Will Parrish: Paul Hobbs & Ken Wilson — Wine Country’s Clearcutting Crooks


Hobbs’ Vineyards

 From WILL PARRISH
Laytonville
TheAVA.com

Paul Hobbs, internationally renowned winemaker with headquarters in Sebastopol, is described in his web site biography as a “trailblazer” and “prospector.” Those are fitting designations, if not always in the ways his publicist intends. Formerly the winemaker at two of the most prestigious wineries in the country, Opus One and Simi, Hobbs currently “crafts” — to use the term of trade — numerous acclaimed vintages under his own self-titled label, also working as a consultant on 30-35 other wines at a given time, in as many as six countries spanning three continents. By advertising Hobbs’ association with their brand, those who hire him automatically see a boost in sales.

Kenneth C. Wilson, real estate capitalist and winemaker with headquarters in Healdsburg, is not the first person wine industry observers would typically associate with Hobbs. Whereas Hobbs is widely regarded for his winemaking artistry, as a veritable winemaker’s winemaker, Wilson is better known as an opportunistic investor. The latter has built his own “mini wine empire” — to quote Wines and Vines magazine —- across northern Sonoma and southern Mendocino counties in recent years, largely on the strength, it seems, of superior access to wealth.

Yet, the two men’s activities are closely linked, if only by a single factor: their zeal for deforestation. The practice of clear-cutting is common to vineyard development across the Central Coast, North Bay, and North Coast regions of California. The land clearances Hobbs and Wilson have conducted stand out, however, largely owing to an impressive feat: Each man ran afoul of the law, in spite of the preferential treatment the state and county regulatory apparatus has for so long bestowed on the wine industry.

During the end of April through the beginning of May, Hobbs oversaw a 10-acre clear-cut on a 160-acre parcel he owns in Pocket Canyon, just east of Guerneville, known as Hillick Ranch. The deforestation took place even though Hobbs had not established an erosion control plan nor set forth what portion of the property he would place in a conservation easement, as he was required to do under an agreement with the California Department of Forestry. He also had not bothered to obtain a grading permit or use permit from the County of Sonoma.

It appears that Hobbs had grown tired of waiting for the permitting process to play out, so therefore took a gamble that he would not face any punitive measures if he took matters into his own hands, speeding things along toward installing yet another parcel of grapes to source for his wines.

The clear-cut is in close proximity to Pocket Canyon Creek, where erosion would — and perhaps already did — further damage this fragile waterway, thereby only adding to the cumulative destruction activities of this sort have wrought on the Russian River basin, where the sight of a living fish grows increasingly rare. Owing to complaints by residents, a forester for the Sonoma-Napa-Lake unit of CalFire named Kimberly Sone came to the site and issued a stop-work order based on Hobbs’ failure to attain the adequate permits.

“CAL FIRE was not notified regarding the start up of timber operations as required by the Forest Practice Act,” Sone stated via e-mail. “After conducting a field inspection and reviewing the plan, I requested the Licensed Timber Operator and Registered Professional Forester to stop operations.”

She also stated, reassuringly, that “logs are on the ground and logging debris is still on-site, thereby reducing significant amounts of erosion.” That would seem to be a tacit acknowledgment, however, that some significant degree of erosion has either occurred or is in danger of occurring.

The Hillick Ranch clear-cut has even escalated into a rare instance of county officials being at odds with a vineyard developer. John Roberts, a member of the Sonoma County Water Coalition and the Atascadero-Green Valley Creek Watershed Council, is one of various West County residents who has been active in trying to put a halt to Hobbs’ clear-cutting. Roberts met with Sonoma County Fifth District Supervisor Efren Carrillo on May 18th to provide him documentation on the environmental destruction Hobbs and other vineyard developers have wrought, as well as try to compel him to take action to rein in the star winemaker.

“Efren was aware of the situation and was able to say that based on the visit by officials, enforceable actions took place on the property,” Roberts says. “Since it is under investigation, he could say no more, except that he and many others are very unhappy with Hobbs.”

Hobbs’ action is especially significant because it is the first serious test of Sonoma County’s Timber Conversion Ordinance, which ostensibly governs felling of designated timber land to make way for winegrapes and other “agriculture.” The Board of Supervisors passed the ordinance in 2006. It requires that all timber-to-agriculture conversion projects set aside at least 75 percent of a given parcel in a conservation easement. That’s as opposed to an outright ban on such conversions, as regional environmentalists originally sought. The conservation easement provision is widely seen as having been shaped by Premier Pacific Vineyards, the massive vineyard development corporation run by the infamous William Hill and Richard Wollack, who are attempting to clear approximately 1,700 acres of forested land in the Gualala River basin, on a 20,000-acre parcel, to install miles of grapes.

