A Chinese rice company has defaulted on loans it used to purchase the Bellisimo Vineyard estate in Sonoma County's Knights Valley, according to public records.
The lender, Transamerica Life Insurance Co., has initiated foreclosure proceedings against China Organic Agriculture, which acquired the property in 2008 for $14.8 million.
China Organic, which had sought to import Sonoma County wines to China, borrowed $8.5 million from Transamerica to acquire the vineyard property and luxury home west of Calistoga.
It missed its first payment on June 11, according to public records. Transamerica filed a default notice on Sept. 9, stating that China Organic was delinquent on its payments, in the amount of $508,373.
"I think they're just trying to figure out where to go from here," said Will Densberger, a real estate agent with Pacific Union, which handled the 2008 sale.
The default by China Organic is the latest sign of financial stress within some segments of the North Coast wine industry after a slowdown in wine sales during the recession.
Since the start of 2011, the owners of at least 17 vineyard properties in Sonoma County have defaulted on their loans, according to public records.
Densberger, who is no longer connected with Bellisimo, said the economics of the wine industry have changed since China Organic purchased the vineyard property in 2008.
"They purchased the property right after the peak," he said.
The vineyard is older and probably approaching the end of its useful life, Densberger said.
"Three and a half years ago we were in a completely different market than we are today, and to completely replant that vineyard would cost $2 million, maybe $3 million," he said.
The Bellisimo Vineyard property spans 153 acres, including 75 acres of vineyards producing chardonnay, merlot and cabernet grapes. The vineyards yield 260 tons of grapes per year, which are crushed to produce 15,000 cases of wine, according to the vineyard's website. The website also lists $450,000 per year in revenue from Ledson Winery and Vineyards, Dry Creek Vineyard and E&J Gallo Winery.
The property value was assessed at $7.5 million in 2011, according to RealQuest, a property information database.
A listing on a vacation home rental website advertised a seven-bedroom rental on the property for $750 to $850 per night. On the property, a tennis court and 53-foot infinity edge pool overlook the vineyards.
Phone calls to China Organic Agriculture were not returned Monday. Transamerica representatives said they did not have knowledge about the property.
News researcher Janet Balicki contributed to this report.
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