Urban Story Ventures will lease the jail for $375,000 annually, with a 3% increase in rent each year, according to county documents, lasting 35 years. According to the lease, Hamilton County needs to review and approve all construction documents as well as the construction schedule for renovations.
If Urban Story Ventures doesn’t adhere to the construction timeline, the county can consider that as defaulting on the lease.
Commissioner David Sharpe, D-Red Bank, amended the resolution approving the lease to add a few more conditions.
The first is to limit data processing and data storage use to only 12,000 square feet of the jail, and anything beyond that requires the approval of Hamilton County. Those terms are in response to community pushback on the data center aspect of the proposal, Sharpe said during the meeting, and are meant to stop anyone from turning the building into only a data center.
The second is that 1.5% of the net profits from Jailhouse Studios will funnel into workforce development programs focused on the arts and entertainment industry. The money will be handled by the local Songbirds Foundation and can be used for teacher compensation, classroom supplies and student experiences.
Sharpe’s amendments passed unanimously. He said he’d already discussed plans for additional terms with Urban Story Ventures during meetings over the past couple of weeks and that its officials were amenable to his suggestions.
“We really put our heads together, and I asked for some written agreements into the lease to give a level of comfort to our community about the concerns that they’ve expressed,” Sharpe said in an interview after the meeting.
During the meeting, county Public Works Division Administrator Todd Leamon said the county jail has become a liability because it’s been vacant for so long. The county pays about $24,000 in utilities for the building each year, despite water and other things being shut off, Leamon said.
The fact that the building needs significant investment to come back online played into leasing agreement negotiations, Leamon said.
White said during a prior meeting that Urban Story Ventures plans to invest $60 million to $80 million in local contract labor and $20 million into supplies for the project.
In a statement, Hamilton County Mayor Weston Wamp said the Jailhouse Studios proposal would be an overall public good.
“The old jail facility has been a liability to taxpayers since it was closed in 2020,” Wamp said. “The vision for using it as a creative hub will serve two purposes: activating an entire block downtown as well as turning a liability into a revenue-generating asset for the county.”
A dozen people came to speak, half for and half against the creation of Jailhouse Studios.
Several said they were concerned about the possibility of environmental harms because of the data center aspect of the proposal, an issue that spurred a petition asking for better public input opportunities with over 1,000 signatures. A few also said they were worried about the lack of information about how many jobs would eventually be created.
At least person one thought Hamilton County was getting a bad deal on the lease.
Noah Johnston, whose wife, Erikka Johnston, started the petition, said during the meeting that according to his calculations, the difference in annual rent and the actual value of the property after renovations will fully reimburse Urban Story Ventures by year 16 of the lease. He said the county should consider limiting the lease to 16 years and then renegotiate the price.
“Let’s make sure we pay them back for their investment, but let’s not allow more monetary value to be extracted than is necessary to pay the tenant back as they deserve,” Johnston said.
But several others, consisting of local artists and arts teachers, said they wanted to encourage commissioners to support the creation of Jailhouse Studios.
One of them was Bryce McGuire, the director of horror movie “Dolly,” which was filmed in Chattanooga and is in theaters. McGuire said he wants to film his next movie in Chattanooga, too, but he can’t do that without the proper infrastructure in place, like fully equipped studios and local crew staff.
Tyler Reddick, a music instructor at the Center for Creative Arts, said he routinely has to tell students they have to leave the city in order to make it as musicians.
“It would be a beautiful thing to be able to have them in this city being able to do what they really love,” Reddick said. “Right now we’re preparing students to leave, and I think this is a way we can give them an opportunity to stay.”
