The board also discussed the early draft of a pact with the city of Napa over the half-billion-dollar project, providing the clearest picture yet of plans to address issues like the area’s eventual annexation, the city’s providing of surface water and the sharing of what the developer has said is a tax windfall of up to $4 million annually.

It was the fourth time that those items had been on the board’s agenda, after a swell of public comment and continued questions pushed supervisors to return the measures to staff for additional work on three separate occasions since they first went before the board on Jan. 15. The vote, which would adopt the “Napa Pipe Zoning District” designation, water supply findings and general plan changes related to the project, is now planned for a fifth meeting on the topic on June 4.

County staff were directed to include direct mention of the nearby Napa River in the zoning change, as well as a directive to prioritize the employment of area residents in the project’s construction and ongoing operation.

The development has drawn a steady stream of public comment since it was first proposed in 2007, and has evolved significantly from a proposal that once called for 3,200 housing units on the former industrial site. The current proposal involves an approximately 70 percent reduction to those units — now less than 1,000 housing units including 140 units of affordable housing — a 154,000-square-foot Costco Wholesale store, a 150-unit continuing care retirement center, a 150-room hotel and other community, warehouse and office space.

The current proposal follows recommendations that the county’s Planning Commission proposed last year, one that has engendered an increased level of public support. Yet for the city of Napa, questions remain as to how to pursue a relationship with the county over a significant development that sits just beyond its borders. Formal talks to develop a memorandum of understanding began between city and county staff last November.

“We have gone from working against each other in an adversarial relationship to working with each other to develop the best project we can,” said Keith Caldwell, supervisor for the eastern district that includes the city of American Canyon.

High among those concerns is the source for potable water for the development’s homes and businesses. As currently proposed, Napa Pipe will receive the majority of its water from surface water sources in use by the city of Napa, and rely on groundwater only in cases of emergency. That relationship with the city, however, is still under negotiation, and another source may be pursued that includes a groundwater component if an agreement is not established.

In addition, both the county and the city have agreed to seek an extension of the city’s sphere of influence and the eventual annexation of the site, which would ultimately entail a voter-approved measure, according to the draft memorandum of understanding provided by the city of Napa. If approved, non-residential portions would join immediately, while residential portions would join either when new permits are issued or automatically in 2022.

When that sphere is extended, an existing 45 to 55 percent property tax sharing agreement between the city and the county will then apply to housing within the Napa Pipe area. The county and the city tentatively agree to evenly split revenue from sources like sales tax and transient occupancy tax, with the city receiving 100 percent after annexation. Affordable housing credits will remain for the county, planners have said.

“We have to make decisions about this property while it’s under our jurisdiction. We want to go forward in partnership with the city,” said Hillary Gitelman, director of the county’s planning, building and environmental services department, to the board.

Medtronic spokeswoman Cindy Resman told the Business Journal that approximately half the job cuts will take place overseas and 70 jobs would be affected across California, including Santa Rosa. Most affected employees have already been notified, she said.

“The company’s current worldwide employee populations is approximately 45,000 — this is relatively flat from the start of our (fiscal year 2013),” Ms. Resman said in an email, also pointing out that Medtronic currently has 555 positions posted on its website, including 105 in California.

About 65 percent of all cuts have already taken place. The remainder will take place before the end of the company’s 2014 fiscal year, Ms. Resman said, adding that while job cuts have occurred in some areas, growth has occurred in others.

The announcement of companywide jobs cuts came during a conference call with investors and reporters announcing Medtronic’s fourth-quarter earnings.

Minneapolis-based Medtronic anticipates it will save between $200 million and $225 million annually as a result of the job restructure. Cuts will take place primarily in medical device maker’s Cardiac and Vascular Group and spine segment.

The Cardiac and Vascular group, which includes the cardiac rhythm disease management, coronary, structural heart and endovascular businesses, reported international sales of $1.34 billion in its fourth quarter and fiscal 2013, ended April 26. That’s a 7 percent increase over the year after adjusting for currency changes, or 4 percent as reported, according to Medtronic.

Companywide, Medtronic reported international fourth-quarter revenues of nearly $4.5 billion, up 5 percent for the year when adjusted for currency, which included a $48 million hit from currency fluctuations.

