‘Vacancy Tax’ could fill empty spaces in city

Published 7:12 pm Friday, April 19, 2019


I have enjoyed your reporting of the recent financial issues plaguing the City of Franklin and Southampton County. I have felt that your staff of reporters have laid out the facts of the debate and the arguments in particularly good form and manner, while also maintaining an element of neutrality.

I was particularly intrigued when your team turned the debate over to the public and asked for suggestions on methods the local city government could implement to generate revenue and halt the increase on taxes of residential real estate, etc. This challenge to the public has pushed me over the edge, from that of a silent observer, to a vocal, participating citizen in the debate.

My professional background is twofold: For the first half of my professional career, I was in a senior level management position of a local Fortune 50 company, managing locations with annual revenue ranges of $55 million to $25 million per year, and tasked with responsibilities of managing personnel, various departments, vast quantities of inventory, and most importantly, ensuring location profitability. The second half of my professional career has been at a corporate level sales position for the same company. In the latter position, I have established myself as one of the area’s leading contractors and serve an area of roughly 75 miles in circumference around Franklin. That being said, I have taken the approach of looking at this debate from a purely business perspective.

From this perspective, I conclude that the root cause of Franklin’s financial issues are not based on an insufficient amount of taxes being assessed on the local populace, but rather in the fact that Franklin is not conducive to commercial business and in most cases can be classified as a hostile environment. There is a precise reason that the commercial properties in Franklin are regularly passed over, businesses choose our surrounding counties and cities, and businesses come and go so quickly here. Which, as a result, leaves buildings and store fronts vacant for years on end. That reason is that Franklin’s commercial real estate is at a rate in which incoming businesses cannot afford the overhead of leasing rates and mortgages, while maintaining any sort of profitability. Either asking lease rates are ridiculously overpriced, or the current owner has an absolutely unrealistic expectation of what the property is worth in their selling price.

If Franklin wants to become profitable, then Franklin must become more advantageous and aggressive in marketing to new and nationally established business ventures. Franklin must harden its resolve to draw business in and create a pro-business environment. This approach must began by forcefully motivating the current commercial property owners with vacant store fronts, empty lots and buildings to either fill their locations with established/legitimate businesses or face being penalized by the City of Franklin through a the use of a “Vacancy Tax.”

If the City of Franklin penalized property owners that had vacant commercial property locations, at a rate of 5 percent of the property’s assessed value, annually, the current owner would quickly become motivated to either lower the rent to draw in a business or lower the asking price and sell the property to avoid the penalty.

An example of the penalty would be a building on Armory Drive, with a tax-assessed property value of $2.5 million. If the owner failed to draw in a new business within a year, then the city would begin penalizing the owner at $10,416, per month until filled, which equates to $125,000 per year in gained revenue for the City of Franklin, and on top of the standard property taxes.

Now consider the amount of vacant store fronts, buildings, and lots on Armory Drive, Stewart Drive and Downtown Franklin. The added benefit, to such a policy would be that when the units are filled, more businesses are generating sales tax revenue, the city has aided in creating more local employment, and with the addition of more business, the local population increases, thus driving up home values.


Robert Aaron Morgan