Mare Island Warehouse Fire

[Carolyn Tillie]

In this morning's Chronicle....

Warehouse fire destroys huge wine collection

I could see the plumes of smoke but had no idea what was burning!

Early reports indicate that one of the wineries who stored their wine there was Realm Cellars. Obviously insurance will cover losses, but how does a winery recoup from such a loss????

[winesonoma]

It will be interesting to see what was in there.

[eje]

Wine Lovers Lose Millions

Thackrey, Saintsbury, and Tres Sabores among those who lost wine.

[Carolyn Tillie]

BTW, for those of us that frequent the wine boards, there is a growing movement of die-hard collectors who are donating some of their own libraries BACK to the winery owners and winemakers in an effort to help them re-build their lost history.

[winesonoma]

A new twist on the story. http://www.sfgate.com/cgi-bin/article.cgi?...MNGEAF8V7T1.DTL

[ludja]

A new twist on the story.  http://www.sfgate.com/cgi-bin/article.cgi?...MNGEAF8V7T1.DTL

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Wow, maybe "the butler" didn't do it, but it is quite a coincidence (as I understand it) that the crooked businessman who was asked to remove all his wines from the facility did so just a few days before the fire and then was in the builiding the day of the fire! I guess this story will evolve.

Quotes for posterity and/or later acess:

\

...

It isn't the first time [Mark] Anderson's [of Sausalito Cellars] wine dealings have come under scrutiny. Last month he was charged in Marin County with 10 counts of embezzlement after thousands of cases of wine he was holding for clients allegedly vanished.

...

In a telephone interview, Wine Central's Krystal said he had asked Sausalito Cellars to cease storing wine at his facility several months ago. He would not say specifically why.

"We did not like to have them as a client of ours," Krystal said. "We just chose to give them notice (to vacate) and have them go their way. ... They had some delays in getting themselves organized with the trucking and wrapping, and I guess, finding a place. We were patient. There were no lawyers or threats."

Krystal said Anderson's firm had rented about 2,500 square feet of space in the Vallejo warehouse but had cleared out most of its wine before this week's fire.

...

[Rebel Rose]

"Mark is a person who has been very involved in Sausalito for many years," Whitson said. "Mark was very generous about donating wines to community events.''

Humph.

[JohnL]

Maybe we have "discovered" what happened to those collectors wines that "disappeared."

[ludja]

It has been formally established that it was arson.

Regarding, suspects, it's a real Peyton Place. In addition to mentioning Mark Anderson, the article speaks of long, bitter internal disputes between partners.

link

Court records indicate that the wine storage firm was embroiled in an internal partnership dispute. Its partners had invested and loaned more than $2.5 million to the business, which continued to sustain large operating losses.

Wines Central's four original partners have been vying for 3 1/2 years over control of the potentially lucrative business. Two partners claim they were swindled by the other two partners, who in turn say that they were misled and defrauded of their financial stake.

[Carolyn Tillie]

As a side note, from many of the other wine chat lists, there is an unorganized effort by collectors to help some of the wineries build their lost libraries.

I grassroots movement seems to be building for wineries like Saintsbury, who lost their ENTIRE library of wines, where a collector might have a a bottle or a case of an older vintage and are giving it back to the winery. It obviously isn't much and will never replace all that was lost, but for many wineries, their entire histories are gone.

It is though someone has lost their family photos in a fire yet someone across the country just happens to a duplicate of one of the photos. I have been unable to acquire a complete list of the 82 wineries that suffered in the blaze but I know I have a bottle or two from the few I have spoken with and have already offered my single bottles back to help them rebuild their library.

I have suggested to several prominant bloggers that wine bloggers would be the perfect medium to facilitate this, but the whole scenario is just too knew to figure out exactly how to manage it.

Will keep you all apprised... In the mean time, if you think you might have an older bottle or two from a California winery and are interested in donating it back, you could simply call the winery in question and ask they suffered a loss from the blaze.

[Rebel Rose]

I've just learned there will be a Q&A meeting next Tuesday sponsored by the Napa Valley Vintners. Speakers will include attorneys, insurance specialists, and TTB specialists. Plus, the meeting notice states that attendees will "hear helpful advice from Napa Valley vintners who suffered similar losses in the 2000 Frank-Rombauer wine warehouse fire."

Although it is expected that fire insurance will reimburse clients for their losses, it is unclear whether that will be at cost, replacement, or current market values. The library and reserve wines that were destroyed will be difficult to value as they are irreplaceable.

The biggest impact on all the brands will be the loss of their position in the market. Without current releases, the vintners fear that consumers will adopt an "out of sight - out of mind" attitude about their varietals. When their next vintages are bottled and released, it will take twice as much effort to re-introduce their label to buyers and regain their recognition and momentum.

The financial impact extends past the warehouse owners and vintners and on down the distribution chain.

