Bank retains Kluge for $19M

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Glass half empty: Looking on as the failed auction commences for Kluge Estate Winery & Vineyard are, from left, Chad Zakaib, former general manager at Jefferson Vineyards; Matthieu Finot, King Family Vineyards winemaker; Virginia Assistant Secretary of Agriculture Matthew Conrad; Jonathan Wheeler, former director of Kluge’s Champagne program; an unidentified observer; and Gregory Brun, former director of winery and vineyard operations at Kluge.




Maybe we should use the spit bucket more often. Because the various sips of Virginia wine industry news over the past couple of weeks have our heads spinning. First, the year’s defining moment turned out to be an anti-climax. The latest chapter for Kluge Estate Winery & Vineyard, the troubled behemoth, came to an unceremonious end on Wednesday, December 8, when Farm Credit of the Virginias bought the foreclosed 906.6-acre property for $19 million. Though seven bidders registered for the auction, there was, in the end, a single bid, coming from the very bank that holds a $34.8 million lien on the property. Including 164 acres of vineyards, a tasting room facility, staff houses, a barrel cave, various winery buildings, and loads of farm and wine-making equipment, the property was the centerpiece of Patricia Kluge and husband Bill Moses’ strategy to be the “East Coast’s premier winery.” Bad business planning and over-production spelled trouble, however. Indeed, on Saturday, December 11, other fruits of their ambition further withered on the vine as 15,000 cases of Kluge wine, some dating to 2004, went on the auction block at The Warehouse in Madison County. With cases selling to a smattering of retailers and wineries for as little as $2 apiece, the trustees eventually enacted a minimum bid of $15 per case for some vintages and $50 or $100 for others. More than half the inventory was still available when, 90 minutes into the wine auction, the trustees suspended public bidding, citing a need to at least cover the cost of taxes with each case sold. 

Whereas people were giddy to get an unheard-of deal at the wine auction, at the winery auction, the mood was dour. “I’m kind of in mourning,” said local distributor Pamela Margaux, whose husband, Claude Thibaut, was at one time the sparkling winemaker at Kluge. “There’s no love lost between us,” she said of Kluge, “but I am sad for the Virginia wine industry.”

William Shmidheiser III, the acting trustee, said the bank would continue to look for a buyer.

Eight digits might be a budget-buster when it comes to an extant winery, but how does $7 million sound? That’s the price tag on The Winery at La Grange, a 20-acre establishment with about six-and-a-half acres under vine. Annual production at the Haymarket winery, the only one in Prince William County, is about 7,000 cases. 

 

Last summer, when Albemarle County amended its zoning ordinances to give greater license to farm wineries to conduct special events—weddings, for the most part—Keswick Vineyards owner Al Schornberg decided not to sell the historic mansion on his property, as planned, but to add special events to his business instead. But after three weddings, by October, Keswick Vineyards faced a court injunction to cease and desist, following action brought by an upset neighbor. The issue? Amplified outdoor music. Seems that living next to the splendor of a vineyard is nice, but living with the strains of “Billie Jean” thumping through the windows is not.

Faced with what perhaps was an unforeseen issue, the Albemarle Planning Commission will take up the farm wineries noise matter on January 18. 

 

Early last week, Chad Zakaib, an oft-quoted industry spokesman and a robust promoter of Virginia wine, had what he calls an “amicable parting” with Jefferson Vineyards, where he was general manager. Winemaker Andy Reagan will now wear the GM hat, too. “I had a vision for where I wanted to take the business and that vision was not shared by the owners. We had long and healthy debates about what to do and when and how fast. In the end we realized we were on different pages and I sort of excused myself,” says Zakaib.

 

Finally, Well Hung Vineyards, a newcomer to the Albemarle scene, is among some 200 wine labels included in “How Wine Became Modern,” a much-heralded, multi-media exhibit at the San Francisco Museum of Modern Art. Well Hung, as the name might suggest, aims to, er, stand out, locally with a label that features three pairs of male legs seen from the waist down with strategically placed grape clusters sparking the imagination. Modern or cheeky? As with so many things wine, it’s a matter of taste.  

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