The federal Small Business Administration has designated an area of Downtown Leesburg has a Historically Underutilized Business Zone, a distinction that will give some small businesses an advantage in the competition for government contracts.
Businesses located in the area, which stretches from King Street to the Leesburg Bypass between the W&OD Trail to the south and Edwards Ferry Road to the north, must be 51 percent-owned by American citizens and 35 percent of its employees must live in the HUBZone.
According to the 2010 U.S. Census, the tract designated as a HUBZone—the first in Loudoun County—has a total population of 5,887. Census tracts are designated as HUBZones if 50 percent or more of the households are below 60 percent of the Area Median Income. Loudoun is included in the Northern Virginia region, whose AMI for 2012 was $107,500.
Kevin Knight, the founder and CEO of Knight Solutions on South King Street, said he plans on applying for a HUBZone certification and he is familiar with the process. He already was awarded a HUBZone distinction when his company was based in Hampton, but he said it would be tough for Leesburg businesses to meet the qualifications.
“That’s going to be a challenge, I think,” he said. “You have to find people around your business who are living in HUBZone districts. You don’t have to travel too far to find out you’re in River Creek or the more affluent areas around here.”
Despite the challenges, Marantha Edwards, Leesburg Director of Economic Development, said she has fielded inquiries from businesses looking to relocate to downtown Leesburg. In some cases, these companies hire professionals and encourage them to move into the HUBZone.
While government contracting may have the connotation of defense or high-technology jobs, they can be an array of services, including cleaning or land contracts. For example, Knight Solutions owns construction and maintenance contracts, employing veterans to preserve veterans cemeteries, including those in Arlington and Quantico.
“It’s the full spectrum,” Edwards said. “It is an opportunity for government contractors and those businesses to grow their contracting and get an advantage.”
The federal government has a stated goal of offering 3 percent of all its contracts to HUBZone businesses, although Knight says it has been “a challenge to reach that goal.”
Nevertheless, the opportunity is there, and sitting squarely in the middle of the HUBZone, at 202 Church St. SE, is the Mason Enterprise Center, Leesburg’s business incubator and home to dozens of small businesses.
More importantly, it’s also home to a few vacancies.
“The beauty of it is we have a business incubator within a HUBZone,” Susan Henson, the director of the MEC, said. “I’ve already rented two offices since we found out we were a HUBZone two weeks ago. Among the contracting community, they seem to keep an eye out for HUBZone stuff.”
Companies who don’t have any government contracts shouldn’t get ahead of themselves. Becoming a government contractor is a complicated enough process before having the added wrinkle of applying for HUBZone certification.
“If [a company] is not already doing government contract work or has already gotten its feet wet in that arena,” Henson said, “then jumping into a HUBZone is not the first step to take.”
Henson pointed out that, technically, a HUBZone contractor only need employ 35 percent of its employees in any HUBZone, not particularly the same HUBZone. However, the closest HUBZones are in Manassas Park and in Charles Town, WV, so Henson expects the vast majority of employees to come from Leesburg.
“The key thing is that these companies, should they locate here, need to be able to locate employees that live within the HUBZone,” Henson said. “There will be some targeted efforts to locate employees.”
That is the main takeaway Leesburg’s business leaders see from the HUBZone designation. While employers may come and set up shop, the real impact is for the people living in the area with the opportunity for high-quality jobs.
“It is a job generator,” Edwards said. “It is an economic development tool that we have not had before.”