Napa who? Chinese money pours into less-appreciated wine region

David Liu made his first fortune more than two decades ago, exporting American scrap metal to his rapidly industrializing home country of China. After the financial crisis, he scored big again, buying distressed apartments in the U.S. and selling them later for a tidy profit.

Liu is now convinced he's spotted his next major haul, with the help of Chinese investors. The millionaire developer is betting that the oft-dismissed wine region of Temecula is poised to break out as a far bigger destination for oenophiles and tourists given its proximity to Los Angeles, Orange County and San Diego.

"Napa Valley is bigger, but it's too far away," said Liu, 57, a former statistics professor turned real estate developer, and the quality of the Temecula wine is getting better.

Liu, an American citizen who splits his time between China and the U.S., purchased 700 acres of barren Riverside County land that had previously been destined for tract homes.

In its place, Liu and his company, Standard Portfolios, are building a sprawling wine resort and residential community tentatively named Twelve Oaks that will include a Marriott-branded hotel, a winery, event space and multimillion-dollar homes.

The project comes at a time when Chinese investment has spilled over from the traditional Southern California destinations of Los Angeles and Orange counties to other parts of California. Twelve Oaks, which is scheduled to open in 2019, is the biggest of at least five projects backed by Chinese investors in Southern California's primary wine-producing region, which consists of about 40 wineries.

The infusion of foreign capital bolsters a plan backed by Temecula Valley wine producers to more than double the number of wineries in the area to more than 100 by 2020. The expansion is aimed at boosting a local tourism industry that generated about $700 million in 2015, according to the most recent statistics.

Chinese investment has slowed because of new regulations in China aimed at stemming capital flight. But over the long term, experts say, Chinese companies and investors will continue to snap up assets abroad.

For many of the Chinese investors, they not only get a chance at visas for themselves and their families, but the perceived prestige of owning a piece of California wine country — albeit not yet the vintages celebrated in the pages of Wine Spectator.

David Pierson writes for the Los Angeles Times.