FRANKLIN—Twenty-one years ago, a crumbling four-story brick building sat on the outskirts of downtown, mostly vacant save for a few Christmas decorations and other random items that were stored there.

Today, the building — a former buggy factory built in 1907 — has been repurposed and renovated and houses the Franklin Business Incubator, which just took top prize in a regional contest among community economic development programs.

The incubator, which opened in 2005, beat out 17 other programs in the region to win the 2008 Community Economic Development Award from the Southern Economic Development Council. Before that, the program had won the same award for the state.

“Apparently there was a lot of stiff competition,” said John Smolak, president of Franklin Southampton Economic Development.

The entries were evaluated on innovativeness, transferability, community commitment and leverage measured objectives and secondary benefits, according to an SEDC press release.

“It’s somewhat like a best practice in that other communities can emulate what you’re doing,” Smolak explained. “I guess we’re doing something right.”

Smolak said the incubator, which is funded by the city, has a primary goal of helping entrepreneurs and small-business owners learn how to run and grow a business.

“Small business has always been a cornerstone of growth, no matter at what time,” he said.

Smolak said with more than 100 workers in the building — businesses including a music studio, private investigator, contractors and insurance services, to name a few — the impact on the community is the same as if Franklin had wooed a new company to the area.

“These are businesses that are paying back to the city,” he said.

Two more businesses are set to move in to the incubator building, setting the occupancy rate at 24, said Nancy Parrish, small business development manager and manager of the incubator.

“We have three or four more empty spots,” she said. “We’re hoping to build out the fourth floor, too.”

Sometimes, a business outgrows a small incubator office, she said. Instead of having to find another place to lease, the incubator program allows such a business to locate to a bigger office.

“They are able to grow into a bigger space under the same roof,” Parrish said.

Anchor tenants, such as Parrallax Information Technology, provide services back to other tenants for a reduced fee and sign a longer lease.

Generally, the businesses are encouraged to move on in 3-5 years, hopefully to a location in the immediate area, Smolak said.

“The incubator is not just a landlord,” Smolak said. “It really is a program.”

Tenants wishing to lease space in the incubator have to present a business plan. In return, the tenants are given “hands-on management assistance, access to financing and exposure to critical business and technical support services, as well as shared office services, access to equipment, flexible leases, and expandable space, all under one roof,” according to materials about the program.

Smolak and Parrish said one criticism the incubator faces is that it takes business from downtown Franklin.

Not true, they say.

“We don’t want to be viewed as competition with downtown Franklin,” Parrish said. “One important lesson that many of the citizens of Franklin could learn is that we will only improve ourselves by working with each other, not against each other. When we are not working as a team to promote our town, there is too much wasted time, money and energy spent trying to justify and educate, that it keeps us from moving forward as we should. We all need to look for things that we share in common that will help us to grow — and use them for that purpose.”

According to an economic impact study last year, the average salary of people in the business incubator was $39,267.65, compared to a $24,226 per capita annual income for residents of the City of Franklin. Total income for the incubator was $3,700,407 with a profit of $949,198 for the tenants.

Smolak said the program is still growing.

“It’s not always perfect, but I think we’re on the right track to making this community better,” he said.

“It’s a good location and they offer services to help a business get on its feet,” said Jim Strozier of Highground Services, a consulting engineering company. “(The award) is well deserved. They should be proud of it.”

Highground is one of the businesses that has outgrown its corner office on the third floor. It is set to move into a bigger office soon.

The incubator also has allowed businesses to lease temporary space while they are in transition.

H&R Block’s lease has run out on its training office near Hart Realty on Armory Drive. While the company waits for the new location to be available, it has set up shop on the third floor of the incubator.

“We were able to meet a need for that business when it might otherwise have left our area and taken its revenue with it,” Parrish said.

The incubator is located at 601 N. Mechanic St.