HUBZone status keeps benefiting Leesburg business Wednesday, Oct. 16, 2013 by Ben Hancock | 0 comments | Email this story
Susan Henson is the Regional Manager of the Mason Enterprise Center.Times-Mirror File Photo/Beverly Denny
Businesses vying for government contracts are always looking for a competitive edge. In order to grab that advantage some businesses are relocating to a sliver of Leesburg located within Census Tract 610505. That area became a Historically Underutilized Business Zone (HUBZone) in January. It is located in the heart of Leesburg running from North King St. to the Leesburg Bypass, with Edwards Ferry Road as the northern boundary and The W& OD Trail to the south. HUBZone certification gives companies a 10 percent price evaluation preference when applying for government contracts as well as 3 percent of government-wide prime and subcontracting dollars, which amounted to over $9.5 billion in 2011. According to the Small Business Administration HUBZones are "typically areas of low median household incomes or high unemployment or both." Census Tract 610505 is 60 percent below the median household income of the rest of the county, making it eligible for HUBZone status. Areas of West Virginia, Winchester and Frederick also have the designation, which is given every 10 years, because it is based on Census data. Each HUBZone is reviewed every five years to make sure it still complies, but rarely is the designation taken away after the first five-year review.
To qualify as a HUBZone business a company just needs to meet all of the eligibility requirements and apply with the Small Business Administration. For a business to become eligible for HUBZone certification it must be a small business as certified by SBA, must be owned and controlled by at least 51 percent United States citizens, the principle office of the company must be in a HUBZone and 35 percent of the company's employees must live in any designated HUBZone in the country. Employees can live in a Winchester HUBZone for instance and work at a Leesburg business. The HUBZone Employees only have to work 40 hours a month though, so they might be 10 hour a week employees. To apply for certification companies have to move into the HUBZone area before they are granted certification, because leasing documentation must be provided and employees must have gone through two payroll periods of working at the office before an application can be filed with the SBA. Because companies are required to have headquarters within the HUBZone businesses like Dunlap-Weaver, a local lawfirm, are beginning to lease special HUBZone office space in their building at 211 Church St. for $299 a month. Most small businesses want a smaller workspace at the beginning anyway, because it is cheaper and easier to manage. Many work in the field and just need the address, or office space for an administrative assistant. As companies begin to receive government contracts and grow, they will be required to grow their employee base as well, which will effect job seekers in the area. Prospective employees who already live in a HUBZone will be more valuable to HUBZone businesses, because those businesses are required to hire more than one-third of their workforce from within a HUBZone designated area. Also, an employee might relocate as a term of their contract with a HUBZone business, which could affect the residential real estate market within Leesburg. Susan Henson from the Mason Enterprise Center says it is great for incubators like hers, because it gives small businesses looking for government contracting jobs a leg up in the beginning. Even if the HUBZone designation were to be eliminated after 2020, these businesses are already located in Leesburg and have had multiple years of growth. Other socioeconomic groups also receive advantageous treatment from the government. Harvetta Spann, Co-Founder of "The WAVE" or Women as Veteran Entrepreneurs, will actually qualify for four different preferential groups once her application for HUBZone certification is put through â€“ once the shutdown ends.
WAVE is a woman-owned business, service disabled veteran-owned business, a smallbusiness certification and will soon be HUBZone certified. "It basically makes my company more marketable, more in demand," Spann said of her certifications. By making Leesburg more open to government contracting, the wealth in surrounding areas can begin to move into the Leesburg HUBZone. Most of the HUBZone businesses in Leesburg are IT or logistics firms, dealing with cyber security and analytics. These fields are ideally suited for smaller more mobile companies. Since January, 19 businesses have moved into Leesburg seeking HUBZone certification and almost 100 jobs have been created as a result of the program according to the Town of Leesburg Economic Development Department. The growth of companies could also see the growth in demand for more office space and residential housing to support HUBZone business. Companies will also be able to lease currently vacant office space more easily as companies move out of incubator space, like Custom Software solutions who went from leasing two and a half offices at the Mason Enterprise Center to now leasing an entire floor of a building on Loudoun Street. Looking to the future there are 26 prospective companies who are looking to move into the area for HUBZone purposes in the near future, which would exactly double the number of HUBZone businesses already in the area.