Napa at Last Light

by James Conaway

  Less than two centuries ago trees grew so densely on the western ridge that a raindrop could take a week to reach the earth. It’s difficult to imagine this valley as one of the southernmost reaches of the temperate rain forest that starts in Alaska, but it is. As recently as the nineteenth century grizzlies romped here, scooping salmon and steelhead from the Napa River, and its tributaries ran year-round in a paradisiacal setting brimming with groundwater and wildlife.

  “We don’t have defenses here against raw capitalism. It encroaches on the common welfare, adversely affecting water, air, noise, and traffic. And elected officials do nothing.”

  CHAPTER THIRTEEN:

  The Riddled Rabbit

  1.

  HALL Wines sits at the south end of St. Helena, its welcoming gesture a thirty-five-foot, six thousand six hundred-pound, blindingly stainless steel rabbit leaping from among vines next to Highway 29. The sculpture is full of holes, as if its creator anticipated the chorus of public derision that fell like karmic buckshot on his creation as soon as it was unveiled. According to a book produced by the Halls its name is Bunny Foo Foo, after a character in a children’s poem. Grazers in Napa vineyards are in fact hares, not rabbits, but personal choice is as sacred in California as redwoods and surfboards, and more malleable.

  Earlier, the architect Frank Gehry had come up with a design for an undulant shell, a photograph of which appeared in the New York Times showing the famous architect and the Halls next to a maquette. It resembled a doll’s mansion topped with crumpled burlap, but the Halls canceled that project without explanation. The winery that was eventually built looks more like an office building with environmentally correct accoutrements.

  It is LEED certified, and in the foyer hangs a twelve-foot bespangled black satin medallion made of found material that could be titled Elvis Dreams of Microorganisms. Upstairs, red glass globules dangle, apparently signifying wine but looking more like plasma. The winery also boasts a tunnel lined with fancy bricks from the Habsburg Empire that the Halls brought back with them from Austria, after Kathryn’s diplomatic mission for President Clinton was over.

  And that’s about all visitors to HALL Wines are presented with, other than a costly tasting of another overripe cabernet sauvignon reaching for cult status, and the Halls have indeed received one 100-point Parker score. The Halls cleared a trailer court from this site before they built the winery, eliminating a significant portion of St. Helena’s rare affordable housing. The curious may buy their book, A Perfect Score: The Art, Soul, and Business of a 21st-Century Winery, from a press that also publishes Newt Gingrich and Rand Paul.

  The book informs readers that “despite homegrown political complications”—citizens’ complaints—“we love it here.” Weekends begin when they get into their convertible with their two Cavalier King Charles Spaniels, and head toward their favorite trailhead on the outskirts of Calistoga. They hike up the hill. “The valley stretches out in front of us like a sprawling vine . . . What a fantastic way to start the day!” It’s far from a property they own in the eastern sector of the county where twenty-eight thousand trees await felling.

  Craig skims the surface of past financial problems in the book, mostly those related to the 2008 recession and to wine, with this aside: “Kathryn always says that Leverage is my middle name.” Anyone wishing to know more about him, and the origins of his wealth, is left with mostly fawning stories from the Texas press and public documents. Peer into that cellar hole of corporate remainder, at the bottom of an exceedingly twisty staircase, because it’s worth the effort when considering the impact Hall has had on his chosen valley, one that far exceeds the spectacle of Bunny Foo Foo.

  * * *

  An epileptic child, Craig Hall grew up in Ann Arbor, Michigan, “a hub for left-wing activism” according to D magazine, a quasi-promotional glossy out of Dallas. Craig had to take phenobarbital, a depressant, for his epilepsy and tended to get injured in sports—breaking an ankle in tryouts for high school football, breaking his nose in tryouts for baseball. While he speaks of times when he wandered alone in the woods, dreaming of being a poet or perhaps a social worker, there was an altogether different side to him: an eight-year-old who turned a half-dollar investment in soda-making syrup into a thirty-seven-dollar profit, and who later took on multiple paper routes and lied about his age to sell knives door-to-door. Craig told D that by the time he was a high school senior he had saved up $4,000.

