Va. winemaker's painstakingly built empire crumbled in months amid recession

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Washington Post Staff Writer
Thursday, February 24, 2011

One recent wintry day at the Kluge Estate Winery and Vineyard tasting room in Charlottesville, customers were snapping up cases of red wine for bargain prices at what felt like a tag sale. Refrigerator cases that once held gourmet fare, such as pheasant-stuffed cabbage leaves, foie gras and chocolate tartlets, stood empty, and only a skeleton staff remained to pour tastings.

Outside, a retired insurance executive named Jerome Morris was picking over European oak wine barrels priced at $40 apiece. He said he was sorry the vineyard owned by socialite Patricia Kluge - once married to the country's richest man - was going out of business.

"Whatever she screwed up on, she didn't screw up on the quality of the wine, that's for sure," Morris said emphatically.

Up until late last year, Kluge had made a tasty sparkling wine and blended reds at her winery, nestled in the foothills of the Blue Ridge Mountains, up the road from Monticello. Kluge wines had been winning awards and acclaim for the Virginia wine industry and were served at four-star restaurants, as well as at the White House and Chelsea Clinton's wedding rehearsal dinner last summer.

"Everybody thought we were doing a grand job," says Kluge, sitting down for an interview in her attorney's office on Charlottesville's quaint Main Street. "I think if the economy had not come about the way it did and the bank had been more patient, then things would have been fine."

Kluge - still striking at 62 - arrives wearing an orange cashmere sweater, casual pants, studded Ugg boots and crystal-globe earrings the size of giant prawns. Musky perfume fills the air.

She has been the subject of endless fascination since she landed in Charlottesville in the 1980s as the British-raised and much younger wife of billionaire John Kluge. Over the years she had become known as a generous donor to local causes and a successful vintner, but in the past nine months, she has undergone a spectacular reversal of fortune, with credit problems forcing the sale of her jewelry and antiques and the banks seizing the vineyard and other property.

Just days ago, it seemed the low point had been reached.

On an unseasonably warm day in February, representatives from Kluge's bank gathered on the steps of the county courthouse to auction off her grand estate, Albemarle House. She and her ex-husband had spent four years during the '80s building the 23,000-square-foot home, modeled on an English country manor, outfitting it with eight bedrooms, a swimming pool, a private chapel, wine grotto and helicopter landing pad. Kluge called the place "my most perfect spot on Earth."

Now stripped of its contents, the mansion was set to go to the highest bidder, at a figure far below its initial listing of $100 million. A crowd of about 60 curious locals, media and others gathered to watch the fire sale.

Just before the auction began, however, one of the lawyers in attendance stepped forward and said: "We represent Donald Trump."

Gasps rippled through the crowd. By the end of the legal wrangling, Trump had the right to buy the property at the bank's price - a bargain $15.26 million - or even less, and is negotiating for some of Kluge's other former holdings.


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