Regions Hampton Roads

Mill closing shocks Franklin-area economy

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Economic development officials around Franklin are trying to wake up from their worst nightmare — the closing of the area’s top employer.

In late October, Memphis, Tenn.-based International Paper Corp. announced that it would shut down its mill in Isle of Wight County near Franklin, an operation that employs 1,100 workers. Company officials say the decision stems from a restructuring strategy prompted by falling demand for paper and packaging products. International Paper also will close mills in Pineville, La., and Albany, Ore.

All Franklin mill employees will be laid off by early next year, but the spillover effect is even more devastating, says Lisa Perry, Isle of Wight’s economic development director. Five of the county’s top 10 business taxpayers are International Paper suppliers, and other local businesses, such as loggers and trucking companies, also will be hit hard by the closure. Surrounding localities are expected to lose $13.5 million in annual tax revenue, according to the Virginia Economic Development Partnership.

Within days of the company’s announcement, however, local officials were looking for ways to turn a bad situation into something good. “Diversifying our economy is something that we’ve wanted to do for a long time,” explains Perry. Her office has been working to develop relationships with site consultants and companies involved in renewable energy and other types of advanced manufacturing. “We’re just going to have to work twice as hard now, and we’re going to have to work at warp speed.”

The first step has been trying to set up a meeting with International Paper officials to find out what they plan to do with the mill and surrounding real estate holdings. The mill campus includes 1,400 acres, and the company owns another 1,000 acres in other parts of the county.

“We’re really anxious to sit down with them and understand what their plans are,” she says. “Because if they are willing to sell those assets and take an aggressive partnership role with us in terms of marketing that property, then those assets will be a terrific way to begin to put people back to work.”

Perry already has received inquiries from independent power companies about the site. She also hopes to partner with a commercial developer to help market the mill along with Isle of Wight’s intermodal park. That facility is designed to house warehouse, distribution and manufacturing companies with ties to the Port of Virginia.

Perry and other local officials, including John Smolak, president and CEO of Franklin Southampton Economic Development Inc., met with Gov. Timothy M. Kaine, asking that the International property mill be designated an enterprise zone.  That step would allow economic development officials to offer prospective companies job tax credits, renovation improvement grants and other benefits.

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