There are plenty of examples of where $5 million in tax dollars has gone in downtown Franklin: Henderson Drugs’ updated storefront, Indigo Duck restaurant’s renovated interior and facade work, just to name a few.
During the past six years the Franklin Development Corp. has loaned or given money to 26 homeowners to fix up their homes. It also has approved low-interest loans so 16 businesses could renovate the inside of their shops and paid half the cost, nearly $690,000, for 16 building owners to restore their building facades. The organization put about $2 million toward larger projects, such as buying land to help Ivy Tech’s Franklin campus expand and helping renovate the long-vacant Hazelett building.
Those funds are now mostly gone. Of the original $5 million from the city’s tax-increment financing, or TIF, districts, less than $200,000 remains for additional projects. The organization also was spending up to $200,000 per year in operating costs from a separate pool of $600,000 to pay for its director, legal fees, office expenses and fees for project reviews.
And now the organization is preparing to ask for more.
How or if the Franklin Development Corp. will get more money hasn’t been decided. City officials said they see benefits from the projects the group has helped fund, which have sparked new interest in downtown Franklin, including new businesses or an existing owner wanting to fix up a building. But the city likely won’t cut another large check for the organization like the first time. Instead of giving the organization money and having the board approve and fund projects, the group should find the projects first, then ask for money, Mayor Joe McGuinness, city council president Steve Barnett and Franklin Redevelopment Commission chairman Bob Heuchan said.
“I don’t ever see a situation come up again where that big block of money goes out the door,” Heuchan said.
McGuinness would rather see both the Franklin Development Corp. and the city redevelopment commission wait before considering giving out more money. About $900,000 worth of projects approved last year have barely started, so the group should now be focused on completing those and then analyze how they’ve contributed to the downtown before pursuing new work, he said.
The funding shortfall has put additional programs planned by the organization on hold. Board members are getting updates on ongoing projects. They review their loan and grant programs to decide whether those were beneficial to the community. They’re asking other city officials and residents for suggestions on other programs, such as flipping rundown houses or offering small business loans.
“I think we have accomplished a lot, and we had a clear vision to deploy dollars toward improvement, whether it was to the city or the residential areas that qualified. And I think overall we’ve accomplished quite a bit. We’ve got a lot of success,” board president John Ditmars said.
The organization was formed to spur new economic growth in the city, especially downtown. The $5 million in funding came from the city’s TIF district, where property taxes collected from businesses are set aside to pay for economic development or infrastructure projects.
In addition to giving out grants or loans, the organization also was designed to take on projects the city or redevelopment commission couldn’t do. For example, the city was trying to purchase the last four houses in the flood buyout but hadn’t been able to due to mortgages or liens on those properties. The Franklin Development Corp. was able to buy the homes at tax sale and will give them to the city so they can be demolished.
“That’s kind of contribution that we made that doesn’t get a whole lot of emphasis on it, but it’s contributing to making it happen. Without our involvement there might be unnecessary delays,” Ditmars said.
The organization also can help fund repairs or redevelop housing and has helped 26 homeowners make repairs with low-interest loans. Heuchan wants to see more of that work in the future, he said.
The majority of organization’s funding went into downtown for facade improvements or business renovations. The renovations done to the Hazelett building, which was deteriorating after more than a decade of standing vacant, may not have happened without the group’s investment of $400,000, McGuinness said.
Businesses are still contacting the city each month to ask about facade grants or find out what kind of incentives might be available to help with their new business. That continued interest from business will help board members make a case as to why the city should continue funding the Franklin Development Corp., Ditmars said. Board members want to be able to go to the redevelopment commission later this year with a detailed plan of how the board will spend money in the future and how it will benefit the city, Ditmars said.
“You can drive through town and see the fact there has been some pretty positive initiatives going on. Some of that, certainly not all, is because of the FDC involvement and what we were able to contribute to that effort. It’s been a collaborative effort with the city, and I think there is a lot of momentum right now to keep it going,” he said.
The organization hasn’t always made the right moves for the city and wasn’t open about how it made decisions on what projects were being funded, Barnett said. The new board has made vast improvements to inform the public and other city officials about how they plan to use the tax dollars. Those moves have created a new level of trust between the organization and the city, Barnett said.