Michigan Grapevine: Vineyard management, property both hot
Both the regional and statewide real estate market has been in a long slump, but vineyard real estate is proving to be a small but notable exception.
With comparatively cheap land prices and a burgeoning reputation as a wine region second to none, northwest Michigan is a vintner magnet.
"It is a bargain here," said Dan Matthies, owner of Leelanau County's Chateau Fontaine. He's also an independent licensed real estate agent and operates Peninsula Properties, which specializes in vineyard property.
According to Matthies, vineyard prices in Grand Traverse and Leelanau counties average $10,000-$20,000 per acre. In California's Napa Valley, expect to pay $100,000 per acre for standard vineyard property, and $300,000 and up "for the good stuff," Matthies said.
"Northwest Michigan is the place to grow grapes and get started in this industry," Matthies said.
The Traverse Area Association of Realtors reports that the average time on the market for a home sold in the first quarter in Grand Traverse and Leelanau counties was 168 days. Contrast that with a deal for a 40-acre vineyard property Matthies plans to close the first week of May. It's a former cherry orchard offering an industrial well, north-south ridges, high elevations, equipment friendly and close to M-22-key to drawing wine tourists to the future tasting room. The sellers contacted Matthies about a listing.
"Thirty days later I had a buyer interested," said Matthies. The new winery will be a joint venture between a longtime local player and a Connecticut partner.
The Michigan Grape and Wine Industry Council reports that vineyard acreage statewide has increased 24 percent over the last decade. One caveat to would-be vintners: make sure the prospective site really is suited to grapes. With property sales poor in general, "vineyard property" could become mere marketing lingo for land that is simply vacant, as Matthies knows. He got into his sideline real estate business five years ago after visiting a buyer who found out the hard way, when the vines he'd planted in a valley in central Leelanau County started dying.
Can an endeavor with as many variables as grape-growing be standardized?
Mutual Farm Management, the region's largest private vineyard management company, says yes. And their efforts to do so could flatten the learning curve for future generations of growers and winemakers in the already booming industry.
Last year, Mutual owner Jim Thompson bought out Craig Cunningham of Vine Care, another well-known vineyard manager. Since then, the duo has taken over management at Chateau Chantal and Chateau de Leelanau, as well as a percentage of the vineyards at wineries including Chateau Grand Traverse, Willow, Ciccone and L. Mawby.
In total, they manage 236 producing acres. That's impressive market share: 15 percent of Michigan's 1,300 total wine grape acres. Another 39 nonbearing acres are under their management, and additional plantings are going in.
Cunningham and Thompson aim to standardize practices that work best here. Thompson managed the vineyards at Chateau Grand Traverse and Leelanau Cellars before starting Mutual in 2001.
"We're focusing on a system that works and lends itself well to mechanization," said Cunningham. Access to mechanical equipment, including harvesters, shoot positioning machines and pre-pruning machines, is another draw for Mutual's clients.
"If you're not covering the acreage, you can't justify those expenditures," Cunningham said.
Mutual employs 27 field laborers and equipment operators now and will add a second equipment shop on Leelanau County this year, north of Suttons Bay. What's next? Thompson said this year, his sixth in business, he'll meet his 10-year goal. In the next five years, he wants to increase to between 500-600 acres.
If the industry grows as real estate agent/vintner Matthies forecasts, he'll likely beat that, too. Matthies sees a doubling of the two dozen northwest wineries by 2015.
"There's no reason why there won't be," he said.
Cari Noga has covered Michigan's wine and grape industry since 1999 for news and trade publications. Send news and ideas to her at firstname.lastname@example.org.