1st Wine Barrel Program Shipment!

This week I’d like to share some photos related to our personalized wine barrel program. The following pictures are from our partnered winery, Bombal & Aldao, where much of our wine is barreled. The personalize vintages of our first wine barrel program (from our 2007-2008 harvest) have officially been sent to barrel owners, who will be receiving their bottles soon. The above photo is of several barrels assigned to, and labeled with the name of, individual barrel owners. Each barrel contains the custom blend or varietal of each individual’s choosing. The next photo gives you an idea of what our cellar looks like. The following photo shows the custom hand-labeling of our barrel program’s bottles. Each label is customized to the specifications of the barrel owner, including their name, design, and any description or text they might want to appear. As a barrel owner myself, I’m personally looking forward to receiving my “Mathis Estates” bottles any day now! Our bi monthly newsletter is due out soon, and it’s packed full of Algodon Property updates. You’ll be very pleased with Gerhard Heusch’s new rendering of the Grand Center Court for Algodon Wine Estates’ tennis center. The one time dream of hosting Mendoza’s top tennis tournament, The Algodon Malbec Classic, is slowly turning into a reality. Look for our latest online issue of The Algodon next week! --Scott Mathis

Argentine Interview, AM Update, More Media, and Wine News…

I hope everyone had a memorable Memorial Day weekend! For those Spanish speakers (or Google Translate aficionados) check out our interview with Los Andes online published this week (the interview can also be found at AreadelVino.com). Los Andes newspaper is a huge publication, analogous to the New York Times of Mendoza. In the interview we discuss among other things our Algodon Wine, a bit of our history, and the fact that we’ve already invested approximately $25 million in our Argentine properties. The interviewer also touches on the world-wide economic downturn and its effect on real estate developments. I have always been very clear about my optimism regarding the future of Argentine real estate, and that I believe in the importance of diversifying personal investments outside of the U.S. economy and the U.S. dollar. In one of my favorite exchanges, the interviewer asks to what extent our Argentine developments have been affected by the economic crisis:

Question: Did you have to lay off any staff due to the (economic) crisis? Answer: Actually we hired nine people in Buenos Aires for the mansion; a luxury hotel with a restaurant, bar, and wine cave- and two others for the hotel in Mendoza.

Gerhard Heusch emailed me this morning and once again confirmed that the scheduled Algodon Mansion opening date is still intact. They’re working very hard down there, and the work is going fast!

Algodon Wine Estates gets a tremendous write-up from Jim Bryant for Chicago’s (metro area) “Quintessential Barrington” lifestyle magazine. Mr. Bryant’s glowing descriptions of our estate, our wine, our amenities, and San Rafael- go beyond terrific. He also very favorably mentions our partners at Bombal & Aldao and Finca los Alamos.

In other wine news, The LA Times published an interesting article titled Findings of wine contest study hard for critics to swallow. From the article; “…consumers should not always assume that gold medal winners are outstanding wines…retired Cal State Humboldt professor Robert Hodgson said he looked at the results for more than 4,000 wines entered in 13 U.S. competitions in 2003 and found little consistency in what wines won gold medals.” Our Master of Wine, Antony Foster, followed up on this in an email to me. For the most part, he indicated that he’s in agreement with the article, and that he thinks it would be in our best interest to enter our wines in reputable competitions run under international rules. Good advice.

--Scott Mathis

Organic wine, Olive Oil, Grass Courts, and Hitting the Slopes

According to WineSur.com, Argentine organic wines are growing in popularity. In case you missed our last newsletter, Algodon Wine Estates has set aside 2.1 acres of Malbec vineyards and 2.1 acres of Bonarda vineyards for organic treatment. Organic certification for these vineyards won’t be achieved for three years; however it is yet another income-generating and value-building aspect of our versatile wine estate.

Diego Coll Benegas (Algodon Wine Estates’ Director of Project Development, Tourism & Hospitality) wrote me today to tell me that our olive oil is bottled! I’ve had the pleasure of enjoying it while dining at the estate’s award-winning restaurant; it is truly delicious and is the perfect complement to our wines. The new Algodon Olive Oil labels look great as well. I hope we can show them to you in the next newsletter, which is due out in just a few weeks.

