As the Crimson reported yesterday, Harvard has purchased around $60 million of vinelands in California through Brodiaea, a fully-owned company.
Harvard Management Company, the in-house management firm that oversees the University’s $32.7 billion endowment, has continued its strategy of investing in natural resources by purchasing millions of dollars’ worth of vineyard land in central California, according to University tax filings and recent reports of purchases in the region.
Brodiaea, a Delaware-based corporation that is entirely owned by the University, paid $10.1 million in February for more than 7,500 acres in Santa Barbara County, according to a report last month by the Farmland Investor Center, a market research firm. David Hamel, an appraiser quoted in the report, estimated that the University, through Brodiaea, has so far paid $61 million for more than 10,000 acres in the Santa Barbara and San Luis Obispo Counties.
Kevin Galvin, a spokesperson for the University, confirmed that HMC owns the land described in the reports. Galvin declined to comment on how much was paid for the acres.
HMC’s new holdings come in a region where the quality of land and grapes is rising, according to Michael Fritz, the author of the story which first reported the purchases. “If you can get in in the early days before the land prices skyrocket, you’re better able to harvest returns as time passes,” Fritz said in an interview with The Crimson.
Farmland Investor Center wonders “if Brodiaea was a well-timed water play in light of the region’s worsening groundwater shortage.” As the market research reporter writes,
“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.”
According to Harvard’s manager there, though, “the timing of Brodiaea’s irrigated land purchases in San Luis Obispo County and the subsequent moratorium on new irrigation development was ‘pure coincidence.'”