Napa Valley Wine Auction 2000: Total Access Coverage

Dana Nigro
Posted: June 12, 2000

Silicon Valley Money Comes to Napa Valley's Vineyards

Napa's charity wine auction raises a record $9.5 million.

By Dana Nigro and Thomas Matthews

The Nasdaq crash this spring may have interrupted the New Economy party, but someone forgot to tell the folks at the Napa Valley Wine Auction over the weekend of June 1.

High-tech and dot-com money flooded the Valley with a liquidity more intoxicating than wine, as bidders spent $9.5 million on prestigious labels and luxurious packaging at the 20th annual charity auction. The total was a new record, nearly double that of last year's event. As always, the proceeds will be distributed locally, mostly to health-care providers. But under the cover of charitable generosity, it sometimes seemed as if Silicon Valley was using the auction to annex Napa Valley as its own private playground.

Chase Bailey, who retired a year ago from his position as principal technologist at Cisco Systems, was the auction's top bidder. Bailey and his wife, Susan -- whose business cards say they are "folks at leisure" -- spent about $1.7 million for more than 10 live auction lots, including $500,000 for a 6-liter bottle of Screaming Eagle Cabernet Sauvignon 1992, the cult winery's first vintage.

"I was expecting to spend half a million [at the auction]," said Bailey. "I never thought I'd get up to $1.7 million, but we really wanted those lots, and my wife and I decided in real time to go for it." He fought off longtime top auction buyers Ron and Teri Kuhn for the Screaming Eagle in a bidding war that topped all expectations for a single bottle of wine and brought the audience of about 2,000 to its feet.

As the Baileys and the other guests at their table cheered and toasted the winning bid, Screaming Eagle owner Jean Phillips and winemaker Heidi Peterson Barrett rushed over to thank them. "I'm just so overwhelmed and honored," said Phillips, astonished at the price paid for her wine.

The Baileys have been frequent visitors to Sothebys and Christie's wine auctions, but this was their first time at the Napa Valley Vintners Association event. "My wife and I really love California wines," said Chase. "We've got a large cellar in Lake Tahoe that we're trying to fill with the best wines possible. I started out with a 100-bottle cellar, about 15 years ago, and have worked my way up to a 2,500-bottle A-league cellar -- which I think is the perfect size -- plus a 1,500-bottle overflow cellar. I've got a good mix of younger and mature wines that I can circulate through over eight or 10 years."

Other bidders who owe their bankrolls to Silicon Valley included Chuck McMinn of Los Altos Hills, Calif., who is currently chairman and CEO of Certive and has run two other Internet start-ups. He not only paid $230,000 for a lot that included 20 Cabernets from Pine Ridge, but also signed a deal to buy Napa Valley's Vineyard 29 winery for a price some observers estimated at $6.5 million. Dan Lynch, an Internet investor from Los Altos Hills who has been a key figure introducing players from one valley to the other, was the auction's fifth highest bidder, ponying up $150,000 for a lot comprising dinner, wine and crystal from Staglin Family Vineyard.

The onslaught of Nasdaq cash caught auction chair Nancy Andrus of Pine Ridge by surprise. "Never in my wildest imagination did I anticipate this incredible result," she said. While each successive chair has an unstated goal to surpass the previous year's total, this year's bonanza may be hard to top. Speaking to the crowd at the closing dinner, 2001 auction chairs Robert and Margrit Mondavi confessed they were a bit intimidated. "All of you save your money for next year -- we need your help," quipped Margrit.

It's been a wild ride since the first auction, in 1981, which raised a total of $140,000. Back then, the owner of a wine shop in Buffalo, N.Y., sent shock waves through the industry by paying $24,000 for a single case of wine: the debut release of Opus One. This year, Dee Lincoln of Dallas, co-owner of the Del Frisco's Double Eagle steak houses, nonchalantly paid $33,000 for a case of yet-to-be-bottled 1999 Dalla Valle Maya at the barrel auction. She called the wine "a match made in heaven" for her restaurants.

And this year's highest-priced lot, a 10-vintage vertical of magnums of Harlan Estate Cabernet, dwarfed the entire proceeds of the earliest auctions, selling for $700,000 to 10-year auction attendees B.A. "Red" and Yvonne Adams, who are involved in the gas and oil industry in Louisiana.

Today, would-be bidders ante up $2,000 per couple simply to attend the auction, at the Meadowood resort, and the series of fancy hospitality events that occupy a three-day weekend of good food, prestigious wine and conspicuous consumption.

Napa Valley has changed dramatically in the intervening years. Rene di Rosa has been watching the region's evolution since the early 1960s, when he planted a vineyard called Winery Lake in the Carneros region. It became famous as a source for Chardonnay, and in 1986, di Rosa sold the 170-acre vineyard to Sterling Vineyards for around $8 million. "I sold it too soon," he lamented. Di Rosa was attending a ceremony for one of Napa's newest and most ambitious projects, the American Center for Wine, Food and the Arts, currently a $50 million construction site. He added, "I've seen the Valley change from a family place to a corporate place."

There are still plenty of pockets of the old Napa. The Hotel St. Helena opened in 1881 on the main street of what has become the Valley's most chic town. The hotel's rooms have no voice mail, no data ports, no minibar, no desks, no closets; you simply hang your clothes on a peg and fall into an iron-framed bed. But the luxurious new Villagio Inn and Spa, a walled "Tuscan" resort in Yountville, is probably a better indication of the future.

There are still plenty of families, too, and new ones are moving in. Ron and Teri Kuhn of Wheaton, Ill., enjoyed the auction atmosphere so much that they bought an estate in the Stags Leap District in 1995; they are releasing the first wine from their boutique Pillar Rock Vineyards this fall. The Kuhns are leading a fight to prevent Beringer Wine Estates, new owners of Stags' Leap Winery, from expanding winery operations in their neighborhood. Ironically, in this case, the corporation is the old-timer -- Beringer was founded in 1876 -- while the newcomers try to shut the door behind them, preserving the valley as they found it.

There are plenty of crosscurrents at work in the Valley, from environmentalists who seek to prevent new vineyard development to coalitions determined to maintain low-cost housing for migrant workers in the face of soaring real estate prices. But during auction weekend, the conflicts are kept well below the placid surface of Napa's beauty. The towns string banners welcoming the bidders; volunteers help park their cars; local restaurants supply service staff and kitchen facilities for the many events that draw away their customers.

In the auction catalog, Jon Emmerich, winemaker for Silverado Vineyards, which hosted the barrel tasting, summed up the division between the two worlds of Napa Valley. Playing off the event's "Kaleidoscope" theme, he said, "I have two kaleidoscopes I look through. The first is the 'jaded' kaleidoscope. I see people buying into a wine country lifestyle of starter castles and trophy wines. The problem with this scenario is a lack of commitment to preserving and protecting the Napa Valley as a viable agricultural community. It becomes just another commodity. The second is an 'optimistic' kaleidoscope. What I see from this view is the continuation of dedicated people working in unison for the common goal of producing world-class wine."

In the end, the success of the Napa Valley Auction may be a better barometer of consumer confidence in the American economy than of the (undeniable) improvement of the region's wines. But it also indicates that wine has become an approved token of the culture of success, along with the Ferraris and Rolexes and casually staggering jewelry that gleamed and flashed through the Valley last weekend. The show may seem excessive to those more jaded or less fortunate. But let's not begrudge Napa Valley its happy days. In the history of the California wine industry, golden eras have been few and far between. The vintners and their friends are not missing a minute of the one they're enjoying now.

Daniel Sogg contributed to this report