Grand Traverse Circuit Court Judge Philip Rodgers today dismissed the lawsuit Old Mission wineries filed last October, allowing Black Star Farms to continue selling wine made in Leelanau County at its new Old Mission tasting room.

Old Mission zoning normally requires wineries to both grow grapes and make wine on the peninsula. But last summer, Black Star got a temporary zoning exception for its new tasting room on McKinley Road. The exception allows Black Star to sell wine made from Old Mission grapes but processed at its Suttons Bay winery until the end of 2009, while it built winemaking facilities at the McKinley Road site.

The other five Old Mission wineries sued under the auspices of their trade association, the Wineriesof Old Mission Peninsula. But by December, they had changed course and wanted to back out — all but Chateau Grand Traverse, which filed a motion to take over the case. Along the way a court filing deadline was missed.

Ed Roy, attorney for WOMP/Chateau, argued today that he could not have filed a brief for either party given that the former no longer wanted to pursue the case but the latter had not been recognized by the court to do so. But Rodgers disagreed. He said that Chateau should have been an original plaintiff. He characterized the attempt to take over WOMP’s suit as a “highly risky maneuver” and dismissed the case on the technicality of the missed deadline.

Still believing in the merits of his case, Chateau Grand Traverse CEO Ed O’Keefe Jr. is considering his next move. As the oldest Old Mission winery, O’Keefe argues Chateau has invested substantially in building the Old Mission “appellation” - a federally-recognized label that functions like a brand.

Black Star, O’Keefe says, devalues the Old Mission appellation by selling wine made in Leelanau County.

Black Star contends what’s important is where the grapes are grown, not where the wine is made. Rather than try to pack processing facilities on Old Mission, where taxpayers support farmland preservation via a dedicated tax, Black Star winemaker Lee Lutes favors using the land for vineyards. Processing facilities could be located in Traverse City or anywhere, for that matter, he said, without harming the Old Mission appellation.

Lutes also says the point will soon be moot. Wines made on Old Mission from last fall’s harvest will be ready in a matter of weeks.

Happy new year. Yesterday was the year in review; today I look ahead. Again, in reverse order of significance, are five stories I predict you’ll read about in 2008.

5. More cherry orchards will shift to vineyards. Traverse City won’t be the grape capital, but watch for vines to replace trees. It just makes sense: Grapes offer a higher profit margin and are actually in demand. Just ask Robin Usborne. Her Benzie County vineyard isn’t even planted yet and harvest is a good three or four years away, but she’s already contracted every one of her would-be grapes to a winery buyer.

4. More wineries will begin charging for tastings. For the first time, the 2008 edition of Michigan Wine Country, a promotional magazine put out by the Michigan Grape and Wine Industry Council, is expected to include whether and how much a winery charges for tastings. Once considered a customer killer, charging is gaining more acceptance now. It’ll be interesting to see how that plays on Old Mission, where zoning prohibits charging for tastings.

3. More wineries will seek to become “green” — and market that fact. Some already make sustainability and environmentalism part of their operation. Others benefit green causes. Several Leelanau wineries, for instance, donate a portion of the proceeds of at least one vintage to the Leelanau Conservancy’s farmland protection fund. However, with the public more aware and willing to spend for green-friendly goods, wineries are going to start talking about it, like Peterson and Sons, down near Kalamazoo, which makes sulfite-free wine.

2. A winery will sell. Will it be Bel Lago, Chateau de Leelanau or Willow, the ones officially on the market, or another? Bookmark this blog and find out.

1. Michigan’s wine center of gravity will continue to shift north. In November it made some news when the AP picked up a story that this blog had in August - that Leelanau Cellars overtook St. Julian as the No. 1 winery in the state, as measured by taxes paid in Michigan. St. Julian got a rash of local media phone calls, wondering if it had been dethroned. The fact is, St. Julian IS bigger than Leelanau Wine Cellars in terms of overall production. Its sales outside Michigan don’t show up on state reports, but the two self-report producing about 130,000 and 80,000 cases, respectively. But the reaction shows how important status is in the industry. Leelanau Cellars also has a big expansion underway, as does Chateau Grand Traverse, No. 3 in the 2006 report. Due to those projects, I predict they’ll continue to gain on their southwestern brethren in 2008, if not surpass in the statistics. Meanwhile, there are at least four new wineries I’m aware of underway - three on Leelanau and one on Old Mission. By multiple measures - the sheer number of wineries, their growth and their size - the north will continue to lead the state.