Small, independent fine wine brokers who depend on some of the limited wines from the affected producers will feel the impact in their profit margins over the next year with less product to sell.

Nurit Robitschek , owner of Discoveries in Wine in St. Helena, a wine brokerage specializing in small, allocated Napa and Sonoma wines, was deeply saddened by the tragedy. Her portfolio included wine lost in the fire that was pre-sold and expressed, "the thousands of dollars in lost commissions does not begin to factor in the years of marketing costs."

[LindaJ]

Certainly many of these bottles are irreplaceable, but if art museums can insure against theft and fire, wineries should be able to do the same. I'd really love to hear the results of that Q&A. This is where regional producers' associations could really help their membership by providing cost effective coverage. So sad that folks work so hard and put their heritage into the hands of some bastard who screws them out of spite or greed.

[Rebel Rose]

Latest developments:

Mark Anderson's house has been searched

Complex legal mess

According to court records, some plaintiffs in the Rombauer case were at the same time defendants -- and vice versa -- and the actions of one salvage company trying to pawn off wine from the fire prompted a separate lawsuit in San Francisco. In 2001, a San Francisco judge forced Greer & Kirby, a salvage company, to stop selling wine culled from the ruins of the Rombauer fire. At the time it sold about 9,000 bottles to a North Beach import company as fresh-bottled wine.

Eew.

Out of the game

The additional impacts of the fire are equally staggering:

* Vintners will be forced to compensate retail, restaurant and other customers, because so much of the wine lost in the blaze had already been allocated and was paid for.

* Many of the wineries were either underinsured or not insured at all.

Winery owner Delia Viader lost all of her 2003 production, which included 6,000 cases worth $3.5 million.

Some wineries were unaware that their policies included restrictions on wine values stored off premise (elsewhere). In addition, all warehouse contracts that I have seen have teensy-tiny limits on their financial responsibility for your wine, generally as low as $100--which doesn't even cover the value if a warehouse employee drops a case.

Locally, Justin Winery and Four Vines were hit.

"It's a huge hit," Grant said. "This is the time of year you sell it. The holiday season is when you sell all your wine."

[mizducky]

Wow. Not to make light of any of the financial and artistic losses suffered by all these people, but this could be turned into one hell of an intense true-crime book. Or movie. (Maybe some of the vintners could at least recoup their financial losses that way... a hairbrained idea, probably, but you never know... )

(Edited to correct grammar/wording)

Edited October 22, 2005 by mizducky (log)

[Rebel Rose]

Mare Island, The Movie. Actually, I think you're right. This deserves to be a film. Some of the wineries affected are young artisanal firms, and some of the wine libraries date back to a time when those firms were also struggling young artists. Whoever started this fire had a lot of smoldering, psychotic, self absorbed hate for someone. So let's see, we need a director, a Sumo sized wine embezzler, warehouse partners who hate each other, a sexy and smart FBI agent, tough and smart BATF-TTB specialists, a few sleazy rich attorneys, and at least one beautiful damsel winemaker determined to get to the bottom of it all (I nominate Michelle Rodriguez).

[Bombdog]

a sexy and smart FBI agent, tough and smart BATF-TTB specialists

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As a former Arson Investigator in the bay area, I thought I had a shot, until I read this part

Oh well, my 15 seconds were gone long ago

[Rebel Rose]

A Thursday article in the San Francisco Chronicle reports that the fire was started in the warehouse library, destroying the most expensive wines in the building. Mass market wines, which were stacked toward the perimeter of the building, may have survived.

(It isn't uncommon for special wines and customers who receive preferential courtesies to have their wines near the center of a wine warehouse, as that is generally the coolest part of the building.)

Vintners still can't reach their stock:

Thackrey, who had all his marketable wines in the military-built warehouse, has been able to recover 500 cases -- all single-vineyard, high-end wines -- of the 4,000 cases he had stored. But he can't yet find any of his entry-level nonvintage Pleiades blend, of which he had more than 2,000 cases. And while he has spotted his flagship wine -- the 2003 Sean Thackrey Orion Rossi Vineyard California Native Red Wine ($75) -- he can't reach it.

"There's no way to get to it with the forklift," Thackrey said. "It's very dangerous -- huge mountains of broken glass, tottering piles of pallets just on the verge of falling over."

And even if the wine isn't heat damaged, it's reputation may be:

Several vintners said wineries are unlikely to release wines that have been heat-damaged because of the long-term damage to their reputation.

"If there's any question whatsoever, we would destroy it," said Justin Baldwin, owner of Justin Vineyards & Winery in Paso Robles. "It would hurt us more if we were to pawn something off if it was iffy. I would rather keep my reputation and my integrity."

Baldwin, whose winery had more than 15,000 cases in the warehouse, is already hearing from distributors worried that they won't receive their allotment.

"I've got people from London to Honolulu saying, where's our wine," Baldwin said.

[Rebel Rose]

Gruesome photos supplied by Tom Wark on his blog, "Fermentation."

