HomeMy Public PortalAbout2009_tcwsmin0526
Council Work Session May 26, 2009
Council Chambers, 25 West Market Street, 7:30 p.m. Mayor Umstattd presiding.
Council Members Present: David Butler, Thomas Dunn, II, Katie Sheldon
Hammier, Marty Martinez, Ken Reid, Kevin Wright and Mayor Kristen Umstattd
Council Members Absent: None.
Staff Present: Town Manager John Wells, Deputy Town Manager Kaj Dentler, Town
Attorney Jeanette Irby, Director of Finance Norm Butts, Research Manager Betsy
Fields, Economic Development Manager Marantha Edwards and Clerk of Council Lee
Ann Green
AGENDA ITEMS
1. Work Session Items for Discussion:
a. Mason Enterprise Center - Incubator Feasibility Study
Keith Segerson, George Mason University, and Miles Friedman, Miles
Friedman and Associates, presented the results of the Mason Incubator
Feasibilty Study to the Council.
Mr. Friedman stated the real key to growing a healthy economy is the ability
to grow young companies. He stated he is a consultant for the Mason Enterprise
Center and a resident of the Manassas Center. He stated the demographics,
including business birth rates, excess of business birth rates over deaths,
population mix, percentage of homeownership, etc., for Leesburg look great. He
stated they met with groups and individuals to find out what they thought.
Mr. Friedman went over their recommendations: (1) Mixed use or general
purpose incubator primarily in the incubation or acceleration phase. He stated
the highest ratio of success will be with the young, growing firms. (2)
Encourage a partnership with the University. He stated the Enterprise Center is
a premier example of this type of partnership. He stated the highest ratio of
success is where a university is involved. (3) Possible co-location with a small
business development center and a telework center. He stated the telework
facility broadens out the capability to draw larger businesses that want to let
their employees telework.
Mr. Segerson stated George Mason runs three telework centers for GSA. He
stated there is some interest in eliminating one of their centers and combining it
with the Leesburg incubator. He stated this is not certain, but is a possibility.
Mr. Friedman stated the Incubator should be a minimum of 5,000 square feet.
He stated if it is co-located with the Small Business Development Center (SBDC)
and the telework center, it will need to be a minimum of 9,000 square feet. He
stated co-location with the SBDC allows you to expand your critical services to
these young companies. He suggested a combination of private offices and
cubicles. He stated the cubicles provide opportunities for people with short term
leases and people who want to grow cubicle by cubicle. He suggested starting
with a core square footage and the possibility of expanding within the same
facility. He stated you have to have the standard office equipment such as
desks, chairs, a heavy duty copier, a fax machine and other office equipment as
Town Council Work Session of May 26, 2009
Page 2
well as a decent sized conference room. He described virtual clientele who drop
in and use the facilities, but don't maintain an office space. He stated virtual
clients can utilize a small conference room.
Mr. Friedman stated Class B office space in or near historic Leesburg with
good access to transportation and ADA-compliant is necessary.
Mr. Segerson added the site will need adequate parking. He stated some of
these type of spaces are very expensive. He noted there are ways to negotiate
a favorable lease. He stated they looked at properties that are either ready to
occupy or at least have all their permitting and are shovel ready. He stated at
this time, Mason Enterprise Center has 38 physical locations across the state.
He stated every one of them is totally different because they are tailored to each
community.
Mr. Friedman stated the Mason Enterprise Center will provide operational and
service delivery. He stated the local community will be involved as board
members because it is critical to have input from the community. He stated
high growth firms look for opportunities to spin off entrepreneurs. He stated the
creation of interaction and innovation between companies becomes a great
attraction for other businesses to come to the community.
Mr. Segerson went over some of the companies that have gone through the
Mason Enterprise Center incubators. He stated they typically graduate one to
three companies per year. He added an additional benefit of the partnership
with the University is the ability to partner with the small businesses on grants
and contracts and the faculty resources.
Mr. Friedman discussed the financial needs of the center. He discussed ways
to cut expenses through partnerships with the landlord and negotiated discounts
with equipment supply companies. He talked about seeding the center with a
desirable mix of businesses.
Mr. Friedman reviewed the challenges that will face the incubator including
raising the up-front capital, negotiating donors and discounts, securing the early
anchor tenants, securing support services, and keeping graduating businesses in
the area. He stated the goals for the incubator have to be realistic and the
Town needs to understand the commitment.
