The East-Side Winery has been sold in its entirety to a group of Lodi investors who plan to maintain it as a winery, wine and bank officials announced Friday.
The new owners, Robert Reynolds, Donald Reynolds and Rudy Maggio, already own the winery's major label, Oak Ridge Wines, in addition to M&R Packing company.
The East-Side complex will remain as a producer of wine and at least some of the workers will reportedly be allowed to keep their jobs, representatives from the East-Side Winery said.
The newly purchased winemaking compound will be run under the name Oak Ridge Winery LLC, said Michael Gurev, an attorney representing the new owners.
Gurev, of the Stockton-based firm Freeman, D'Aiuto, Pierce, Gurev & Keeling, said the owners plan to use the winery to handle custom crush projects and for storing wine in bulk.
"The preservation of the winery is assured," said Kent Steinwert, president of the Lodi-based Farmers and Merchants Bank, East-Side's primary lender.
He said the bank expects any financial impact from the winery's $7.2 million debt to be immaterial now that the real estate has been sold.
The experience has not discouraged F&M from doing business with wineries and the bank will continue to be committed to the grape industry, Steinwert said.
Lee Eichele, general manager for the former wine co-op, said he is confident the new owners will be able to turn the troubled winery around.
The price of wine grapes this year will likely be at or below 2001 levels in the Lodi area because of a boost in production. Statewide, wine grape production is estimated at 3.3 million tons, according to the July forecast from the California Agricultural Statistics Service.
In 1997, the winery crushed 20,000 tons of grapes, a number that has been in a steady decline ever since.
The new Oak Ridge Winery will have to crush between 15,000 and 20,000 tons to remain viable in today's market, Eichele said.
The first phase of the East-Side Winery auction was completed Thursday. Eight buyers were present at the 20-minute auction, including Oak Ridge representatives.
All of the machinery and equipment was sold to Oak Ridge.
The 50-acre property, which comprises the vast majority of the winery's net worth, was later sold to the new owners by F&M Bank as well.
Located on Highway 12, the winery is made up of three separate parcels. All of the winery buildings, including an antique redwood fermentation barrel that now serves as a tasting room, are located on one 10-acre parcel.
Another 10 acres comprise a nearby vineyard while the remaining 30-acre property is undeveloped and located along the Mokelumne River.
All of the property was sold to Oak Ridge as a single lot.
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