Sayonara to the Best of California

Out in the cool valley that is home to the Clos du Val and Stag’s Leap wineries, right in the middle of Napa’s most precious turf, there is a spot that explains something about us and the Japanese. It explains the uneasiness that is creeping into our relations with each other.

That spot is a small winery that, until last year, was known as the Louis K. Mihaly Vineyard. It was a family-run affair that produced wines designated in the trade as “outre-premium,” meaning they were babied into near perfection and carried price tags to match. The Mihaly winery now has another name, and another owner.

As you have guessed, the new owners are Japanese. It is now called Silverado Hills Cellars and the new president is Kojiro Iwasaki. The purchase itself is hardly news, since the Japanese have been buying California wineries for years. The Mihaly Vineyards, in fact, is the eighth winery to come under Japanese control during the 1980s.

But Iwasaki’s company is expanding beyond Silverado Hills, and that is news. Later this year the Kohnan company will build an all-new winery at a site several miles down the road. It will be unique in all of Napa. This will be a winery for sake, the Japanese rice wine.

Gleaming white, the new facility will feature the most modern equipment. The visitor tours will end with a stop at that Napa Valley standard, a tasting room. It’s only out back that you see the difference between this winery and others. The big loading hoppers are built to hold rice, not grapes.

Now, the obvious question is this: Why would the Japanese want to locate a facility that depends on rice in the Napa Valley? In Napa, after all, there are only grapes and no rice. And Napa land is not cheap. Why not put your sake plant close to the great rice farms of the Sacramento Delta? The explanation is intriguing.

Iwasaki says his company wants to put the winery here because then it will be a Napa winery. Forget that it will have as much true connection to the Napa Valley as, say, a Pepsi-Cola bottling plant. In Tokyo, Iwasaki says, the name of Napa Valley has come to be associated with wines of high prestige, and his company wants that prestige for its sake. It’s a matter of acquiring a cultural symbol.

All up and down the wine region, you can see this pattern repeated. The Japanese-owned wineries throughout Napa and Sonoma invariably are operations of the highest status and prestige. No Christian Brothers, no mass producers on this list. Instead you find Chateau St. Jean, Raymond, St. Clement and Whitehall Lane. They have acquired the icons of the California wine tradition.

And it is the same with Japanese purchases of real estate throughout California, so much so that this approach has come to have a name. It is called the “jewel” strategy. In Los Angeles, Japanese companies now own some of the highest office buildings in downtown; they own not just any hotel but the Bel-Air, not just any tennis and golf club but the Riviera.

What’s wrong with buying the best? Nothing. But our loss of control over some of our best chunks of real estate, over the California symbols of the good life, has left us feeling shorn somehow, and shabby. Like the fading aristocracy pawning the family silver.

The argument is made that the Japanese actually own far less of the American turf than do the Canadians or the British. Undoubtedly that is true. But neither the British nor the Canadians have this unerring knack for acquiring the best we have. This month a British company, Grand Met PLC, also acquired a California winery. It bought Christian Brothers, second only to Gallo in volume sales.

The Christian Brothers sale was a pure business deal, of course. The acquisition of a Mihaly Vineyard, or even a Bel-Air Hotel, is something different. When a buyer pays $1 million per room, as the Sekitei Kaihatsu company did for the Bel-Air, that buyer is looking for something other than a positive cash flow. He is announcing his arrival. He is marking the turf.

And that, I think, is what leads to the uneasiness. It reminds us that we have lost a step. Once William Randolph Hearst and others looted Europe of its art treasures. Hearst carted his take back to California by the boatload and built his monstrosity at San Simeon. There was nothing beyond the reach of the American barons.

We don’t do that anymore. Instead we watch this real-life Monopoly game being conducted right before our eyes, with the players furiously buying and selling the best pieces of California. Only this time we are not players ourselves. This is a game we can no longer afford.