FRANKLIN—The state is asking that construction work to finish the build-out of the Franklin Business Incubator, a project that has been delayed several times since the beginning of the year, begin to move forward.

Meanwhile, local officials continue to await a decision by International Paper Co. as to where the company plans to base 35 customer service employees. That decision will affect how many jobs need to be created at the Incubator, one of at least three sites the company is considering.

Last year, the Incubator — located at 601 N. Mechanic St. — was awarded two grants to complete the building: a $150,000 grant from the U.S. Department of Agriculture in August, and a $536,466 grant from Community Development Block Grant–Recovery program. CDBG–R is funded by the American Recovery and Reinvestment Act and is administered by the Virginia Department of Housing and Community Development.

“It appears that we were not given another extension by DHCD,” Nancy Parrish, manager of the Franklin Business Incubator, said Tuesday by phone and on Monday during a work session with the Franklin City Council. “We had the start date for construction extended three times and had gone back for one more, but DHCD is requesting that we go ahead and move forward with starting construction as we initially were going to do it.”

Parrish said construction work, which was to originally start on Jan. 4, could begin by the beginning of March. The project will include the renovation of cubicles on the second and third floors of the four-story building, finishing a build-out of 20 percent of the third floor and performing a complete build-out of the fourth floor, which is currently vacant.

“Because we were granted this money as part of the economic stimulus package, we have to create some jobs,” Parrish said. “We had all of that worked out, how many full-time and part-time jobs would be required.”

But Parrish said the entire process changed after IP announced on Oct. 22 that it would close the Franklin paper mill, eliminating about 1,100 jobs. Since then local elected and economic officials, including Parrish and fellow co-workers with Franklin-Southampton Economic Development Inc., have been lobbying to save the 35 customer service jobs that are not affected by the closure.

One proposal that has been discussed at length is for the customer service employees — who work for the corporate office in Memphis, Tenn. and currently operate from the third floor of a three-story office building adjacent to the mill — to have new offices on the entire fourth floor of the Incubator.

“If they’re going to take a whole floor of the space that was going to be built out, I no longer have the same amount of square footage to create jobs in,” Parrish said. “We would be given a partial credit (by DHCD) for the number of IP jobs that we saved.”

According to Parrish, uncertainty over the number of jobs that would be required led to the delays.

“We won’t get the same credit for saving a job as we do for creating a job,” Parrish said. “We don’t know what those numbers are, and I think because those numbers are not clear DHCD was wanting to get all of that firm on paper before we proceeded.”

Parrish said that when the grants were first awarded, the stipulation was made that the money be spent toward creating 40 full-time and 37 part-time jobs at the Incubator within two years of the project’s completion.

“I felt like 40 full-time and 37 part-time was doable,” Parrish said. “It was going to mean a lot of work because the economy is not what it used to be two years ago. For the most part, people aren’t clamoring to start businesses. But I do have some businesses in here that are growing, and I would get to count their employees as well.”

Asked how many jobs may need to be created if the IP jobs move to the Incubator, Parrish guessed that it could be about 20 full-time and 18 part-time.

“I feel like I can create 20 full-time jobs and 18 part-time jobs,” Parrish said. “I think I could still do half of that original requirement. But it’s not about making my job easier. I’ll do what I have to do. I’m not looking for the easy way out.”

IP spokesman Rick Ouellette said Tuesday that the company had not yet decided where to house the customer service employees, but did say that “a decision (should be) forthcoming within the next few weeks.”

“Discussions are ongoing,” Ouellette said. “As soon as a decision is made we will talk with our employees first, and then with the other key stakeholders in the community soon after that.”

The Incubator — a former buggy factory constructed around 1907, partially renovated beginning in 2004 and opened in 2005 — currently houses 26 small businesses, which employ 120 full- and part-time employees.

City Manager June Fleming said DHCD has been supportive of the effort to keep the IP jobs in the city.

“Richmond has really been behind us,” Fleming said Tuesday of DHCD. “We’ve gotten extension after extension for when we could start the project while waiting on a decision from IP. We are sure that (DHCD) in Richmond is saying to (the U.S. Department of Housing and Urban Development) that this is an important part of the community, and we want to keep it here.”

In December, a notice of award was sent to the Portsmouth-based construction firm SEVAC Corp., which entered the lowest bid for the project at $421,000. Community Development Director Donald Goodwin said at that time that if SEVAC could comply with the requirements and conditions for the project they would ultimately be under contract to perform the construction work.

The city received 13 bids, the highest of which was $703,000.

Parrish said construction could begin on the second and third floors of the building, and work to build rest rooms and fix the floor of the fourth floor could also be performed.

“If IP decides to come on board, then we could go back and adjust the job creation piece,” Parrish said. “But very soon there’s going to come a day when we’re going to need to know whether we go with the original plan or with the plan we drew out for IP to accommodate their needs. When it gets to that day, it would be too late for them to have the fourth floor the way they want it.”

The company reportedly wants an open floor plan on the fourth floor if they come to the Incubator. Parrish said in December that walls could be put up later if IP ever left.

“Anybody would love to have a company come in that’s going to bring (35) employees,” Parrish said. “But there is an emotional attachment there for us that no one else has. This is a part of an industry that has deep roots here.”

Local officials, including at least one real estate agent and members of FSEDI, took IP representatives around the area last year to show them available properties to house the company’s customer service workers.

“We weren’t trying to sell the Incubator; we were trying to sell Franklin and Southampton,” Parrish said. “This was one of several locations we showed them. But they weren’t interested (in the others). As it narrowed down, the Incubator is the only thing that made their short list.”

Parrish said representatives with IP told her the company was also looking at two locations east of the city.

“If they don’t come here, they won’t be in Franklin or Southampton,” Parrish said. “The Incubator is our last shot to save the jobs here.”