Ironically, Hobbs has been in the spotlight across recent weeks not because of his precedent-setting Hillick Ranch clear-cut, but because of his court-sanctioned fleecing of Sebastopol neighbor John Jenkel. The saga has attracted a pair of stories in the Santa Rosa Press Democrat, though the North Coast’s paper of record has failed to mention several significant details of the story, while framing others far too leniently toward Hobbs. Jenkel’s side of the story, though entirely absent from the pages of the PD, is worth considering in detail, particularly since it sheds considerable light on the sort of mindset that drives people like Hobbs, whose sense of entitlement seems to be so overwrought that it even surpasses his renown as a winemaker.

A grove of roughly 60 douglas firs stood adjacent to the property line shared by Hobbs and Jenkel just outside of Sebastopol. A few years ago, Hobbs drilled a well roughly 200′ from Jenkel’s existing well, presumably to nourish the thirsty grapes he had planted on the site. Jenkel had a sand filter installed by a pump co. that was supposed to purge itself on a periodic basis. Soon after Hobbs drilled his well, Jenkel’s well started drawing sand for the first time in its many years of service.

The filter malfunctioned, however, and water ran continuously for a few months, with the deluge seriously damaging the root systems of two trees on the Hobbs parcel and affecting six others. A tree blew down and clipped a corner of one of Hobbs’ buildings. Hobbs then took what was apparently, in his mind, the logical next step: he removed the entire grove of trees, claiming all of them were compromised . That’s in spite of the fact that Jenkel had already identified and corrected the malfunction in his pump.

Next, Hobbs sued Jenkel for the cost he incurred in removing the trees. Not only did the judge side with Hobbs, but the winemaker received a judgment of $360,000 — more than twice what he originally sought. Jenkel, who sought to defend himself in the case, is notoriously clumsy in court, making him easy picking for Hobbs. The winemaker has since poured a foundation 50 feet in length for future buildings exactly where the doug fir grove previously stood.

The story is especially intriguing given Jenkel’s notoriety around Sonoma County. The 72-year-old former San Francisco candy maker is perhaps best known for his bizarre rants at Sonoma County Board of Supervisors meetings, where he can typically be heard touting implausible conspiracy theories, many of which center on former San Francisco Mayor and State Speaker of the Assembly Willie Brown. Jenkel accuses Brown, for instance, of being a mastermind behind the September 11, 2001, attacks on the World Trade Center and Pentagon.

So far, Hobbs has purchased three out of Jenkel’s four Sonoma County properties at auction. He has obtained them for far below market value: $60,000 combined. Thus, Jenkel still owes Hobbs roughly $300,000. Ironically, this asset-stripping at the hands of Hobbs might qualify as exactly the sort of cold-blooded conspiracy Jenkel has so often accused various governmental factions of carrying out, except this time with an overzealous winemaker acting the part of Willie Brown, who Jenkel personally blames or having stripped him of a bus he formerly owned when he lived in San Francisco.

Even assuming he is not engaged in a cold-blooded conspiracy to take away Jenkel’s property, but instead was merely “defending” himself against a neighbor he labels as overly aggressive, Hobbs’ actions reveal a degree of ruthlessness that is considerably at odds with his image as an artisanal winemaker. For example, Hobbs could have elected to place a lien on the elderly Jenkel’s properties, collecting his more than $300,000 during probate, rather than stripping Jenkel of the parcels outright.

If nothing else, Hobbs has capitalized on the circumstances at hand. Naturally, he felled all of the trees that previously adorned the former Jenkel property off of Highway 116, sparking outrage from local residents. Hobbs is moving immediately to install grapes there, further expanding his ever-increasing wine fiefdom. The California Dept. of Forestry determined that the redwoods and doug Firs on the Jenkel property were landscape trees, so his felling of them was perfectly legal. Agriculture is exempt from California state laws governing Wild and Scenic Corridors.

Meanwhile, it remains to be seen whether the Environmental and Consumer Protection division of the Sonoma County District Attorneys office will pursue an enforcement action against Hobbs. Calls to the Sonoma County DA’s office were nor returned as of press time. Environmental activists and local residents did meet last week with Ann Gallagher White, who heads the environmental protection division of the DA office. White reportedly promised to “look into it” but did not commit to taking action.
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Ken Wilson, for his part, is no stranger to action by the DA in connection with his vineyard development schemes. He has the distinction of being the only such developer in Sonoma County ever sentenced to a jail term stemming from environmental damage he caused in the process of installing grapes. Wilson clear-cut forested land and removed the trees’ root systems across roughly 50 acres off Scagg Springs Rd., 13 miles west of Healdsburg, in 1997. The result was a mind-boggling 18,000 cubic foot landslide into House Creek, a tributary of the Gualala River, in early 1998. That figure comes courtesy of the Department of Fish and Game.

“It was an act of God coming in, the mountain slides down the hill and suddenly he is in the middle of a criminal case,” Wilson’s attorney, Chris Andrian, said at the time, referencing the run-off prompted by heavy winter rains.