Fourth-quarter earnings on that revenue were $969 million, or 95 cents per diluted share, for a decrease of 2 percent on revenue and 1 percent on share value over the year.

For the Cardiac and Vascular Group, fourth-quarter revenues were $1.33 billion, a 4 percent increase over the same period last year.

Coronary revenue of $465 million grew 5 percent, with sales of drug-eluting stents increasing by 22 percent when adjusted for currency variations, driven gains of the Resolute Integrity drug-eluting stent.

Structural Heart revenue of $310 million grew 8 percent on a constant currency basis or 7 percent as reported.  Growth was driven by the strength of transcatheter aortic heart valves.

Endovascular revenues of $235 million grew 7 percent over the year, driven by “significant growth” with Medtronic’s Endurant aortic stent graft in Japan, while strong growth from thoracic portfolio was driven by Valiant Captivia in the U.S., Japan and China.

Medtronic said fourth-quarter revenue from implantable cardioverter defibrillators possibly outperformed the rest of the market, growing 2 percent over the year to $755 million after adjusting for currency differences.

“These fourth-quarter results were a strong finish to a solid fiscal year and, more importantly,” represented “another step toward our goal of delivering consistent and dependable growth,” Omar Ishrak, Medtronic chairman and chief executive officer, said in a statement. 

The Restorative Therapies Group, which includes the spine, neuromodulation, diabetes and surgical technologies businesses, had worldwide sales in the quarter of $2.117 billion, an annual increase of 4 percent when adjusted for currency. Spine product revenues on those sales were $811 million, which was flat over the year after adjusting for currency changes.

Medtronic also projected its fiscal 2014 full-year revenues to grow by 3 percent to 4 percent, while diluted earnings per share could grow in the range of $3.80 or $3.85 per share, or about 6 percent to 8 percent. Both projections are currency-adjusted.

Shares of Medtronic were $52.35 at the close of Tuesday trading, up nearly 5 percent. In after-hours trading, the price crept back down to $53.17, for an overall increase of 1.57 percent.

“This is great news for Sonoma County’s thriving hospitality industry,” Ken Fischang, president and chief executive officer of Sonoma County Tourism, said in a statement, adding that hotel occupancy rates have steadily improved.

Year to date, occupancy is up 11.4 percent over 2012, according to Sonoma County Tourism.

Visit California, the state’s official tourism booster, also found that visitor-generated taxes equaled $168 per household in Sonoma County, while tourism-related employment accounted for nearly 17,000 jobs in Sonoma County — or nearly one in every 10 jobs.

Hospitality industry revenue also increased 4.9 percent from 2010 to 2011. From 2001 through 2011, industry revenue from tourism soared 41.5 percent.

“Nearly 10 percent of our local jobs come from the hospitality sector, so this increase in revenues bodes well for more jobs and income here in Sonoma County,” Ben Stone, director of the Sonoma County Economic Development Board, said in a statement.

The increase in visitors also means an increase in local government revenue. Spending by visitors to Sonoma County accounts for 19 percent of local tax revenue, according to Mr. Stone. The county collects nearly 17 percent more tax revenue from visitors than the statewide average.

The county has a 10 percent transient occupancy tax (TOT) that goes toward the general budget, along with a 2 percent assessment for the county business improvement area, or BIA, that specifically goes toward tourism efforts.

“Sonoma County has long been an attractive destination for visitors,” said Tim McGregor, board chairman of Sonoma County Tourism and general manager of Bodega Bay Lodge. “We certainly are anticipating that the county will continue the upward trend in TOT revenues that we have enjoyed over the past few years.”

GT Advanced provided 3.4 million shares of common stock and agreed to pay an unspecified amount in the future, the Nashua, N.H.-based company said in a statement today.

Thermal Technology makes high-temperature thermal and vacuum systems that GT Advanced will use to make products including sapphire cover screens for touch-sensitive electronic devices.

In 2012, Thermal Technology reported that it had about 70 employees.

Alaska Airlines ticket counter at Charles M. Schulz-Sonoma County Airport

Nearly 16,800 passengers flew Horizon that month. With 63,600 trips through April, ridership was up 2.1 percent versus the same period in 2012.

