City Winery’s Michael Dorf (Top NYC Entrepreneurs, 2011)

City Winery’s Michael Dorf (Top NYC Entrepreneurs, 2011)

by Justin Martin
Crain's New York Business, May 2011

New York City may be the center of finance, fashion and media—but winemaking? Forget about it.

Michael Dorf’s City Winery is trying to fill that void by arranging for fresh-off-the-vine grapes to be express-shipped to Manhattan from the Finger Lakes, California, Oregon, even Chile. Customers who purchase certain memberships can make an entire barrel of wine under the tutelage of a master vintner. City Winery is also an event space: It both hosts its own concerts and tastings, and rents out the venue for private parties, wedding receptions and the like.

Mr. Dorf, 49, is a veteran impresario. In 1987, he founded the Knitting Factory, a legendary downtown venue, now defunct, where hipsters swilled warm beer from plastic cups and caught acts like Sonic Youth and Yo La Tengo at the outset of their musical careers. But he resigned under pressure in 2003 after battling with investors over a variety of issues, such as the proper strategy for running the sideline record label. (The investors declined to comment.)

Mr. Dorf spent a few years licking his wounds and casting about for his next opportunity. By the time he hit his 40s, he was married with kids and he’d become a wine aficionado.

“I wanted to create something based on where my head was at,” he said, “and for a crowd that was a little older and more mature.”

As recently as 2002, fortified kosher wine was made on the Lower East Side, but Manhattan has no tradition of producing high-toned vintages. Mr. Dorf planned just such an operation. In 2008, he leased a 21,000-square-foot space at Hudson Square—but his timing was terrible.

One of the first events on his new business’s calendar was a holiday party for Lehman Brothers. By Christmas 2008, the company didn’t even exist anymore, a victim of the massive economic meltdown.

“My business plan was to sell barrels to bankers,” Mr. Dorf said, “but I was forced to re-evaluate everything.”

City Winery still sells its memberships to produce barrels of wine, which range from $5,000 to $15,000, depending on the type of wine and the process involved in making it. But the ever-resilient Mr. Dorf has also placed greater emphasis on holding concerts and selling wine by the glass.

His enterprise has turned out a bit like one of those bars that brews beer on premises, storing it in huge vats. In this case, customers can get wine fresh from the barrel. Offerings cost roughly $10 a glass and boast clever names, such as SoHo Vignon Blanc and NY City Cab. Not surprisingly, the 300-seat concert venue features acts for a mature, wine-quaffing crowd, such as Allen Toussaint and Rickie Lee Jones.

“It’s the Knitting Factory for grown-ups,” Mr. Dorf explained.

“Michael is not afraid to get knocked down,” said David Pakman, a partner at Manhattan venture capital firm Venrock, who has teamed up with Mr. Dorf for several ventures over the years. “He simply finds a fresh angle.”

Mr. Dorf is certain that City Winery (projected to post $10 million in revenues in 2011, a 25% gain) is a scalable business. He’s opening a location in Chicago, and he’s looking at Miami, London and other major cities where there are oenophiles but no nearby vineyards.

The entrepreneur gives heavily to charity. He donates about 8% of his product to auctions that raise money to help New York City public schools, battle diseases such as leukemia and assist other causes.

—Justin Martin