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12 CapitalPress.com October 20, 2017 Jackson Family’s most visible label is Kendall Jackson WINE from Page 1 But it has fallen to her to usher “Big Ag” into Oregon. Jackson Family Wines, based in California, has more than 40 properties in the U.S., France, Italy, Chile, South Africa and Australia. A trade publication, Wine Spectator, reported in 2012 that Jackson Family had annual revenue of $500 million. The entire Ore- gon wine industry, including 725 wineries, had $529 mil- lion in sales in 2016, accord- ing to a census commissioned by the Oregon Wine Board. Jackson Family’s most vis- ible label is Kendall Jackson, which includes the best sell- ing Chardonnay in the U.S. for 25 years straight. If it isn’t top tier wine, the Kendall Jackson sales “keep the lights on” and make the rest of the company’s estate brands possible. “Thank God, drink it up,” Keegan quipped on a video produced for the Oregon wine archives at Lin- field College in McMinnville. Jackson Family Wines be- gan its move into Oregon five years ago, buying a succes- sion of highly regarded Willa- mette Valley vineyards: Pen- ner-Ash, Willakenzie, Gran Moraine and Zena Crown. The company then began building the state’s largest winery, a 68,000-square-foot facility directly across the highway from the Evergreen Aviation museum and water park site in McMinnville, the Yamhill County seat and the heart of Oregon’s wine coun- try. The vineyard acquisitions and winery construction sent a collective ripple through Oregon’s wine industry, be- gun and nurtured over the past 40 years by quirky, driven individuals who nonetheless quickly recognized that col- laboration was the key to suc- cess. They knew Oregon would never match California’s crop size, and shouldn’t try. Instead, they focused from the beginning on quality, not quantity. Oregon Pinot noir, which emerged as the state’s signature wine, commonly sells for $40 to $65 a bottle or more. Would Jackson Family undermine that carefully nur- tured market niche with $15 corporate Pinot or low-price blended reds? “There was concern about a big California property coming up here,” said Ellen Brittan, who with her hus- band, Robert, owns Brittan Vineyards near McMinnville. “The last thing we wanted to do was change the culture up here.” “The story of the Willa- Eric Mortenson/Capital Press Jackson Family Wines employees make last-minute checks at the company’s new winery in McMinnville, Ore. The company’s expansion in Oregon may mark a turning point in the state’s small but high-quality wine industry. mette Valley is out of left field,” pioneering winemaker David Adelsheim said in an interview earlier this year. “A group of people became a bigger group of people, which became a bigger group of peo- ple. “I’m not sure you could change it successfully,” he said. “You can’t change that focus and vision by snapping your fingers. There’s no one thing, no one person, no one winery. But there is one grape, maybe that’s what you can say.” The Oregon Way Eugenia Keegan is Adelsheim’s longtime part- ner, and is in Oregon because she chose to join him. With Jackson Family Wines mov- ing into the state, the two of them decided in March 2013 to approach the newcomers. “In the style of Oregon,” as Keegan describes it, they in- vited them to lunch to talk things over. Company Chairman and Proprietor Barbara Banke, an attorney who founded the company with her late hus- band, Jess Jackson, attended with members of her family and select company officials in tow. The two women hit it off. Keegan remembered that her family’s ranch near Petaluma, Calif., in Sonoma County, was next to Jackson Family’s La Crema wine property. For her part, Banke was “bullish” on Oregon, Keegan said. “There was no desire to change the Oregon culture or the way we do things,” she said. “They were impressed Eric Mortenson/Capital Press Pinot noir grapes, Oregon’s signature wine, tumble over a convey- or into a tank at Jackson Family Wines’ new winery in McMinnville, Ore. with what we’d built here. They invested in the way we do things.” So much so that the com- pany asked Keegan to head its Oregon operations. Some Oregonians re- mained skeptical until the first wines emerged from Jackson Family’s newly purchased Willamette Valley vineyards. “Oh yeah, they came here to follow the tradition,” Kee- gan describes the reaction. “Oh yeah, they get it.” Her partner, Adelsheim, agrees. “Jackson Family, in essence, just bought into it,” he said. Willing partners The industrially zoned property across from the museum and water park was what