Horizon Air, a subsidiary of Alaska Air Group (NYSE: ALK) offers flights between Santa Rosa and the cities of Portland, Seattle, Los Angeles and San Diego.

Terms of the deal, completed about a week ago, were not disclosed except that Verihealth is now a wholly owned subsidiary of privately held Falck USA, based in Seattle, according to CEO Boo Heffner.

“We’d been in discussions with Verihealth for about the last year and we very specifically targeted them as a great company,” Mr. Heffner told the Business Journal. “We’re very selective in who it is we acquire.”

The acquisition of Verihealth represents the first foray into Northern California for Falck USA, which in just two years has become the third largest ambulance provider in the U.S. after a series of partnerships and acquisitions from Massachusetts to Washington, Mr. Heffner said.  

It’s also yet another sign of the consolidation taking place in the health care sector, spurred largely by the Affordable Care Act and the economic realities that are impacting companies — from physician groups to blood banks to ambulance companies — large and small.

“There’s a lot of interest beyond one company acquiring another,” said Mark Knight, a Santa Rosa-based health care consultant.  ”It does show consolidation in health care, not just in the traditional settings like hospitals and physicians groups, but you’re seeing it in ambulance companies and other providers.”

Verihealth was founded by Gary Tennyson in 2000 at 2190 South McDowell Blvd. as an ambulance and medical transport company, with a training institute for emergency medical technicians.  Combined with Falck Northern California’s new operation, Verihealth has a staff of 268 employees and a fleet of 40 ambulances, according to Mr. Tennyson, who said Falck approached him.

“I wasn’t looking to sell Verihealth,” Mr. Tennyson said. “But when we were approached by Falck and as I got to know the organization, and the quality individuals on the Falck team both in the U.S. and internationally, that truly care about our customers, it was obvious we would be a perfect fit.”

Mr. Tennyson will continue to head Verihealth and will become CEO of Falck’s Northern California region. Staffing levels won’t change and the name Verihealth will remain in Sonoma County, Mr. Heffner said.

“We don’t want to wipe out a reputation that a company has established through the name,” Mr. Heffner said. “We looked at a lot of different companies, and Verihealth is a very well-established company run by a very experienced team.”

He added, “All decisions are made at the local level.”

While Verihealth will retain its name, Falck USA views Petaluma as a key stepping stone in growing its presence in Northern California and the San Francisco Bay Area, Mr. Heffner said.  Petaluma will serve as Falck USA’s Northern California headquarters given its centralized location.

“We view them as a springboard, if you will, into larger markets in Northern California,” Mr. Heffner said. “You couldn’t put a better dot on the map of a central area. It’s within a stones’ throw of some big markets.”

Verihealth is the second ambulance company  in Sonoma County to be acquired within the past year, with REACH Air Medical Services being the first last December. Texas-based Air Medical Group Holdings, Inc. purchased the Santa Rosa-based air medical transport company for roughly $250 million.

Mr. Heffner said that while ambulance companies are distinct from other medical providers, the industry is nonetheless adapting to the post-health care reform world by striking collaborations and partnerships in an effort to become more efficient.

“We have to save money in today’s reimbursement environment,” he said, referring to payment changes in the Affordable Care Act that shift away from the fee-for-service model and more toward bundled payments that take into account health outcomes.  ”It’s real and it’s here. We all have to deal with it. The reimbursement structure has a lot to do with it.”

To that end, ambulance companies play a vital role in the delivery of health care, and Falck, started in Copenhagen more than 100 years ago, is in a good position to share its experiences with hospitals and other providers, Mr. Heffner said.

“Whether hospital or ambulance, we all have to work on patient outcome. We as the transporter are a key cog in that wheel in patient care,” he said. “Making sure people end up in the right facility and have the right type of transportation, you have to be efficient.”

For example, trained paramedics can work closely with hospitals and physicians to utilize technology in determining the most appropriate facility to take a patient or whether they could be treated at home, all with the goal of lessening costly trips to emergency rooms.

“It’s a very important mode of transport — you are a continuum of care. There can’t be a drop-off in care. It has to be equal or better,” Mr. Heffner added.

The ambulance industry in general is well-positioned to help reduce health care spending by carefully thinking about what the necessary level of care is, particularly for non-emergency care.

