FRANKLIN—Faced with a looming deadline tied to more than $700,000 in grant money, the City of Franklin has entered into a contract to complete the build-out construction of the Franklin Business Incubator.

Meanwhile, International Paper Co. will announce sometime next month where it will set up offices for 35 customer service employees. The Incubator, located at 601 N. Mechanic St., is one of several locations in the area that the company is considering.

“We had to enter into a contract today or we could lose the funds,” Nancy Parrish, manager of the Franklin Business Incubator, said Tuesday.

According to Parrish, construction is expected to start Jan. 4 and 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.

Community Development Director Donald Goodwin said Tuesday that a notice of award had been sent out to SEVAC Corp. of Portsmouth, which entered the lowest construction bid for the build-out project at $421,000. The city

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

Goodwin said that if SEVAC could comply with the requirements and conditions for the project they would ultimately be under contract to perform the construction work.

Parrish added that IP would require an open floor plan if the company were to set up offices on the fourth floor.

“It would be slightly differently than what we had initially intended,” Parrish said. “They would need more open space. Most people who are starting businesses don’t need huge, open areas. But IP, with the way they have their customer service team, would need that.”

But Parrish said it wasn’t too late for IP to decide it wanted to come to the Incubator.

“If IP were to decide to come here we would have to make some changes,” Parrish said. “We would still try to accommodate them. We don’t have to start on the fourth floor. We’ve got places on the third and second floors that we can start with. But we could not drag any longer waiting on them, or we could have lost our grant money.”

Parrish added that if IP were to come to the fourth floor of the Incubator and then someday leave, it would not interfere with the ability to put up walls in the future.

IP officials have looked at three or four available properties in Franklin and Southampton County to serve as offices for the customer service employees, who work for the corporate office in Memphis, Tenn. The workers currently operate from the third floor of a three-story office building adjacent to the Franklin paper mill facilities.

Other sites that have been mentioned include Suffolk and Chesapeake.

Parrish said recent correspondence from an IP official involved with the search for new offices read, in part, “we will let you know what direction we will head later in January.” She declined to name the official.

Asked about the January timeframe, IP spokesman Rick Ouellette said Tuesday, “We have not heard of any decisions that have been made. We have not made any decisions and we’re still looking at available options. We will notify affected employees when the decision is made, and then soon after that we will notify other stakeholders in the community.”

This year the Incubator has been 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.

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