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Originally published April 19, 2014 at 8:01 PM | Page modified April 20, 2014 at 9:18 AM

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Potato king’s heirs seek to raise $48M in IPO

Descendants of Eastern Washington potato baron Peter Taggares II plan to launch a company to buy Pacific Northwest orchards and vineyards. Also, something different is brewing at Tully’s Coffee.


By Seattle Times business staff

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Descendants of Eastern Washington potato baron Peter Taggares II hope to harvest up to $48 million through a stock offering to launch a company intent on buying Pacific Northwest orchards and vineyards.

Although a Colorado-based owner of farmland just went public this month, it’s apparently unprecedented in this corner of the country.

“I can’t recall in the last 40 years anything like that happening,” said John Stuhlmiller, CEO of the Washington Farm Bureau.

The newly formed Taggares Agriculture would start by paying $30 million for a 3,200-acre apple and Concord grape property that is now owned by various members of the Taggares clan.

The company sees an opportunity to buy or lease additional land from small farmers ready to retire. Its preliminary prospectus, filed Thursday, says it can “capitalize on the Taggares name, reputation and long-standing relationships in the farming community” and potentially pay landowners with its stock.

Investors in the initial public offering would wind up owning 69 percent of Taggares Agriculture, according to the filing. Another 26 percent would belong to Peter J. Taggares IV, the Kennewick-based company’s 31-year-old president and CEO. The company expects to trade on Nasdaq with the ticker TAG.

A website for one of the extended family’s ventures recalls that Pete Taggares II, who died in 1999, “established himself as the largest farming operation in the state of Washington, based in Othello, and one of the largest producers of French fries in the United States.”

At one time that empire spanned 40,000 acres, which he distinctively marked “by painting all of his farm infrastructure white, from the buildings to the electrical poles,” according to the IPO filing.

The family remains a “very large” owner of farmland, much of it irrigated and therefore more valuable, Stuhlmiller said.

The CEO’s father, Pete Taggares III, perhaps best known as a one-time Husky football star, will advise the company.

The extended family’s other business interests remain private, with holdings apparently centered in The P.J. Taggares Co.

The stock offering comes close on the heels of an IPO by Farmland Partners, a real estate investment trust that owns 7,800 acres of farmland and three grain silos in the Midwest. Farmland Partners priced its $53 million offering at $14 on April 16, but since then the shares have hovered between $13 and $13.50.

The attorney handling Taggares Agriculture’s IPO, Andrew Shawber, of Summit Law Group in Seattle, said he’s not aware of any similar transactions in Washington state.

The property Taggares Agriculture would buy from family members after the IPO is Snake River Vineyards, in Burbank, Walla Walla County. That operation had net sales of $7.7 million in fiscal 2013 and net income of $1 million, according to the filing.

Some IPO proceeds will go to redevelop about 1,000 acres of the Snake River property for “high-density apple varieties, wine grapes and cherries.”

The Farm Bureau’s Stuhlmiller said he can see two reasons for taking a family farm operation public: to consolidate or buy out some stakes as ownership fragments over several generations, and to finance capital-intensive projects needed for expansion or meeting regulatory requirements.

A side effect of selling shares to urban investors could be “giving nonfarm folks a glimpse” into the issues facing farmers, he said. “Seems like there’s some positive value in that.”

— Rami Grunbaum: rgrunbaum@seattle-times.com

Tully’s in new bags

Something’s afoot at Tully’s Coffee — at least in the way the coffee-shop chain sells its packaged beans.

The colorful bags of Tully’s Coffee that are usually displayed with prominence are missing from many of its Seattle area stores. That coffee is roasted by Keurig Green Mountain Coffee Roasters, a Vermont company that bought Tully’s wholesale operations as well as the brand in 2008.

In their place, at least in some of the stores: bags made of brown paper, with a more artisanal look — still bearing the Tully’s logo, in black ink, and with fancy monikers such as Forte Extra Dark and Dutchman’s Blend.

Baristas at several locations said the chain, which has a license from Keurig Green Mountain to keep using the Tully’s brand, is not restocking the old bagged coffee and is selling fresh beans roasted by Dillanos Coffee Roasters, a company based in Sumner.

Which would make one wonder if all is all right between the chain and its longtime roaster.

Michael Avenatti, a California lawyer who bought Tully’s out of bankruptcy proceedings last year, says everything’s chipper and that people who said otherwise are ill-informed.

He said Tully’s the coffee shop continues to purchase coffee from Keurig Green Mountain, and the two companies are seeking ways to work more closely together and jointly build out the brand.

Tully’s enjoys “a great relationship” with the Vermont roaster, he said, and has “an enormous amount of respect for their company and their coffee roasting.”

Avenatti said Dillanos is roasting “various blends for us, which we are experimenting with” to complement the Tully’s “heritage blends.”

Its licensing agreement with Keurig Green Mountain allows it to buy coffee from other roasters “from time to time, which has been done by Tully’s for years,” he said.

A spokeswoman for Keurig Green Mountain declined to comment about the relationship with its licensee.

In any case, Tully’s seems to be experimenting with ways to freshen up its look in an area where discerning coffee addicts are increasingly seeking new thrills, such as pour-overs, cold brews and single-origin coffee from exotic locations.

Ángel González: agonzalez@seattletimes.com



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