Two weeks after a judge refused to allow Chateau Grand Traverse to enter a lawsuit over zoning exception on Old Mission peninsula, the winery has filed another motion to join the action, now seeking to take over the plantiff spot from the Wineries of Old Mission Peninsula (WOMP) association.

The motion filed Tuesday seeks to substitute parties, meaning CGT, the largest and oldest of Old Mission’s five wineries, would take over the plantiff’s position in the lawsuit WOMP originally filed against the Peninsula Township Zoning Board of Appeals back in October.

The suit was over a special exception the board granted toBlack Star Farms in August allowing Black Star’s Old Mission tasting room, which opened Oct. 13, to temporarily sell wine made at its Leelanau County facility. Old Mission zoning normally requires wineries to both grow grapes and make the wine on the peninsula. Black Star is also an intervening defendant with the township.

WOMP, of which CGT is a member, unanimously voted to allow CGT to take over the suit on Monday, according to the legal documents. A hearing on the substitution is set for Jan. 14.

Jim Krupka of Chateau Chantal, secretary of WOMP, said that the four other wineries still disagree with the ZBA decision to grant Black Star an exception.

With its less-regulated sister facility in Leelanau, where wineries can offer what Krupka called “value-added” activities like hosting weddings and tasting room food service, Black Star has an advantage over other WOMP wineries, he said.
“$1 invested in a wine making plant in Leelanau has a better chance of delivering a return on investment than one on Old Mission,” Krupka said.

But the decision to back off was practical, he said. “We continue to look at the potential outcomes in a realistic way,” he said. “Our main issue continues to be with the township and the regulation and keeping things balanced.”

Meanwhile Ed O’Keefe, CEO at CGT, wants to pursue another line of legal defense: that allowing Black Star to serve wines not produced on Old Mission devalues the “Old Mission” appellation, recognized in the wine industry to have value. O’Keefe sees the case as the Michigan version of a long-running California legal battle, in which a Napa Valley wine association won protection of the Napa Valley name.

“I can’t let them bring that wine over here,” O’Keefe said. “All we want is take your wines back.”

Black Star, which does grow its grapes on Old Mission, contends that it has taken flak from other Leelanau wineries in the past for not being a true Leelanau winery. It says the temporary exception, good through 2009, is necessary to recoup some of the investment in its Old Mission tasting room until the winemaking facility there is complete. 

SHAMELESS PLUG DISCLAIMER: Right upfront. Don’t say I didn’t tell you.

It was a pleasant surprise to open up Northern Express this week and see that Chicken Soup for the Wine Lover’s Soul — the latest in the inspirational book series which includes an essay I wrote — included in a roundup of suggested gift books by authors living in or connected to northern Michigan. Thanks to reporter Rick Coates, who formerly handled marketing for the Leelanau Peninsula Vintners Association and now writes about wine and food, among other topics, for the Express.

Shameless plug continued: Gota wine lover on your Christmas list who might want a signed copy? You can buy it through PayPal on my writing website. Price is $14.95 and local pickup is available (probably too short of notice to ship in time for Christmas.)

Further plugging, but this time for a worthy cause: If you’re not in need of Christmas gifts, wait until January and buy it and many other great books by local authors at a benefit book sale for another local writer, Lori Hall Steele. This blog will be updated when a date for the benefit is determined.

With just days left in a cooling-off period during which five Old Mission wineries, Peninsula Township and Black Star Farms were trying to settle a zoning dispute out of court, Chateau Grand Traverse has filed a motion seeking to intervene, claiming “its interests are no longer being adequately represented.”

Last month the Wineries of Old Mission Peninsula, a trade group that represents five wineries, including Chateau Grand Traverse, sued the township’s Zoning Board of Appeals over a special exception the board granted to Black Star Farms in August. The exception allows Black Star’s Old Mission tasting room, which opened Oct. 13, to temporarily sell wine made atits Leelanau County facility. Old Mission zoning normally requires wineries to both grow grapes and make the wine on the peninsula.

Black Star subsequently entered the suit as an intervening defendant, and all parties agreed to a 30-day cooling off period — which ends Monday — during which they would try to settle out of court. Uniform zoning was the stated goal of negotiations, according to representatives from WOMP, Black Star and the township. Peninsula township has crafted and adapted multiple zoning ordinances as wineries have opened over the years, and the result is that different wineries operate under different rules.

On Wednesday, however, Chateau Grand Traverse, the largest and oldest winery on Old Mission, filed a motion to intervene as a plaintiff. It states in part:

“Chateau Grand Traverse, Ltd. is concerned that its interests are no longer being adequately represented by the Association (WOMP) which may consider settling this zoning dispute on terms not acceptable to Chateau Grand Traverse, Ltd.”

