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McAuliffe and McDonnell could partner on the purchase of paper mill

Anita Kumar

On the day that Gov. Bob McDonnell makes his first trip to International Paper's Franklin mill, we learn that one of his former political rivals is making a bid to buy the soon-to-be closed factory and convert it to a wood-fired power plant.

Terry McAuliffe -- the businessman and Democratic National Committee chairman turned failed 2009 gubernatorial candidate -- and other investors want to buy the plant, which is scheduled to close this spring, resulting in 1,100 layoffs. They want to turn it into a environmentally friendly biomass energy plant.

Sources in the governor's office say McAuliffe and his partners would be eligible for tax credits, available in the new McDonnell administration, that would allow a $500 income tax credit for the creation of "green" jobs and a credit for up to 350 new green jobs if the jobs are in an enterprise zone.

McAuliffe said this morning that he has visited the plant with other investors and has also met with the paper company's top executives at their headquarters in Memphis. He said the group has extended an offer for the plant, but bids were due by Feb. 26, and he said other companies may have interest in the plant, too. A nondisclosure agreement barred him from providing details about the offer, McAuliffe said.

"We're hopeful and excited about our offer. But it's up to IP to decide what they want to do with their plant," he said.

McAuliffe talked about the deal with McDonnell, before his inauguration, and former governor Tim Kaine, which was first disclosed by the Richmond Times Dispatch.

McDonnell spokesman Tucker Martin said the governor is supportive of any idea that could create jobs and wants to hear more about the project. "This specific proposal is intriguing, and we look forward to hearing more about it from him," he said. Martin also noted that a number of other groups have expressed interest in the facility, and the administration is equally interested in hearing more about those proposals as well.

McAuliffe said a green energy plant would not only replace some of the jobs lost at the facility but could also draw other companies to Virginia that are interested in locating near a plant from which they could purchase environmentally friendly energy.

"We have a very generous offer in that will create jobs and a whole new industry in Virginia. I hope Governor McDonnell is 100 percent supportive of my efforts," McAuliffe said.

McAuliffe said he knew federal tax credits might be available if the deal goes through but he had not fully explored whether state credits might also apply.

It's actually surprising that McDonnell hasn't been to the Franklin plant, considering jobs has been his number one priority as candidate and as governor.

Instead, it was his Democratic opponent, state Sen. Creigh Deeds, who quickly changed his campaign schedule to meet with workers after International Paper announced it would close its paper mill in southeastern Virginia, near the North Carolina border, in October. Deeds went on to produce a four-part plan that would provide workers with increased unemployment and health benefits, which he wanted to be paid for in part with $125 million in federal stimulus money that legislators rejected last year.

McDonnell will hold separate meetings with workers and community leaders and receive a briefing from the company on services being offered to employees.

He will be joined by Jim Cheng, his secretary of commerce and trade, and senior economic adviser Bob Sledd.

By Anita Kumar  |  February 9, 2010; 4:40 PM ET
Categories:  2009 Governor's Race , Anita Kumar , Creigh Deeds , Election 2009 , Robert F. McDonnell , Terry McAuliffe  
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LOL Anita! Generous of you to say Terry is partnering with McDonnell. Seems to me, if I read right, this was all Terry's idea and McDonnell is just saying yes to it. This is further evidence that Terry would have kicked Bob's booty from one end of the Commonwealth to the other in the general and he clearly would have been the IDEAS and JOBS Governor. Funny we haven't seen an idea to genrate jobs for out of work Virginians yet-- but he still wants to cut their unemployment benefits. Go TERRY!

Posted by: mr_gremlin | February 9, 2010 7:15 PM | Report abuse

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