Valuing Winery Caves
The history of underground wine storage extends back at least to the Roman Empire. Roman winemakers were aware that the even temperatures and higher humidity below ground protected the wine from the extremes of temperature and changes in humidity on the surface. In the Napa Valley the first wine caves were built for the same reasons in the late 19th century using picks and shovels. The passage of Prohibition put an end to cave development for several decades.
Modern wine cave construction began again in the late 1960s using tunneling equipment instead of manual labor. Today additional reasons for constructing caves include reducing the use of valuable agricultural and scenic lands for building sites and the economic and environmental savings of natural air-conditioning in a time of expensive energy. Given the right geology, the surrounding rock and soil helps keep caves at 60 degrees of temperature and 80% humidity with little, if any, outside energy. If the site is too flat or the soil too soft for digging a cave, a large excavation is dug, a concrete structure built in the excavation and then the entire structure is covered over with earth. For more information on wine cave construction you can visit www.winecaves.com.
The first wine caves in Napa Valley were simple, unfinished tunnels used for barrel storage. Today wine caves have become more elaborate both in finish and function. The construction of a wine cave is a complex undertaking, including geological investigations and oversight by the State of California Division of Mines and Tunneling for the underground portion in cooperation with the local building and fire departments for the portal itself or any electrical, plumbing or other features. Disposing of the spoils, or tailings, created by the excavation can require special procedures and permits. Use of a cave for purposes such as a tasting room or wine production requires a Use Permit from the local Planning Department. At least two major wineries are constructed totally underground in caves as large as 150,000 square feet in size.
Whether simple or elaborate, there are approximately 150 caves which are an improvement to real property in Napa County and which are subject to assessment for property tax purposes. Our office uses a cost approach to value caves. We request from the owner the entire cost of the project including, but not limited to, permit, engineering and architect fees, construction interest and actual construction costs including spoil removal and placement. Our field appraisers review these costs to insure that the value enrolled falls within a reasonable range.