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Eugene Weekly : Coverstory : 9.20.07



Looming Wine

Our valley's wine industry is about to boom. Can we guide it?

BY LANCE SPARKS

EDITOR'S NOTE: Back in our July 22, 1999 issue, Lance Sparks wrote a cover story on "Wine Country," predicting a boom in local vineyards. This story is an update.

It's a nearly perfect late-summer morning in Oregon's vineyards, from Hood River and the Columbia Valley in the north, to the verdant hills around Dundee, through the Willamette Valley, the Umpqua, the Rogue. Last night was cool. The day dawned clear and still, temperatures ratcheting rapidly upward toward the 90s, taking sugar levels in grapes toward those magical numbers (measured as brix) that will signal the rush to harvest and crush this year's vintage — another, we hope, in a string of successful vintages stretching back into the mid-1990s.

A worker prunes vines at Sweet Cheeks Vineyard
Frost fans at King Estate
Sweet Cheeks' Chardonnay grapes

Wine looms large in Oregon's future, and in the future of the south Willamette Valley, especially in the small communities — Veneta, Elmira, Monroe, Junction City — that border the foothills of the Coast Range. Wine and wine tourism and businesses related to both will feel the impact of thousands of visitors seeking the best of this area's fine wines, especially pinot noir and pinot gris. The impacts are already being felt on the wine-touring routes that weave through the valleys and towns along Territorial Road and its byways.

Ric Ingham, Veneta's city manager, says, "In the city of Veneta, we talk about it all the time. We want to have our own healthy, vibrant economy." Ingham adds, "We view wine tourism as hugely important."

King Estate, the area's largest wine producer with a thousand acres planted, last year hosted more than 10,000 visitors in its tasting rooms and restaurant (interestingly, about half of them locals, according to Sasha Kadey, King's marketing manager), and King Estate expects that number to increase yearly for the foreseeable future.

Those numbers might seem dramatic here, but in the north end of the valley, one major winery, Sokol-Blosser, reports as many as 900 visitors in a day during the high season.

Lane County Commissioner Pete Sorenson, whose district is "where the consumers live," considers this potential "phenomenal for the people of Oregon" and calls it a "tremendous economic engine." Lane County Commissioner Bill Fleenor, whose district encompasses core wineries in our area, enthuses, "I think it's great." Wine tourism, Fleenor adds, is "a nice, clean industry that we should be promoting." And we are promoting it: Lisa Lawton, representing the Convention & Visitors Association of Lane County (CVALCO), reports, "Wineries were the second most requested category of interest from visitors to Lane County during this past fiscal year. This is the first time we've seen requests rise to this level. The popularity of wine tasting and touring in our area is really growing as local and statewide marketing efforts continue to increase exposure for Oregon's wine industry." As next summer's Olympic Trials approach, CVALCO and other touring associations are placing ads in prominent magazines and Web sites, emphasizing wine tours among other activities. The area expects to draw "13,000 spectators, 1,000 athletes and officials, and 1,000 media representatives," touts the ads.

That many people eager to taste wines might be equally eager to fill their experience — and their shopping carts — with other products and services. Wine is obviously an agricultural product, but it is also a cultural product. The connection between love of fine wine and fervor for fine dining is old and celebrated; those wine lovers will want to eat good local cuisine. They'll be looking for charming places to rest their heads and bodies after days of tasting and touring. Inevitably, this must spur growth in construction of hotels, motels, B&Bs and spas, and all of these will have to be serviced with utilities, such as water, electricity, gas, sewers and roads. Clearly, the positive economic impact could be significant: new jobs to replace losses due to declining timber harvests; new customers for small businesses, craftspeople, farmers and artisans in the wine corridor; new demand for housing, with a corresponding rise in property values.

This prospect raises — or should raise — vital questions about the future of our valley, how the citizens of this area want it to grow, how and who will pay for the infrastructure adaptations that such growth will demand, and a host of others. Could our heretofore quiet valley become Napacized? Would that be a good thing, or could we end by being well and truly Californicated?