A hearing on the motion is set for Dec. 3.

“I’m disappointed they are pulling off and going their own way,” Kerm Campbell, co-owner of Black Star Farms, said of the action. He said Black Star and the township are waiting for a response from WOMP and he still hopes to settle by Nov. 19.

Chateau Grand Traverse CEO Ed O’Keefe Jr. said that he believes the intervention was necessary to insure that the long-range goal of consistent, enforced zoning is achieved.

“My fight’s not against Black Star,” O’Keefe said. “I’m going for the long run”

WOMP is established as a majority-rule organization, so theoretically if three member wineries voted to settle, it could move forward. However, the next WOMP owners meeting is not scheduled until Nov. 20 — the day after a settlement is due.

WOMP secretary Jim Krupka of Chateau Chantal, who has served as the group’s spokesman on the suit, was out of town and not available for comment, nor was Peninsula Township Supervisor Rob Manigold.

If the case is not settled, it is to be scheduled for oral argument after Jan 2.

Prospective vineyard owner Robin Usborne won’t have a product for at least four years. But she’s already got a customer.

Usborne owns an eight-acre parcel in Benzie County. Next year, using the services of Mutual Farm Management, she plans to plant five acres with grapes. And though she can’t expect even a partial crop until at least 2011, all the would-be grapes are already contracted to Mackinaw Trail Winery in the U.P.

In the sense of knowing her specific customer, Usborne, who works for Michigan State University in Haslett, a few hundred miles from her vineyard, is ahead even of the auto companies and other manufacturers of consumer goods. Based on their extensive demographicresearch, they can tell you their customer is a married mother of two, say, or a single 20-something or a retiree. But not too many can pinpoint a specific individual, the way Usborne can to Ralph Stabile, owner of Mackinaw Trail.

Usborne recently completed a certificate in viticulture and enology at MSU and met Stabile’s son in her enology classes. She also completed an internship last year at the Michigan Grape and Wine Industry Council. The state promotional group wants to increase Michigan’s wine grape acreage from 1,750 to an ambitious 10,000 by 2024. Most area wineries say they can’t get enough Michigan grapes to meet their needs.

Wine grape acreage already has increased significantly in the northwest, more than doubling in Grand Traverse County in the last decade and almost doubling in Leelanau County, according to a just-released U.S. Department of Agriculture report.

But what are considered the best sites are already planted - indicated by an actual decline in the number of acres planted in northwest counties besides Leelanau and Grand Traverse. So the Council, MSU extension and growers are embarking on an effort to find other places vines will thrive. With its terrain and proximity to Lake Michigan, Benzie County, where Usborne has vacationed for years, seems like a good bet.

The banks thought so, too, especially with a customer in hand, said Usborne.

“It was a plus that I had a buyer,” she said. “It’s just a better way to do business.”

Today’s Traverse City Record-Eagle has a story on a lawsuit that could reverberate in the regional industry for years. According to Brian McGillivary’s piece, the Wineries of Old Mission Peninsula is suing the Peninsula Township Board of Zoning Appeals to stop Black Star Farms, based in Leelanau County, from opening a winery on Old Mission this month.

The Record-Eagle story says the WOMP suit claims that an exception the ZBA approved for Black Star in August, allowing it to temporarily sell wine made at its existing winery south of Suttons Bay, “granted a special privilege tothe Winery at Black Star Farms, exceeded its (the ZBA’s) authority, misapplied the exception and changed the intent of the township ordinance.”

That township ordinance requires wineries to both grow and process grapes on Old Mission in order to conduct retail sales.

While the wine initially sold at the new tasting room, set to open later this month, was made in Leelanau County, 90 percent of the grapes were grown on Old Mission, winemaker Lee Lutes said.

Ironically, “we’ve taken flak over the years from our Leelanau brethren for being an Old Mission winery,” he said.

Construction on Old Mission was underway when Black Star learned of the dual requirement. The township advised seeking the zoning exception, he said, adding that the winery facility is complete and that wines from the 2007 vintage will be made there.

The wineries say they aren’t opposed to Black Star’s Old Mission operation, but want it to play by the same rules. In the winery community, Old Mission is notoriously more restrictive about what it permits than its counterpart authorities in Leelanau County, the other bastion of the northwest Michigan industry, just across West Grand Traverse Bay.

“There’s room for additional wineries here. The issue here isn’t with a specific winery, it’s with the specific action by the township. We’re just seeking clarification on what the rules are,” said Jim Krupka, secretary of the WOMP organization and CEO of Chateau Chantal, one of the five WOMP winery members.

