McAuliffe bids to convert Franklin mill to biomass plant

Former gubernatorial candidate Terry McAuliffe has submitted a bid to purchase International Paper Co.'s mill outside of Franklin and turn it into a wood and biomass energy plant.

The paper mill is scheduled to close this year, eliminating 1,100 jobs. McAuliffe, who ran for governor of Virginia but lost the Democratic nomination to state Sen. Creigh Deeds, estimated the venture could save hundreds of those jobs.

"When I heard the plant was going to close, I immediately thought this was a perfect opportunity to create a biomass wood-burning facility," he said.

International Paper has received several unsolicited proposals for the plant, said Desmond Stills, a local spokesman for the Memphis-based paper company. "At this point, there's no way to tell whether any of these proposals are viable," he said.

International Paper has not said publicly what it intends to do with the mill after it closes, and it has not been marketing the site, Stills said. However, the company has set an informal deadline of Feb. 26 for proposals.

Other proposals for the soon-to-be-shuttered plant also call for turning it into a biomass energy site, said John Smolak, president of Franklin Southampton Economic Development Inc., an organization that promotes development for the region.

"We're very cautiously optimistic that a reuse of that facility may be possible," Smolak said. "There is certainly no guarantee that something will work out. I think it's encouraging that IP senior management has taken the initiative to entertain these proposals to see what is possible."

McAuliffe, a former chairman of the Democratic National Committee, said he and a group of investors would provide the capital for the project. He said he would bring in Peter O'Keefe to run the day-to-day operations of the plant. O'Keefe is a political associate of McAuliffe's and also serves on the board of Leaf Clean Energy Co., a green energy investment firm.

"This is what I talked about when I ran for governor," McAuliffe said. "This is where we need to be in Virginia. Capital investment is going to other states because they're enticing companies to come to their states because they have a green energy standard."

McAuliffe has been making the rounds in Virginia, saying in November that he was eyeing the state as a potential location for an automotive factory to build hybrid and electric vehicles. He is chairman of GreenTech Automotive Inc., a start-up company that has said it plans to build a $1 billion plant to make "green" cars in Mississippi.

The former political candidate said his ventures are not tied to plans to run again for governor in 2013.

"I don't know what I'm going to be doing in four years," McAuliffe said. "I knew that would be the speculation. But I spent a year traveling through Virginia. I know these issues. I said in the campaign that if I couldn't do it as a governor, I would do it as a private citizen."

Biomass energy production at the paper mill could be eligible for the kind of green job tax credits supported by Gov. Bob McDonnell's administration. Two bills before the General Assembly - one of which is sponsored by state Sen. John Miller, D-Newport News - if passed would give tax credits or grants to employers who create green jobs.

McDonnell on Tuesday afternoon met with local officials and workers at the International Paper plant. The governor's visit to the paper mill had long been scheduled and was not connected to McAuliffe's bid on the property, a spokesman said.

In an interview Tuesday, McDonnell said he was aware of McAuliffe's bid for the plant.

"Terry McAuliffe has an idea a minute," McDonnell said. "There are a number of people out there who have proposals."

Pilot writers Julian Walker and Linda McNatt contributed to this report.

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com