Issue #35, November 24, 2006

Come ‘n Get It

Seven Wineries on the North Fork are For Sale. Is this a Problem?

By Joan Zandell

Driving through the Hamptons on a beautiful fall afternoon, foliage aside, what is more visible than the blazing colors of the ‘For Sale’ signs? So why the sudden alarm when North Fork Wineries do the same?

Real estate agent Barry Novick of Brown, Harris, Stevens in Cutchogue, represents the Castello de Borghese Vineyard, the Schneider property, the Palmer Vineyard in Cutchogue, as well as the Sherwood House Vineyard, all located on the North Fork and all for sale What is going on? In a recent telephone interview he seemed to feel all the recent negative press was unfounded.

“These vineyards are not new to the market,” said Mr. Novick, “and you have to bear in mind that there are a limited amount of qualified buyers. A vineyard is not an easy sell, nor a quick sell. The ones I’m handling have been on the market for less than a year. Schneider was listed with someone else prior to listing with us. Some people look at purchasing a vineyard like purchasing a sports car. There’s a lot of romance. In reality, it’s farming and farming is risky. When living with the day-to-day realities, their enthusiasm wanes. Wine making is labor intensive and financially risky.”

Mr. Novick then described the various phases of the buying and selling of vineyards. “First, there were the pioneers. They had a passion for wine and a passion for the area. Examples are Hardgraves in 1973 and Bidwells in the 80s. They came out here with limited capitalization. In 1997-98, Hardgraves sold to Borghese. With the new wave came infusions of money and larger operations. Now we’re going through the next new wave.

“There are about 33 vineyards on the North Fork,” the realtor continued, “and out of those 33, only approximately 7 are on the market. That’s not a lot. We’re in our infancy here, compared to Europe. We’re getting wonderful recognition and things are only going to get better. The industry is still so new compared to Europe. Nevertheless, Robert Parker, of The Wine Advocate, gave the North Fork Wineries above a 90, which is a milestone for this region.

“I’ve sold a couple of wineries and I feel a strong sense of a commitment to the area. We might be going through some growing pains at the moment, but in the long term things will only get better. I believe that the industry is here to stay.”

For those still wondering why sell now, Mr. Novick said, “One of the reasons is because of the tremendous increase in land value. Land values have escalated in the last five years. Valuation is based on land value and structure value and they will only continue to become more profitable. Take a look at Duck Walk Vineyards, for example, they are owned by the Pindar family and they’ve opened Duck Walk North on Route 25. That is positive reinvestment.”

According to a recent article in Newsday, the Sherwood House Vineyards, which is for sale through Brown, Harris, Stevens, via Mr. Novick, recently opened a small tasting room that helped boost sales this year by a whopping 350 percent. Sherwood House is a 36-acre property that has 27 planted acres producing 1200 cases of wine a year. The hoped-for sale includes the land, the brand name, 7000 cases of wine and the tasting room.

Bruce Schneider of Schneider Vineyards is the third generation of his family to work in the wine industry. He apprenticed in Burgundy, France from 1987-90 at a vineyard known as Domaine Pierre Boillot in Mersault. As a result, Mr. Schneider, working with Mr. Boillot’s nephew, had the opportunity to experience the hands-on nature of the business. “I got to see that it’s really a way of life,” said Mr. Schneider in a recent telephone interview, “and a very balanced way of life at that, mixed with hard work, good food and family at the center. The great thing is seeing the intimacy from the ground up. There are different philosophies and business models. I saw someone raising the quality of the wines in that vineyard, and that made me very passionate about the product.

“I love all aspects of wine making. Over 12 years, I’ve honed my skills. I work as a marketing consultant in the wine industry and work with wines from all over the world, particularly Chile and Germany. I travel to meet wine makers. Our tasting room is a co-operative group, we are a boutique business and our wines retail at $25-$40 a bottle. We produce fewer than 2000 cases a year. My preference is the Cabernet franc grape as the base for our wines. It is food friendly and age worthy. That’s where the passion and artistry come in. In our case, we’re selling a piece of real estate, and for us, it’s part of a lifestyle. These are lifestyle businesses and investors involved at varying levels. As lives evolve, they have to make choices about lifestyle. Selling is inevitable.”

The Lieb House Vineyards represented by Ed Petrie of Sotheby’s, is described as being in the midst of “50 plus, manicured award-winning vineyard acres in the heart of Long Island’s picturesque wine country.” Mr. Petrie was on vacation at the time of the writing of this article, and so was unavailable for comment.