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Pacific Coast Business Times: Winery investments heat up throughout Central Coast

August 19, 2016
Santa Barbara, California – Published 8/19/2016
By Alex Kacik

Winemaker Daniel Green acquired Jaffurs Wine Cellars, a Santa Barbara County wine producer known for its Rhone varietals.

Craig and Lee Jaffurs founded the company in 1994. It produces about 5,000 cases each year from growers in Santa Ynez, Ballard Canyon, Santa Rita, Los Alamos and Santa Maria. The Jaffurs’ production facility and tasting room have been operating in downtown Santa Barbara at 819 E. Montecito St. since 2001.

Green, who founded Lompoc-based Conarium Wines in 2012, will take over the day-to-day operations. Craig Jaffurs, who plans to retire, will maintain an active role and eventually transition to a position on the board of directors. All staff at Jaffurs Wine Cellars will stay on board, the company said.

The acquisition marks a flurry of wine deals that have bolstered a wine industry boom throughout the region, said Jon Ohlgren, senior vice president of ranch, vineyard and agricultural properties at Radius Group.

“We are seeing more activity in the wine space than we’ve seen since the recession,” he said. “There is especially interest in land that has water resources. People are seeing value in our price per plantable acre compared to much higher prices around the Russian River and Sonoma areas.”

Joe Wagner, a fifth generation Napa Valley winemaker, recently purchased a $4.1 million parcel on Sweeney Road in Lompoc. The 184-acre parcel, located within the Santa Rita Hills American Viticulture Area, is planned for an approximately 120-acre vineyard that’s likely an expansion of his Napa brand — Copper Cane Wine & Provisions.

San Francisco-based real estate investment firm Jay Paul Co. purchased an 1,134-acre site in Happy Canyon for $26 million with plans of developing a several hundred acre vineyard.

“If you look at the microregions, like Lompoc, Los Alamos and Santa Ynez, they are going gangbusters,” Robert Rauchhaus of Radius said.

That activity is spurring a lot of secondary economic development around wine infrastructure like distribution and bottling, Rauchhaus added.

Napa Valley-based WineDirect, an ecommerce platform developer and wine distributor, recently signed a lease for a 50,000-square-foot industrial building in Santa Maria.

“With such activity and a growing interest by Napa and Sonoma vineyards in the Santa Barbara region, land prices will continue to be the primary lure, especially with Napa and Sonoma land values at multiples of those seen in our region,” Lee & Associates wrote in its second quarter Central Coast report. “However, with ongoing expansion and limited availability, there will be upward pressure on land values.”

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