I’ve been in conversations with our design architect, Gerhard Heusch, regarding a new design for Algodon Wine Estates’ entrance/gate in the next phase of construction. I like the idea of incorporating, or rather I’m inspired by, the conceptual design of a traditional Argentine Estancia. My feeling is that this will give the entrance a warm and welcoming aesthetic. Once we have some preliminary sketches, I’ll be sure to share them with you. Also, as construction on our tennis courts continues, we decided to add one more grass court (at no significant added expense), which will give us a total of three grass courts. Had we decided to only construct two, we already would have been highly regarded as an important tennis destination. Three grass courts just ups-the-ante; as we will be the only three-court facility in all of Argentina.

The Argentine Post has an informative piece on skiing in Argentina. Although Bariloche is featured in the article, Las Leñas is also mentioned. As you may already know, Las Leñas, one of the best ski resorts on the continent, is just a 2 hour drive from Algodon Wine Estates. Something to keep in mind when planning your next trip to Mendoza!

Property Updates, Delta Air, and chilled Malbecs and more…

I received some tennis court update photos from our hard working crew in San Rafael. All I can say is wow!

I think this is the first time I’ve ever actually seen a tennis court constructed from scratch. The speed with which this is moving along is very impressive. You can really get a sense from this photo of how unique our tennis center will be; set right in the middle of a beautiful 50 year old olive grove. It’s really going to be an amazing place, and we look forward to our guests playing on those courts in just a few short months!

I also received a great Algodon Mansion update from Gerhard Heusch. The glass for the six-story lightwell (which will include a waterfall descending to the lobby) is now being installed. Here’s picture of them working on it:

This aspect of the Mansion is very unique. Each suite has either door or window access to the lightwell, which offers sky views.

Good news for us in NYC: starting mid December of this year, Delta Air Lines provide flights between New York's John F. Kennedy International Airport and Buenos Aires, Argentina! The flights will operate five times a week!

The Washington Post’s recent article titled “Ah, a Cold, Refreshing ... Red?” talks of the surprising joys of chilled Malbecs on a hot summer day. From the article; “Malbec is very much the red wine of the moment, responsible for a stunning surge of imports into the U.S. from Argentina…Malbec has spicy, black-pepper tastes and we really weren’t sure ourselves how well it would stand up to a chill. The answer: fascinating…With a steak right off the grill or a rare hamburger, it would be hard to beat this taste on a hot day.”

I also found two articles this week regarding the U.S. debt and the weakening dollar. The first is from Yahoo! Finance, and the second The Washington Post. Both are worth the read as the country prepares for next year, and on. This is what I have been saying all along, it is prudent and timely that investors diversify outside the U.S. economy and into global assets. The dollar is still strong against the peso, and Argentine properties remain undervalued.

--Scott Mathis

Algodon Mansion Update!

Here is a nice update from our architect, Pedro Lagleyze, on the construction progress of our Buenos Aires luxury hotel:

“Scott - As we expected, on Wednesday afternoon we met on the worksite with Gerhard Heusch and the construction company to determine what to do with the existing marble cladding. We came to the decision that we will maintain the existing work and make some adjustments. We also took this opportunity to resolve several outstanding issues.

Regarding current progress, the balance of work form our new main contractor is more than positive. Much progress has been made toward the finishing stages (floor carpentry, equipment carpentry, painting, etc.) during this week, and will continue through the next.

Currently, marble work has been completed on the upper floors and the stucco work is moving along quickly. We’ve already started the wood flooring work, and the painters will come next week. In the spa, we will be working on the completion of the roof in the coming weeks. The marble work is finished there, and the stucco will start this week.

In the basement, work in the service areas is almost finished and the toilets and plumbing are already functional, as are the changing facilities for the staff. Regarding the kitchen, I suppose you're aware of recent changes requested by the chef. Next week we´ll get the final design in order to modify and finalize this sector once and for all. In relation to the area of public bathrooms and offices, once Gerhard and the contractors define the design of the marble, we will be in position to start the task and prepare the site for the arrival of the metal ladder.

The ground floor, as usual in this type of work is more concerned with the general movement of the work. Yet we are moving strongly in its final configuration. In that sense it is very important to define the ceiling to use. The elevators are up and running and only lack the interior design for its implementation.

The façade is finished on the upper floors, and the ground floor work will begin to take place in the coming weeks.