  He bought a scruffy rooming house and let rooms to University of Michigan students caught in an inflated rental market, then pooled two hundred dollars from fifteen acquaintances, and repeated the move.

  His poetic aspirations and his early belief that business was boring and ignoble had apparently been reassessed.

  Craig’s parents took him to a psychiatrist because of his obsession with money. “I messed with the guy,” Craig claims, telling the psychiatrist that all the images he showed Craig, in an attempt to elicit meaningful responses, reminded him of dollar bills. Craig added, “It was fun.”

  What’s the reader to make of a boy so sure of himself that he toys with a grown medical professional? Was the kid who had wandered in the woods still there, but in the new, protective clothing of budding entrepreneur? How did the psychiatrist interpret Craig’s bizarre reaction to a simple psychological test, and were his parents reassured, or distraught? Did their son care? Most striking is the distance between the savvy protagonist of this self-serving tale and the rest of foolish humanity.

  Is it possible that Craig wasn’t “messing” with the psychiatrist at all, but telling the truth, that everything Craig looked at did remind him of money?

  Intent on being a millionaire, he dropped out of college. University degrees matter in Ann Arbor, but he eventually moved to Texas, where the opposite is true. By that time he had raised millions for apartment complexes near Detroit, and diversified quixotically into for-profit health care and even racquetball. But real estate was the real deal for Craig, and Dallas the place to be.

  He teamed up in 1984 to buy the Dallas Cowboys from oilman Clint Murchison Jr. By then Craig and silent partners owned thousands of apartments and millions of feet of office space. They had close to five thousand employees, if D magazine is to be believed. They also carried huge debt. The tax shelters that had made all this possible in the first place were sensibly withdrawn by Congress in 1986, and investors wanted their money back. Craig sold his share of the Cowboys and other personal assets, but it wasn’t enough.

  The New York Times defined Craig’s predicament: “The fragility of Texas’ real estate market was underscored last spring when . . . Hall, once the nation’s largest real estate syndicator, filed for protection under the federal bankruptcy code.” Real estate syndication is the gathering of passive investors willing to risk money in buying, operating, and selling property for a lot more money, and it remains Craig Hall’s real profession.

  His 1992 filing for Chapter 11 protection prevented the government from seizing the rest of his assets. The Resolution Trust Corporation offered to sell him some of the mortgages his partnerships had placed with banks, but at deep discounts, so he had to raise $102.5 million in three months to bring it off. “There was a lot of blood on the table,” Craig would later say, and it wasn’t his. A former investor told D, “There was a time I’d just as soon not be behind the wheel when Craig Hall was crossing the street,” implying that he would have run him down.

  A reporter for the Dallas Morning News later wrote, “Mention the name Kathryn Hall to many in Dallas, and the universal response is a glowing smile and a kind word. But mention the name Craig Hall, and some people wince, voicing adjectives such as ‘sleazy’ or ‘slimy.’ ”

  Craig met Kathryn Walt Cain, a lawyer and once candidate for mayor of Dallas, and they lunched at an Indian restaurant, exotic in Dallas. Craig married her. By then he was collecting investors to buy more Dallas real estate, installing in it art that now belonged to both of them, and branching out again into u
nrelated ventures—oil and gas, computer software, even a blood laboratory. The Hall Office Park near Dallas was now his as well. “No one could understand why Hall was developing on farmland . . . ,” said D magazine. “But his instincts about the path of growth were dead on.” And easily transferable to Northern California.

  In Napa, the former poetic, untutored dreamer would find self-realization in the amorphous role of “vintner” and a process was by now numbingly familiar: husband and wife desire a small vineyard and a few cases of wine to further enhance their lives—and set out to achieve this at any cost. With the Halls, this blossomed into something larger than most. First they bought the old Sacrashe Vineyard in the hills of east Rutherford, tunneled into the mountain, and built a showy house designed by David Schwarz just up the road from the Auberge du Soleil, where luncheon could be had overlooking a landscape suggestive of Burgundy.

