Months after filing for bankruptcy, Venue Church has agreed to sell its former big-box store property on Lee Highway -- but pastor Tavner Smith said the embattled church will live on.
Crosswalk Chattanooga, a Seventh-day Adventist Church, had been sharing the property with Venue under a lease agreement since the summer.
If the deal closes as planned, Crosswalk will soon take ownership of the space, a repurposed former Sam's Club in which Venue Church has held services for about five years.
Founded around 2013 as a "judgment-free zone" aimed at those disaffected from traditional church spaces, Venue was soon listed among the nation's fastest growing congregations.
But attendance precipitously dropped after much of the staff quit in December 2021 over concerns with the church's direction and Smith in particular.
Following that tumultuous period, membership -- and revenue -- rapidly declined, and Venue could no longer sustain its costs. Facing foreclosure on its 6401 Lee Highway property, in August the church filed for Chapter 11 bankruptcy, giving it more time to settle its debts.
Another church made an offer on the property, but Crosswalk exercised a clause in its lease agreement allowing it to purchase the property for itself on the terms the other potential buyer had offered.
The deal is not set to close until February, but a court earlier this month approved the purchase agreement for $3.6 million.
The 46,800-square-foot property's assessed value is $4.9 million, according to public records. The difference between that valuation and the sale price in part reflected the fact of Crosswalk Chattanooga's active lease, which limited what potential buyers could do with the space -- and thus the pool of interested parties, Smith said.
If completed as planned, the sale will allow Venue Church to pay off its creditors, Smith said. He added that the future financial picture for the church remains unclear, but the church will continue to meet in the Lee Highway space until the deal closes -- and potentially for a period after as it seeks a new location -- if it needs to work out a temporary arrangement with Crosswalk Church.
The sale "puts us in a place where we can begin to move forward," Smith said by phone. "We definitely will be continuing the church."
Venue Church opened its doors in 2013 at a space on Shallowford Road, and it proved exceedingly popular under Smith's leadership. The church added a leased satellite campus in North Georgia and began renting the Lee Highway property in late 2016, moving in around Christmas of 2017 following a renovation period, Smith said.
Venue Church bought the Lee Highway property in 2019 for $4.5 million, public records show.
"I was so drawn in to the lights, the music, the way the pastor spoke," one former volunteer, who joined Venue in 2019, told the Times Free Press. "You felt so good walking out the door, like, 'Oh, I'm supposed to be here,' no matter what else was happening in your life."
Before the pandemic, Venue was known to attract upwards of 1,500 people on Sundays on Lee Highway and at a North Georgia location. After in-person service resumed, attendance averaged about 800 adults, Smith said.
Attendance is now far lower. Staff and volunteers left the church as rumors spread about a relationship between a church employee and Smith, who went through a divorce last year. The pastor would later himself describe having been in an "inappropriate relationship." But he denied that it constituted an affair and told concerned church volunteers he and his ex-wife had been living apart well before their divorce became formal.
In December 2021, staff gave Smith a deadline to step away from leadership for a period, but the pastor refused, the Times Free Press reported.
(READ MORE: Former members question culture of Venue Church, a Chattanooga megachurch in crisis)
Staffers quit en masse, and disaffected former members described an institutional culture increasingly oriented toward growth and money that brooked little dissent.
In January, Smith, whose salary at one time approached $200,000, announced a sabbatical, the Times Free Press reported. He returned to the pulpit Feb. 6, apologized for wounding people and asked for forgiveness.
Smith said he has always been among the church's biggest givers. His salary is set by a board of overseers, he said, adding that he took a $50,000 pay cut this summer prior to the bankruptcy and personally paid three large bank payments the church was behind on.
Finances were bleak. In court documents, the church reported $3.1 million in revenue in 2020 and about $2 million in 2021. By August, the church said it had brought in just about $597,000 for this year.
Seeking to stave off financial catastrophe, Venue Church, which had closed its North Georgia campus, rented its Lee Highway space to Crosswalk Chattanooga. The congregation is among the biggest satellites of a California-based Seventh-day Adventist Church, said Justin Wampler, a church administrator at the Chattanooga location.
Crosswalk Chattanooga has used the space mostly on Saturdays, the day of sabbath in the Seventh-day Adventist tradition. Wampler said the service attracts on the order of 600 people some weeks.
Crosswalk Chattanooga did not initially intend to buy the property, Wampler said. But it established a right of first refusal clause in the lease, which ultimately gave it the option to make the purchase when it went for sale.
Both Smith and Wampler described a smooth working relationship.
"Venue has been a blessing to Crosswalk," Wampler said by phone. "Tavner and his team have been super easy to work with."
When, facing foreclosure, Venue Church filed for Chapter 11 bankruptcy on Aug. 23, it reported $4.7 million in assets, which included the value of its property, cars and miscellaneous possessions like computer equipment and couches. It reported $3 million in liabilities, including about $2.8 million owed to First Citizens Bank, which held collateral on the Lee Highway property.
This fall, Cornerstone Apostolic Church offered to buy the Lee Highway property for $3.6 million, court records show.
Under its lease agreement, Crosswalk Chattanooga was entitled to review the terms of the deal, and after a quick fundraising effort, decided to buy it for itself.
The purchaser is the Georgia-Cumberland Conference, the umbrella administrative body of the Seventh-day Adventists in the East Tennessee region.
Venue Church currently has about five employees. Smith said those include him, a youth pastor, a care pastor, a creative director and an operations director.
It's too early to discuss future plans in depth, Smith said. "For right now, what I would say is, we want to build something that blesses this city and helps people find hope in a hurting world."
Contact Andrew Schwartz at aschwartz@timesfreepress.com or 423-757-6431.