Harvard investors buying up local vineyards
Between July 2012 and February 2014, Harvard representatives have knocked on doors and quietly spent $61 million for 10,176 acres in Santa Barbara and San Luis Obispo Counties. Image from Farmland Investor Center.
With the California wine market on a cyclical upswing, Harvard Management Company, the Boston-based investment shop for Harvard University’s $33 billion endowment, is quietly assembling a Central Coast vineyard play, reports Farmland Investor Center. The area—located between San Francisco and Los Angeles—is rising in stature as a wine grape-growing region, with Wine Enthusiast magazine dubbing the Paso Robles American Viticultural Area as last year’s “Wine Region of the Year”.
Mercator Research believes Harvard is making its Central Coast purchases via Brodiaea Inc.—a Delaware domiciled entity formed in June 2012, the report says. In February, Brodiaea paid $10.1 million or $1,322 per acre for a 7,622-acre cattle ranch in northeast Santa Barbara County. Brodiaea has spent $61 million so far to acquire 10,176 acres in Santa Barbara and San Luis Obispo Counties, estimates David Hamel, an appraiser in Santa Maria.
Some market observers have wondered if Brodiaea was a well-timed water play in light of the region’s worsening groundwater shortage. Last August, the San Luis Obispo County Board of Supervisors adopted an “urgency” ordinance that prohibits any new development or new irrigated crop production unless the water it uses is offset by an equal amount of conservation. Water levels in the Paso Robles Groundwater Basin have fallen sharply in recent years—two to six feet a year in some areas—causing wells to go dry and forcing many vineyards and rural residents to drill deeper wells, according to local accounts. The irrigation development restriction remains in place through August 26, 2015. The basin supplies water for 40% of the county’s agriculture sector.
Cal Coast News reports that local Matt Turrentine, a proponent of creating a Paso Robles water district, has quietly been directing investments in large San Luis Obispo County parcels of plantable land, paying top dollar and using funds provided by Harvard University’s $33 billion endowment. Turrentine is a member of the board of directors of the Paso Robles Agricultural Alliance for Groundwater Solutions (PRAAGS), a group comprised primarily of wine grape growers, winemakers, ranchers, and other agricultural interests.
And again, we get screwed
Why doesn't Harvard use their billions to educate?! The bell tolls for "old school" universities.
They do! This is treated like any other investment in their portfolio where they expect their holdings to increase in value over time. The "earnings" on their investments go towards maintaining their infrastructure, student financial aid, etc.
That's obvious and not my point! $33B could forever change the trajectory of education in this country for the better. Harvard could be leading the charge on innovating higher education instead of protecting their endowment and legacy. The ROI on higher education from a student's perspective is abysmal. Disruption will happen in the industry… either Harvard leads it to protect their future or it will happen to them and their future will be uncertain (but they will have wine for comfort).
And again, we get screwed
Why doesn't Harvard use their billions to educate?! The bell tolls for "old school" universities.
They do! This is treated like any other investment in their portfolio where they expect their holdings to increase in value over time. The "earnings" on their investments go towards maintaining their infrastructure, student financial aid, etc.
That's obvious and not my point! $33B could forever change the trajectory of education in this country for the better. Harvard could be leading the charge on innovating higher education instead of protecting their endowment and legacy. The ROI on higher education from a student's perspective is abysmal. Disruption will happen in the industry… either Harvard leads it to protect their future or it will happen to them and their future will be uncertain (but they will have wine for comfort).