Small businesses have been moving to an area in central Leesburg that recently qualified for incentives under a federal program intended to attract business and add jobs in disadvantaged areas, town officials said.
This year, the U.S. Small Business Administration designated a census tract that stretches from Leesburg’s historic downtown east to the Route 15 Bypass as a Historically Underutilized Business Zone. The designation gives incentives to small businesses in the HUBZone that meet ownership and workforce criteria.
Marantha Edwards, Leesburg’s economic development director, said the designation is given to census tracts in which at least half the households have incomes below 60 percent of the area median household income, or that have a 25 percent poverty rate. Small businesses in the zone that meet eligibility requirements receive preference in competing for federal government contracts.
The Leesburg HUBZone’s main boundaries are King Street to the west, Edwards Ferry Road to the north, the Route 15 Bypass to the east and the Washington & Old Dominion Trail to the south.
Edwards said the designation “is about jobs” and helps not only small businesses but also job seekers who live in the zone. To be eligible for federal contracts that are set aside for HUBZone businesses, at least 35 percent of the company’s employees must live in any HUBZone. Because Leesburg has the only HUBZone in Loudoun County, the businesses there are likely to hire people who live nearby, she said.
“It definitely means some increased jobs for some folks that live in the HUBZone,” said Susan Henson, director of the Mason Enterprise Center for Leesburg and Loudoun County, a business incubator affiliated with George Mason University. “It also means really being able to grow some businesses that have a foothold in government contracting but now have a vehicle that they can grow their business with.“
Henson said the Mason Enterprise Center has had “a lot of increase in traffic due to the HUBZone.” The incubator, which provides work space to fledgling small businesses, has only one vacant office remaining, she said, after adding seven companies in the past month.
Most of the new businesses are information technology consultants, Henson said, but they also include companies that specialize in event planning and logistics.
Bob Cusack, co-owner of Custom Software Systems, is seeking HUBZone certification for his company, which has been housed in the Mason Enterprise Center since the incubator opened in October 2011. His company manages technology systems for the FDIC and other financial regulatory agencies.
“From a competitive standpoint — from a small-business standpoint — it kind of takes the big businesses out of the picture to give small businesses a chance at winning some of the business that’s set aside for the HUBZone area,” Cusack said.
Obtaining certification is challenging, Cusack said, because of the requirement that 35 percent of employees live in HUBZones. His company has 20 employees, meaning seven would have to live in a HUBZone.
“One of our objectives is to look into the Leesburg HUBZone area and find potential candidates that we can groom for the IT industry — students, even — so [we could] bring in interns and groom them over the years,” Cusack said.
Leesburg Mayor Kristen C. Umstattd said the HUBZone designation is good news for the town.
“It has brought businesses to Leesburg that otherwise might not have come here, and certainly we’re encouraged by that,” she said. “We hope it will boost the employment numbers in some of our more disadvantaged communities.”