie Hedges in the early days of the campaign.
Waliser said the significant financial commitment from the industry as a whole gives the venture the clout it needs to pursue additional funding. “Without it, it’s more difficult to get private funding or other public funding because they’re going to come back and ask, ‘What is industry doing?’” he told Wines & Vines. “There’s a general recognition that the public sector is not going to be able to provide funds for specific industries, even if it’s in the public good.”
The pledge by the wine commission mirrors a proposal presented to Washington State tree fruit growers this summer, which would see a special assessment levied on production to endow programs at WSU that serve the industry. Cherry growers are being asked to consider an assessment of $4 per ton while other growers would pay $1 per ton. The goal is to raise $32 million over eight years to create three endowments to fund 11 new staff positions and generate half the annual operating funds of WSU research orchards at Wenatchee and Prosser. The sector’s referendum ends Aug. 30; results will be announced next month.
Washington’s wine industry also supports the newly established Washington Tourism Alliance, which hopes to raise $15 million and fill the gap left by the June 30 closure of Washington state’s tourism office.
Private sector funding in Oregon
Oregon’s wine industry is seeing a similar trend toward industry-driven fundraising. The wine industry raised more than $2 million for the Oregon Wine Research Institute at Oregon State University. OSU’s College of Agricultural Sciences worked with those funds to make better use of the college’s dwindling allocation of state funding.
Still, the pressures keep growing. Dr. Sonny Ramaswamy, dean of the college, crisscrossed the state this spring to stave off a proposed $20 million cut in funding: His effort resulted in “only an $8 million reduction.”
Recognizing that budget pressures aren’t going away as federal and state legislators grapple with budget shortfalls for the foreseeable future, Ramaswamy said endowments similar to what WSU plans are possible at Oregon State. “More and more and more, we are going to have to rely on a significant portion of the funding coming from the users,” he told Wines & Vines, pointing specifically to the path pursued by the Washington tree fruit growers.
“Thanks in large measure to Betty and Dick O’Brien (formerly of Elton Vineyards in Yamhill County) we have endowed the viticulture position that Patty Skinkis is in,” he said. “We’re hoping that we’re going to be able to endow the others as well.”
Budget constraints haven’t halted hiring, however. The college recently hired Dr. Gabriel Balint, a graduate of Brock University in St. Catharines, Ontario, to fill a viticulture position at the Southern Oregon Research and Extension Center in Central Point. Ramaswamy said that plans to fill an enology position are also in the works.
The danger of endowment funds is exposure to market volatility. The correction of 2008 knocked 25% and more off some investments at Oregon State and elsewhere. While those investments have in large part recovered, the current stock market turmoil hasn’t been for the faint of heart.
“What’s been happening on Wall Street in the recent past; what’s happening in Europe, is having a huge impact on us,” Ramaswamy said.