“We have a multifaceted approach. When it’s more of an ongoing chronic situation, maybe there’s an alternative, such as making sure they are compliant with medications, and focusing on prevention rather than reactionary medicine,” Mr. Heffner said.

Falck USA is currently operating in 14 states and just north of 5,000 employees across the country. Internally, Falck operates in 37 countries and employs more than 16,000.

In Napa County, vintners and growers trade groups are concerned about a coalescing county climate action plan (countyofnapa.org/CAP) that includes specific numerical targets for greenhouse gas reduction.

The county Board of Supervisors sent the draft plan back for a rework in December after agricultural groups protested a number of elements, especially carbon offsets growers would have to buy because of certain viticultural operations. The board said it wanted offsetting measures to be done locally instead of completed elsewhere via a fee.

The revised draft plan came to the county Planning Commission in early May. But a recently released list of best management practices for ag companies hadn’t been reviewed in time for the meeting, so the matter was postponed.

One potentially problematic aspect of those BMPs is the inclusion of numerical targets for a number of elements, according to an official from a major ag trade group in the valley.

“The problem is a lot of local measures we do can’t be quantified because the science isn’t there,” she said, speaking anonymously because her organization hasn’t taken an official stance on the plan.

And the latest draft of the Napa County Climate Action Plan, in the works for several years, comes on the heels of an abandoned attempt earlier this year to create a special conditional waiver for viticultural operations in parts of Napa and southern Sonoma counties from stricter new Bay Area erosion-control requirements.

One of the key industry concerns with the conditional vineyard waiver program developed by the San Francisco Bay Regional Water Quality Control Board was confidentiality of the five-year farming plans that would be filed as part of the program.

Other sticking points with the draft vineyard waiver were that it duplicated Napa County hillside planting restrictions and California Environmental Quality Act-dictated review of significant vineyard projects. The draft also didn’t distinguish vineyard land from the rest of a property and would cost growers an estimated $38 million to $60 million over 20 years, according to Bay Basin Plan figures submitted to the Bay water board in February by Napa County Farm Bureau, Napa Valley Grapegrowers, Napa Valley Vintners and Winegrowers of Napa County.

The Bay water board dropped the vineyard waiver plan and is working on accommodating vineyards under the general waste discharge requirements. WDRs specify how a business will operate so no to let pollutants — in this case, sediment — get into environmentally protected waterways.

Meanwhile in Sonoma County, whether large-scale solar energy arrays should be allowed on vineyard land is being considered.

The Sonoma County Board of Supervisors in early May considered a proposed renewable energy ordinance that would “prohibit” such systems in areas zoned “agriculture intensive” to produce no more than 125 percent of a property’s electrical needs.

There have been concerns raised about the loss of productive farmland to so-called solar farms.

The county’s three agricultural zones were created to protect farmland, Bob Anderson, executive director of United Winegrowers of Sonoma County, told the supervisors at the hearing.

His group and others want clarification on language in the proposed ordinance about what would be allowed and what wouldn’t. The supervisors tentatively plan to take it up again on Aug. 6.

A developing matter for trade groups in both counties is officials’ interest in monitoring usage of groundwater from private wells and in further limiting where wineries can be built, how many should be in the county and what wine-related operations are allowed on land under various protection methods such as California’s Williamson Act conservation easements or agricultural land trust requirements.

“A vineyard is an ag use, but a winery in a vineyard may not be a compatible use in the way local governments go through land-use issues,” said Buzz Hines, partner and former Environmental Law Department chairman of law firm Farella Braun & Martel.

The North Coast wine grape harvest of 2011 came in below expectation and left many North Coast wineries on the short side, especially as consumers began trading upscale once again. Some wineries turned to the market for wines in bulk to augment short supplies — but they found that the inventory available was limited and prices had jumped. They would have to pay dearly if they wanted to protect their market share.

The 2012 grape market followed suit: activity started early, tonnage available was limited and prices were strong.