[Abra]

Wow, I missed this thread when it started, and never saw a word about this event in the press. It's terrible.

I feel so naive, never having imagined such skullduggery and possibly thuggery in the semi-local wine business. What do you all think - is this some sort of wake-up call to the future of the wine business, as the stakes get higher with wine's increasing popularity in the U.S., or more likely just the work of one isolated wacko?

[Rebel Rose]

Someone here was definitely wacko. But the world of wine has an abundance of strange and frightening characters and circumstances.

Our Odd Wine News thread includes reports of French authorities seizing entire winery productions. Topping that, Italian Customs confiscated wine and then apparently stole it.

And you missed the saboteurs who chainsawed 475 vines down in Spain, and the poor vineyard guys in Napa who were shooting at birds and had a SWAT team descend upon them. "Step away from the bird, NOW, sir!"

Edited to correct geography.

[ludja]

About 18 months later...

Charges of 19 felonies, including arson, interstate transportation of fraudulently obtained property, fraud and tax evasion were recently filed against Mark Anderson in the Mare Island wine warehouse fire. click

The article reports that 75-80% of the 6 million bottles of wine stored in the warehouse were damage or destroyed. These bottles were owned by 92 wineries and 43 private collectors. Initial estimates of monetary loss were $100 million but newer estimates put the value at closer to $250 million.

A Sausalito businessman set fire to a huge warehouse on Mare Island in 2005 to cover up a scheme in which he sold wine that vintners and collectors had paid him to store, federal prosecutors charged Monday as they wrapped up an investigation into a blaze that resulted in wine losses of up to $250 million.

...

(Mark) Anderson, the owner of Sausalito Cellars, was supposed to ship bottles to clients around the world upon request, but much of the wine was missing when the owners requested it, prosecutors say.

….

Anderson is a well-known figure in Sausalito, the couple said. He is a fine-arts photographer who wrote columns for the Marin Scope, a newspaper in Sausalito, and served on the city's Arts Commission, Sister City Committee and Parks and Recreation Commission.

Federal authorities, however, painted Anderson as a greedy businessman who committed a violent crime to cover his tracks.

...

Edited March 20, 2007 by ludja (log)

[Carolyn Tillie]

Fascinating re-cap story on the arsonist in today's San Francisco Chronicle.

Some things that have come out:

Samuel Maslak told investigators he had been the chief investor in Bacchanal, a South San Francisco restaurant that went broke in 2000. Needing to store 756 cases of leftover wine -- collateral in a bankruptcy proceeding -- he found Mark Anderson.

The wine was trucked to a waterfront warehouse used by Sausalito Cellars in May 2001, where Maslak assumed it would be safe until he arranged to sell it through Christie's. But when the auction house came to pick up the wine in December 2003, Fraass said, Anderson released just 166 cases. Only the cheapest wines remained.

"I called Mark and said, 'There should be roughly 7,000 bottles of wine,' " Maslak said. "Mark's answer was, 'I was wondering when you were going to deliver (the rest of) those wines for storage.' "

But most surprising was the case of the Marin Chapter of the International Wine and Food Society. Anderson was a member and was close to the group's chairman, Jack Rubyn. Fraass said Anderson had agreed to store the society's wine in a separate room at the Sausalito warehouse; only Rubyn would have a key.

Two years later, in June 2004, Rubyn arrived to grab several cases of wine for a charity tasting. He found the society's stash in disarray, Fraass said. Wine from other collections was intermixed.

An inventory failed to account for 482 bottles worth $282,000, the detective said. The most valuable was the 1959 Lafite-Rothschild, which wine critic Robert M. Parker Jr. gave a score of 99 out of 100 and called "the greatest Lafite-Rothschild that has approached full maturity."

Anderson gave several explanations to clients and police, Fraass said: He had not received the wine in the first place, or it was stolen by an employee, or it was a casualty of bad record-keeping. Some clients with missing wine, Fraass said, were offered replacements for their lost vintages.

"He would actually pick up a bottle of wine and say, 'I don't know whose wine this is. Do you want it?' " Fraass said.

The mind reels....

[MaxH]

An amazing story. In the Bay Area a couple of years ago, after the fire I think, a reputable wine warehouser posted press articles conveying longstanding concerns about that type of (and that specific) wine-storage business, which was based on checking in a certain bottle with the promise of getting the same wine back later, the bottle being handled meantime by the firm.

Of course, that leaves open a mechanism for a warehouser to sell the bottle, use the capital, and buy back an "identical" bottle later on the market on demand. Like banks using deposited capital, keeping only a fraction in reserve. I gather that was what happened. With such a scheme, even if all the wine were returned, its owners wouldn't know provenance, storage history, even authenticity of the bottles they got back.

(I also know Marin IW&FS and Jack Rubyn, a good man and reputable organization, does wine-education and charitable activities. Exploited shamelessly in this scam apparently.)