Some of the wealthiest and best-connected land speculators in the western hemisphere came together for a conference two months ago in Miami, from October 19-21, to discuss their accelerating feeding frenzy, more like a hoarding frenzy. Land speculation booms throughout much of the world, even with the torpid state of the global economy, which seems frequently on the verge of an even worse downturn. Persian Gulf states are working out land deals in Africa, Asia, and Eastern Europe; China is buying up large tracts throughout Africa; and 33 million hectares of the Amazon have been licensed to petroleum companies.
In 1976, economist Susan George noted that only .23 percent of landowners own more than half of all the world's land (never mind those who own no land at all), a trend that has likely only worsened in the interceding 35 years.
“The Agriculture Investment Summit Americas is a three-day senior-level conference for US, Canadian, and Latin American investors to access global agribusiness and farmland opportunities,” the conference web site reads. The confab was designed as an opportunity not only to gain advice, but as a place to “benefit from intensive networking opportunities” with, for example, potential investors.
One of the featured speakers in this gathering of the global “.23 percent” was Richard Wollack, co-chairman of Premier Pacific Vineyards (PPV) based in Napa. He was the only Northern California resident on the program. Few people in our region understand land speculation as Wollack does.
Premier Pacific, which Wollack operates 50-50 with long-time vineyard developer William Hill, claims to own the largest vineyard portfolio in the country with acreage in Washington and Oregon, and holdings running up California’s coastal zones from Santa Barbara to a massive 30-square-mile (20,000 acre) slice of the Gualala River watershed on the Sonoma-Mendocino border -- a project known euphemistically as “Preservation Ranch.” The company owns three large vineyard estates in Anderson Valley, including the parcel of the so-called “Big Dig,” a notorious large pond off Anderson Valley Way.
PPV's largest project is the one that has given it greatest notoriety. Preservation Ranch would involve clear-cutting roughly 1,700 acres of redwood forest and ripping out the roots, installing more than 80 miles of six-foot high fencing that would fragment wildlife habitat across the majority of the parcel, building 90 miles of road. There would also be a gravel mining operation, and of course the various industrial-scale water diversions necessary to fill the project’s proposed 40 reservoirs. At various turns, Premier Pacific has touted a large subdivision as part of the project.
The Gualala River has already been battered by years of industrial logging and, more recently, intensive wine-grape cultivation. The destruction of so much redwood forest would damage the watershed further, on a massive scale.
In the past year, the Associated Press, New York Times, Los Angeles Times, Santa Rosa Press Democrat, North Bay Bohemian, Huffington Post, and most of all this fine publication have featured stories on Preservation Ranch. Friends of the Gualala River, the local non-profit with members primarily based in Annapolis and Gualala, has helped collect nearly 100,000 signatures on a petition opposing both Preservation Ranch and a proposal by Spanish wine giant Codorniu to convert around 170 acres of redwoods to grapes on a nearby parcel. A petition calling on Codorniu to withdraw its proposal to clear-cut in Annapolis circulates in Spain, having collected 34,000 signatures.
It seems as though the heightened public scrutiny has finally caught up with Premier Pacific, as it may soon with Codorniu. A few weeks prior to Wollack's dispatch to the Miami confab, the company's biggest funder indicated they may sever ties with the project. The California Public Employees Retirement System (CALPERS), which had made $200 million in investments in the company, announced they were removing Premier Pacific Vineyards from their previous position as managers of the investment fund. In other words, while the pension maintains its investment in PPV, PPV is no longer manages the investment.
Next month, CALPERS announces the new manager of the fund. Speculation abounds that said new manager will drop PPV entirely, which would spell a dismal fate for the company, being that the pension counts for at least half its investment dollars.
Lewis Purdue, editor of Wine Industry Insight, led off a recent story on the subject thusly: “The CalPERS (California Public Employees Retirement System) decision to fire Premier Pacific Vineyards (PPV) as the manager of its poorly performing vineyard real estate portfolio has left PPV’s 130+ employees — from tractor drivers to executives — energetically networking, knocking on doors and handing out resumes — all of them fearing their jobs will be gone by Jan. 1, 2012.”
Over the summer, I received personal confirmation when a prominent state-level government staff member e-mailed me to ask for an update on the project. Let's just say this staff person seemed to be carrying out her or his investigation independent of Premier Pacific, implying that certain influential elements of California state government are not on friendliest of terms with the company. It would make sense for CALPERS to shed an investment like that in PPV, given that the pension has faced considerable scrutiny of its own for its investment practices in the last few years.
PPV has several other investors, the largest being Connecticut-based endowment adviser Commonfund Realty, which is in for $50 million. CB Richard Ellis, the global real estate firm of which Wollack is former chairman, invested $1 million when PPV was first getting going in 2002.
Dallas real estate mogul Stuart Hall plopped an undisclosed amount into PPV in 2003. His previous history doesn't necessarily inspire confidence in his judgment, however. Hall built a $4 billion real estate empire in the 1980s. Then, in the 1990s, he declared bankruptcy as the market crashed. Hall owns several of his own vineyards, including a 230-acre site on the Silverado Trail in Napa and the other in Alexander Valley, entitled Iron Horse Vineyards. His wife, Kathryn Hall, a former US ambassador in the Clinton administration, grew up in Mendocino County, where she managed a 63-acre vineyard owned by her family, the Walts.
With so much money backing them, Premier Pacific has been able to hire some of the cream of the local crop to carry out its proposals. One of their legal advisers is Eric Koenigshofer, who was campaign manager for Sonoma County Supervisor Efren Carrillo, in whose district Preservation Ranch is located. Koenigshofer himself is a former supervisor in the district, and he also has strong connections with the Sonoma County Planning Commission, which will rule on Premier Pacific's proposal if even makes it to a vote.
SoCo's Permit and Resource Management Department has lately been working with PPV on producing a draft environmental impact report. This document will cost about $1.5 million and will reportedly be ready by early 2012. Both the Planning Commission and CALFIRE, the state-level so-called “lead agency” in this matter, will then vote on whether to grant PPV a permit for the project.
It seems as though things are coming to head in the fight to protect the redwood forest and the Gualala River from the wine industry's biggest land speculator. One way of reading Richard Wollack's high-profile appearances at global land investment conferences (he was scheduled for a similar conference in London the same month, though he had to pull out of the engagement at the last minute) is that he is making a bid for back-up investors in case CALPERS really does withdraw from the proposal next month.
We'll continue our coverage in the AVA in the coming weeks, including a full-on biography of Wollack and Hill, the latter being one of the most ecologically destructive men in Wine Country across the past 30 years.