Entire California AVA for Sale

Despite claims of racism and financial skulduggery, here's your chance to own your own wine region.

In February an entire California AVA went on sale for $3.3 million. Now it's July and the property is still sitting on the market.

Doesn't anybody want to buy an entire AVA?

"We got a ton of inquiries from all over, from France and the East Coast," says Todd Renfrew, who is handling the sale for California Outdoor Properties. "Out of 100 inquiries, only a couple came to look at it. It's a shame. It's beautiful there."

The property in question is Cole Ranch, which consists of about 150 acres (60 hectares) in Mendocino County. There are 55 acres of grapes planted, and water rights for the neighboring property. It's a great place to grow cool-climate wine grapes, as proven by Esterlina Winery, which made fine Riesling and Pinot Noir there a decade ago.

Cole Ranch is between Russian River Valley and Anderson Valley, both physically and in climate. It was granted AVA (American Viticultural Area) status in 1983, basically because farmer John Cole applied for it. Cole Ranch is a 20-minute drive from Hopland, and an hour north of Sonoma County's Santa Rosa. And you can own the whole thing!

And $3.3 million doesn't seem like much money in the California wine industry. Just last month Heitz Cellar's new owner spent $25 million for a 54-acre vineyard – almost exactly the same size. That vineyard, which had been owned by Treasury Wine Estates, had no reputation to speak of, not like Cole Ranch. The crucial difference is that the $25 million vineyard is in Napa Valley while Cole Ranch is in Mendocino County.

Alas, there's an unfortunate back story.

Esterlina was one of the few black-owned wineries in the United States. It was humming along fine in the wine business until an ill-timed expansion in 2006. Brothers Eric and Craig Sterling – a physician and an attorney in their pre-wine lives – bought Everett Ridge winery in Sonoma County and moved their growing wine business there from Mendocino County.

Esterlina started when the Sterlings' father began growing grapes in Alexander Valley in 1995. By 2006 they had wonderful grapes from Cole Ranch but there is no winery on the property; the only building is a home for the vineyard manager. The Everett Ridge purchase seemed like a move that would take the Sterlings to the next level of success.

Instead, it proved to be their downfall. But the Sterlings say racism in lending played a role. The Sterlings claim Bank of the West promised to finance the Everett Ridge purchase, but reneged, forcing them to take a high-interest bridge loan or lose their $315,000 deposit. Then the economic downturn hit and they were unable to refinance the loan.

Bank of the West foreclosed on the Sterlings in 2016. They sued, claiming racial discrimination in lending. They changed attorneys in 2017; the current status of the lawsuit was not available at press time.

Their winery in Sonoma County sold right away and is now Flanagan Wines. Cole Ranch, in less famous Mendocino County, has been a more difficult sell.

The wine market and perhaps global warming have changed its varietal mix. Half of the vines are now Cabernet Sauvignon, with about 20 percent each of Pinot Noir and Riesling. The remainder is Merlot.

Currently all of the grapes from the vineyard are sold to other wineries. Even when the Sterlings were operating at full capacity, they still sold some of their grapes. But that leads to a marketing problem. Wineries buying Cole Ranch AVA grapes must be aware of labeling rules. If a wine lists Anderson Valley AVA or Russian River Valley AVA on the label, it must contain at least 85 percent grapes from that region. No matter how good they are – and they were often very good – Cole Ranch grapes have to fill in the margins.

Of course, somebody who wants to establish themselves in the wine business could always take over and try to teach consumers where Cole Ranch is. So far, people kicking the tires on that idea have just walked away.

"The message I got was, people didn't think the income it would generate would justify the cost," Renfrew told Wine-Searcher.

Renfrew says he does have one interested buyer who sent a letter of intent but, until the money has been produced, the country's smallest AVA is still for sale.

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