Buyer Representation Tin Cross Ranch Purchase

Property: An Ultra-Premium Winegrowing Estate 

Consisting of approximately 232 acres of land with a main house plus guest house and 29 acres of vineyards rising to 2,450 feet above the Alexander Valley and first planted to vine in 1855. Tin Cross Vineyards is one of the oldest and most beautiful vineyards in California and is the ultra-premium wine-growing estate for Tin Cross, Byington, and Four Seasons ESC.

The property

Client Description: The Buyer is a current client I sold Byington Winery to a couple years prior. I was contacted to keep an eye out for vineyards in the prized Pine Mountain-Cloverdale Peak AVA where he was sourcing grapes for his premium wines.

Problem or Opportunity: I was contacted by an attorney who was advised to call me to see what I knew about this AVA and if I might have a potential Buyer if it came on the market. What I learned was the property was cross collateralized with a Victorian House in Downtown Healdsburg and the combined value of the two properties exceeded their current recorded incumbrances, thus creating a short sale situation. To complicate the situation:

• The mortgage lien holders included two banks and two private lender entities
• The original farmhouse was to be abandoned when the new modern home on the property was built, but it was remodeled and was intended to be used as a vacation rental
• The property was listed with a third-party real estate company and we submitted an offer for both properties and wine inventory
• The Victorian House was sold separately during negotiations and the contract did not specify the sale was subject to lender approval, which put the listing agents in a bad position and subject to a lawsuit if they could not deliver the property per the purchase contract
• We made an offer and negotiated the purchase of Tin Cross Ranch, subject to lender approval
• Due to pressures on the wine company, all lenders and further complicated by a pending divorce the current owner was subject to, the properties were thrown into a bankruptcy and now we were subject to the court system
• We found ourselves dealing with the Seller’s real estate agents, two attorneys representing the seller on the short sale and the bankruptcy and four or five additional attorneys representing the banks and private lenders
• We were coming into harvest season and the grapes needed to be picked and sold
• The original farmhouse was to be abandoned when the new modern home on the property was built, but it was remodeled and was intended to be used as a vacation rental

Solution: We first got a commitment from our client to continue the process of acquiring the ranch. He hired another attorney, a bankruptcy attorney to work with his transaction attorney. We committed to see this transaction thru to the end knowing there was a good chance it would take months and have a negative outcome and took the following steps:

• We hired an entitlement specialist to get the farmhouse recorded as “Worker Housing” which ultimately kept it from being torn down
• We negotiated a “Grape Contract” whereby our client would purchase the entire vintage
• We enlisted the services of a farm management company client of ours to manage the vineyard and harvest the crop.
• We worked with all of the attorneys hired by each affected property lien holder in an effort to negotiate a fair and equitable solution, including discounting our fees
• The listing agents asked us to negotiate on their behalf and allowed us to see this transaction close

Outcome/Benefit: We were able to complete the transaction. Our client acquired an asset that provides premium fruit for his most premium wines and a second home he is able to enjoy with his family. Additionally, he was able to acquire a property at a price that was very favorable, and the value today has probably tripled at a minimum. We also gained several new clients as a result of our efforts, including the banks and attorneys.