The proliferation of co-working spaces throughout the county may spell the death of Leesburg’s incubator.
Leesburg Town Council voted unanimously Tuesday night to discontinue the Memorandum of Understanding with George Mason University regarding the Mason Enterprise Center at the end of the fiscal year, June 30. County supervisors seem likely to make a similar move after county Economic Development Executive Director Buddy Rizer recommended during a recent Board of Supervisors committee meeting that supervisors eliminate funding for the incubator in the upcoming Fiscal Year 2023 budget.
Both Rizer and Leesburg town staff members point to the growth of co-working spaces throughout the county since the Mason Enterprise Center opened a decade ago, and said the incubator does not appear to be fulfilling its initial mission of being the center of entrepreneurship for the county. Instead, it has become a prime location for businesses looking to take advantage of the 202 Church St. SE building’s location in the HUBZone, a designation that gives businesses priority access to certain government contracts. While the incubator was hatched with the goal of launching businesses that would graduate from the program and move on to other locations in Leesburg or greater Loudoun, some have stayed in the building beyond their startup period to take advantage of the HUBZone location.
The Town of Leesburg is responsible for the lease of the building which boils down to $63,000 annually, said Economic Development Director Russell Seymour, while Loudoun County pays George Mason University, which oversees the Mason Enterprise Center, and funds the Small Business Development Center, which co-located there in 2014.
As both town and county staffs got together in recent years to share concerns with Mason Enterprise Center staff, the ultimate question, Seymour said, was “what is separating what we are doing from other co-working spaces.”
“At the end of the day public money is funding this operation,” he said during the council’s Monday work session.
The county staff has been adamant that doing away with the incubator would not impact the operations or the existence of the Small Business Development Center, and has indicated that the savings from no longer funding the operation would go toward adding additional staff that would focus on counseling entrepreneurs, Seymour said.
Both he and the council also expressed a desire that the businesses needing the HUBZone location should not be displaced. Seymour said he would be speaking with the building owner about that subject soon.
“The HUBZone is an asset for us, something a majority of businesses are relying on. We want to keep them right in that building,” he said.
Much has changed in the 10 years since the Mason Enterprise Center debuted in 2011, several council members said, and the incubator may not be the essential service it was once deemed to be.
“We’re in a different place,” Councilman Ara Bagdasarian said.
Susan Henson, regional director of the Mason Enterprise Center in Leesburg, directed inquires on the council action to Paula Sorrell, associate vice president of innovation and economic development for GMU.
In a statement, Sorrell said the university was proud of the work done at the incubator over its decade of existence, and pointed to the 240 companies served with an average of 11 companies graduating every year.
“More than half of those companies opted to stay in Loudoun County and 42% of the companies Mason’s team supported through the MEC incubator in Loudoun are minority owned,” the statement noted.
“We are encouraged by the success of MEC-Leesburg incubator companies such as Colvin Run and The Building People, and Inc. 5000 winners Makpar and Lynker. We are grateful to our board of advisors – MEC Alum Members and local business champions, for providing the MEC with guidance.We are pleased with the Mason team who supported these companies and added services at the Mason Enterprise Centers that include access to no-cost mentorship, tech and gov con education and networking programs, payroll support, group health and life insurance, Mason interns, Mason student projects and connections to Mason faculty. In addition, the team of Mason employees kept the MEC open while the university was closed due to COVID in order to continuing to serve the businesses in the community, and of maintaining the incubator at 100% capacity,” the statement said.
Sorrell also thanked both the Town of Leesburg and Loudoun County for their partnership in support of the incubator, and said the university was looking forward to the success of other incubator projects in Prince William County and Arlington, and a newly renovated space in Fairfax.