Franklin is again considering using taxpayer dollars to help build a facility that a new company could move into.
City officials have in mind a location off Graham Road near Commerce Drive for a new shell building. They know how big they want the building to be, based on the needs of companies looking at expanding or locating in Indiana. And they have the experience to know what to expect when constructing and selling or leasing the building.
Now, they want to research specifics, including the cost, and discuss the need for the facility with city council members.
The idea was proposed by redevelopment commission member Rob Henderson and has support from Franklin Mayor Joe McGuinness because a new shell building could bring higher-paying jobs to the area and increase the assessed value of the property, officials said. Before it could be built, the city council and redevelopment commission would need to approve using city funds to cover part of the cost of construction.
“I’m glad this conversation is happening again,” McGuinness said.
The 50,000-square-foot building would consist of four exterior walls and a roof but would be undeveloped inside, allowing a company to customize the facility to its needs. The property officials are considering is 70 acres across Graham Road from the county animal shelter and just north of Premium Composite Technologies. The city is not planning to use the entire property for the shell building.
In 2013, the city worked with developer Runnebohm Construction to build the first shell building in Franklin. The city had committed to spend up to $100,000 on utilities and interest payments and pledged to pay $450,000 for the property if the building didn’t sell by September of this year. Nine months after the building was complete, Hetsco Inc., which conducts routine and emergency maintenance and construction management and labor for power plants and industrial operations, relocated from Greenwood and moved into the building. Some of the money the city had committed was used for incentives for the new company.
City officials are split on whether to build another shell building, with no guarantee that a company will be looking to move in. Most shell buildings take 18 to 24 months to fill; Franklin’s nine-month time frame is unheard of, said Mark Writt, senior vice president of the Indianapolis branch of CBRE real estate firm.
Johnson County Development Corp. President and Chief Executive Officer Cheryl Morphew talked to the Franklin Redevelopment Commission this week about how other cities approach shell buildings. Indiana had 19 empty shell buildings as of October, she said. The square footage of the buildings ranged from 43,000 to 1 million square feet, she said. Nine of the buildings are around 50,000 square feet, but none is in direct competition with Franklin, she added.
“We were lucky the first time in selling it in about nine months. I think we all recognize that,” Morphew said. “This is always a risk, but we also want to make sure that we get it right and we have a competitive project.”
Local officials are looking at constructing a 50,000-square-foot building with room to expand to 150,000 square feet or more, and more acreage to expand on if needed. At that size, Franklin’s facility would be comparable to ones in cities like Shelbyville, Plainfield, Greenfield and Anderson, Writt said. Last year, Stanley Black & Decker moved out of a 50,000-square-foot space in Shelbyville because it had no room to expand.
A new shell building also could attract more than one company, like the city did with the first building, officials said.
Before Hetsco moved into the building, Grayson Thermal Systems was interested in purchasing the 51,000-square-foot structure. Even though Grayson didn’t move into the shell building, it still leased a building in Franklin. Another central Indiana company, Technical Threads, moved into the area to serve Hetsco’s need for heavy-duty fasteners and bolts.
The goal for a second shell building is to make it attractive to manufacturing companies, since that is who typically goes for facilities that size, and that fits in with the other businesses in Franklin, McGuinness said.
If the city already has a building, a company could customize the space within a few months instead of waiting another year to start from scratch, Morphew said. More than 30 companies have shown interest in building or expanding in Johnson County this year, she said. Most companies want less than 20 acres for their building, she said, so the 50,000-square-foot shell structure would fit most companies’ needs.
“The goal is to be better prepared as a community for that company who is looking for an existing facility and cannot take the time to build from scratch. Creating a product like a shell building, it saves a considerable amount of time and money for a company to buy it and customize it, rather than buy land, prepare the land, design a building, construct the building, etc.,” Morphew said. “Companies are all about speed to market and reducing their down time to relocate and/or expand. Having a shell in place is a huge competitive advantage.”