The growing season of 2012 was extraordinary, as we have discussed in this column before. This time last year, wineries, growers and brokers were in the vineyards counting two clusters per shoot, which usually means an average sized crop. The market needed to see a large crop so prices remained high with numerous multiyear agreements signed. The North Coast experienced a near perfect growing season that increased the weight of the berries and surprised everyone with record or near record crops throughout the area. But wineries were thirsty enough to keep accepting overages and some continued buying on the spot market as long as they could find space in a tank or barrel – or the executive swimming pool.

So here we are at half-past spring in 2013. Frost danger is just about over. Both the bulk-wine and grape markets have been active, and tonnage available on the spot market is limited. Most vineyards are reporting two clusters per shoot, as seen last year at this time.

Are we caught in a Groundhog Day replay of last year? Well, no, we’re not. Here are two differences:

• There is about three times as much bulk wine available now as there was last year at this time. As the proprietary chart with this column shows, Turrentine Brokerage currently has almost 15 million gallons of wine listed for sale, compared with almost 5 million a year ago.
• Last year, people saw two clusters per shoot and expected an average crop. This year, people see two clusters per shoot and expect an above-average crop. But I don’t expect a repeat of the bounty of last year. We have not had as much rain and already have had some higher temperatures.

As always, the real challenge in the wine business is to separate short-term and long-term trends and to deal effectively with both, even if they move in opposite directions.

Short term, there is more supply in tanks and casegood storage after the large 2012 crop. The 2013 crop probably will produce fewer North Coast tons than that of 2012, but it will still probably be adequate to satisfy immediate needs.

Casegood sales are growing, however, and productive capacity in the North Coast is not. Ultimately, it is impossible to continue to grow sales without growing supply. This is likely to be the fundamental challenge of the next 10 years in the North Coast.

This year on Feb. 2, Punxsutawney Phil the groundhog came out of his lair and proclaimed an early spring. I’m not sure he was correct for Pennsylvania, but he was certainly accurate for those of us in the North Coast. The crop size of 2013 is now up to the very unpredictable lady we call Mother Nature.

We have a long ways to go, but I believe we need to look at the crop this year considerably differently than that of 2012. And we must not let short-term abundance blind us to long-term needs.

I’m neither a groundhog nor really a poet, but here’s how I would put it:

We advise not to surmise but open your eyes.
Every year’s a surprise but you win the prize
that goes to the wise by watching the size
and listening to the sales guys.

•••

Brian Clements is a partner and vice president of Novato-based Turrentine Brokerage (turrentinebrokerage.com).

Carlisle Winery & Vineyards

For Mueller, the winery ended up being bigger than the family originally thought would be needed when it was built in 2001 and too out of the way for tasting room traffic, said Lori Mueller. They decided not to expand the brand.

“Staying this size allows us to make everything on our own and lends itself to consistency and quality,” Ms. Mueller said.

Conversely, production of Carlisle needed to grow to maintain brand momentum, according to winemaker and co-owner Mike Officer.

“The waiting list was getting so long that we were concerned that people might be losing interest,” he said.

If production had remained in the 5,000- to 6,000-case range as it was in 2009-2010, then it would have taken eight to 10 years for those on the waiting list to get orders, Mr. Officer said. Production increased to 7,300 in 2011 and 9,300 cases of 25 wines made from the bumper 2012 crop.

Ninety percent of sales are to the mailing list, 5 percent is sold directly to California retailers, and the rest goes to five distributors. Carlisle wines sell for $25 to $48 a bottle.

Starr Road Properties, LLC, led by Carlisle owners Mike and Kendall Officer, purchased the Mueller winery at 6301 Starr Rd. from the Mueller family on April 16 for an undisclosed sum, according to public records.

The Robert Mueller brand and inventory is set to move to the Punchdown Cellars custom facility, and the Carlisle brand is scheduled to go from Punchdown to Starr Road by this year’s harvest, according to the proprietors.

With the shift to its own winery, Carlisle is installing 19 tanks, including 10 it already had, as well as a press and destemmer-crusher. Winemaker-viticulturist Jay Maddox will remain.

The Starr Road winery is allowed to produce up to 10,000 cases a year, but Mueller only makes 4,000. Punchdown allows a great amount of control over production, Ms. Mueller said. That’s part of the reason Carlisle has been there for 15 years, Mr. Officer said.

