Council approves $40,000 sale agreement to Highground Services

Published 11:20 am Saturday, December 20, 2014

Back in October, the Franklin City Council offered the property known as the old power plant, located at 500 N. Mechanic St., for sale at a price to be agreed upon later to Highground Services Inc., which was a business that grew out of the Franklin Business Incubator.

On Monday, Dec. 8, council approved the proposed Real Estate purchase agreement for the sale of the property 5-1, with Councilman Greg McLemore voting nay and Councilman Benny Burgess excusing himself.

The property will be sold for $40,000 to an economic holding company for Highground as an economic incentive for the buyer to renovate the existing structure to accommodate a business tenant.

Back at the Oct. 27 meeting, McLemore had expressed some heartburn with this price because it was selling the large building at a significantly reduced rate than a person can get a house for. Vice Mayor Barry Cheatham said at the time that the building was undeveloped and will cost the company a large amount in renovations.

On Wednesday, McLemore confirmed that was his holdup.

“It breaks my heart that people can sell a building for $40,000, for a commercial building, but then turn around and sell a house on Langston Street, charging $120,000,” he said. “They will charge some poor people for a regular home, and that’s no luxury living on Langston, to a citizen for $120,000, yet hook up your friends for $40,000.”

In October, council approved an approximately $120,000 sale of a home the city had renovated through a state program.

McLemore added that he believed it was worth more than $40,000.

“As far as I am concerned, we never tried to market that property,” he said. “I understand they will be putting money in it, but my gut feeling is that this doesn’t just sit right.”

On Wednesday Cheatham said this sale was a win-win.

“We are keeping a company with 60 high paying jobs in Franklin, and we are putting them in the downtown, historical district, where they will put in a lot of money to renovate it,” he said. “And some folks who want to stay in Franklin are going to be able to stay in Franklin. We would have hated to see these jobs go to Chesapeake.”

Cheatham said the building will also be put on the tax rolls, and it will eventually be going in at the value that it is appraised at after Highground completes the renovation.

City Manager Randy Martin said the renovations will easily cost more than $500,000. He added that Highground, being an engineering firm, may be able to offset some of those costs in kind. But the appraiser would take it at full value, not at the number that Highground was able to save on it.

Martin says the city also avoided some future costs. The city manager said the city would have had to eventually make the decision to renovate it for upkeep, or to ride it out until it was time to demolish it. Either way, the cost would have been significant.

“There would have been no revenue with it, there would have only been costs,” Martin said. “You can’t let it perpetually sit there and deteriorate.”

Cheatham said you can’t compare a newly renovated residential building with a decades-old power and light building that had been used for nothing but storage.

“I don’t think we sold it too cheap,” he said. “Everything I have heard about Highground Services is that they do things first class. They will create something that we can be proud of. I’m very happy that they are staying in Franklin.”