  Suddenly Craig Hall cared about terroir, that other kind of real estate. He bought the site of the old wine co-op south of St. Helena on the visitor feeding tube of Highway 29, which came with a grandfathered right to bottle a lot of wine, where HALL Wines would rise. And he began talking like other vintners, rhetorically asking himself if, in two hundred years, his distant Dallas real estate empire would still be there.

  He answered himself: “I don’t know. But Thomas Jefferson used to drink Lafite Rothschild, and I’ve gone over to the estate in France where they still make that wine. The idea that you can build a business that will endure over time and make a difference to people and their experiences—that’s what it’s all about.”

  Making a difference “to people and their experiences” is what real estate development and tourism are all about, not agriculture. That is hardly a premier cru sentiment, and certainly not Jeffersonian, although it is good public relations and represents the new imperative in Napa Valley: Show reverence for the past and for the future, and ruthlessly exploit the present.

  2.

  The assessor’s records indicate that HALL Wines’ LLC owns the thirty-three-acre winery site on Highway 29 valued at a measly $5,205,231, and the vineyard at an even more measly $468,364. But the structure was valued at $56,331,205, so the total, with all the fixtures thrown in, was about $80 million. Kathryn Hall wasn’t new to her vintner role when the winery opened, having—with her brother—obtained an Alcohol Beverage Control Board license to manage vineyards and make wine near Ukiah, in Mendocino County. HALL Wines shares an ABC license with the Halls’ smaller winery in the hills above Rutherford, bought after flipping two office towers in downtown Dallas. According to D magazine, Craig sold these fully leased for millions in profit.

  The Halls’ first winery and the house in Rutherford are owned by 199 Rutherford Associates LP, registered in Dallas. The limited partner was Mike Reynolds, variously presented over the years as HALL Wines’ winemaker, general manager, president, exalted multipurposer, and finally “developer.” In 2007, on the eve of recession, another entity was formed for the Rutherford property and deeded over to a new LLC, Hall 60 Auberge, also registered in Texas.

  That money was rumored to have been provided by First Republic Bank, which had financed the failed Lake Luciana and Aetna Springs projects up in Pope Valley years before. Hall had already acquired the long-defunct cattle operation above Capell Creek and rechristened it Walt Ranch, but Walt Ranch was owned by neither the Walts nor the Halls, but by a company called Hall Brambletree Associates LLC, a real estate syndicate whose members typically did not have to be identified or enumerated.

  Hall’s intention, he said, was to plant vineyards, not to build so-called ranchettes like those going onto another of his vineyard development sites up in Alexander Valley. Mike Reynolds was in charge there, too, as well as at Walt Ranch over the mountains in eastern Napa County, long the sniffing ground of Texans.

  Reynolds has an MBA from UC Berkeley and a degree in winemaking and viticulture from UC Davis, thus two-upping his boss, who has neither. Earlier, Reynolds had worked for the notoriously difficult Jess Jackson. But before that Reynolds worked in an entirely different environment—Schramsberg—as winemaker and then general manager. Within old Jacob Schram’s redoubt Reynolds was known as bright and business-eager, but that he would come to sit on the board of the California Wine Institute and belong to the Young Presidents’ Organization would have surprised his colleagues at that time. And likely no one at Schramsberg could have dreamed that Mike would one day end up as the partner in the wine business of a Dallas real estate developer.

  Winemaking is a profession once associated with art, even nobility. But a path to wealth beginning at wine’s back door had opened up. Developers might still be making themselves respectable with wine, but now winemakers could—and eagerly did—move in the opposite direction. Such an endeavor would once have been considered déclassé, but viticulture had become a gloss for almost any profitable transaction, even if in direct conflict with the vision that had inspired Jefferson and created the agricultural preserve in the first place.

  The Hall Financial Group, the umbrella over Hall’s various operations, registered in Texas, includes HALL Wines and WALT Wines. It apparently also provided financing to two downtown Napa boutique hotels and the Senza Hotel on the northwest side of the city of Napa, with parks, fountains, Japanese iris, boxwood, wisteria-draped arbors, and cherry trees.