Council Member Martinez questioned how big the offices are. He questioned
how the lease with the landlord is negotiated
Mr. Segerson stated they vary, but the smaller, the better because it keeps
the costs for the small businesses down. He added the Mason Enterprise Center
offers assistance in negotiating with the landlord. He stated there are a lot of
creative ways to negotiate lower rent.
Vice Mayor Hammier questioned whether the incubator provided assistance in
securing venture capital for the young businesses.
Mr. Segerson stated they focus the business on getting to the point they are
ready to seek venture capital and then assist them in making their pitch to
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Page 3
"angel funders". Mr. Friedman stated venture capitalists know that residents of
the incubator are better prepared and that gets them in the door quicker.
Vice Mayor Hammier questioned what the process is to lease spaces in the
incubator or whether the space it is first come/first serve.
Mr. Segerson stated they often have empty spaces, because when a business
graduates, they often leave a much larger space than when they started due to
the growth of the business. He stated they do some picking and choosing of
businesses because they want to be sure the enterprise is scalable and the
business owner wants to and can grow. They want a business with a good
business plan and adequate cash flow. He stated 84% of the businesses invited
into the incubator graduate and meet or exceed their business goals.
Council Member Reid asked for statistics on the type of businesses that utilize
the various incubators that partner with George Mason.
Mr. Segerson stated he would get the information; however, it varies from
location to location.
Council Member Butler asked the total square footage necessary for this
enterprise.
Mr. Segerson stated they are looking for about 5000 square feet.
Council Member Butler clarified the center would be mixed use.
Mr. Segerson stated there is more synergy and less competition between
companies if they are mixed. He stated having one type of incubator lessens
the ability to cross pollinate.
Council Member Butler asked for clarification on the importance of Loudoun
County "being on the same page". He stated he thought the report indicated
Loudoun County is not ready to work with the Town on this venture.
Mr. Friedman stated it is very hard to do anything in isolation. He stated
contributions from both the Town and County would be very important. He
stated from an economic development strategy standpoint, it is very important
for the County to refer clients to the incubator as well. He stated the buy in
doesn't have to be identical, but there should be some support from both
entities even if it isn't financial. He stated he is unsure if the County is ready to
work with the Town on these priorities. He stated it is a perception issue and
this project could go a long way to reinforcing the fact the Town and County are
. "on the same page".
Mr. Segerson stated the County has expressed interest in Mason's events;
however, they would encourage a broader involvement in the incubator.
Betsy Fields stated they are working on getting on the report in front of the
County's EDC Executive Committee. Ms. Fields stated Memory Porter came to
all the Task Force Committee meetings.
Town Council Work Session of May 26. 2009
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Council Member Wright questioned how the incubator relates to the other
Town initiatives. He questioned whether there is a cohesive plan of how the
incubator and the other things the Town is working on add up.
Mr. Wells stated the Economic Development map identifies several different
initiatives which is part of their overall strategy and part of the Council's
priorities. He stated another level of discussion is probably necessary, but this is
not something that is not already on the list.
Council Member Reid commented he likes this approach to economic
development because it is concrete.
Mr. Segerson stated these free concrete services are also available for people
who have retail spaces in Town. He stated they only charge for classes and
space. He stated virtual clients are those who do not have an office, do not
have the cash flow, but want the affiliation with the center. He stated they get
an address, phone service, voice mail, use of conference room, and access to
consultant services.
Council Member Wright stated it is important to offer services to retail
businesses in the historic district because one of the biggest challenges to the
start up retail businesses is they do not have a solid business plan.
Mr. Segerson stated the Virginia Small Business Development Center network
reported they will be developing consulting practice guides for retail businesses.
He stated this will notch up the Center's expertise in retail.
Council Member Wright clarified the necessary up front money would be
around $100,000, although this would be dependent on donations and
fundraising. He questioned whether this would be an ongoing donation expected
from the Town.
Mr. Segerson stated the center should be mostly self sufficient at the target
level after three years. He stated the numbers in the report are the best guess.
Mr. Wells stated the numbers are a range meant to give the Town an idea of
what would be necessary. He stated the outside range of the worst case
scenario should be set aside for the commitment of three years of funding.
Council Member Wright stated questioned what is trying to be achieved by the
institution of an incubator.
Ms. Fields stated this is a development strategy to make Leesburg become
known as an entrepreneurial campus. She stated the EDC mapped out the
specific steps needed to get to that point, one of which was the institution of an
incubator.
Council Member Wright questioned the definition of Class B. He questioned
whether it needed to have the look and feel of Class A.
