Napa County tallies quake wine damage

[caption id="attachment_97391" align="aligncenter" width="500"] The Aug. 24 south Napa Valley quake toppled barrels and cases of wine at The Hess Collection's American Canyon warehouse. (credit: Robert Russo, The Hess Collection)[/caption]

NAPA -- While the full extent of damages to Napa County's wine and related businesses from Sunday's earthquake won't be known for days or weeks, county emergency-response officials have reached heard back from 239 local wineries and have heard from just more than half had quake-related damages or losses, estimated to be nearly $50 million.

The Napa County Emergency Operations Center sent surveys to roughly 500 Napa Valley Vintners producer, grower and hospitality members Tuesday morning and had heard back from 123 of them by Wednesday afternoon that estimated damages were about $48 million, according to spokeswoman Nikki Lundeen. That figure doesn't include losses from business interruption, tourism and inventory.

"We are looking at all types of resources available to help our members to recover from this and get back into harvest mode," said Rex Stults, in charge of the group's industrial relations.

The county is collecting that information to see if it meets state and federal thresholds -- said to be roughly $50 million -- for declaring the area eligible for disaster receive help in the form of low-interest loans to cover up to $2 million in quake damage to business property. Governor Brown would have to make the request for the aid, and President Obama would have to approve it, according to a spokesman for Rep. Mike Thompson, D-St. Helena.

Meanwhile, Napa Valley Vintners on Tuesday announced it set up a $10 million earthquake-relief fund from proceeds of its annual charity wine auction in late spring.

Part of the damage assessment is figuring out where the inventory is. Though its winery is in Glen Ellen in Sonoma Valley, B.R. Cohn's barrel and order-fulfillment warehouse is south of Napa, near where the quake struck.

"The initial report in the hours after the quake was that we might have lost up to half of our 2013 vintage in barrels," CEO Dan Cohn said. "As we sift through things, it's clear that estimate was not accurate fortunately. It looks more like 10 or 15 percent."

Of about 2,600 barrels in the warehouse, only around 1,100 had wine in them. The rest of the vintage was in tanks at the winery, where the facility and adjoining tasting room had little damage and were operating normally, Mr. Cohn said.

The Napa Valley winery damage tally so far doesn't take into account any effect to the connected industries such as tourism, lodging and dining, with insurance industry estimates ranging from $1 billion to $4 billion.

The latest economic modeling for the areas where local government officials have received reports of damage -- stretching north of Napa to Vallejo and west to Los Carneros winegrowing region -- suggests the damage to private and public buildings and infrastructure, losses of property and impacts to the economy is $362.4 million, according to Ms. Lundeen. That includes $338.7 million in building and economic damage, $8.8 million for transportation infrastructure and $14 million for wastewater, water and other utilities.

Staff in the Napa County Emergency Operations Center continue to assess damage to public facilities and infrastructure as well as privately owned homes and facilities in the unincorporated areas, according to the county.

Inspectors have completed 108 inspections to date. Of these, 16 were red-tagged as uninhabitable and 21 were yellow-tagged, meaning those who enter or stay in them need to be careful. The county said it continues to respond to requests for inspection and is compiling information on damages sustained countywide.

Napa city inspectors have completed the first round of building inspections, tagging 613 structures, officials reported Wednesday. About 500 are yellow-tagged, and 113 red-tagged.

An example of repair work that will be continuing in coming weeks is the Andaz hotel downtown, where the street out front is set to be closed for two weeks as crews finish the project.

Insurance agencies that work with hundreds of North Coast wineries said their assessment teams are still working with clients in the area to determine damages.

Tony Guerrero, a partner in George Petersen Insurance Agency, which has hundreds of winery clients, said the extent of damage those clients suffered isn't yet known yet.

"It appears we dodged a bullet on that one," said Ken Keeney, senior vice president and an earthquake coverage expert in Wells Fargo Insurance Services' Petaluma office. "We have had a few wineries with casegood losses and bulk-wine losses. We have clients with wine stored [in public warehouses], and we have not heard of any damage."

A benchmarking study the brokerage conducted a few months ago found few companies carry earthquake insurance because of the cost, which had decreased 5 percent to 10 percent at that time, Mr. Keeney said.

Conventional earthquake policies can have deductibles of 10 percent to 15 percent of the insured value, which can leave the insured winery with a hefty amount to cover themselves after a quake, the experts said.

Stock-throughput insurance policies with earthquake endorsements have lower premiums and deductibles but have only started becoming of interest for the wine business in recent years. Coverage can follow the inventory whether it's in barrels or bottles, in the winery or a warehouse, so obvious quake-related damage claims possibly could be paid within a few weeks, Mr. Keeney said.

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