Jonesborough allows Tennessee Hills Distillery expansion

Jonathan Roberts • Jan 14, 2020 at 8:00 PM

JONESBOROUGH — Expansion is officially on the way for Tennessee Hills Distillery after the Jonesborough Historic Zoning Commission approved the distillery’s expansion plans at a meeting last Thursday.

“The primary focus is production space,” said distillery owner and Jonesborough Alderman Stephen Callahan. “It’s going to allow us to produce more and get more product out to our retail stores.”

The expansion, which will more than double the distillery’s footprint, is expected to cost around $300,000, with another $200,000 in equipment being moved in to increase production. Currently, Callahan estimates the distillery moves about 1,000 bottles a week, and described it as “pretty crazy” to be able to do that in the available space. The expansion will add about 2,000 square feet to the side and rear of the existing building.

Callahan said the added space will allow the distillery to keep production inside the 171-year-old Salt House for “at least the next year,” though Callahan expects to ultimately purchase a secondary location to allow Tennessee Hills to scale up its production effort.

“This will last us at least the next year, but as we move forward from that we’re definitely going to be looking at getting more production space over the next year just trying to figure out where the right location might be,” Callahan said, adding that they’re still eyeing possible locations in downtown Johnson City and elsewhere in the county. “We know we’re going to need it, but we’re not really sure where we want to go.” 

Jonesborough Historic Zoning Commission Chairman William Kennedy said the commission was concerned about how the addition would be attached to the Salt House, but that after some negotiation they were able to work out a design that “relates better to the original Salt House,” while addressing secondary concerns such as drainage. The first design was brought to the commission in November, and was given final approval on Jan. 9. Construction is expected to begin on Jan. 20. 

In October, Callahan estimated the expansion would cost about $1 million, but now says they will instead put the remaining $500,000 toward a new facility.

When the distillery does move most of its production to a secondary location, small-batches and pilot runs of new liquors will still be produced at the “flagship location,” and there are no plans for the distillery to ever leave the Salt House, even though the large-scale production operation will.

“We’re going to keep it here in Jonesborough as long as we can,” Callahan said of production.

The distillery also plans to hire at least two new full-time employees this year -— one salesperson and one distiller — and potentially another part-time worker as well, Callahan said.