Napa Valley projects target small wineries
AMERICAN CANYON Vintners who bottle hundreds or a few thousand cases a year
and want total control over how their wines are made may find what they are
looking for in two industrial condominium projects planned for southern Napa
Valley next year.
These projects Napa Gateway Commerce Center in south Napa and wine condos slated as part of the planned Lombard Crossings development in American Canyon are part of a trend toward small wineries starting up in industrial parks
because of increasing difficulties and expenses in creating a rural venue.
At the corner of Gateway Road and Technology Way in Napa Valley Gateway Business
Park in south Napa, developers of Napa Gateway Commerce Center plan to build two
20,640-square-foot buildings on 3.1 acres.
The complex is designed to provide units as small as 2,844 square feet for wine
warehousing or production, according to Chris Neeb, a Cushman & Wakefield agent
who is marketing the property.
"All the deals in play are wine-related,?he said, noting that two companies
have signed letters of intent to buy a total of 12,000 square feet for casegood
storage. There is still a decent amount of demand in the market for that kind
of space.
The project has building permits and is expected to be under construction this
fall and completed next summer.
Project owners Cory and Kristen Phillips purchased the fully entitled project
this past summer from Lake Street Ventures, the developer of the large Napa
Junction hospitality, retail and multifamily housing project now in its third
phase in American Canyon.
The Phillips started Phillips Tile in Napa in 1992 and expanded it to Fairfield
a few years ago before selling the company to private-equity investor Goense
Bounds & Partners of Lake Forest, Ill., in February 2006. The couple moved out
of the area but wanted a Napa Valley real estate investment, according to Mr.
Neeb.
Napa Gateway Commerce Center was designed by Mountain View architecture firm
Dennis Kobza & Associates, who also designed the Vitro Packaging warehouse in
American Canyon. The new project, located at 769 and 799 Technology Way, is
configured to have 18 to 21 feet of warehouse clear height as well as dock and
grade-level truck doors.
With an ample parking ratio of three spaces per 1,000 rentable square feet, the
project is designed to allow easy truck staging, according to Mr. Neeb.
The asking price for the units starts at $185 per square foot for old shell
condition, or with minimal interior improvements. Mr. Neeb said the Phillips are
open to negotiating improvements such as sloped floors and drains for use in
washing winery tanks or barrels. Plumbing for the drains was designed into the
building.
For buyers wanting to store barrels or make wine, the developers plan to provide
tanks for holding winery process wastewater, which can contain high
concentrations of organic materials such as grape juice and skins that overwhelm
treatment plants.
Some wine-related companies with operations in the Napa County Airport-area
industrial parks are finding it more economical to contract with East Bay
Municipal Utility District to haul high-strength wastewater away for processing
than to install pretreatment systems that would allow treated water to be sent
into the sewer system.
"Hold-and-haul costs $10,000 per unit to haul wastewater a couple of times a
year during the crush months versus hundreds of thousands to $1 million for a
pretreatment system,?said Chris Koenig, who handles property management and
entitlements for R.H. Hess Development of Napa.
The company is investigating that wastewater processing solution for its
envisioned 45,000-square-foot wine condo project on Oat Hill in the industrial
area of northwest American Canyon.
R.H. Hess has commissioned an architect-builder team that has built two very
large wine warehouses recently to redesign a 25-acre project previously approved
for small industrial for-sale lots into the wine condos plus wine warehouses
with 151,000 and 136,000 square feet. Sacramento-based architecture firm Perkins
Williams & Cotterill and general contractor Sierra View, also of Sacramento,
helped Yandell Trucking with its warehouse project for Vitro Packaging and is
building a 650,000-square-foot regional distribution center for Jackson Wine
Estates.
Lombard Crossings had been approved as a subdivision of half-acre to acre
parcels targeting contractors who wanted to build their own buildings. However,
the slowdown in homebuilding and infrastructure requirements from regulators
prompted R.H. Hess to reassess the project as the profit margin for an $8
million project shrank to $100,000, according to Mr. Koenig.
With the community specialty land-use overlay allowed for with the
light-industrial zoning for the site, R.H. Hess looks to target small wineries
that want to offer visitors a view of southern Napa Valley as they taste wines
from atop Oat Hill.
any small wineries are unable to get winery permits in Napa County and are
forced to go to custom-crush facilities,?R.H. Hess President Rick Hess said.
This allows them to go to their own facility and have product control and
tasting rooms.
Billet Transportation of American Canyon has expressed interest in the proposed
151,000-square-foot warehouse. The 136,000-square-foot warehouse would be served by a rail spur built to connect to outside markets via the California Northern
Railroad line.
Mr. Hess plans to resubmit the project this year and hopes the
environmental-impact studies already done will allow the project to move forward
to construction in spring.
Asking prices and rents for Lombard Crossings has yet to be determined.