Near Wallula — Railex plans to build an $18 million wine storage and distribution center near Wallula for wine from Ste. Michelle Wine Estates.

The 500,000-square-foot building will be an expansion to the Railex’s current Wallula operation, allowing it to store up to 10 times more cases of wine and expanding its employees by up to 30 percent.

Ste. Michelle Wine Estates has already signed a long-term lease for most of the warehouse and plans to contract with Railex to transport domestic and import wines throughout the United States.

This is a significant expansion of the work Railex does for Ste. Michelle Wine Estates, officials said. Railex began storing and transporting wine for Ste. Michelle Wine Estates more than three years ago.

“Ste. Michelle is an expert at growing grapes and making wine,” said Rob McKinney, Ste. Michelle Wine Estates vice president of operations. “Although we have expertise with transportation and distribution issues, we determined that our business has grown to a scale that requires a third party logistics provider to manage our distribution requirements according to our exacting standards.”

Ste. Michelle Wine Estates is the largest wine producer in the Northwest and uses about two-thirds of all the wine grapes in Washington. It owns Washington wineries such as Chateau Ste. Michelle, Columbia Crest, Snoqualmie Vineyards, Northstar and Spring Valley. It also co-owns Col Solare on Red Mountain with Italy’s Antinori family.

The new building will allow Railex Wine Services — the new LLC Railex is creating for wine storage and transportation — to store up to 5 million cases of wine, said Jim Kleist, senior vice president of West Coast operations for Railex. It is scheduled to open February 2013.

“It’s 11 football fields under one roof,” Kleist said.

While Ste. Michelle Wine Estates will lease most of the warehouse, some room will be available for other wineries, he said.

Once the new warehouse is open, Kleist said they will shift wine from its current facility to the new one, allowing it to be used for other commodities.

Port of Walla Walla commissioners agreed today to sell 30 acres of land in the port’s Dodd Road Industrial Park to Railex for the project.

For the full story, read Thursday’s Tri-City Herald or go to www.tricityherald.com.