Fewer entrepreneurs have had access to the space and support offered by the Chattanooga Area Chamber of Commerce’s incubator program at the Hamilton County Business Development Center since 2024.
That year, the chamber stopped leasing space in a portion of the building in anticipation of more than $5 million in renovations the Hamilton County Commission authorized County Mayor Weston Wamp to make on the facility.
Those renovations didn’t happen. According to Haley Burton, press secretary for Wamp’s office, county officials and an architecture firm determined the needed renovations were more extensive than previously anticipated.
Businesses participating in the incubator program can lease space in the Business Development Center for three to five years for a subsidized rate, which increases each year a business is in the program.
Since the chamber stopped leasing space or renewing leases in a portion of the building, the program has shrunk to 34 tenants. The 127,000-square-foot facility can accommodate about 60 program tenants.
In a May 1 memo to commissioners, who are set to vote Wednesday on whether to authorize Wamp to sell the Business Development Center, Wamp counted the program’s inefficient use of space among the reasons the property should be sold.
(READ MORE: New tenants wanted for renovated Business Development Center)
“County property management analysis reveals only half the building is occupied by businesses, and the inefficiency is costing taxpayers,” Wamp said in the memo.
Jeremy Henderson, vice president of marketing for the chamber, said the chamber stopped leasing space on the second floor when the organization signed a new lease with the county in 2024.
The second floor has a rentable area of 33,272 square feet, which is about 31% of the building’s total rentable square footage of 106,508, according to an appraisal of the building conducted for the county in November 2025 by The Haisten Group.
The report estimates the as-is value of the building at $6.5 million, with a useful life of 40 years and no noted deferred maintenance.
A prorated annual expense of $75,000 for major repairs and replacements is estimated in the report.
“The major repairs and replacements expense was estimated by considering what it would cost on an annual basis to sink into an account at 1-3% interest to replace the roof and other structural components over a 20-year period,” the report said. “The expense ratio for the property appears to be in line with the market as reflected through the review of many operating statements over the years.”
County officials say necessary renovations will cost more than the building is worth.
“The building faces millions of dollars in deferred maintenance and infrastructure limitations,” Wamp said in the memo. “A recent assessment identified major capital needs across HVAC, roofing and structural systems, along with concerns related to electrical capacity, fire suppression and plumbing that have not yet been quantified.”
On April 13, tenants were informed by officials with the county and chamber of the potential sale of the Business Development Center. The county owns the building, and the chamber operates the program.
Two days later, Wamp held a press conference at which he announced the county’s intention to move the business incubator program to the Franklin-Roberts Future Ready Center that’s planned at a former BlueCross BlueShield building at Gateway Avenue and West M.L. King Boulevard.
The center will likely be fully operational by fall 2028, Wamp told the Chattanooga Times Free Press, and he said he assumes the incubator portion of the building will be ready sooner than that.
In the May 1 memo, Wamp said the planned incubator at the new site is comparable in size to the space actively used today at the Business Development Center, “allowing for maintained capacity with improved efficiency.”
According to The Haisten Group appraisal report, office use is the most financially feasible option for the building, which is at 100 Cherokee Blvd. on Chattanooga’s North Shore.
“If medical office, apartment or hotel use were considered, the cost to either convert or demolish the subject improvements for such a use was determined to be cost prohibitive,” the report said. “Due to the subject’s current general office improvements, the appraiser believes an office use is more financially feasible.”
In March 2024, the Hamilton County Board of Education purchased the property at 401 W. M.L. King Blvd. from health insurer BlueCross BlueShield for $10 million.
In August 2024, the county entered into a new lease agreement with the chamber. Previously, the chamber was responsible for maintenance of the building and utilities.
“When the current administration took office, it was discovered that the lease agreement with the chamber had expired in 2015,” Burton said in an email when asked why the county took over maintenance of the building. “Under the previous lease, the chamber was responsible for facility maintenance and upkeep. The chamber subsequently requested that the county assume responsibility for half of the utility costs as well as building maintenance, citing a lack of available capital to cover those expenses.”
The new lease stipulates that 17 office suites on the second floor be designated “lessor suites” for use by “no more than four county employees.”
Potential clients of the incubator program must go through a review process and be accepted into the program before they can lease space. A list of applicants are now awaiting review, because application reviews are on hold until the County Commission votes on the fate of the building, Henderson said.
“When and if we begin reviewing applications again, there are three to four available spaces with working HVAC,” he said in an email.
Contact business reporter Emily Crisman at ecrisman@timesfreepress.com or 423-757-6508.