Lutes said he didn’t know if Black Star is, in effect, caught in the crossfire between the Old Mission wineries and the township.

“We don’t know if this will affect us, or if this is the wineries of Old Mission trying to get cause with the township,” Lutes said.

But while the suit is against the ZBA, not Black Star, there’s strong potential for it to damage the spirit of what the industry calls “co-opetition” — the combination of cooperation and competition that exists among the wineries. Co-opetition is formalized in the two wine trail associations, WOMP, filing the suit, and, across the bay, the Leelanau Peninsula Vintners Association, of which Black Star is a member.

As a marketing principle, co-opetition seems to work well for the wineries. For example, joint special events draw many more visitors to all than any one could individually. And marketing is key in a winery’s business operation. That’s why this lawsuit seems so remarkable and risky, if the aim is really Peninsula Township’s full-of-hoops ordinances.

It’s reminiscent of the animosity stirred up in Leelanau County several years ago over Leelanau Cellars’ trademark of the word “Leelanau” and subsequent lawsuit to stop Chateau de Leelanau from using the word on their labels. Detroit News columnist Sandra Silfven wrote about those hard feelings back in 2002.

(That long-running legal battle culminated just last month, in fact, with a U.S. appeals court decision affirming the lower district court decision in favor of Chateau de Leelanau.)

The wineries say they want to hang onto co-opetition.

“Co-opetition is a very healthy thing,” Krupka said. “Each additional winery has made this place better.”

Will that apply to the new winery on the block? Lutes said that Black Star does plan to join WOMP. Its location as the first Old Mission winery tourists would pass as they drive north on the peninsula from Traverse City would make it a pivotal player.

“We fully expect that we would work towards becoming a member of WOMP. As a winery on Old Mission I would expect we would become one, if we are welcomed,” he said.

Next steps are undetermined. Ed Roy, the Traverse City attorney handling the case for WOMP, was unavailable for comment and Krupka did not know whether any court date had been set.

With two days to go before the Sept. 30 bid deadline, there are no bids yet on the table for Leelanau County’s Chateau de Leelanau.

Auctioneer Dennis Kubesh said he is now working with two potential bidders, one from Grand Rapids who is already in the wine business, and one from Missouri who is not. He said he is about 60 percent sure an offer will be made before Sunday’s deadline. Suggested starting bid is $3.5 million; for full details, click here .

Kubesh said details on issues like the licensing, land and tasting rooms that impact price have kept the interested parties from submitting final offers.

“Stuff that is typical when yousell an operation turnkey,” he said. “Not insurmountable issues, but issues.”

Kubesh said that the Sept. 30 deadline is not absolute.

“It’s going to be hard and fast if an offer is submitted that is accepted by the sellers,” he said. “If there are too many contingencies or the price is not adequate, they’ll probably leave it open.”

Chateau de Leelanau was listed earlier for sale this year at $4.2 million.

On Wednesday, the New York Times posted a story on its website headlined “Happiness for $10 or less” that ranked a tasting panel’s choices of the best $10-and-under bottles of wine. No, there were none from Michigan.

But what drew me to the story is the fact that it is sitting, still, now on Friday afternoon, at the top of the Times’ most-emailed story list. What’s even more fascinating is that readers posted 574 comments to the piece, sharing stories of their favorite under-$10 wine. 574 readers!

Also this week I was interviewed by a Kalamazoo College student, Emily Dayton, who is writing her senior thesis on Michigan’s wine industry. (More about her project in future posts.) One of her questions was what forces did I view as helping or constraining the industry from taking off. I didn’t think of price at the time, but after seeing the Times story, it hit me hard.

In the piece, writer Eric Asimov makes clear that an under $10 price often means less than the best. “I feel the best values are in the $10-to-$20 range, where you can find sensational wines made by small producers using traditional techniques. These sorts of wines are much harder to find at $10 and under,” he says.

Many Michigan producers fall into exactly those parameters. Perusing a recent wholesale price list from Mitten Wine Logistics, a Michigan-only distributor, most wineries did have some choices under $10. But once the retailer marks them up, a lot will be pushing that $10 mark.

As I told Emily, one factor that’s both a plus and a minus for Michigan wineries is their relative obscurity. Wine drinkers like to feel they’ve discovered something new and different. But there’s a limit to how much they’ll risk out of their wallet to make that discovery. The Times story’s popularity tells me there’s a lot of people for whom $10 is kind of a threshold. Michigan winemakers will definitely need to work hard to get them to cross over.