We are working hard and continue with the aim of finalizing the work for August. If we achieve this objective, the balance will be two years of work at a cost per square meter of USD $2,500. Not bad for our unique product in this market. - Pedro Lagleyze, Arquitecto”

Sounds like things are rolling along nicely! We’re almost there…

--Scott Mathis

Algodon Mansion Update!

Gerhard Heusch's recent email to me regarding Algodon Mansion’s construction was enlightening and exciting. Here’s a brief summary of the latest accomplishments; the marble in the bathrooms and dressing rooms are almost complete; all of the kitchen equipment has been delivered and has been positioned. Diego Coll Benegas will visit the site this week to check the equipment and oversee its installation; the contractor began the installation of the balcony floors earlier this week; he will begin installing the basement wood flooring next week; a notable, specialized carpenter was recently hired for some intricate woodwork needed on the ground floor, his reputation precedes him and we’re all excited about his addition to the team; our glass contractor has begun work on the light shaft; the rooftop pool is being prepared for tiling; and our stucco/molder contractor is continuing work on the main foyer and has recently begun work on the ground floor elevator hall.

--Scott Mathis

Golf & Tennis Clubhouse Update

I’ve been in recent conversations with Gerhard Heusch and José Luis Clerc, and we’ve made some preliminary decisions regarding our new clubhouse facilities and the direction we want to move in. They include changing rooms for both golf and tennis players which feature 10 showers each as well as lockers. We also want to include separate locker-room areas, steam showers, sauna, massage room, and a lounge with a television, Wi-Fi, telephone, and bar, etc. In terms of the Pro shops, we would like to have one for tennis and a separate one for golf. We’re eager to finish construction by the fall in order to be ready for a challenger tournament that we’d like to host later this year. Jose Luis has emphasized that the locker rooms and lounge areas should be of exceptional quality and design, because this is what sways players to come and play there often, and perhaps make a change from the local club that they already belong to. I’m in total agreement with this. -Scott Mathis

Algodon Mansion

“Perhaps the most tangible sign of Argentina’s economic recovery, is its booming real estate market, which has transformed Buenos Aires, the capital, into a construction site.” - The Wall Street Journal I love that quote. Tourism in Argentina is thriving right now, and has been for the last several years. I see it every time I go down there, and my favorite hotels are always almost booked to capacity. Argentina is literally the leading tourism destination in all of Latin America, and had over 4.5 million visitors in 2007. The Argentine Tourism Office says that visitors from the US alone grew more than 35% between 2005 and 2007. I like those numbers! 2.2 million foreigners visited Buenos Aires last year, and Buenos Aires City Tourism Bureau did a study that found foreign tourists prefer four and five star hotels (who doesn’t?), and that 2007 occupancy rates exceeded 85%. Things are looking good for our hotel project. The mansion we purchased is absolutely amazing. It was previously a private residence and is located at 1647 Montevideo Street in the heart of the embassy and luxury hotel district, Recoleta. The Mansion is a magnificent 20,000 sq/ft estate that was built in 1912. It’s a 5-story building, but we added a subbasement during the renovation, bringing it to 6-stories. The architectural team we decided to use for the renovation is headed by internationally acclaimed architect, Gerhard Heusch. He’s got a great portfolio, and I’ve had the pleasure of seeing some of his past projects in person, including The Grand Havana Room in both New York and LA. The hotel will feature 10 luxury suites, a 5-story hanging garden, and rooftop pool, spa, and bar. Watching the completion of this project has been a real experience. These days, I get down there to oversee the project just about every other week. One of the highlights for me has been the construction of the rooftop pool. Wow. It’s going to be truly fantastic. The hotel is also going to have a restaurant featuring South American & French-fusion cuisine, a private dining room with a wine cave and humidor, library bar, wine cellar, and an outside dining patio that features an A-framed glass ceiling. This project has become very personal to me, and I have to say that I’m quite proud of it. With Gerhard’s help (as well as the rest of our incredible work team down there), Algodon Mansion should be opening its doors in December. That’s right around the corner, and we’re all very excited about it. The plan is to have a wonderful New Year’s opening party for our partners and friends. I’m looking forward to it. I’ll be here next week with more about Algodon Mansion…Gotta go, I have work to do! --Scott Mathis