McHenry Vineyard CZU Lightning Complex Fire Rebuild History

Right at the end of August we bottled our 2023 vintages. The 2023 harvest was our smallest on record. Potentially a delayed result from the fire. We had rounded out our fruit with purchases of Pinot noir from Beauregard Ranch and Coast Grade Vineyard (all nearby vineyards in Bonny Doon). As a result, we will not have 2023 "Estate" offerings. Instead, we have blended fruit from all three of these premium vineyards to make a one of a kind "Three Ranches" blend. It is a showcase of this fantastic appellation. We also produced a "Barrel select Reserve," selected from only Billon barrels, with a slightly higher mixture of new oak. Brandon worked the bottling line with Ryan Beauregard's crew. This year we used his own bottling line, vs bottling via a portable bottling truck set up. We will release this wine sometime in 2026.

The 2025 harvest was spectacular. We harvested on two separate days, with sugars in the 23-25 range, with around a 3.3 ph. We are excited for the potential of this vintage! (2025 should be a stand out year for Santa Cruz Mountain wines in general). We have about 12 barrels. We will be producing an Estate, and an Estate Swan Clone for the 2025 vintage, like previous years. We are grateful for all the continued support from Gerardo's crew, Prudy Foxx/Foxx Viticulture, and Ryan Beauregard/Beauregard Vineyards. As in years past, we poured at the Bonny Doon Art and Wine Festival, which is a fundraiser for the local elementary school.

We are making slow progress on the rebuild permitting issues. There are a number of non-rebuild related permitting tasks associated with officially transferring the business to Annie and Brandon, which we have been delaying as we worked to settle the insurance claim. It is a tangle of regulatory tasks that need to be properly timed, along with the rebuild permitting tasks. This will become more of a focus for Brandon over the winter months.

At long last, we finally were able to install the sod at the pool! We will be working on some landscaping improvements around the pool and house, and finish putting up the last bit of fencing around the pool in the late Fall. We were also able to install an EV charger for the new electric Monarch tractor. There's still lots of general work to do to continue clearing the land of debris and maintaining fire clearance, wich we will be focused on during the winter months.

Progress on the rebuild was stalled in the Spring and early Summer due to other life priorities. Brandon's mom Claudia became ill in the late winter, and passed away in the Spring. The family spent a lot of time together with Claudia (and Brandon's dad Mark), during this time. Annie was also busy teaching, and Brandon coached both boys in little league on two separate teams. The time spent in Bonny Doon was for vineyard maintenance, general property maintenance, and fire clearing and clean up. The vineyard is quite healthy, and we expect a fantastic and prolific harvest this year.

In 2022 we had applied for a CORE voucher (a California program to help farms electrify their operation and vehicles), to be used for an electric tractor. The voucher paid the majority of costs for the tractor, with certain stipulations. Unfortunately, the company we ordered from (Monarch) had performance issues with the front loader (which we had ordered). We hadn't heard from them in quite some time. However, in late Spring we heard back with a reformulated offer for a non front loading tractor. The deal was updated and we secured a new Electric tractor. We don't think it will replace all the functions of our Kubota, but we can use it to reduce our use of diesel for some types of work over the coming years. If we expand the vineyard in the future, it will be nice to have two tractors. We look forward to trying it out. The tractor was delivered in July, and we still need to install a charger for it.

We have yet to resume the pool project at "Grandma's House," but will hope to do so this year. We did install new locks, doorknobs, and a lockable door on the master bedroom closet (so we can store our own possessions if/when we rent that house for short term rentals). We are thankful to our friend Jason for helping us with these tasks. This Fall we hope to finish the pool project and make other small improvements that could enable short term rentals. Lastly, after a tough Spring, our family focused on enjoying the Summer time-off for Annie and the kids, with trips to Milwaukee, Yosemite, and Legoland.

During the winter two significant things happened in regard to the rebuild. The first is that we were finally paid for some of the Business Income Loss and Extra Expenses for the Winery insurance claim. This is the last major component of the Winery claim. Although we were not paid exactly what we had submitted, nonetheless it was a major step toward closing out that claim. We'll have to examine whether the remaining claimed items are worth fighting for. Secondly, we completed an updated Site Plan and submitted it to Santa Cruz County. Unfortunately, at the end of 2024 the organization that was contracted to handle fire victims claims is no longer handling fire rebuilds. Now we will need to go through the regular County process. However, they have indicated there is still expedited treatment for fire victims.

Our updated Pre-Clearance application was received and processed. Unfortunately we did not pass the Fire clearance inspection. Brandon spent weeks trying to contact Cal Fire to investigate why. It appears now, given the increased scope of the potential project (a larger winery building), that our main driveway is not wide enough. We seek to appeal this decision. In regard to our Geological review, we passed again. Our mitigation plan for the Rock Fall Hazard seems to suffice. We also did not get a pass from the Environmental Health team. Unbeknownst to us, given the project is larger in scope, they require a full Septic design and permit in order to pass Pre-Clearance. To do this, we also have to hire a Civil engineer for a drainage and excavation plan. The combination of these items would cost tens of thousands of dollars. We had assumed these expenses would be incurred after Pre-Clearance, and before we would apply for Building permits. But, we are wrong. It is not much of a "Pre" process if that is the case, in our opinion. Lastly, since the scope of the winery building has increased beyond 10% of the previous square footage, we also need to update our Use Permit and address other County permitting issues. In short, we have not passed Pre-Clearance at this time.

On the business side of things, we had to deal with a minor emergency. Our longtime storage warehouse (California Wine Transport) in San Jose, which had been purchased by another company one year ago, announced a 5X increase in storage cost with less than a one month notice. Two months later, they announced they would be going out of business and gave us less than one month to vacate. Finding affordable storage for wineries of our size was quite a challenge. But we secured a place in Sonoma, at Groskopf Warehouse. We are grateful for them, and the expedited help we received to move all of our wine quickly.

The vineyard continues to thrive, and we had a good bud break and fruit set. We are going to barrel age the 2023 a bit longer, and will bottle later in the year. Unfortunately we were not able to install the sod at the pool before the rain came. We'll look to finish that project later this year. There is still a ton of cleanup around the property, and loads of material to burn, which is a constant focus during burn season. We are focused on some improvements to the "Grandma's House," including installing new locks and doorknobs and installing a new lockable door in our master bedroom closet, in case we explore using the house for short term rentals. The prospect of doing short term rental is a whole other can of worms to figure out.