Jackson Family was looking for, and McMinnvile city officials were happy to help with the required per- mits and inspections. Jody Christensen, executive di- rector of the city’s Econom- ic Development Partnership, called it a “significant devel- opment” for the community. McMinnville scored an- other agriculturally related development this year when Organic Valley, based in Wisconsin, bought and refur- bished the Farmers Creamery Cooperative, spending more than $12 million in excess of the purchase price to update the plant. When production goes full bore, the facility will produce 4 million to 8 million pounds of organic butter per year, along with powdered milk. The Jackson Family and Organic Valley operations are what economists call de- sirable “value-added” manu- facturing. That is, they pro- duce and sell a finished good rather than ship raw material elsewhere. That’s important because food and drink processing proved resilient during the recent recession. It was the only Oregon manufacturing sector that didn’t lose jobs during the recession, and the only one to reach an all-time high — more than 28,000 jobs in 2015 — during the recovery. Neither facility will re- quire vast work forces: About 15 seasonal workers join 10 full-time workers at Jack- son Family, and the butter plant will employ about three dozen workers by next year. However, in a town of Mc- Minnville’s size, 35,000, the impact is magnified. The parcel and an existing office purchased by Jackson Family had belonged to Ev- ergreen Aviation, and had sat empty for some time. The office building became the hub for Jackson Family’s Or- egon operations and the new winery rose behind it. In ad- dition, the company contract- ed with a local architect and construction firm. Mitch Davis, a Jackson Family senior vice pres- ident, said the facility is the company’s administra- tive hub in Oregon and will serve as a lab and custom crush operation for the com- pany’s winemakers at other properties. “One of the things our ownership very much wants to do is control the wine-mak- ing process themselves,” Da- vis said. “The last thing you want to call this is a ‘plant,’” he said. “This is an artisanal winery, and we built it for the future. You don’t know what’s going to happen down the road; we built it so we don’t paint our- selves into a corner.” Davis acknowledged Jackson Family is conscious of fitting in. “We don’t want to be a California company that’s trying to play Oregon,” he said. “We want that group to feel very much Oregonian.” Ellen Brittan said the company acted wisely. “The biggest thing they did was hire Eugenia,” she said. “Rather than send someone up from California, which I think would be a big mistake.” The company’s size will benefit Oregon, she said. “They’re able to amplify everything we’re trying to communicate,” she said. “We just don’t have the mega- phone that Jackson Family has around the world.” The powerhouse Eugenia Keegan leads a tour of Jackson Fami- ly Wine’s facility. The first grapes are arriving, and fork- lifts buzz to unload trucks. Conveyor belts carry grapes into crushing tanks, bare stems emerge for disposal, and pipes carry fresh juice to rows of gleaming tanks. The first wines will emerge from here this year. Keegan likes to say the crucial work is done in the vineyard — vines are not widgets — and the fermentation process in the winery is where the fruit learns to express itself as wine. She wears jeans and a Tartan plaid shirt set off by a strand of pearls. Young men and women, seasonal interns, bustle about the facility. Each year, a few are hired full- time. Keegan once told an in- terviewer that she hopes to help young people under- stand how wonderful and how small the industry is. The person you’re talking with today may be your boss tomorrow. Keegan fondly recalls be- ing an intern once herself, decades ago in France. She recognizes which of these in- terns have, like she did, fall- en in love with the art, sci- ence, sweat and pressure of making fine wine. She notes the ones that jump to learn new things, and beam with accomplishment. “I can tell by the end of the first day,” she said. Easement terms can be evaluated based on reasonable expectations, community standards POT from Page 1 Dan Wheat/Capital Press File Wheat is harvested near LaMoine, Wash. Low wheat prices are one area of disappointment for Northwest farmers, who will see small profits for most of the crops grown in the region, according to a Northwest Farm Credit report. Report anticipates fresh potato prices will increase after harvest into profitable territory REPORT from Page 