Silicon Valley’s Rhys Vineyards to pay $3.7M to settle regulatory action on Mendocino County irrigation ponds

Rhys Vineyards LLC, based on the California Central Coast but with vines in Mendocino County’s prime pinot noir region of Anderson Valley, has agreed to pay $3.76 million to settle enforcement actions brought by state wildlife and water regulators for unpermitted diversion of rainwater runoff on property of a planned small vineyard in a northern part of the county.

It’s part of increased enforcement of water rights permits on North Coast tributaries in the past decade.

Investigators in 2015 found what they determined to be three reservoirs totaling nearly 22 acre-feet and collecting rainwater runoff headed to the north fork of Ten Mile River and the south fork of the Eel River, according to State Water Resources Control Board documents.

“The illegal and permanent loss of wetlands and streams caused by the vineyard construction was an egregious violation of state and federal law,” said Josh Curtis, assistant executive officer of the North Coast Regional Water Quality Control Board, in an announcement Friday. “This settlement demonstrates our commitment to protecting and restoring our region’s waters and maintaining a level playing field for the vast majority of the region’s vineyard operations who work proactively to meet or exceed environmental regulations.”

Two reservoirs preexisted the purchase of the 4,591-acre Clarke Ranch property southwest of Laytonville from Golden Ram Sportsmen’s Club in January 2015, and one was constructed that year along with an adjoining area for a 14- to 16-acre vineyard. While the property came with riparian rights to pump water from tributaries, it didn’t have appropriative water rights, which allow for collection of runoff into reservoirs, the documents said.

“Rhys Vineyards, LLC deeply regrets the mistakes made,” wrote Tina Wallis, an attorney for the Ukiah-based operations of the Los Gatos-based vintner, in an announcement of the settlement Thursday. “They want to thank the agencies involved for their diligence in working with them to resolve this matter and reaching an agreement.”

The settlement includes nearly $1.7 million in penalties related to construction of three irrigation ponds in 2015 as part of the Clarke Vineyard project on, according to the settlement, approved by the state water board July 24.

Another $1.77 million would be set aside to fund an environmental restoration project on the south fork Ten Mile River by The Nature Conservancy. That project is scheduled to begin next summer. It’s designed to improve rearing habitat of the threatened Coho salmon in the lower 1.7 miles of the south fork and 4.5 miles of the main Ten Mile River, according to the announcement.

Wallis said Rhys doesn’t plan any other development on the property.

The settlement also includes $216,000 for state Department of Fish & Wildlife pollution action and habitat restoration funds.

Rhys Vineyards was started by former Silicon Valley software executive Kevin Harvey, with its first vintage in 2004. It has focused on making top-quality pinot noir wines in the Santa Cruz Mountains. In 2008, Rhys purchased property in Anderson Valley for what has become the Bearwallow Vineyard, now with 32 acres of vines.

In 2017, Rhys purchased part of the former Masonite plant in Ukiah to build a winery, according to The Press Democrat.

Update, Aug. 2, 2019: Comments from the North Coast water board were released Friday.