Mr. Segerson stated it has to be ADA compliant and have a lobby. He stated
it has to be in a top notch business area.
Town Council Work Session of May 26. 2009
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Council Member Wright cautioned against releasing addresses of possible
locations to the public since a decision to participate in this has not yet been
made by Council.
Mr. Segerson agreed noting there are a lot of things that have to be taken
into consideration.
Council Member Dunn stated he does not want to say this has to be located in
a particular spot in Town. He questioned whether the incubators have done any
work with family businesses.
Mr. Segerson stated there is no specific target for family businesses, but they
do bring in experts to work with the businesses as necessary.
Council Member Dunn questioned whether the service industry can be
addressed by the incubator.
Mr. Segerson stated the incubator can help with business expertise, but not
with the skilled portions of those types of businesses.
Council Member Dunn stated he does not want to see this become another
department of Town Staff. Further, he questioned whether the center has ever
worked directly with the landlord rather than having the local jurisdiction fund it.
Mr. Segerson stated many times the center can negotiate lease terms that do
not require the financial support from outside. He stated the long term business
model will have some revenues that can be used to provide on-site
administration.
Mayor Umstattd stated County involvement is necessary as this has the
potential of benefitting the entire county. She stated the historic district has
certain beneficial aspects, but some of the other potential locations will have
similar amenities. She stated it sounds like the Town will have to take on the
primary responsibility for this center. She questioned what contribution George
Mason will make in this enterprise.
Mr. Segerson stated there is no cash contribution, but in-kind services are
possible. He stated the branding component is very important as this is a
franchise-like environment. He stated their marketing and negotiating know-
how is a big advantage.
Mr. Friedman noted as the center grows, there will be less and less needed
from the public sector to support it.
Mayor Umstattd asked for more information on what types of companies are
in the various enterprise centers. She questioned the justification of having very
stringent entry requirements when the center is not at full capacity.
Mr. Friedman stated other centers have been less choosy the first years.
Mr. Segerson stated they are very sensitive to the funding sources. He stated
they do not get a lot of applications from companies that do not meet the
criteria because of the expectations of these centers.
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Mayor Umstattd stated she has visited the Fairfax City center. She stated it
seems to run very well.
Council Member Reid noted that 2/3 of all businesses fail. He stated the
success rate for the incubator is 84%.
Follow-up on this item will occur at the June 8 work session.
b. Declaring the Intention to Reimburse the Town from the Proceeds of
One or More Financings for Airport Fund and Capital Projects Fund
Improvements
Norm Butts presented this item. Mr. Butts stated this is a requirement of the
Federal government.
Council Member Dunn questioned what would happen if this resolution was
not passed and how this affects the next year's budget.
Mr. Butts stated if the resolution was not passed, the work would be paid
from operating funds.
This item will be on the Consent Agenda for May 27, 2009.
c. Council Rules/Roberts Rules of Order
Council Member Martinez' request for this item to amend and clarify Council's
Rules of Order was discussed. Council Member Martinez stated the Council
needs to readdress what the exceptions to the Rules of Order are and if anything
needs changed.
Council Member Wright stated it is a good idea to do this annually. He
stated it is a reminder of what the rules are. He questioned whether a rule
should be instituted to allow the motion maker to comment first because a later
commenter may make a motion to table.
Council Member Butler stated he believes this is already addressed in
Robert's Rules.
Mayor Umstattd stated her preference is to allow the motion maker to say
something before any motion to table is made.
Council Member Wright stated another item that is in need of a rework is the
Council Ethics Policy. He stated it needs to be drafted into a single resolution.
Council Member Reid stated there can be an improper use of fair procedure.
He questioned whether Council Member Martinez intends a more strict
adherence to Robert's Rules.
Council Member Martinez stated his intent is to make sure the rules that
Council has are adequate and have everyone abide by them. He stated there is
too much point and counterpoint discussion. He stated the Mayor should have
the authority to look at the fairness of the process and base her decisions on
this. He commented if a more strict adherence to Robert's Rules is what is
necessary, then he would support that.
Town Council Work Session of May 26. 2009
Page 7
Council Member Reid stated the Council needs to purchase a recognition
system which would show a light when someone wishes to speak. He stated a
parliamentarian would also help. He questioned whether this is the Town
Attorney's responsibility.
Ms. Irby stated she does not want to limit the free flow of speech.
Mayor Umstattd stated she does not want to get into a situation where they
are always arguing the rules.
