Francesco Aquilini is pictured in Vancouver in 2008. His family’s Aquilini Investment Group has purchased a swath of prime vineyard properties in Washington state for $8.3-million.ANDY CLARK/Reuters
When bidding started last Saturday for a swath of prime vineyard properties in Washington State, dozens of would-be buyers were in the room.
But when the auction was over, only one went away with the spoils: Vancouver's Aquilini family. Its privately held Aquilini Investment Group, which has interests in real estate, agriculture and professional sports through its ownership of the Vancouver Canucks, now stands to become a significant player in the wine business with its surprise purchase of 670 acres for $8.3-million.
The Aquilinis bought all 31 parcels included in the sale, crushing the hopes of other bidders who wanted to acquire one or two parcels of land in the highly regarded wine district.
"We had one bidder who was wanting all of it [the property] and you had 30 bidders who wanted individual pieces," Scott Musser of Musser Bros. Auction, which conducted the sale, said on Tuesday.
"It was kind of a them-against-us syndrome in the room – every time you had an individual buyer come on top on the board, you'd have a round of applause. And then you'd have an, 'oh' after the Aquilinis would bid – it was exciting and dynamic."
The property – located in Washington's Red Mountain wine region – was put up for auction by Kennewick Irrigation District, a state agency. KID acquired the site in 1943 through foreclosure. Since then, the dry, brushy land sat undisturbed and unwanted – until wine makers took note.
With irrigation, the arid lands will be ideal for growing grape varieties such as cabernet sauvignon and syrah, which have made Red Mountain a sought-after growing area.
Through a development plan now under way, irrigation is on its way, along with a hefty price tag. Plans call for water to be diverted from the Yakima River to 1,785 acres on Red Mountain, including the 670 acres owned by KID.
The $20.5-million project translates into costs of about $11,000 per acre for landowners who are on the hook to pay for it as part of the development plan.
"The reason we sold is that we are not in the wine business and we did not want to service that debt," KID district manager Chuck Freeman said.
KID decided to sell the property through auction because it anticipated strong interest in the land, Mr. Freeman said. The auction took place in Pasco, Wash., and lasted more than five hours. The "power parcel" auction process used at the sale allowed individual would-be buyers to keep bidding on one or more parcels in competition with bids for the same parcels from the Aquilinis.
"We had some bidders bidding on two, five or seven – a combination of parcels," Mr. Freeman said.
"Then we had the Aquilinis, who bid on all 31. That was their combination."
The price of the transaction includes $8.3-million for the land and nearly $7.5-million for its share of the development charges. Those charges can be paid off immediately or over a period of up to 25 years.
The Aquilini Group did not immediately return a call for comment.
In an e-mailed statement sent to KID and provided to The Globe and Mail, Luigi Aquilini described the acquisition as "a great opportunity to enter the viticulture business in one of the best growing regions in Washington state. We are in the process of determining the best grape varieties to grow in the region with the intention of developing and planting the land as soon as possible."
The Aquilinis are unlikely to stop with merely growing grapes for other wine makers, said John Schreiner, a wine writer who has written extensively on the wine industry in B.C.
"It is unlikely that all they are going to do is grow grapes – they will surely put a winery on it," he said.