FRANKLIN—International Paper announced Tuesday it plans to spend $83 million to repurpose a portion of its shuttered Franklin mill, creating 213 jobs.

Beginning in mid-2012, the company expects to begin fluff pulp production at the mill, located across the Blackwater River in Isle of Wight County.

“You should start seeing activity fairly soon with the ramping up of equipment,” said Donna Wadsworth, communications manager for IP in Ticonderoga, N.Y. “We’ll be ramping up to full staffing by next spring.”

Peter O’Keefe, a principal with CMI, said Franklin Pellets LLC is still looking at the facility for a wood pellet manufacturing operation. Company officials, including former Virginia gubernatorial candidate Terry McAuliffe, said last month they were negotiating with IP for use of the mill campus, which could accommodate both pellet making and fluff pulp production.

“We’re still in the middle of our process,” O’Keefe said. “We’re in the due diligence phase and nothing has been finalized.”

IP continues to actively evaluate additional repurposing options for the Franklin site with third-party partners, according to a statement released Tuesday.

Wadsworth said the jobs in the fluff pulp mill would be manufacturing and production jobs similar to ones used before the facility shut down last year. Pay would be competitive and hiring would be based on skills.

“We have wonderfully skilled people in the area,” Wadsworth said. “We look forward to working with them. We will be hiring on a mill needs basis and will certainly consider the skills of former employees as part of the process.”

In addition to the 200-plus jobs to be created by the plant’s repurposing, IP’s announcement also opens the door to many new indirect jobs in the transportation and logging industries, said John Smolak, president of Franklin Southampton Economic Development Inc.

“There will be a tremendous amount of indirect spinoff in transportation jobs,” Smolak said. “These indirect jobs that are created are very important to the community as well.”

Mayor Jim Councill said a number of factors helped lead IP to the decision to repurpose part of the mill campus. Those factors include the quality of the workforce, local commitment as well as proximity to major ports and a plentiful wood basket.

“We are ecstatic,” Councill said. “We knew things were being discussed, but we didn’t know if anything was going to happen.”

Councill said the City of Franklin received 18 to 20 percent of the tax revenue generated from the plant before it closed through a profit sharing agreement with Isle of Wight County.

Wadsworth said the availability of southern pine, which is ideal for fluff pulp, was another big reason for IP’s decision to repurpose the mill. The unique fiber length and absorption properties of this species make it ideal for producing high quality fluff pulp, according to the statement.

Fluff pulp is used in a variety of consumer goods, such as baby diapers and adult incontinence products.

“We would like to thank International Paper for its unprecedented efforts in repurposing the mill,” said Thomas J. Wright III, chairman of the Isle of Wight County Board of Supervisors. “We appreciate the efforts of the governor and Virginia Economic Development Partnership in assisting the county with this deal. This announcement comes at a critical time for Isle of Wight County as we strive to maintain excellent schools and services in a difficult economic environment.”

The announcement is a result of a team effort between Isle of Wight and Southampton counties and the City of Franklin, said former Isle of Wight County Supervisor Phillip Bradshaw. He said the three entities formed a regional committee to help former employees and later worked with IP to help with the repurposing of the mill.

Bradshaw said the investment IP will make when repurposing the mill will help spur the local economy.

“It’s a new beginning,” he said. “I think that’s the way we have to look at it.”

Don Robertson, spokesman for Isle of Wight County, said he hopes the announcement will be a psychological boost for many in the county.

“When IP left many folks had spent their lives there,” Robertson said. “It was like losing a loved one or a family member almost. The prospect of a new beginning for the mill is huge from a psychological perspective.”

Robertson said the repurposing of the mill does not solve all of the financial challenges facing the county, but “it’s a significant start.”

Small businesses in the area will also benefit from the mill repurposing, said Franklin Southampton Area Chamber of Commerce Executive Director Teresa Beale.

“There will be a trickle-down effect,” Beale said. “People with paychecks will be able to put more money into the local economy.”