Arson Fire at Wine Warehouse

VALLEJO Wine warehouse fire was arson, police say Court records show business was mired in partnership feud
- Jim Doyle, Chronicle Staff Writer

Wednesday, October 19, 2005

Investigators looking into the Mare Island warehouse fire that destroyed up to $100 million of vintage wine said Tuesday that last week's blaze was deliberately set. Police and arson investigators said during a news conference in Vallejo that they have interviewed about two dozen people in their preliminary investigation of the fire, and they expect to question many others associated with the Wines Central storage facility. No suspects have been named, and police would not say how the fire was started, nor would they speculate on a motive.

"Right now there are several persons, or people, of interest," said Lt. Lori A. Lee of the Vallejo Police Department. "It could be dozens, anyone from employees to those who are tenants or have ownership interests, or vintners who are storing their wine there." Lee said police and fire officials have been deluged with tips, rumors, and innuendo about who had a motive to start the fire. "It's still premature to say that anyone has been cleared," Lee said. "It's an open investigation. We have investigators filtering out in a number of directions." Investigators said last week that they wanted to talk to anyone who was in the warehouse on Oct. 12, the day of the fire. The relatively short list included the warehouse's general manager, two unnamed forklift operators and any visitors to the site.

One of those visitors was Mark Anderson, the owner of Sausalito Cellars, a wine-storage firm. Anderson faces embezzlement charges in Marin County for allegedly stealing wine from private collections. He has pleaded not guilty to those charges. Police on Tuesday refused to say whether Anderson is a suspect in the arson. Anderson could not be reached for comment Tuesday. Senior special agent Nina Delgadillo of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives said a team of forensic chemists and cause-and-origin specialists have found "sufficient (physical) evidence to tell us that this was an intentionally set fire. ... We are vigorously pursuing the person or persons who caused this." Investigators would not discuss the arsonist's skill, or whether the fire was started with the aid of an electronic timer, an accelerant or match. Public comments about the evidence, they said, could taint interviews with suspects.

Bill Tweedy, an investigator and spokesman for the Vallejo Fire Department, said the fire caused an estimated $10 million in structural damage to the warehouse, causing the building's concrete roof to sag. He said the building, which had 3-foot-thick concrete walls, was equipped with a fire-detection system, but was not required by law to have sprinklers.
He said firefighters were on the scene three minutes after being alerted to the blaze by two 911 phone calls and a private alarm firm. However, the firefighters needed to cut through the warehouse's steel rollup doors before beginning to fight the blaze. Inside, timbers were falling to the floor in the 35-foot tall building. Eighty-two vintners stored wine at the warehouse, along with large volumes of pasta and sugar.

As investigators announced their preliminary findings, new information surfaced about the economic turmoil of Wines Central, which rented the warehouse. Court records indicate that the wine storage firm was embroiled in an internal partnership dispute. Its partners had invested and loaned more than $2.5 million to the business, which continued to sustain large operating losses. Wines Central's four original partners have been vying for 3 1/2 years over control of the potentially lucrative business. Two partners claim they were swindled by the other two partners, who in turn say that they were misled and defrauded of their financial stake. The wine storage business was formed in 2000 by partners Jacobo "Jack" Krystal of San Rafael; Sonoma County developer Russell Lugli; and Paul Hutchinson and Jack Lair, both of Napa County. The four had a falling out in 2001. The firm was dissolved in October 2001, then started up again a month later with only Krystal and Lugli as partners.

In an April 2004 affidavit, Krystal wrote that Wines Central had negotiated an agreement with liquor distributor Pacific American Services, which would invest in Wines Central and manage its warehouse -- in return for a 49 percent share of profits. But he complained that the deal was stalled by the partnership dispute. "No investor wants to invest cash into a business with pending litigation," he wrote. He also wrote that, unless Wines Central is able to soon go ahead with the management deal, the company "will be in grave danger of having to shut down its business and close its doors."

In August, Marin County Judge Lynn Dupree denied Krystal's request that the firm be authorized to enter into a new management and investment deal, saying that it would be premature to allow the deal to go forward while the court is engaged in an accounting of all four partners' financial interests. Asked this week about the ownership dispute, Krystal said: "We don't discuss our internal business."