FRANKLIN — Space at the Franklin Business Incubator is in high demand these days. So much so that Nancy Parrish, the small business development manager, said she has a waiting list of tenants.

However, thanks to two grant awards, which together total nearly $700,000, the incubator will soon be rolling out the welcome mat to more businesses.

Currently, the building houses 28 small businesses employing 120 people.

“Ten years ago, this property was basically an eyesore,” Parrish said of the four-story building on North Mechanic Street, built in 1907.

Gov. Timothy Kaine announced on Thursday that a $536,466 grant had been awarded to the city under the Community Development Block Grant – Recovery program. The city was previously awarded a $150,000 grant from the U.S. Department of Agriculture.

“Even in a tough economic climate, Virginia is continually working to provide employment opportunities for all our citizens,” Kaine said in a press release.

The CDBG–R is funded by the American Recovery and Reinvestment Act and is being administered by the Virginia Department of Housing and Community Development. Franklin is one of six communities statewide to receive a share of the more than $5 million in grants.

“I just think that it is so awesome that Franklin was one of those six chosen,” Parrish said Friday. She even traveled to Winchester for the governor’s announcement.

The grant funding will allow the city to finish renovations to the building. The building was partially renovated when it opened in 2005. Currently all of the first and second floors and about 80 percent of the third floor have been renovated.

Parrish said that the complete build-out of the Incubator “was something that needed to happen,” but the city didn’t have the funding.

Construction could begin as early as late October.

According to a press release from the governor, the building could accommodate up to 18 more businesses after renovations are completed. The project is expected to create up to 77 new, permanent jobs and 15 temporary construction jobs.

The Franklin Business Incubator’s goal is to assist new small businesses by providing support and guidance and eventually “graduate” them out on their own–hopefully to locations within the city.

“On the state level, and even on the regional level, we’re seen as a success story,” Parrish said. “People need to recognize that.”

She said that some people don’t realize how valuable an institution like the Incubator is to the community. She said that small businesses are “the future” of economic development, and the Incubator helps support small businesses in the area.

“When our businesses are successful, it’s a good situation for all of us,” Parrish said.

She expects the entire building to be built-out and ready for businesses within the next two years.