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41,200-square-foot project gets going defying economy

NAPA - A 41,200-square-foot "wine condo" project in south Napa has defied economic conditions by not only starting construction at a time when such financing is challenging but also having 85 percent of the space leased or reserved for sale at the outset.

[caption id="attachment_14233" align="alignright" width="360" caption="An architectural rendering by Dennis Kobza & Associates of one of two buildings under construction at Napa Gateway Commerce Center"][/caption]

Construction started on Napa Gateway Commerce Center at 769 and 799 Technology Way in Napa Valley Gateway Business Park in late June.

Thanks to aggressive deal-making to reach a financing milestone, three wine-related companies so far are set to occupy the two-building development when it's completed around the end of November, according to Chris Neeb, one of the Cushman & Wakefield agents marketing the property for developers Cory and Kristen Phillips, former owners of Phillips Tile.

"We were pretty aggressive with pricing to land a few deals there," he said.

One of the delays in the project, originally set to start late last year, was a shift in general contractors. Shaw Construction of Vacaville now is at the helm of the project.

Set to occupy the project are capsule distributor Ramondin USA in 14,700 square feet, Ryan McGee Bottling in 8,500 square feet of a condominium set for sale to an investor group and boutique wine order fulfiller DDC Shipping in 11,500 square feet.

Ramondin USA, a subsidiary of the Spanish capsule maker by a similar name, has been looking to expand in the south Napa area for the past two years, and this distribution facility gives the company 40 percent more space in a more prominent location for less money than comparable spaces, according to General Manager Steve Galvan. Ramondin USA at present is located at 2557 Napa Valley Corporate Drive in south Napa.

"We were going to buy, but the economy tanked," he said. Now the company has a lease with an option to purchase.

Ramondin USA has nine employees.

Much of Ramondin's North Coast sales are tin capsules for high-end wine producers. Though sales have been slower in the past year and a half because of the wider economic recession, the company has been helped by stabilization in tin prices.

A year ago tin per-ton prices soared from $10,000 to $26,000, propelling capsule prices from 10 to 12 cents each to 18 to 20 cents, according to Mr. Galvan. The price of raw tin dipped back to $10,000 a ton and has stabilized at $13,000 to $15,000 a ton, or an average of 15 cents per capsule.

DDC Shipping is a four-person fulfillment house for 30 mostly Napa County wineries, and owner Chris Sweetanos is looking to take the 5-year-old business to the next level with twice as much space, new packing lines and added services. The company is currently located in Suite L-6 at 68 Coombs St. in Napa, and finding a small space with docks for large trucks had been challenging.

Most of the wineries DDC serves are one- to three-person operations that sell mostly directly to consumers or trade accounts, but DDC has been getting more calls from larger wineries in recent months, according to Mr. Sweetanos. Some of the inquiries came after the hiccup in operations in June at much larger competitor New Vine of Napa.

"With the turn in the economy, people have been looking at how they handle shipping internally, and in the past six to eight months they've been looking at changing from in-house shipping," he said. "If you have your own shipping facility, you're paying for labor and workers' comp for what is a small part of what you do. If you have one person manage the wine club, you can ship the wine to a fulfillment house."

Mr. Sweetanos and his business partner, Didier Loustau, don't want DDC to get too big so the company can maintain customer service and hold to a commitment to same-day shipments and no deliveries interrupted by a weekend. Mr. Sweetanos himself has a 3,000-case-a-year brand called CS Cellars.

The partners are, however, planning added services and will likely need a couple of more employees, according to Mr. Sweetanos. The new facility is set to have separate packing lines for club and daily shipments, which are expected to help double volume with the same staffing, and space for clients to store more wine. Also the company is thinking about offering a delivery service to get wine to Napa Valley shops and restaurants.

Since the company started, DDC has progressed from manually packing boxes and processing orders to automated order processing and compliance systems via WSN's FORT System.

Ryan McGee Bottling has been "virtually nomadic since our inception," according to co-owner Mary Ryan McLaughlin. The 12-year-old company's three trucks cruise from winery to winery for all but a total of three months of the year, so it has been challenging for the company to find a place to park them, especially a location with 14-foot doors.

Mobile bottlers have been in increasing demand for the past several years with an increase in the number of smaller brands, for which the cost of a dedicated bottling line may have been too expensive for a short period of use each year. The current economic recession has made such savings all the more important, but the total volume of work has changed, according to Ms. McLaughlin.

"The vast majority of our clients have been reducing production," she said. "We've had to work harder to keep our schedule full."

This fall, owners Andy Ryan, his sister Ms. McLaughlin and Brian McGee plan to rebuild their first truck, first in service in January 1995, around an Impresstik rotary pressure-sensitive labeler capable of orienting neck and front labels at 90 bottles a minute, more than double the current speed. The company will then have only one truck capable of applying cold-glue labels.

The mobile bottler currently is based in Suite 121 at 1370 Trancas St. in Napa.

For more information, contact Ramondin USA at 707-944-2277 or www.ramondin.com, DDC Shipping at 707-255-8693 or www.ddcshipping.com and Ryan McGee Bottling at 707-258-9388 or www.ryanmcgeebottling.com.