Incubator hatches state award

Published 12:00 am Tuesday, June 3, 2008

FRANKLIN—Nancy Parrish displays an acrylic trophy like a proud parent. The award recognizes the Franklin Business Incubator as the winner of the Virginia Economic Development Association’s Community Economic Developers Award.

Communities across the state submitted nominations to VEDA, a Virginia Beach-based group that facilitates business growth.

Franklin’s submission entered the incubator among communities with populations between 5,000 and 10,000. Winning the state award qualifies Franklin for the regional award of the Southern Economic Development Council Inc. in Hot Springs in October.

“We hope this is just the beginning of recognition for this very laudable project,” said Parrish, the small development business manager.

The incubator offers businesses a place to start operations, where office supplies are available, as well as office space and technology at a rate lower than on the open market. Additionally, tenants are offered management assistance and have access to financing. Currently there are 20 tenants at the location, Parrish said.

Since 1982, the Virginia Economic Develoment Association has been increasing the effectiveness of those who practice economic, industrial and community development in Virginia, according to Connie Long, VEDA executive director.

Among the services provided by VEDA:

– promotes standards of professionalism and ethics within the economic development community;

– facilitates the exchange of information among its members;

– provides input that helps maintain Virginia’s leadership position in economic development;

– encourages continued education through state and national economic development organizations.

The award is virtually a celebration of the history of the incubator, which opened three years ago this month on Mechanic Street, in a building that turns 100 this year.

The VEDA awards committee scored four areas of contribution made by the locality:

– business retention and expansion;

– business recruitment;

– community development;

– community involvement.

This year’s VEDA awards program replaced the Ally of the Year and Volunteer of the Year. It is designed to recognize outstanding communities in the commonwealth for their efforts in advancing the economic viability of their community through economic and community development programs.

SEDC has formulated this awards program for state association members.

One previous winner from Virginia that featured a Caroline County economic development program has gone on to win the regional level, Long said.

The Franklin presentation, prepared by City Manager Bucky Taylor and staff members, offered some context behind the start of the incubator program.

As part of a Powerpoint presentation, Franklin was described as a city that had undergone dramatic changes during the 1990s, several of which “had a direct negative impact on the economic base of the city.”

Specifically cited was:

– the closing, downsizing and restructuring of several area businesses, including the sell of Union Camp Corp. — the area’s largest employer — to International Paper Co.;

– reduction of agricultural subsidies to local farmers and the subsequent sale of much farm land to developers for residential housing;

– Hurricane Floyd and its aftermath of the flood that destroyed more than 128 businesses downtown, as well as many homes.

At the time, the city owned a sturdy, four-story 40,000-square-foot building that was sitting vacant on the edge of the historic area.

The Franklin Business Incubator was funded in conjunction with three other city projects: City Hall, the courts and safety building and flood infrastructure renovations.

The city also calculated the economic impact the incubator has delivered to the city. For example, property values of the six small houses located directly across the street have increased in value by almost 75 percent.

In addition, Parallax Information Technology had outgrown its space and considered leaving the city. The business was designated an anchor tenant, keeping the international business within the city, Parrish said.

When the Franklin Business Incubator opened on May 23, 2005, it had eight tenants with 13 employees. In June 2006, the first economic impact study was conducted on the 10 tenants who had been occupants of the FBI for six or more months.

The results indicated there were 42 full-time and 19 part-time employees.

The average salary of the employees was $34,000 annually, compared to $24,646 per capita annual income for residents of the city.