Client Challenge
A boutique winery invested heavily in developing a farm winery after receiving zoning and construction approvals from the local government. Shortly after the project began, the municipality imposed a moratorium on alcohol license applications and enacted more restrictive zoning regulations. Despite complying with all prior requirements and receiving a temporary license, the business was ultimately denied a permanent license, which left it unable to operate and generated significant economic losses.
Our Role
FairValue Advisors was engaged to assess the economic damages suffered by the company. We analyzed historical expenditures, management projections, and market data to estimate the business’s fair market value in a “but-for” scenario, assuming the license had not been denied. Using both cost and income approaches, we developed a reasoned and defensible damages model grounded in accepted valuation methodologies and industry benchmarks.
The Result
Our valuation determined that the business would have been worth approximately $1.56 million if it had been allowed to operate. After the denial, its value dropped to roughly $30,700, which resulted in a measurable economic loss of over $1.53 million.
