Clippers Grape Expectations: Inside Charles Hustle Banks' $200 Million Wine Portfolio

**Buddy Mignon** · 09-21-2016

Wow!!! Riddle me this??? How does Charlie Hustle borrow money from Jim to build a 200 million wine empire, yet Jim doesn't make a ing dime?. Not only that... he loses money.

In 2010, investor Charles Banks and billionaire real estate and sports entrepreneur Stan Kroenke dissolved their joint ownership positions—not altogether amicably—in a high-profile, ultraluxury lifestyle portfolio that included Napa’s Meadowood Resort, The Napa Valley Reserve and that paragon of wine-collector frenzy, Screaming Eagle Winery. Banks, now 48, would soon prove that there are indeed third acts in American lives.
As the founder and managing partner of Terroir Capital, which manages about $200 million of assets in hospitality and wine, the Atlanta-based Banks has gone on a largely below-the-radar buying spree over the past five years that has given him a mixed shopping cart of winery holdings from California to France to New Zealand. They include a worldwide, 150,000-case value brand from South Africa (Mulderbosch), a faded doyenne from Napa Valley (Mayacamas) and tiny, collector-cult iconoclasts such as Sandhi and Wind.

If the thread binding these disparate wineries isn’t entirely evident to outsiders, it is as clear as a Chablis to Banks. “We are looking for definitive projects,” he says. “We always ask, ‘Can we be a game changer here?’ ” He is, to hear him tell it, the wine world’s Man With the Plan.

Banks’ self-confidence was already firmly grounded back in his 30s, when he was known as the guy seemingly bent on the creative destruction of Screaming Eagle. He was an outsider to the wine establishment then, a moneyman from CSI Capital Management, whose high-profile client roster included NBA stars such as Kevin Garnett. True, he had already founded luxury-priced critics’ darling Jonata Winery in partnership with billionaires Gerald Levin and Arnon Milchan. Six years later, in 2006, Banks recruited Kroenke to buy Screaming Eagle, which produced one of the most expensive wines in the New World. Banks was not exactly paralyzed with awe.
After filing the deed to Screaming Eagle, “I drove straight to David Abreu’s yard,” he recalls, and told the Valley’s most prominent viticulturist to roll out his bulldozers. “We are taking out 70% of the vineyard there, day one.”

Abreu was dumbfounded, but Banks was adamant: “Start the bulldozers.”
“I tore out 70% of the grapes because 80% of the grapes were being sold to other producers anyway,” Banks explains. “It was a 59-acre vineyard, and only a couple of acres were going into Screaming Eagle. And if I tore out the vineyard, I got out of the evergreen contracts on those acres.”
More important, “there was the perceived scarcity. We weren’t actually going to make less wine; in fact, we were going to make more wine. But everybody thought we were going to make less because we tore out those vineyards. It allowed us to triple the price in three years and more than double production, and nobody knew. Screaming Eagle was at $250 a bottle when we bought it, $850 when I got out. And production went from 500 cases to about 1,500.”

http://www.forbes.com/sites/richardn.../#59c1061b6a05