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Tennessee Hills reaches for sky with $20 million Bristol distillery, museum plans

WJHL Tri-Cities logo WJHL Tri-Cities 7/18/2022 Jeff Keeling
Tennessee Hills reaches for sky with $20 million Bristol distillery, museum plans © Provided by WJHL Tri-Cities Tennessee Hills reaches for sky with $20 million Bristol distillery, museum plans

BRISTOL, Tenn. (WJHL) - Barely a year removed from a small operation in Jonesborough, the Tennessee Hills brand announced a second multimillion-dollar project Monday that will include a major automated distillery and museum in Bristol.

Scott Andrew partners with Tennessee Hills founder Stephen Callahan in a larger parent brand called “Rugged American Spirits,” which includes a brewery opened last year on West Walnut Street in Johnson City.

The Tennessee Hills management team stands outside their future headquarters and distillery location in Bristol with Bristol, Tenn. economic development director Tom Anderson (in red shirt). L-r, COO Vernon Spaulding, CFO Ryan Chupa, founder Stephen Callahan, co-owners Scott Andrew and Daphne Andrew. (WJHL photo) © Provided by WJHL Tri-Cities The Tennessee Hills management team stands outside their future headquarters and distillery location in Bristol with Bristol, Tenn. economic development director Tom Anderson (in red shirt). L-r, COO Vernon Spaulding, CFO Ryan Chupa, founder Stephen Callahan, co-owners Scott Andrew and Daphne Andrew. (WJHL photo)

The pair planned to build both a brewery and distillery on about five acres they own on Walnut but Andrew said after rapid growth in demand, they needed to look for additional space. Working with Tom Anderson, an economic developer with the City of Bristol, they found their way to a nine-acre hill that’s the first one drivers see as they enter the Volunteer State from Virginia.

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“We saw this hill, it wasn’t even for sale,” Andrew told News Channel 11 while standing on the property Tennessee Hills bought a couple months ago. It includes a 19,000-square-foot building that American National University had left empty for two years due to COVID-19 — and by around next fall, a 34,000-square-foot distillery that will pump out up to 7,200 bottles of spirits in a span of hours. Callahan’s current operation in Jonesborough produces about 1,000 bottles a week.

“I just drove up here and knocked on the door,” Andrew said of the hilltop location, a stone’s throw from the Pinnacle shopping center and not far from the new Bristol, Va. casino. “I called them, they were up in Virginia, and they said ‘yeah, we’d be interested in selling it.’ We were fortunate to be able to craft a deal with them and buy the property, which is perfect for Tennessee Hills.”

Tennessee Hills is investing $21.3 million, including about $8 million for high-tech distilling equipment that will occupy the new $11 million building. They’ll retrofit the former college into a space that will include classrooms for distilling and business classes, a museum dedicated to Tennessee’s statewide history as a whiskey hotbed, and the rugged entrepreneurialism that has marked Northeast Tennessee for centuries.

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The project fits well enough with Bristol’s focus on lifestyle tourism that the city is donating 45 acres of land across Highway 11-W, adjacent to The Pinnacle.

“It fits very well going back to the Birthplace of Country Music, just all the growth that we’re having,” Anderson said. “All the growth that we’re having, there’s a lot of outdoor enthusiasts, tourism, events that we have going on more and more, and they just mesh very well with that and they’re willing to put the resources behind it.”

The 45 acres will become what Anderson called an “adventure park.” Andrew referred to the wooded site, a mix of steep terrain, about five acres of flat land and a valley.

“We’re canvassing a bunch of ideas,” Andrew said. “We’ve got everything from an outdoor adventure park to a Smokestillery restaurant to cabins and somewhat of a resort complex on top of the ridgeline similar to what you might see in Gatlinburg, except a little more of an industrial Tennessee Hills look.

“If we can, we’re probably going to combine a lot of those things together, and we really just agreed to develop everything that was usable as we develop these ideas, based off of the $20 million we’re already investing in this site.”

Jobs in the mix

The overall concept is likely to create up to 80 jobs eventually. In fact, the Tennessee Department of Economic and Community Development (ECD) sent out its own announcement about it Monday touting the creation of 45 jobs over five years. ECD is providing workforce training grants and other incentives in addition to the help coming from Bristol.

“Tennessee’s strong business climate and skilled workforce continue to ensure success among companies like Tennessee Hills Distillery,” Gov. Bill Lee said in a release. “I thank this Tennessee brand for its commitment to job creation and look forward to seeing many more years of success in Northeast Tennessee.”

Bristol mayor Mahlon Luttrell called Rugged American Spirits "synonymous with quality and innovation.

“This project consists of the perfect blend of investment and vision that will not only bring more than 80 new jobs to our community, but that also leans into our cultural heritage, further elevating Bristol as a destination of choice for unique experiences delivered by masters of their craft,” Luttrell said in a statement.

In addition to the provision of land by Bristol, the Tennessee Hills distillery project is in what’s called the “420 Zone” - meaning it qualifies for incentives that send some sales tax dollars generated from retail within the site back to the business for reinvestment. The Pinnacle benefits from the same program.

“With the retail element and that incentive coming from the state, and then we’ve got a pretty robust incentive policy already that the city has in place, and it being a manufacturer, they were able to check all the boxes,” Bristol’s Anderson said of his work with Tennessee Hills over the past several months.

“As time went on we just helped them make their business case and they chose this for their home.”

The new distillery - and a new, much larger brewery still planned for Johnson City - will be designed by Tennessee Hills new chief operating officer Vernon Spaulding. Spaulding is a key figure in the craft beer industry who has led the design and construction of more than a dozen craft and microbreweries nationwide over the past nine years, including Wiseacre Brewing in Memphis.

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