Canadian outbids all for valuable Red Mountain vineyard land

By on November 23, 2013
Scott Musser of Musser Brothers Auctions and Real Estate in Pasco, Wash., leads Suki Bath, Aquilini Investment Group representative, through paperwork Saturday, Nov. 23, 2013, after the real estate auction for Red Mountain parcels.

Scott Musser of Musser Brothers Auctions and Real Estate in Pasco, Wash., leads Suki Bath, Aquilini Investment Group representative, through paperwork Saturday, Nov. 23, 2013, after the real estate auction for Red Mountain parcels. (Photo by Eric Degerman/Great Northwest Wine)

PASCO, Wash. – A high-profile and high-stakes auction for the most valuable vineyard land in Washington took a dramatic turn Saturday evening.

A Vancouver, British Columbia, company outbid all others Saturday, paying $8.3 million for 670 acres of land, of which 518 is inside the Red Mountain American Viticultural Area. The auction was conducted by Musser Bros. on behalf of the Kennewick Irrigation District, which has owned the land since the 1940s – land that has never been farmed.

A representative for Aquilini Investment Group in Vancouver ultimately won a bidding war that included winery and vineyard owners from Washington to Napa Valley. Aquilini is directed by Francesco Aquilini and owns the Vancouver Canucks of the National Hockey League and Rogers Arena. Aquilini was founded a half-century ago by Luigi Aquilini, Francesco’s father.

Alex Ryan, CEO and President of Duckhorn Vineyards, in St. Helena, Calif., declined to increase his final bid, which ended the auction at 7:17 p.m. Ryan was bidding on a combination of parcels rather than the entire KID release as Aquilini did.

“He paid a lot of money for it, so we’ll see what he’s going to do with all this good land,” Ryan said. “On a big scale, it’s a good investment, so good for him.”

Suki Bath, the representative for Aquilini, told Great Northwest Wine that the company purchased the land as an investment with no current plans to plant vineyards. In fact, the company first looked at the land this weekend before deciding to attend the auction.

Immediately after the auction, many of the unsuccessful bidders approached the Aquilini representative, handing him business cards and indicating their interest in purchasing some of the 31 parcels they’d just lost out on.

“Maybe he’ll sell it back to me at a discount, right?” Ryan said with a chuckle.

Scott Williams, general manger and winemaker of Kiona Vineyards & Winery, said, “I’m sure that’s in the grand plan.”

Red Mountain smallest AVA in Washington

Red Mountain auction will take place.

The Red Mountain land auction was Saturday afternoon and evening. (Photo by Eric Degerman/Great Northwest Wine)

The Red Mountain AVA is 4,040 acres in size, making it the smallest grape-growing region in Washington. Its reputation for high-quality red wine grapes also makes it the most high-profile region and, thus, the most expensive. Recent land that has been up for auction has gone for as much as $30,000 per acre. The 670 acres on the auction block Saturday went for an average of $12,388 per acre.

The land the Kennewick Irrigation District owned became available because the KID is bringing much-needed water to the ridge near Richland that will make additional viticulture viable. Up to this point, about 1,400 acres of vineyard are planted. This 518 acres of vineyard land has been considered the last best chance to get in on the most valuable soil in Washington wine country.

Ryan attended the auction on behalf of his winery. Duckhorn recently told Great Northwest Wine that it plans to launch a Washington winery using Cabernet Sauvignon grapes from Red Mountain. It will release its first wine, a $40 red from the 2012 vintage, next Labor Day. It came to the auction with plans to purchase land for a future vineyard and winery but left empty-handed.

“I’m in love with the wine business, and we identified some parcels that we were going to make great wine out of. That’s a passion-driven thing,” Ryan said. “Emotionally, I’m disappointed, but we’ll rally and find some other land and make sense out of the future.”

At one point, 16 groups – including Duckhorn, Kiona Vineyards & Winery, Upchurch Vineyard, Hedges and many other prominent companies – combined to outbid Aquilini.

By the end of the five-hour auction, however, Aquilini’s $8.3 million was the winning bid.

“It was fun,” Williams said. “I asked the auctioneer, and he said it was the longest one they’d ever done and also for the most parcels.”

Williams received handshakes and condolences immediately after Musser Bros. ended the auction. One well-wisher complimented Williams for “putting up a good fight.”

“What a deal! I kept oscillating between fine and $3 million in debt. Fine and $3 million in debt,” Williams said with a chuckle. “There were people who were going to buy me a drink!”

Fidelitas Wines owner/winemaker Charlie Hoppes also controls 15 acres of vineyard on Red Mountain. He arrived before the auction began and witnessed it all from the sidelines as folks wanted to know who their new neighbors would be.

“I never would have guessed this would happen,” he said.

First Red Mountain vineyards planted in 1975

Red Mountain

Red Mountain sweeps down to the Yakima River in the eastern Yakima Valley. (Photo by Andy Perdue/Great Northwest Wine)

The first vineyards were planted on Red Mountain in 1975 by Williams’ father, John, and Jim Holmes of Ciel du Cheval Vineyard. They purchased their land for $200 per acre. Development of the benchland in the eastern Yakima Valley has been slowed through the years by a lack of water rights, a situation that is being rectified next year when the KID finishes a local improvement district that will cost $20.2 million.

In addition to the cost of each acre purchased, a cost of about $11,000 per acre will be assessed for irrigation. And it will cost another $20,000 per acre to plant grapes. The first grapes would be available in the third growing season.

Though based in British Columbia, Aquilini is no stranger to Washington agriculture. It owns Aquilini Dairy, an 1,100-acre, 670-head dairy farm in the Yakima Valley town of Sunnyside that’s affiliated with Darigold. It also is developing about 1,000 acres of blueberries and 1,500 acres of cranberries in Washington. Washington is the largest blueberry-growing state in the country and is No. 5 in cranberries. It is No. 2 in the country in wine grapes, after California.

“It was an interesting process and an interesting result, and the system worked,” Ryan said. “I don’t like concentrated buying situations, but it will work itself out.”

About Andy Perdue

Andy Perdue is the editor and publisher of Great Northwest Wine. He is a third-generation journalist who has worked at newspapers since the mid-1980s and has been writing about wine since 1998. He co-founded Wine Press Northwest magazine with Eric Degerman and served as its editor-in-chief for 15 years. He is a frequent judge at international wine competitions. He is the author of "The Northwest Wine Guide: A Buyer's Handbook" (Sasquatch, 2003) and has contributed to four other books. He writes about wine for The Seattle Times. You can find him on Twitter and .