Officials confident IP looking to repurpose mill facilities

Published 8:55 am Wednesday, April 7, 2010

FRANKLIN—As the final days of the long, proud history of paper manufacturing in Franklin comes to an end, local officials say they are confident that the company bringing that proud history to a close — International Paper Co. — is committed repurposing the Franklin mill facilities for other uses.

Speaking to the media before an economic recovery task force meeting Tuesday, the local leaders say IP has been impressed with the collaborative effort to help the community recover from the loss of 1,100 jobs at the mill.

“Our conversation and discussions with (IP) since day one have been very positive,” Isle of Wight County Board Chairman Phillip Bradshaw said. “I think us organizing so quickly — not only on the local level but at the state and the federal levels in our community as a whole — (plus) the positive response helped encourage IP to look at repurposing the mill.”

Franklin Mayor Jim Councill agreed.

“When it first was announced, I think their idea was they were not looking at repurposing,” Councill said. “They were just going to close it down. But the organization that we put together, literally on the doorstep of the news conference, has turned the tide.”

The task force was formed in November between Franklin and Southampton and Isle of Wight counties in the wake of International Paper Co.’s announcement on Oct. 22 that it would close the Franklin paper mill by the spring.

Since the task force’s founding, confidential negotiations involving IP and about 15 to 20 renewable energy companies have taken place. IP has also reportedly taken some prospects on-site to tour the facilities at the Franklin mill.

“It’s encouraging that IP has seen the number of interested parties that they have,” Southampton County Administrator Mike Johnson said. “This is a bit like pouring water into a funnel. We’re at the very top of the funnel right now. We have a lot of ideas floating around on how to repurpose that site. But over the next 10 to 12 months I think that funnel will get narrower and narrower until you get down to one finalist.”

Said Councill: “I think we can all take some comfort in the fact that (IP) is putting a substantial amount of manpower and thinking into all the considerations of the repurposing, and they would not be doing that if they were not sincere, and if they weren’t hopeful that they could find someone who would be a compatible group for reuse.”

The mayor added, “I’m very impressed with the level of commitment that they are showing.”

Asked if IP was doing anything specific to build confidence among local officials that the company was serious about repurposing some or all of the Franklin mill facilities, Bradshaw quickly pointed out IP’s decision to host a transition center on-site and to host parties with repurposing proposals.

“They’re not sitting back not doing anything,” Bradshaw said. “They’re not out openly soliciting for business or saying they have a plant up for sale. But the people that have been interested in it, and there’s been a lot, they have hosted them.”

Councill added that IP had assigned “very high-level, technical executive-type people” to the repurposing project.

“Not only are they directly connected to all of the suitors, but they also communicate on a regular basis with (Gov. Bob McDonnell’s) entire staff,” the mayor said. “IP has dedicated very high level to people to work this project from a technical standpoint. They’re spending the resources to help us.”

John Smolak, president and CEO of Franklin-Southampton Economic Development Inc., told the audience at the task force meeting that IP would probably review the unsolicited proposals it received for possible reuse of the Franklin mill facilities at the end of April.

“(IP will) again review some of these proposals and see which ones make good sense for the assets that are there,” Smolak said. “IP will sort of vet this process out, probably two or three times to make sure that they’re satisfied with the kind of corporate citizen that could come into this community and offer new jobs.”

He cautioned that it could be some time, perhaps as much as two years, before any new jobs were created.

“A lot of this is going to take some time,” Smolak said. “If we get to the point where we have a draft agreement with a proposal or a consortium that makes sense for that site, there will still be a lot of due diligence that will need to be done (including) engineering studies, legal agreements and regulatory permits. It’s a very daunting process. My guesstimate is (that it will be) a good 24 months, even once a group or proposal is identified.”

The renewable energy companies involved in negotiations with IP are believed to be involved in several processes, including the production of wood pellets, cellulosic ethanol, biodiesel fuel and landfill methane, waste-to-energy gasification and solar, wind and hydroelectric power.