Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
09.01.2011  
 

Wine Country Projects Go to Auction

Ambitious Northwest winery-oriented developments stalled by economy

 
by Peter Mitham
 
 
Woodinville Wine Village
 
Site plans for Woodinville Wine Village included space for wineries (seen above in pink) The site will will go to auction Friday.
Lake Chelan, Wash.—The great unraveling of vineyard-oriented real estate developments continues this month with auctions of development sites in Woodinville and Lake Chelan, Wash.

Woodinville Wine Village goes under the gavel at the King County Administration Building in Seattle this Friday, Sept. 2, while Atlanta, Ga.-based auctioneer Sperry Van Ness is accepting bids for the 891-acre Daybreak site on Lake Chelan in Eastern Washington until Sept. 21.

Developers of both projects had hoped to capitalize on their proximity to centers of wine tourism but ran into financial difficulties when first the real estate market, and then lenders, turned against them.

MJR Development Inc. envisioned Woodinville Wine Village as a mixed-use development on 24 acres, including 260 residences, a restaurant and culinary amphitheatre, luxury hotel, shops and wineries. Designed as an “interactive village community” that “honors our state’s wine industry,” the village was planned for a site on the key Woodinville-Redmond Road NE, within five minutes of dozens of wineries and tasting rooms including Chateau Ste. Michelle’s 1.5 million-case destination winery. Project costs were estimated at $200 million, but just 39 homes were finished before the development sank under the weight of $24 million in loans, interest, taxes and other assorted charges.

800 homes planned
Its progress was greater than that of Daybreak, however. Its 891 acres in the Lake Chelan AVA remain undeveloped. Chelan Butte Holdings LLC originally planned upwards of 800 homes on the site; allowed uses include golf courses, hotel, winery and other amenities. According to auction ads, the site was once valued at $100 million, but Sperry Van Ness is now seeking whatever the market will pay. The sale is being conducted on an unreserved basis, meaning a minimum bid hasn’t been set.

“You’ve got a lender that doesn’t want the asset on their books, and is not in the business to develop it, so they need to sell it,” Louis B. Fisher III, CEO of Sperry Van Ness, explained to Wines & Vines. “They’re hoping to get somebody who’s willing to take a run at it, and is serious enough and has the wherewithal to meet the terms we’ve got for it.”

Prospective purchasers of either property face a challenge similar to the original developers. Sluggish real estate markets mean that making good on the sites’ potential could take some time. Purchasers must consider this, and be ready to bear the holding costs without cash flow from sales.

“The struggle, of course, from an investor’s or a developer’s perspective, is, ‘How long can I hold this before I can go vertical with it?’” Fisher said.

The recent turmoil in stock markets hasn’t helped investor confidence, he added, hence the shift to an unreserved auction and extension of the bid period to Sept. 21, to ensure maximum market exposure and comfort with the opportunity. Removal of a minimum bid requirement effectively gives potential purchasers room to amortize a longer holding period with a lower bid.

International interest
Sperry Van Ness has already fielded interest from 16 states and Canada, where a healthy real estate market and strong currency has prompted many buyers to look south to U.S. real estate opportunities. Still, even buyers from Canada won’t be ignorant of the dangers posed by a large-scale development.

While the Osoyoos Indian Band successfully developed Spirit Ridge Vineyard Resort and Spa in Osoyoos, B.C., the developers of Greata Ranch Vineyard Estates near Peachland, B.C., have not been so lucky. The project launched in 2007 but was shelved when the market cooled. The developers, Kelowna’s Fitzpatrick family (also owners of 40,000-case CedarCreek Estate Winery) and Concord Pacific Developments Inc., have not resumed marketing the property.

Other projects in less-favored locations have also adopted a more conservative approach or been repositioned on account of market conditions. It’s an ironic twist for Northwest wine country, which once saw real estate development as a natural extension of destination wineries and wine tourism.

“It’s the next evolutionary step for our industry. We’ve been successful because we are value-added,” Gordon Fitzpatrick, president of CedarCreek said shortly after Greata Ranch’s launch. “This enables us to keep moving up the value chain.”

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
January 2015 $623 million
7%
$7,912 million
5%
January 2014 $583 million $7,514 million
     
Direct-to-Consumer Shipments » Month   12 Months  
January 2015 $75 million
-3%
$1,818 million
15%
January 2014 $77 million $1,584 million
     
Winery Job Index » Month   12 Months  
January 2015 259
26%
233
15%
January 2014 205 203
     
 
MORE » Released on 02.13.2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct To Consumer
Wine Shipping Report
2015
 
Download full report »
 
 

Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

CALENDAR
  • March 2-5
     
    Decouvertes en Vallee du Rhone
     
  • March 4
     
    Innovation + Quality
     
  • March 4-6
     
    Michigan Wine & Grape Conference
     
  • March 12
     
    Central Coast Insights
     
  • MORE »
 

READER COMMENTS
 
Article: Scurlock joins wine hall of fame »
 
Congratulations David!
Reader: Guest
 
Article: Wineries Cautioned About Internet 'Ads' »
 
I guess my first question would be why is there a three tier system to...
Reader: Guest
 
Article: Wine on the Rocks »
 
Great potential! Mineralities are sought after and can be found in these rock formations with...
Reader: Bruce Coulthard
 
Article: 90% of U.S. Consumers Can Buy Wine Direct »
 
You say that 90% of the consumers can buy wine direct. Really? In most cases...
Reader: Guest
 
Article: Wineries Cautioned About Internet 'Ads' »
 
It is an unfortunate fact that the regulations have no understanding of modern technology and...
Reader: Paul Mabray
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2015 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Production Financial A...
 St. Helena, CA
Finance
 Sales Representative O...
 San Pedro, Long Beach, Lakewood And Cerritos, CA
Sales and Marketing
 Vineyard Manager
 Santa Rosa, CA
Vineyards
 Enologist-Assistant Wi...
 Mendocino, CA
Winemaking and Production
 Assistant Winemaker
 Sebastopol, CA
Winemaking and Production
 Hospitality Specialist
 Napa, CA
DTC, Tasting Room and Retai
 Tasting Room Sales Ass...
 Woodinville, WA
DTC, Tasting Room and Retai
 Public Relations Senio...
 New York, NY
Sales and Marketing
 Tasting Room Host & Sa...
 Sebastopol, CA
DTC, Tasting Room and Retai
 Production Manager Pos...
 Calistoga, CA
Winemaking and Production
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2015 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.