Sonoma business park targets wine, food ventures

The real estate downturn hasn't discouraged developers from moving ahead with a food-and-wine-themed business park south of Sonoma with the first of eight buildings expected to go up this year.

Sonoma Valley Business Park would feature 300,000 square feet if built out -- nearly half the size of Santa Rosa Plaza -- dedicated to food and wine production, with some retail space for tasting rooms and sales.

"We're trying to bring in food and wine production. We're not looking for other uses," said Rick Deringer, a residential developer whose firm, Odyssey Development, is partnering with Ryder Homes to build the project.

The commercial development is a new venture for the two homebuilders as they weather the deep housing downturn and recession. Ryder Homes builds housing subdivisions in Sonoma County and across the Bay Area. Odyssey Development specializes in downtown residential projects.

With the commercial development, they face competition from the larger Carneros Business Park emerging less than a mile away. And the county has ample available commercial space with high industrial and office vacancies.

"I would characterize the market as being sluggish and yet there are unique opportunities as well," said Paul Schwartz, a broker with the Santa Rosa office of NAIBT Commercial.

Wine and food production has not suffered as much as other sectors during the economic downturn.

Both business parks are seemingly well positioned to attract wineries and food production companies looking for new or expanded space. The parks are located along Highway 121, a major Wine Country route, and Eighth Street East, a light industrial corridor.

Transportation access should improve with upgrades planned at the Highway 121 and Eighth Street East intersection and along stretches of those roads.

In targeting large and small high-end industrial and commercial businesses, Sonoma Valley Business Park is touting its access to Wine Country visitors, who could drop in to sample and purchase what the wineries and food manufacturers produce.

"We have the ability to pull off motorists. The whole idea is you have tremendous visibility," Deringer said. "That's why we went to the upscale buildings."

The eight buildings would feature a Tuscan style with stucco walls, red tile roof accents, wood shutters and windows that break up facades up to two stories high.

"It's designed more like a high-end commercial office than an industrial building," Deringer said.

While the developers seek tenants and buyers, they hope to break ground on the first building this fall. The project's build-out could take several years because of sluggish demand for industrial space.

Deringer said the developers can be patient, in large part because the $2.2 million price for the 21-acre site was far below the market average for comparable land.

"It may or may not take long. We're in it for such a low price that we can afford to hold," he said.

Schwartz said the land cost was indeed low and putting up at least one building will help draw tenants and buyers.

"You have to have something available as a showcase for what can be built in the future. If you don't have anything built and all of a sudden there's some demand, they will go elsewhere," he said.

Developers of Carneros Business Park are making a similar bet. They recently completed a 43,000-square-foot building featuring office and industrial condominiums.

"We developed it so that it would have the capability for food and wine. There's still demand," said Willie McDevitt, president of McDevitt & McDevitt Construction Corp., which partnered in the building with developer Bill Sacks.

The 53-acre park is approved for up to 755,000 square feet of development. Two companies so far have purchased lots for new plants. They are Laura Chenel's Chevre Inc. and cork maker Ganau America Inc.