Phased project part of diverse strategy including Napa bistro, Web channel

[caption id="attachment_23329" align="alignright" width="332" caption="Ceja Vineyards partners Amelia, Pedro, Armando and Martha Ceja"][/caption]

CARNEROS -- The Ceja family of winegrape growers, vintners and restaurateurs is pushing to start construction this fall on the first phase of a multimillion-dollar winery project among its vines on the Napa County side of Los Carneros winegrowing region.

The Napa County Planning Commission on June 16 approved a use permit for Ceja Vineyards to build a winery in three phases on 10.3 acres at 1016 Las Amigas Road.

While other approved winery projects have been put on hold in the past two years because of challenged sales for higher-end wine and regulatory pressure on lenders to limit risk in their loan portfolios, the Ceja family is aiming to start construction in early October, according to President Amelia Moran Ceja.

“One of the reasons we’re doing this in phases is access to capital, but we also want to give us a few years to build distribution channels,” she said.

In the first phase, an existing barn and two other farming buildings will be torn down to build a two-story, 21,600-square-foot fermentation building with covered crushpad, barrel storage, tasting room, and wine library.

Ceja currently produces 10,000 cases a year at MacRostie Winery & Vineyards and Enkidu, both located eight miles away from the Ceja property in the Eighth Street East winery production cluster south of Sonoma.

The approved use permit allows for production of 45,000 gallons a year, or nearly 19,000 cases. When Ceja reaches that level, the plan to distribute up to 30 percent in key markets and sell the rest via the direct channels developed in the past four years, according to Ms. Ceja.

In 2006 when her son Ariel Ceja came on board as general manager, he moved the company to a direct-sales model, including opening of a tasting room. Now nine years after the wine was first released, Ceja Vineyards sells wine through its website, club, tasting salon opened in downtown Napa in 2008 and select restaurant placements, including a new one in downtown Napa.

Ariel Ceja, with investment from family members, opened Bistro Sabor in downtown Napa earlier this month. The restaurant seeks to blend the family’s wines -- five are poured by the glass -- with reasonably priced Latin American street food.

The restaurant also provides commercial kitchen for the wine company’s Internet food-and-wine marketing effort. That includes several dozen online videos so far and a forthcoming online channel to be called Salud Napa Valley.

A commercial kitchen will be an important feature of the second phase of the winery project. A 5,700-square-foot building next to the winery will house a hospitality center with a lounge for limousine drivers, more crush capacity and room for barrels, and a hacienda-style patio with a cantera stone fountain.

The last phase includes more casegood storage and expanded outdoor areas with an olive grove. The project also will include environmentally sustainable features such as solar energy and subsurface irrigation from treated process wastewater.

A number of North Coast winery construction projects have been approved in the past couple of years, but many have been shelved because of challenges in getting financing, according to architects and contractors that have specialized in such projects over the years.

“It’s the only one we’re finding that is pushing to start,” said St. Helena-based architect Bill Bylund of the Ceja project. He’s a principal of Valley Architects, which designed it. “We have a couple more waiting for the right moment after touching bases with their banks.”

The estimating and preconstruction departments of Nordby Construction in Santa Rosa have been very busy recently responding to vintner inquiries about projects, but that interest hasn’t been coming out of the ground, according to President and Chief Executive Officer Craig Nordby. The company’s remaining wine job on the books is wrapping up this fall at Rhys Vineyards in Santa Clara County.

“People are realizing it’s a great time to build, but at the same time they need to get funding for it,” he said.

The Ceja project is expected to be put to bid soon. Mr. Bylund is suspecting that reductions in many materials costs and aggressive contractor bidding could shave more than a quarter off the cost of a winery project from what it would have been two years ago.

Local lenders to the wine industry have told the Business Journal that financing is available for projects by established brands with solid finances.

Recent retail data suggests improvement in wine selling for more than $15 a bottle. Only 30 percent of wineries analyzed in an April forecast by Silicon Valley Bank noted that their finances were “slightly weak” and 7 percent, “very weak.”

From their origins in winegrape growing, the Ceja family has spent conservatively, scraping together funds to buy 15 acres in Carneros. Today vineyards total 113 acres and make up 15 percent of family company revenue. Even with winery expansion, grape sales will account for 60 percent to 65 percent of revenue as part of a diversification strategy.

“We’ve done everything carefully and built a strong foundation,” Ms. Ceja said.

The wine company started in 1999 and currently is debt-free, allowing it to funnel funds into sales efforts, she said. That financial footing has led to four offers of financing on the winery project.

Ceja recently inked a deal with wholesaler Glaziers boutique wine division for distribution in major markets in Texas and shipped the first cases there in May.