Vice Mayor Hammier stated she did take a parliamentary procedure class and
it was emphasized that not everyone needs to have the opportunity to speak.
She stated the goal is action, but not the opportunity for everyone to speak just
for the sake of speaking.
Council Member Butler agreed with this statement. He suggested the
question of whether anyone is in disagreement with the motion be asked and if
no one is in disagreement, then the motion can be voted on. He stated the
parliamentarian is a resource, not someone who will interrupt the flow. He
stated he would like to differentiate between status reports and action items.
He requested Council Member Comments be kept to five minutes since the
public is subjected to this rule.
Mayor Umstattd stated the County's five minute rule does not apply to
debate.
Ms. Irby stated it would be difficult to track discussion minutes. She stated
some may find it offensive.
Council Member Butler clarified the rule applies only to Council Member
Comments at the end of the agenda, not as part of the discussion of a motion.
Mr. Wells stated the time limit focused on the Board of Supervisor's
comments at the end of the meeting. He stated the long point/counterpoint
debate would be referred to a committee of the whole at a later point.
Mayor Umstattd expressed a concern that Council Members may be unhappy
if Robert's Rules are used to truncate or limit debate.
Council Member Butler requested a procedure on how to get something on
the agenda. He stated this would save time and allow Council and staff to focus
on things they can actually work on.
Council Member Martinez stated he likes this discussion and would like to see
it on another work session after suggestions have been made.
Mayor Umstattd stated the changes made so far would include whoever
makes a motion gets to make introductory and closing remarks. She stated this
can be implemented immediately. She stated requiring three Council members
to agree to put something on an agenda would require a change to the Rules.
Town Council Work Session of May 26. 2009
Page 8
Council Member Dunn stated the process for putting things on the agenda is
very long. He stated he does not support needing three Council Members to
agree to put an item on the agenda.
Council Member Reid stated he does not support requiring the support of
three Council Members for putting something on an agenda. He stated a
recognition system will help with the process and supported the use of a
Committee of the Whole for in depth discussion.
Vice Mayor Hammier stated it would be beneficial to do an after-action report
on the budget meetings noting those were difficult meetings.
Council Member Wright stated they must be mindful that Council Members
are taxpayers as well and have a right to information.
Feedback regarding this item will be given to Mr. Wells. The item will be
placed on the June 8 worksession agenda for follow-up.
d. Drive Less Summit Follow-up
Mr. Wells presented findings related to the discussion of initiatives to
encourage residents to use their vehicles less. He offered several resources for
Council to look at and offer feedback. He suggested a fall time frame for follow-
up on this item.
Council Member Reid questioned what is the Live, Work, Land use design?
He commented he hoped the discussion will not be dominated by that.
Mr. Wells stated it is being mindful of the proximity of work places to
residential and in response to Council Member Reid's comment, added it is last
on the list for a reason.
Council requested this item appear on a work session agenda in the fall.
2. Additions to Future Council Meetings
a. Additions by Council Members
Vice Mayor Hammier asked for a Resolution affirming that the Town supports
the location of George Mason University in the Town.
Council Member Butler stated it could not hurt to be the most enthusiastic
of all the proposed locations.
Council Member Martinez questioned whether something to get the crosswalk
on North King Street noticed is possible.
Council Member Wright stated the special crosswalks create a false feeling of
safety on the part of the pedestrian, which can be very dangerous.
Council Member Butler asked for some study results as to whether lighted
crosswalks are more safe or less safe than regular crosswalks.
Council Member Dunn noted there are flags on the telephone poles in
Purcellville and expressed a desire to have these flags in Leesburg. He stated
there are signs in the crosswalks in Purcellville. He stated people are still
Town Council Work Session of May 26. 2009
Page 9
crossing the bypass at Fort Evans and Edwards Ferry Road on foot. Further, he
stated he understands there will be improvements to this intersection, but
people are still walking across the intersection.
Council Member Reid asked for written Council objectives.
Mr. Wells stated he believed it was the concensus of Council that the chart
with the circles is the broad based objectives with the more indepth objectives
being identified in the budget. He stated individual objectives get lost in the
detail if Council is trying to set broad objectives.
Mayor Umstattd asked Council Member Reid to bring his draft resolution to
Council for the next meeting.
b. Noise Ordinance
There was no discussion of this item.
3. Adjournment
On a motion by Council Member Wright, seconded by Council Member
Hammier, the meeting was adjourned at 10:25 p.m.
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2009_tcwsmin0427