We've seen this before, in Napa Valley itself (and other California wine valleys in Sonoma, Mendocino, around cities like Monterey and Santa Barbara) and in our own hills and valleys in Polk and Yamhill Counties. In fact, the Napa experience could provide some guidance for our planners — and some cautions.

In the 1960s, Napa Valley — 35 miles long, 5 miles wide — was home to a wine industry known for decent but not exceptional wines, particularly cabernet sauvignon and chardonnay. Average price for a vineyard acre stood around $2,000. Ten years later, the average price per acre had jumped to $5,000. When, in 1976, a Stag's Leap (Napa) cabernet outshone some of the greatest French Bordeaux in a Paris tasting, Napa wines leapt on to the world wine stage. By 1980, price per acre had rocketed up 500 percent, to $41,500. Today, the Napa Valley is home to more than 400 wineries doing more than $1 billion in sales and drawing five million visitors a year. The visitors come on bicycles and motorcycles, in cars, RVs, buses, limos, even horse-drawn buggies. They fly over in hot-air balloons. There's even a special Napa Wine Train. Impact: According to Bergman Euro-National, Napa Realtors, the projected average price per acre for 2010 is $180,000.

Interestingly, the string of small towns along Hwy. 29 from Napa city to Calistoga — towns like Yountville, Oakville, St. Helena — retain their small-town character and feel, and visitors notice the absence of fast-food restaurants and garish signage. This is largely because, before the boom, owners of the wineries, particularly following the leadership of Robert Mondavi, joined with other business owners, responsible city and county political figures and local citizens to enact regulations that had two aims: Reserve vineyard lands and control development. Now, instead of fast-food joints, the towns boast some of the country's finest restaurants and, instead of cheap motels, luxury accommodations to rival the world's best.

The economic upsides seem obvious. There are downsides: Working-class people don't dine at French Laundry or Bouchon or take rooms at Calistoga Ranch. One wine professional described Yountville as having become "a ghetto of the rich." Is there something we can learn for the future of Oregon wine country development? Does Oregon have anything like Napa potential? Actually, the recent history of growth in Oregon wine follows some interesting parallels, with notable differences.

 

For many Oregonians, it still comes as some surprise that Oregon wines are so well-admired as to draw thousands of visitors to our vineyards and tasting rooms. Last year, though, the highly regarded and widely read Wine Spectator listed seven Oregon wines among their yearly Top 100 of the world (note that there are more than 5,000 wines released yearly). This year, the annual (since 1986) Oregon Pinot Noir Celebration drew 900 guests to its three-day event in McMinnville — to which tickets cost almost $800 each — attracting visitors and winemakers from all over the world, many coming to sample and talk about the state's (arguably) best wine, pinot noir. In fact, growth of the Oregon wine industry has been rapid and shows few signs of slowing.

The numbers and history are revealing: Before 1960, Oregon wine, in the post-Prohibition era, was largely restricted to fruit wines, some quite good but not vinifera grape-based. In 1962, Richard Sommer planted Riesling at his HillCrest Vineyards in the Umpqua Valley. In 1966, David Lett, of Eyrie Vineyards, pioneered in the north part of the Willamette Valley, planting pinot noir on his Dundee site. Their success led to remarkable growth. A Wikipedia entry traces the pace of that growth: By 1970, we had five bonded wineries and 35 acres in production; by 1980, we had 34 wineries, 115 growers, 1,100 productive acres; 1990 saw 70 wineries, 320 growers, 5,682 acres; 2000, 135 wineries, 500 growers, 10,500 acres; 2005, 314 wineries, 519 growers, 13,700 acres. According to figures from the Oregon Wine Board, this year Oregon has "350 wineries and nearly 400 wine brands."

Twenty years ago, vineyard property might have cost $1,800 an acre; today, according to Mike McLain, whose McLain Associates are the state's most active vineyard real estate agents, "Prices range from $8,000 in the west mid-valley to as high as $40,000 on the Dundee Hill, per plantable, ready-to-plant acre."

