Councilman expresses heartburn over old power plant sale

Published 5:46 pm Saturday, July 11, 2015

A $26,500 transfer from the Franklin Business Incubator was approved by city council to pay for costs related to disposing of environmental hazards on the old power plant located at 500 N. Mechanic St.

The transfer includes rent and program fees that exceeded expectations. This action is related to the sale of the property to Highground Services, a graduate of the incubator that employees 65 people at an average salary of $67,000. The process started back in October, but has run into a few hick ups as the city has conducted a series of environmental studies required by the loan agency.

During one of the studies, fuel tanks were discovered underground that should have been removed decades ago, said City Manager Randy Martin. To date, the city has spent more than $47,000 in changes to the property, including $8,000 in running the surveys. Martin said that once the environmental issues were discovered, the city was going to have to pay for it no matter what. And for the $20,000 spent relocating the fiber wires, that was also an expense the city would inevitably have to absorb.

Ward 3 Councilman Greg McLemore feels differently. He understands that the expenses would have eventually had to be spent, and that it is good to keep this company in the area. But he asks if the sale of the building has come at the expense of the incubator and taxpayers instead of the buyer?

At the selling price of $40,000, McLemore said he did not feel like the city was being a good steward of the citizens’ money.

“It is almost like — it seems like personal games to me — people getting buildings practically for free,” he said. “We sold the building for what? Is it right that the incubator and taxpayers offset expenses done to sell the building?”

Martin said keeping those salaries in Franklin, as well as Highground on the tax rolls, are worth it. The company could have ended up in a city such as Chesapeake. Additionally, Martin said those expenses were not related to selling it, that it was just paying bills that they would have had to pay no matter what.

In other news related to the building, the closing date had to be postponed for the third time. The first two times were related to the environmental study and cleanup. Now, the Sept. 30 extension relates to Highground having to seek other financial options, as the original bank did not accept the letter from the Department of Environmental Quality clearing the property of any further issues. That letter did not arrive until June 16.

Martin added that the city applied for state funds related to environmental cleanup, and that they would know soon if they will get full reimbursement for the costs.