December 26, 2001

These Cave Dwellers Have Lots of Money, As Their Elaborate Wine Cellars Prove

By SUEIN L. HWANG Staff Reporter of THE WALL STREET JOURNAL

ST. HELENA, Calif. -- For thousands of years, man lived in caves. Recently some very wealthy men have spent millions digging their own. The locale is the verdant hills of California's Napa and Sonoma counties, a horticultural paradise where people lavish money on estates that celebrate and sell fermented grapes. The caves are engineering and architectural marvels, with stereo systems, limestone libraries, heated floors, catering kitchens, vaulted ceilings and Italian statuary. The competition among cave dwellers is intense. Like Europeans, who have fermented wine in caves for centuries, California vintners agree that nothing beats a cool, damp cellar for aging wine. The earthen enclosures offer naturally chilled air and enough humidity to limit evaporation. They also are a come-on for visitors willing to pay $100 a bottle for boutique varietals. And because they can't be seen by neighbors, wine cellars skirt debate about above-ground development. You can dig a cellar here without a building permit.

Still, the latest Napa and Sonoma caves are as much about making an impression as they are about controlling climate. "If you have a cave, you are a man," says Dan Lynch, a 60-year-old Silicon Valley investor and owner of Lynch Winery, in Napa. Down the street from Mr. Lynch's vacation home in St. Helena, workers are hollowing out a hillside belonging to his longtime associate Chuck McMinn, chairman of Covad Communications Corp., a broadband-communications company in which Mr. Lynch was the original investor. Inside the mountain, a 14,000-square-foot, semicircular cave is taking shape for Mr. McMinn's Vineyard 29 winery, including a capacious tasting room supported by Roman columns and a wood-beamed ceiling.

Mr. McMinn, 49, declines to say how much the cave is costing him, but he says he expects the results to be well worth it. "To me it's really about the ambiance and trying to set the right tone," he says. "You don't just see barrels at the entryway; you see barrels that recede into infinity." Mr. Lynch, for his part, is stuck among the cave-less because of the recent battering of his technology holdings, which include Covad, now in bankruptcy proceedings, and Exodus Communications Corp. Mr. McMinn, who retired from Covad in 1999 to vineyard life in Napa, sold a fortune in Covad shares before the dot-com bubble burst. His friend Mr. Lynch, a board member, says Mr. McMinn's take was "way over $100 million," but Mr. McMinn won't discuss it. He says his cave is being financed by the proceeds of several Silicon Valley investments over the years. He was brought back as Covad's chairman last November, nine months before Covad's Chapter 11 filing. Now, as Mr. McMinn's crews dig, Mr. Lynch watches from the sidelines. "I have cave envy," Mr. Lynch confesses.

Fifty feet underground, Amalia Palmaz presides over one of the most ambitious digs in Napa Valley.
Soaring overhead is a 50-foot-high, 75-foot-wide dirt dome reminiscent of the interior of an ancient mosque -- a feat so novel that an article describing its engineering was recently published in a scientific journal called Rock Mechanics in the National Interest. Over the growl of rock-cutting machines, Ms. Palmaz, an elegant Texan whose surgeon husband, Julio Palmaz, co-invented the cardiovascular stent, points out the future sites of a wine-tasting room, which will be lighted by windows punched through the hillside. She envisions a bottling line, water-treatment plant and an elevator that will one day carry equipment to a wine-storage chamber 11 stories below. When complete, Napa's new Palmaz Winery -- all 50,000 square feet of it -- will be completely underground. "A geological achievement," she says. North on Napa's Silverado Trail, 63-year-old Gianni Paoletti, of the Paoletti Winery in Calistoga, is finishing up his terra-cotta-colored grotto, wired for sound and lined with 22 marble statues from Italy. Commissioned by Mr. Paoletti, a Los Angeles restaurateur (Peppone in Brentwood), the statues are of such figures as Leonardo DaVinci, Ronald Reagan and Mr. Paoletti's best friend, Jerry Weiner, a Dallas insurance executive. Mr. Paoletti also has plans to install a 12-foot wall of illuminated stained glass showing a medieval Italian scene of a king's court, no king in particular. "I love beautiful things," Mr. Paoletti says. Mr. Paoletti's 7,200-square-foot cave moved a poet-friend to verse:

Beautiful being magnificent majestic music
Inspiring inside my heart
I ride through the
Moist misty wetness.

Digging an even bigger hole is Darryl Sattui, the son of a taxi driver. He made his millions from St. Helena's V. Sattui Winery, which he started. Mr. Sattui's men are clawing horizontally into his hillside and going 25 feet down into the soft earth. For the past six years, Mr. Sattui says, he has plowed about $6 million of his savings into building an 89,000-square-foot castle with three floors of wine cellars, more than 60 rooms and -- for authenticity's sake -- a 1,000-square-foot medieval torture chamber to show off his maces, manacles and racks. He has brought in 70 huge containers of handmade European bricks -- 350,000 of them -- to build his 14th-century castle, drawbridge, parapets and loggia. He hopes his new winery, which is to be called Villa Amarosa, will be finished in six more years. "It's probably stupid," he admits, "but I don't care, as long as I don't go bankrupt."

The recession has cooled real-estate prices but has yet to dent demand for new caves here, keeping busy a small army of diggers, geologists and engineers who otherwise would be working on subways and utility projects. Napa's cognoscenti still wait months for cave-building legend Alf Burtleson, veteran caver Glen Ragsdale, or up-and-comer Don Magorian to squeeze them in. Others settle for one of six new wine-caving firms that have entered the business. "Anything that has a waiting list has to be profitable," says Theodore Richardson of Anderthal Cave, of Healdsberg, Calif., which diversified into wine caves from sewage-treatment work two years ago. Not just anyone can design a wine cave, oenophiles say. Creating that romantic, aged look takes experience and the right eye. Just look at the warmly lighted walls of Far Niente in Oakville, an early wine-cave builder that has just completed a 10,000-square-foot expansion. Director of Winemaking Dirk Hampson says the winery dug individually recessed lights and buried more than 60 service pipes in the floor to protect the integrity of the cave's horseshoe shape. Or consider the new bathroom walls inside the cave of Oakville's Vinecliff Winery, which exude a special, Venetian glow from the painstaking, 28-layer application of Italian plaster. One of the most coveted caves among Napa-ites in the know is the one lying under Araujo Winery. Thanks to a fluke of local geology, Araujo's cave doesn't require any additional concrete support, allowing the natural rock look to shine through.

Most cave dwellers abandoned their caves eons ago. The damp chill that young wines love so much isn't nearly as catalyzing for human beings, especially ones clad in strapless dresses and open-toed pumps. So radiant-heated floors are a must in caverns where entertaining goes on. Caves are conducive to claustrophobia. John Lail, the designer whose firm drew up the plans for Mr. McMinn, Ms. Palmaz and Mr. Sattui, also advises wineries to locate entertainment areas near cave entrances, because "some people get paranoid and need to get out," he says.

Staglin Winery, in Rutherford, to make its cave less cave-like, is installing all-glass doors at the main entrance to its nearly finished cave to open bright views onto the Napa Valley below. The Staglin family, which owns the winery, has also invested heavily in lighting systems lining three sides of the cave to eliminate the dark, creepy look only a bat would love. "We used to be cave men, but we got out of caves," says Shari Staglin, who admits to finding most caves a bit too dark. "There's got to be a reason for that."

Write to Suein L. Hwang at suein.hwang@wsj.com1