Most of the dramatic growth has been concentrated in Polk/Yamhill, but the south end of the Willamette Valley has also grown from two wineries in the early 1980s to 14 today, stretching from Monroe to Cottage Grove. Most are concentrated on the Territorial ribbon from Elmira/Veneta to Lorane, including the flagship King Estate (where, incidentally, participants at the Oregon Planning Institute Conference could choose to take a tour to taste top-shelf wines and explore the facilities). In terms of planted acreage, Lane County lags behind Polk/Yamhill (1,000 acres to more than 7,000). "But," McLain notes, "as the valley develops and land becomes more expensive up north, more and more growers will begin looking south. And even east. Mohawk Valley, McKenzie Valley, Cottage Grove, anywhere it won't frost and there's adequate heat … 200,000ish acres suited on the west of the valley from end to end … Cottage Grove to Forest Grove."

 

Do those figures presage a Napa-like future for our region? "Never going to happen," says Bill Nelson, president of WineAmerica (National Association of American Wineries). Nelson is now based in Washington, D.C., but for years he was head of Oregon's Wine Advisory Board. He intimately knows the people and the wines of this area and stays in close touch. "You're not going to see something that structurally changes the area," Nelson argues. "You're always going to have a mixture of lifestyles," so towns like Elmira, Veneta and Junction City will have their fast-food places for working-class people side by side with new upscale restaurants for well-to-do wine tourists. In part, Nelson thinks, Oregon can never be Napacized simply because we're not Napa-sized; "You don't have 20 million people wanting to visit."

Nelson does have some concerns about the impact of Measure 37 on the preservation of vineyard lands, simply because "wine land could get priced out by developers" when people want to build "on hillsides with nice views," precisely the kind of property best suited for vineyards. Even if vineyard land is going for $40,000 an acre, "no way vineyard [owners] can fight off the houses" with land going at $25,000 for a quarter-acre. Suddenly, after Measure 37, "there's almost no protection."

Some other shadows have appeared on the sunny landscape of prosperity generated by all this new business and activity. Right now, Territorial Road, the main artery traversing most of the area's major vineyards and wineries, is a narrow two-lane blacktop with, in some places, notable problems in road slumping and rough surfaces. The road also carries farm equipment, log trucks and commuting residents. How much longer can it continue in its present condition? How long can we delay action before a poor surface and too much traffic result in tragic consequences?

 

Wine is good agriculture; in fact, many of Oregon's grape-growers have led the way in the thinking about organic, sustainable farming. King Estate's owners, for example, have converted their 1,000 acres to organic growing, meeting the strict certification standards of Oregon Tilth. Wine producing is also good business for Oregon. According to Oregon Wine Board figures, the total economic impact of the wine industry yielded, in 2006, $1.2 billion, with $203 million going to direct wages and another $370.8 million going to retailers and restaurants. Tourism produced revenues of $92.2 million, with the state receiving tax revenues of $41.6 million. Members of the Oregon wine industry also generously donated $3.03 million to charities. And the future of Oregon wine? In 2006, a record 1,378 new acres were planted in grapes.

As Commissioner Sorenson noted, that's an "economic engine" with considerable power. So would residents of this region and the growers be best served by keeping hands off the wheel and letting laissez-faire forces drive the vehicle into the future? Or should there be some concerted effort by all the stakeholders to take charge of the process and direction? Commissioner Fleenor expresses a wish for what he calls "visioning," for vineyard owners to "put together some plans that we can help them execute." Sorenson seeks "incentives" to create an "open landscape" without which "you're going to look like anywhere else," instead of like the Oregon that drew so many of us to living here.

Today, at the end of another nearly perfect day, the Lorane Valley's vineyards look lovely, darkening fruit hanging on the vines promising a sweet harvest and a bright future. We can only hope that all this beauty will be tended with foresight and prudence — because what we put in the glass is what we'll drink.