Chinese investor eyes Carneros agritourism center

SONOMA CARNEROS -- A wealthy Chinese entrepreneur wants to turn 502 acres of the Roche family ranch and vineyards on the Sonoma County side of Los Carneros winegrowing region into a first stop for wine country visitors from the Bay Area to experience how wine and other major North Coast agricultural products are made.

Purchases of wineries and vineyards from foreign investors, particularly from China, has been a closely watched trend in the past couple of years, as a number of properties have become available.

Since Wenchen Zhu purchased the seven parcels from Joseph Roche, co-founder of Roche Winery & Vineyards, on June 7 for $15.475 million in cash, Mr. Zhu and his representative have been working with a team of local professionals to develop a master plan for the property as well as design and regulatory compliance for a sparkling-wine brand, Bliss Canyon Winery.

[caption id="attachment_84849" align="alignleft" width="405"] A Chinese investor purchased the remaining 502 acres of the Roche family ranch in southern Sonoma Valley and plans to create a destination agritourism education center focused on smaller local producers. The buyer first saw the Roche property while visiting Ram's Gate Winery, seen on the hilltop in the distance. (images courtesy of Wine Realty International)[/caption]

The property includes a 6,000-square-foot home with swimming pool, a barn, 49 acre-foot reservoir and 113 acres of vines, mostly planted to chardonnay with some to pinot noir and merlot. The ranch is said to be suitable for planting vines on up to another 150 acres. Demarcation lines for Sonoma Coast and Los Carneros winegrowing regions go through the vineyards on the property.

Also included in the deal are water rights permits for nearby springs.

"At first, the discussion was purely about a winery, but to distinguish itself from the hundreds in the area we would build in an agritourism element to provide education and build a brand at the same time," said Mr. Zhu's rep, Allan Cao, managing partner of Shanghai Great Wall Etech Investment Management Co. and a Sonoma State University alumnus. "That would make wine marketing easier, because there would be other products with the same name."

The plan, set to be completed in coming months ahead of beginning the land-development process with county government, at this point includes a 250,000-case winery designed for alternating proprietorships -- shared use of the facility -- as well as joint facilities for other farm products. The Bliss Canyon brand is envisioned to be mostly sold directly to consumers and to on-premise accounts, eventually reaching production of 35,000 cases a year. Thus far, products envisioned include grass-fed beef, artisan cheese and culinary oil the nearly 1,000 olive trees on the property.

The cost of this plan isn't being disclosed at this point. A major variant could be the cost of creating parking, perhaps solar array-covered, to encourage use of the property as a hub for tours to reduce traffic elsewhere in the North Coast, Mr. Cao said.

A number of North Bay government and economic-development officials have been discussing options for local facilities where a number of businesses could make premium foods from North Coast farm products under the same roof.

Because of the Roche family's sale of 1,657 acres of the ranch to the Sonoma Land Trust for $13 million in 2007 to create Tolay Lake regional park, the remainder of the Roche property is adjacent to extensive hiking, biking and horse-riding trails overlooking San Pablo Bay. Conservation and agricultural easements were put on parts of the remaining property.

"Because of the location of the property at the entrance to Wine Country, it's ideal to set up a Wine Country visitor's center," Mr. Cao said.

The deal came together earlier this year when Mr. Zhu wanted to tour North Coast Wine Country with Mr. Cao. The latter called fellow Sonoma State alum Linda Yenni of Wine Realty International, and they met for wine tasting at the new Ram's Gate winery across Highway 121/Arnold Drive from Roche Ranch.

Also attractive are recent vineyard and winery acquisitions nearby, notably of Viansa Winery & Italian Marketplace by Vintage Wine Estates and vines by Rombauer Vineyards, Mr. Cao noted.

"We were talking about the new design of that winery and how it blended nature and man-made," Mr. Cao said. "Linda said, 'If you like this, you'll love the property across the road.'"

While a number of Chinese investors Mr. Cao has worked with look to buy U.S. real estate that meets personal needs -- estate homes for vacation stays or children studying abroad -- or easy-to-manage investments, such as retail or multifamily properties. Yet he and other consultants have been saying that agricultural properties are becoming more popular among foreign investors as a hedge against inflation and dwindling food supplies.

"There is a trend worldwide in more of the affluent are more conscious with the stuff they eat and drink," Mr. Cao said. "Our food is cheap compared with the rest of the world, and I think that trend will reverse. At the higher end of luxury food, I think there is more demand than can be supplied."

Indeed, a number of the top 10 hottest trends among chefs for 2014 involve local sourcing of food and sustainable practices, trends said to be continuing for the next 10 years, according to a Nation's Restaurant News report last week.

The Roches have been transitioning their wine business off the ranch for several years. San Francisco pathologists Joe and Genevieve Roche purchased the former Mangle Ranch in 1977 and started raising cattle. They planted grapes in the early 1980s and started the winery in 1987. In 2009, the tasting room moved to downtown Sonoma, and winemaking moved to a new facility on the southeast outskirts of Petaluma.

"It was a succession-planning move by my dad," said Brendan Roche, who has been part of the second generation managing the business since 1989. Joseph Roche sold his personal home, but the family retains 60 acres of pinot noir and chardonnay vines in Sonoma Carneros.

Bliss Canyon Winery, Inc.'s project team includes BAR Architects of San Francisco and packaging developed by Icon Design Group principal Jeffrey Caldewey of Napa.

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