Wilson served a 90-day suspended sentence for failing to perform erosion control on the site, also paying the largest fine ever in such a case — $50,000. But the penalties scarcely curbed his appetite for vineyard development, nor for deforestation. Three years later, Wilson was dubbed Farmer of the Year at the Sonoma County Harvest Fair. Across the last five years, in particular, his winery holdings have rapidly expanded — in spite of the sluggishness of the industry as a whole.

In 2009, Wilson applied to build a 20,000 case winery — a very large facility, in other words — and new tasting room in the Alexander Valley, on a parcel that he has already deforested large portions of, installing terraced vineyard blocks. The parcel is located at 19,583 Geyserville Ave., across from the River Rock Casino. In coming weeks, the proposed new buildings will come up for review at a meeting by the Sonoma County Permit and Resources Management Department’s Board of Zoning Adjustments (BZA). Nearly all such proposals are subject to little more than a rubber stamp by the BZA, members of which are appointed by the county’s perennially wine-friendly supervisors.

As one of Wilson’s neighbors wrote in an e-mail circulated in mid-May, “They’ve already cut down several 100+ foot coastal redwoods while clearing for a terraced vineyard. The parcel contains many thousands of mature large redwoods, firs, oaks and madrones. In order to squeeze in such a large facility, our concern is that they will cut many more trees.”

Strangely, the Wilsons received a $10 million loan guarantee from the Obama administration’s stimulus bill, aka the Economic Recovery and Reinvestment Act of 2009, to help fund their various vineyard and winery expansions — including the one currently slated to occur in the Alexander Valley. Specifically, the investment came courtesy of the US Department of Agriculture, which doled out a portion of the Stimulus Act funds. It was the second largest loan guarantee the USDA issued as part of that particular round of stimulus funding, with only an agribusiness outfit in American Samoa receiving more.

According to the USDA press release in connection with the loan, “The funds are targeted to create and retain quality jobs and serve difficult-to-reach populations and areas hardest hit by the economic downturn,” a classification which hardly seems to apply to Wilson’s vineyards.

The May 2009 edition of the lifestyle magazine Wines & Vines said thus of the Wilsons’ budding vineyard and winery portfolio: “Their collection of wine properties brings to mind Jess Jackson’s penchant for acquiring family-owned and boutique wineries.”

Wilson is not only a major investor in the wine industry. He also owns a famous building at Pt. Reyes, in the coastal town of Inverness, West Marin County, called the Grandi Building. Wilson is controversial around West Marin for attempting to develop the mixed-use, brick building — a historic landmark — into a trendy, even more upscale hotel. According to a source who has had close contact with Wilson, his fortune derives from the Wilson Sporting Goods family, which also ran one of the largest Chicago meatpacking operations around the turn of the 19th century into the 20th century.

Wilson not only owns five vineyard and winery parcels across Sonoma County, but also one of the most prominent winery and vineyard estate in the Ukiah Valley: Jaxon Keys, located right off of Highway 101 north of Hopland. It is one of those Wine Country properties that closely reflects the ties between the wine industry and other extravagant financial interests. The property was first developed by Georgia banking mogul Robert S. Jepson in 1985. Jepson was bought out by the investment group Dbon Mendocino, LLC, in 2005, the latter being backed by the enormous New York City investment firm Fortress Investment Group — one of the most controversial firms on Wall St., which has roughly $42 billion currently under management.

The hedge fund moguls at Fortress purchased the property with the intention both of renovating the winery and developing a series of subdivisions across several hundred of the roughly 1,000 acres, essentially as part of a bid to convert Hopland into a popular homebase for the sorts of people whose ideal homebase is a hyper-gentrified portion of rural Wine Country. Fortress lost patience with this plan in the wake of the real estate market collapse in 2008, however, selling the parcel to Wilson. Mendonesians, be forewarned: if the Wilsons’ record is any indication, they may soon develop the remaining acres on this site, deforesting as they go — ironically, it seems, enabled by funding from Barack Obama’s famous stimulus bill.
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The fact that Obama administration would bestow so much largess on one of Sonoma County’s foremost scofflaw vinters is telling.  Destructive vineyard developers are rarely held accountable for the destruction they cause.  In many cases, they are only rewarded.  The most destructive companies, whether they be part of the wine industry or any other field of extractive enterprise, are also most often the wealthiest and best connected.  It is one of the present economic system’s fatal flaws that it systematically rewards sociopathic behavior.

On a smaller scale, this permissive culture surrounding anything the wine industry does is precisely why Paul Hobbs took a gamble with his unauthorized clear-cut.  He knows the odds are he will never be penalized.  Unfortunately, the North Coast wine industry, as I’ve described in over a dozen articles across recent months, did not grow so huge, nor has it caused so much ecological and human wreckage, because the regulatory system is designed to limit its activities in any significant way.
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