  An early study of Walt Ranch showed freshwater wells, eight miles of seasonal roads, and almost ten miles of hardened roads much like those Hall put in at his Alexander Valley development in Sonoma County as preparation for the ranchettes. There vineyards provided both justification for the development and selling points for highly profitable residential real estate. Again the name listed as the developer was Mike Reynolds. Preliminary studies by the Hall Financial Group suggested that this Sonoma model was now being followed in Napa County.

  Craig Hall suffered a severe economic setback—his second—said to be due to over-leveraged real estate, wrong-way hedges, and a cratered oil and gas venture. He had recovered by 2010, perhaps assisted by the bank bailouts at the end of the Bush era, but this, too, is something of a mystery. His eighteen-story, 500,000-square-foot building, the first in downtown Dallas after Hall’s One Arts Plaza, was to house Hall Financial Group, as well as other financial clients. Additional phases were to take the project’s value up to about $750 million.

  Meanwhile, a lot of money was flowing in, and a lot of money was flowing out. Craig Hall had also told D magazine: “I have a bad habit of putting things on steroids. You could drop me on Mars, and I’d be starting businesses.”

  And people in Napa County were indeed wondering if something otherworldly hadn’t landed in their midst.

  CHAPTER FOURTEEN:

  The Grandmother Tree

  Someone’s mind is on fire to possess, uproot, subdue,

  While another riding a bulldozer, hums a little tune to himself . . .

  The days are becoming shorter, not simply because it’s winter.

  Oh poor trapped earth, the sun grips the map of your death.

  —Leonore Wilson, “Western Solstice”

  1.

  He’s the athletic-looking fiftysomething with salt-and-pepper curls that dangle, Nero-style, over a broad forehead. He wears the same sneakers and running pants he had on when he and his wife, Leonore, traversed the steep valleys of east Napa County to sit on the Eiseles’ front porch to discuss protecting Wildlake. But a powerful impulse to preserve land had been born earlier in Jim Wilson, just across the road from his house on little Capell Creek that he had built with his own hands.

  His glasses—squarish lenses—sit on the end of his nose, his soft, reasonable smile that of a man schooled in two poles of human endeavor: fermentation science and German literature. The sweatshirt’s left over from biking days when he rode thirty-six miles round-trip daily from their high valley to the Anheuser-Busch brewery in Solano County. He led Anheuser’s resource conservation team in trying to figure out how to save water and ener
gy, and was so successful that his “best practices” were adopted elsewhere. He even got the company to put up a wind turbine.

  He and Leonore had been college sweethearts who married young and moved into the trailer next door to her mother’s house on the family’s Capell Creek property. It sat at the end of a near-impossibly steep, winding driveway Jim poured himself, one that climbed past two valley oaks so thick of trunk and broad of branch that the Wilsons called them the Grandmother and Grandfather trees. He started building a house next to the trailer, and almost immediately Leonore had twin boys. Less than a year later she had another son, so while Jim framed and floored and fashioned a fireplace from stones he hauled up from the creek, she tended to three little boys in diapers.

  The family spent most of the time outdoors in the sunny, beautiful, untrammeled country all Californians hear about but relatively few experience, a remnant of the Napa County of the century before and the one before that. When not tending to home and family Leonore wrote poetry. After the main house was finished Jim built a second cunning little redwood “birdhouse” for doves, pheasants, and ducks. Not for eating but for playing with.

  He rode the thirty-six miles round-trip to work for many years, and when he was gone Leonore took the boys next door to her mother’s. She later taught English and creative writing at Napa Valley College, and published a book of poetry. Their sons grew up and moved away but still return regularly, often from great distances, and since the Grandfather tree died always take time to walk out into the meadow and stand in the shade of the Grandmother tree.

  Jim’s interest in mushrooms rivaled his interest in cycling. He knew well that the madrone trees on the property across the road were indicators of prime terrain for fungi. There he was shown by an old Tuscan also living on Capell Creek how to recognize boletes, Caesar’s, and chanterelles, and how to tell these and other types from those that can kill you, called death caps.