Top Landmark in Napa Valley May Go on Sale
Heublein is hoping to sell, lease or convert Napa Valley’s best-known landmark, the Christian Bros.’ castle-like Greystone Cellars in St. Helena.
“We’re exploring options for the highest and best use of the building,” Ron Batori, a spokesman for Heublein’s Fine Wine Group in St. Helena, said Tuesday. He added that “we don’t have a ‘for sale’ sign on the building, but (a sale) is one option we’re examining.”
At 117,000 square feet, the historic, 102-year-old structure is “a terribly under-utilized asset,” Batori said, noting that Heublein uses only about one-sixth of the space, primarily for public wine-tastings and as a retail outlet for wine and souvenirs. The building, built on a site of about 13 acres, was listed on the National Register of Historic Places in 1978 and receives more than 250,000 visitors a year.
Heublein, a division of British-owned Grand Metropolitan PLC, bought the massive property two years ago from Brothers of the Christian Order--a Roman Catholic teaching order that had made wine there since the 1950s. The deal, estimated at $100 million to $150 million, also included 1,200 acres of prime Napa Valley vineyards.
In addition to the Christian Bros. label, Heublein, based in Farmington, Conn., owns the Inglenook, Beaulieu, Quail Ridge and Gustav Niebaum brands.
Until 1984, Greystone Cellars, with floor space of just under three acres, was a key element of the Christian Bros. wine business. Sparkling wine was made there. There was also a bottling line, and cases of wine were stored on four floors. But the building, whose exterior walls are made of hand-cut volcanic stone two feet thick, was closed after engineers decided that it would be at risk in a moderate to severe earthquake.
After making seismic upgrades costing about $6 million, Christian Bros. reopened the building in 1987 as a tasting and hospitality center.
The asking price for Greystone Cellars, which comes with 28 acres across the road, would be about $10 million, according to Michael Shiffman, founder of Suncrest Pacific, a San Francisco commercial real estate firm that plans soon to begin soliciting bids.
Architects hired by Suncrest Pacific to study alternative uses have suggested that Greystone Cellars would lend itself to being a congregate-care retirement community or a conference and education center that could be sponsored by the wine industry. One St. Helena architect suggested that one option would be to convert the building to a retail plaza. Further seismic upgrades costing $2 million to $3 million would be necessary to make the building safe, Shiffman said.
Batori said Heublein would be willing to serve as a partner in a joint venture that would result in “economic benefit” or to lease the property to a tenant interested in making wine there.
He added that the decision to explore alternative uses for the building does not reflect dissatisfaction with the Christian Bros. label. In fact, he said, sales of the brand have soared about 40% since Heublein three months ago lowered the price of cabernets and chardonnays to $6 a bottle from $10 in an effort to take the wine out of competition with other premium Heublein labels.
Batori declined to disclose annual sales for Christian Bros., but the company was estimated to have 1988 sales of about $100 million, about 70% of which came from brandy sales. Sales of brandy have since slumped.
Heublein intends to consolidate winemaking for the Inglenook and Christian Bros. brands in a more modern facility in south St. Helena.
