If it weren't for traffic problems on Route 7, Xerox Corp. might have no trouble getting its 2,267-acre tract beside the Potomac River and two miles east of Leesburg rezoned for corporate parks and executive homes.

Loudoun County staff and planning commissioners expressed delight with plans for the Xerox community during a work session on Sept. 7.

But Route 7, Loudoun's lifeline connecting the rapidly growing western county to the metropolitan area, threatens to become a parking lot if Xerox and other developments proposed for eastern Loudoun dump their traffic onto the four-lane road, Loudoun Zoning Administrator Timothy J. Krawczel said.

If no improvements are made to the highway, "We're going to just have to allow people to use bicycles or they won't be able to move," Krawczel said.

Xerox is not about to allow that to happen, William Griffith Thomas, attorney for the Xerox project, known as Potomac Park, said at the work session.

Xerox is prepared to build an extra lane on part of Route 7 and improve intersections on the highway to ease traffic flow, he said.

Other improvements under consideration are widening Route 659 south of the Xerox property and constructing interchanges with overpasses on Route 7, he said.

And Xerox is proposing some innovative ways of funding these improvements. Thomas said he is investigating whether the corporation can pay its real estate taxes to Loudoun County three to five years in advance, if the county promises to use the money for road improvements.

Another idea Thomas is exploring is whether Loudoun can allocate to a special road improvements account some of about $80 million in additional tax revenue a year that the county is expected to receive from the Xerox project once it is completed.

Special legislation might have to be introduced in the state general assembly to permit these funding plans, Thomas said.

These proposals for funding road improvements fail to impress the chairman of the Loudoun County Board of Supervisors, Frank Raflo, however. "It's mortgaging our future," Raflo said. The extra tax revenue that commercial development such as Xerox will generate is desperately needed to help pay for services for residential development in the county, he said. Raflo cited a recent staff report indicating that every home built in Loudoun County in 1984 cost the county government $7,200 a year more than it generated in taxes. Raflo said he expects larger donations from builders to help underwrite roads necessitated by their developments.

In addition, Xerox is proposing to contribute to a trust fund earmarked for road improvements in the county, with the amount of the contribution dependent on the final form of the development.

Because the Virginia Department of Highways and Transportation has no money allocated in its six-year road plan for improvements to Route 7 east of Leesburg, these proposals are critical to allow future economic growth in Loudoun County, county planners say.

Traffic analyses, for instance, show that, for Xerox to build the first phase of its project, Route 7 must be widened from four to six lanes, said Loudoun's transportation planner, Arthur Smith.

Xerox is proposing 1.3 million square feet of office space, an 800-room hotel and 160 houses by 1988 in the first phase of Potomac Park. That would generate on average 54 percent more traffic in rush hour than the highway currently handles, according to statistics prepared by traffic consultant Gorove/Slade Associates.

Now Route 7 handles 2,298 vehicles an hour in the morning peak travel time. Potomac Park would boost that to 3,649 vehicles an hour, Gorove/Slade's figures show.

Other proposed development alongside Route 7 would worsen the picture, Smith said. If the board of supervisors approves developments such as Ashburn Village and Windmill Shopping Center, traffic on the section of Route 7 outside the Xerox site would almost double by 1988 to 4,140 vehicles an hour during the morning rush hour. That would make the main intersections near the Xerox site impassible, he said.

Developers of Ashburn Village, Rozansky & Kay of Bethesda, propose constructing 5,451 homes, 3.1 million square feet of office space and 200,000 square feet of commercial space on their 1,580-acre tract south of Route 7 and east of Route 641. The board of supervisors must vote on Ashburn Village by Nov. 14.

Windmill, developed jointly by the Rouse Co. and Theodore Lerner, proposes a 600,000-square-foot regional shopping center at the junction of Route 7 and Route 28.

Xerox has proposed for Potomac Park a total of 10.3 million square feet of corporate offices, two hotels -- one with a conference center -- two golf courses with clubhouses and 806 executive-style homes to be built during the next 10 to 15 years.

Loudoun Planning Director P. D. Carr said his staff has no major problems with the application, with one major exception.

"The issue is transportation, transportation, transportation," he said.

Developers and planning staff are continuing to meet to discuss ways of funding road improvements and hope to be ready for Potomac Park public hearings before the county planning commission in October. The application is scheduled for a final decision by the county board of supervisors in November.