Mueller is set to relocate its tasting room in June to a 1,000-square-foot location in Healdsburg. The Muellers built a large custom winery in Healdsburg in 1991 and started their own brand in 1994. The winery was producing 250,000 cases annually by the time they sold it to Silver Oak Cellars in 2001.

Three-quarters of Mueller brand sales are direct to consumers via the wine club and tasting room. Most of the rest is sold to California restaurants, and a little goes to distributors. Wine bottle retail prices range from $23 for sauvignon blanc to $48 for the best-selling Emily’s Cuvée.

***

Spelletich Family Wine Company of Napa Valley is moving its operations into 16,180 square feet in the Napa Valley Commons business park in south Napa to fulfill its need for expansion. That’s more than twice the amount of space at its previous location.

“We now have a facility zoned for wine production and consumption, allowing us for the first time to have a tasting salon on site,” owner Kristen Spelletich said. “We are now much closer The Meritage Resort & Spa and to other wineries located at the Commons, many of whom are longtime friends.”

***

Michelle Berger, Kathleen Inman and Mike Sai of Inman Family Wines

Windsor-based Inman Family Wines, maker of Russian River Valley pinot noir, chardonnay and pinot gris wines, hired Mike Sai as marketing director and promoted Michelle Berger to director of direct to consumer sales.

“I have run Inman Family Wines as a one-woman operation since founding the winery in 2002,” said winemaker and General Manager Kathleen Inman. “Today marks the next chapter in the winery’s history.”

Mr. Sai previously served as marketing manager for Benchmark Wine Group. Before making the jump to wine in 2009, Sai spent a decade in marketing in the footwear business.

Ms. Berger joined Inman in January 2012 as direct-to-consumer operations manager. Previously, she worked in direct sales for 10 years in various high-net-worth luxury product industries.

***

The second North Coast Wine Industry Expo (707-433-2557, wineindustryexpo.com) is still seven months away, but organizers say they are more than two-thirds toward the goal of tripling the number of registered vendors.

The goal is to have 320 booths for more than 300 exhibitors at this year’s event, set for Dec. 5 at Sonoma County Fairgrounds, according to George Christie, president of expo presenter Wine Industry Network.

The goal for attendees of the trade show and conference sessions this year is 4,000. A second building was added to accommodate the additional vendors, and the conference was moved closer to the trade show.

The first expo, last December, had more than 100 exhibitors and 2,000 attendees.

The conference is set to have four sessions — vineyard management, production, sales and marketing, and finance. Speakers will be announced in July.

Attendee registration is $20 a person for the trade show and $75 for each conference session, with discounts for multiple sessions.

The Business Journal is a media sponsor of the event.

•••

Send items for this column to jquackenbush@busjrnl.com or call 707-521-4256.

About 2,000 tickets were sold for the opening of the barrel auction at Raymond Vineyards on May 31 and about 800 the following day for the live auction and festivities at Meadowood Napa Valley resort.

“It’s a great sign for everyone,” said Linda Reiff, executive director of Napa Valley Vintners, a St. Helena-based trade group that organizes the auction. The ticket sellout in April was the earliest in the event’s history, she said.

A number of the largest local hotels have told the association they are booked up for the weekend.

“There is a direct correlation between money raised at the auction and the economy,” Ms. Reiff said.

Though a gauge of wine aficionado enthusiasm, the bidding isn’t a pricing benchmark, said vintner Garen Staglin, honorary auction chairman.

“It’s irrational generosity,” he said.

More than $7 million was donated to local health care, housing and children’s education from 2012 auction proceeds. That brings the giving total over 32 years to $110 million.

The vintners’ group earlier this month committed $3 million from last year’s proceeds and those of 2013–2014 to expanding preschool and English education. Nearly half the valley’s kindergarteners are new to the language, and by the third grade that shortfall is linked to significantly lower test performance, according to the organization.

Many of the group’s 450-plus members contribute auction lots of who’s-who wines as well as luxury trips and events, and fly in and fete bidders, media and visiting star chefs on Thursday and Friday nights.

The auction of 100 barrel lots gives a taste of coming vintages. The live auction will have 45 lots plus a special lot. An Internet-based E-Auction has 170 lots, and bidding opens May 26 at noon.

Auction donations don’t include the more than 500 volunteers from the community and local hospitality industry.