1 from dumping sugar onto the U.S. market have strength- ened sugar prices, and they’ve been pleased by Northwest yields and sugar content. The report anticipates fresh potato prices will in- crease after harvest into prof- itable territory, highlighting a 4.6 percent reduction in Ida- ho’s 2017 planted acreage. Oakley, Idaho, fresh grower Randy Hardy has been en- couraged that processors are buying growers’ production overages, unlike last season, and at-harvest fresh prices haven’t dropped as signifi- cantly as last season. There’s also ample spud storage this season, which was full during the 2016 harvest, Hardy said. “Once harvest is over and the storages are buttoned up, we’ll probably see some price strengthening sooner than normal,” Hardy said. Rick Naerebout, CEO of the Idaho Dairymen’s Associ- ation, said his members have earned revenue slightly below the break-even point for the past 24 months. USDA has forecast somewhat optimis- tic milk prices of $17.70 to $17.90 per hundredweight in 2017, but Naerebout is con- cerned about tight labor and “tremendous uncertainty” re- garding trade with Mexico. Oral arguments over the Wagners’ motion to dismiss were held in McMinnville, Ore., on Oct. 11 before Yam- hill County Circuit Court Judge John Collins. The damages alleged by the plaintiffs are not actionable in court because they’re based on proposed activities that hav- en’t yet occurred, she said. “Even if we assume there is an odor, there’s no evidence it will travel over the plain- tiffs’ property line,” Bizzano said. According to the plaintiffs, the Wagners are not protect- ed by the “right to farm” law because “foul-smelling par- ticles” from marijuana will impermissibly harm wine grapes already growing on the Momtazi property and which have yet to be planted on the Mahesh property. “They’re in the zone of danger in how their grapes might be affected by the mar- ijuana operation,” said Rich- ard Brown, the plaintiffs’ at- torney. Oregon’s “right to farm” statute doesn’t immunize against complaints over “damage to commercial ag- ricultural products” filed by other farmers, Brown said. “It was about suburban encroachment on farms, and not about claims against one farmer by another farmer,” he said. The plaintiffs disagree their lawsuit is based on speculative injuries, arguing that judges can issue injunc- tions that stop future unlawful or harmful conduct. “If the court allows them to develop the property first, it’s the equivalent of letting them pull the trigger,” Brown said. At this point, it’s not nec- essary for the plaintiffs to prove what type of particles may affect grape skins and how far those particles will travel, he said. To survive a motion to dismiss, it’s enough for the plaintiffs to show the Wagners planned to grow and process marijuana — as evidenced by site plans submitted to Yam- hill County, Brown said. “They have a plan. They’ve announced they have a plan. We know they’re go- ing to do it,” he said. The Wagners countered that unknown events — such as wind direction — don’t count as evidence that would justify an injunction against planting a crop. “What if they want to grow lavender? What if they want to raise horses?” said Bizzano. “Nobody knows if it will ever impact the plaintiffs. They’re just scared.” The plaintiffs initially sought a temporary restrain- ing order against the Wag- ners’ marijuana grow site and processing facility, but that request was denied earlier this year. Even so, the Wagners failed to get approval for the processing facility from the county government, so it ap- pears that portion of the proj- ect isn’t yet moving forward. In the most recent version of a complaint proposed by the plaintiffs, their request for an injunction against the proj- ect seems to have been scaled back. The proposed injunction would prevent the Wagners from growing marijuana with- in 400 feet of either plaintiff’s property, instead of prohibit- ing them from cultivating it. Another factor in the liti- gation is a road easement the Wagners have across the Ma- hesh property. The Wagners claim they haven’t unlawfully used the easement as claimed by the plaintiffs, since the easement terms don’t restrict or prohibit farming operations. The plaintiffs argued the judge could interpret the terms of the easement, much like he would a contract. In this case, the illegality of marijuana under federal law also affects the ease- ment’s permissible uses, Brown said. Easement terms can be evaluated based on reasonable expectations and community standards, he said. “The court has the authority to reason- ably construe easements.”
