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Carneros Vintners Part 1: Unconventional Financing, Creativity & Challenges Offer Significant Lessons

January 14, 2009 | Filed under Daily Data | Posted by

A close look at Carneros Vintners’ new 3-million-gallon, custom-crush facility in southern Sonoma County reveals a fascinating account of creativity, unconventional financing from a publicly traded company, and unique site challenges, all of which hold significant lessons for the industry.

Cabral Ranch buildings. Carneros Vintners winery site above red roof.

Carneros Vintners. Winery site above red roof. Click image to enlarge. Photo Copyright 2009, Wine Industry Insight.

LAND, PERMIT, FINANCING DOMINOS FALL INTO PLACE

Wine Industry Insight’s in-depth examination shows that when Dennis Rippey signed the documents to lease the property and finance his proposed winery, he capped a series of events that began in 2002.

On June 17, 2008, according to state, federal and a multiplicity of county documents and databases:

  • CCC VinREIT (owned by Entertainment Properties Trust, NYSE: EPR) paid Carneros View Vineyards (a UCC Vineyards fund) $2.7 million for a 20-acre parcel on Stage Gulch Road in southern Sonoma County.
  • Carneros Vintners (owned by Dennis Rippey) signed a 10-year, triple-net lease on the property with CCC VinREIT. The lease provides for two, 5-year options.
  • CCC VinREIT agreed to provide approximately $5.8 million for the winery’s construction and improvements.

Kansas City, MO-based Entertainment Properties Trust has $2-billion+ in assets and has structured sale/leaseback arrangements with at least 10 wineries and vineyards including EOS Estate in Paso Robles, CA; Napa Valley’s Cosentino Winery and Duncan Peak in Hopland, CA.

Sale/leaseback arrangements can free badly needed capital for expansion and other uses.

Please see WII’s upcoming article: Entertainment Properties Trust: Freeing Up VinoCapitalfor more details.

CUSTOM CRUSH, SOUP-TO-NUTS SERVICE FROM SMALL TO LARGE LOTS

Carneros Vintners has graded the site, and applied for permits for 64,000 square-feet of building construction  including:

  • a 48,000 square-foot building,
  • 2,218 square feet of office,
  • 1,782 square-feet of storage and
  • a 12,000 square-foot canopy over the crush pads.
Graded site for Carneros Vintners. Click image to enlarge. Photo Copyright 2009, Wine Industry Insight.

Graded site for Carneros Vintners. Click image to enlarge. Photo Copyright 2009, Wine Industry Insight.

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