Flory Center closure leaves void in small business development services in Prince William County

PRINCE WILLIAM COUNTY — The longtime head of the Flory Small Business Center is retiring Dec. 31, leaving Prince William County residents without small business development services for the first time in nearly 30 years.

Linda Decker, the center’s CEO and president, is stepping down after deep disagreements with Prince William County officials about the future of the small business center she has headed since it opened in 1991.

The Flory Center is a non-profit, tax-exempt organization that is not part of the county government structure, although it has historically worked closely with economic development officials. The center has a regional focus and serves clients in Manassas and Manassas Park as well as Prince William County.

The Flory Center receives funding from both taxpayer and non-taxpayer sources from those jurisdictions. It assists existing small businesses and start-up entrepreneurs gain access to the resources they need to expand operations, increase sales, and create and retain jobs.

A review of internal documents obtained by Potomac Local indicates Prince William County officials wanted Flory Center officials to increase their services without providing additional funding, and to focus on services within the county — particularly the eastern end — despite its regional structure.

Decker acknowledged the need for services on the eastern side of the county, but said her staff already routinely volunteers their time for Saturday workshops that attract clients from across the region, at no cost to the participants. “You can’t spread us so thin that we can’t even serve what’s here,” she said.

The center doesn’t track where clients come from, Decker said, “because if you’re regional, it shouldn’t matter where you live or where you work. We’re spilling over into each other all the time” — with businesses and their employees living and working in the various neighboring localities that provide the center’s funding.

The county’s Economic Development Department works primarily to attract business in targeted industries, often with a focus on larger companies. While they’re seeking to reestablish the services that have been provided by the Flory Center, county officials are months away from finding a replacement.

“We’re looking at how do we provide the small business assistance and what are the opportunities for doing that,” said Jason Grant, Prince William County communications director. “There’s lots of other ways to do that, so we’re going to look at that, but we don’t have any specific plan right now.”

Helping Businesses Take Flight

The Flory Center has a long relationship with Prince William County. It was created by the Prince William County Industrial Development Authority (IDA) in 1991, during a time period when a recession was leading to rising job losses and unemployment.

The IDA, created by the Board of County Supervisors in 1973, issues private activity bonds as an alternative financing method for qualifying development projects in the county. Its funding comes from fees it collects as part of the bond issuance process, not from taxpayer sources.

The Flory Center is among several economic development projects the IDA supports. The largest percentage of the Flory Center’s budget comes from the IDA.

The center, a resource partner of the U.S. Small Business Administration, focuses on both existing small businesses and start-ups. It offers one-on-one counseling plus workshops and conferences detailing how to plan, launch, manage and grow a business, including information about obtaining the necessary financing and working as a federal contractor.

“If you grow a small business here, they don’t move,” Decker said. “They’ve hired the next door neighbors, their children, whomever. They support your little league. They literally are the backbone of the economy.”

The center has worked with dozens of businesses in the Prince William County area, including Potomac Local, whose publisher, Uriah Kiser, received business counseling and attended entrepreneurial workshops, and American Military University, which was valued at $1.3 billion at its public offering.

The center also advised Aurora Flight Sciences, helping what was then a fledgling aerospace company chose Manassas for its corporate headquarters, located at the Manassas Regional Airport.

“We looked at a number of other possible locations, including other states, before deciding to locate here,” according to John S. Langford, Aurora’s chairman, and CEO. Founded in 1989, the company’s 10 employees worked from a garage in Alexandria in the early days.

Aurora was acquired by Boeing in 2017 and currently has more than 550 employees with operations in six U.S. states and Switzerland. In July, Aurora announced plans to invest more than $13.75 million to expand its Manassas operations, creating 135 new jobs with an average salary of $105,000 per employee by 2022.

“I don’t think we would be where we are today as a company if it wasn’t for Linda Decker,” Langford told Potomac Local in July. 

In 2016, both houses of the Virginia General Assembly commended the Flory Center for its commitment to the region’s existing small businesses and start-up entrepreneurs “as an expression of the General Assembly’s respect and admiration for the center’s dedication to the small business community and economic development in the Commonwealth.”

Funding Reflects Regional Mission

The Flory Center receives about half of its funding from the Prince William County IDA. The rest is primarily comprised of taxpayer dollars from the governments of the areas the center serves — Prince William County, Manassas, and Manassas Park.

The Flory Center was granted tax-exempt status because it lessens the burdens of government. According to its most recent publicly available tax filing, for 2016, it had total revenues of $537,142 and total expenses of $521,465.

The largest percentage of those expenses — 73 percent, or $382,811 — went to salaries, compensation, and benefits. Decker’s compensation totaled $98,402.

To maintain tax-exempt status, the IRS defines reasonable compensation as the value that would ordinarily be paid for like services by like enterprises under like circumstances: “Reasonableness is determined based on all the facts and circumstances.”

In Prince William County, the median household income is $101,059, according to the U.S. Census Bureau. According to compensation comparisons from Salary.com, a top nonprofit program executive in Manassas, Va., could expect to earn between $116,000 and $193,000 — or an average of $147,800.

Marcus Owens, a nationally recognized expert on tax-exempt organizations and former top IRS official, said the Flory Center’s tax filings on its form 990s “did not seem out of line to me at all.”

When it comes to salaries, Owens said, it’s important to put them into the context of what the organization does and where it’s located. In this case, much of the Flory Center’s work involves advising and counseling, he said, so it’s not surprising there would be higher personnel costs.

“The salaries don’t seem very high in comparison to what other people are making in the same geographic area,” he said. “And that’s exactly the data point that the IRS would use to evaluate whether the compensation paid in the charity was reasonable or not.”

Seeking a New Agreement

Since its beginning, the Flory Center has maintained offices in the caretaker’s house on the grounds of the Ben Lomond Historic Site, on Sudley Manor Drive in Manassas, leasing the space for $1 a month from the county.

The Board of County Supervisors voted to approve a total of $400,000 in funding to construct a new building for the Flory Center, across the street from its current location, provided center officials would raise matching funding. But the project stalled for several years, and the county money was never appropriated, although the center spent about $26,000 for initial engineering work.

Earlier this year, county officials sought to designate the Flory Center as a community partner, which are nonprofits that provide community services. That would have required reaching an agreement to update the “memorandum of understanding” specifying its relationship with the county, which was last signed in 1999. As part of that process, county officials wanted the center to add regular counseling sessions and workshops on the eastern side of the county.

In a separate move, county economic development officials announced in October — without agreement from Flory officials — that the center would be providing services at the new Brickyard co-working facility slated to open next year in Woodbridge.

Decker said she and the Flory Center’s board members did not agree to the county’s new requirements. Her staff of about a half-dozen full-time and part-time employees, who currently hold regular events on Saturdays at the Manassas office, could not take on the additional duties without additional funding to support them.

As a result, Decker submitted her resignation in September, and the center’s board voted to suspend its operations. That resignation is effective Dec. 31, 2018.

Because confidentiality and non-disclosures are part of the center’s standard arrangement, Decker notified her past and current clients of her impending resignation — and told them she would be shredding any confidential documents related to their business.

Disagreement between organizations is not unusual, particularly in a rapidly changing location like Prince William County, said Stephen Farnsworth, a political science professor at the University of Mary Washington in Fredericksburg. Different organizations can have different priorities, want to focus on different jurisdictions and want to assert control over how taxpayer funds are spent.

When it comes to economic development in Northern Virginia, Farnsworth said, “the sky is the limit,” and jurisdictions are seeking different industries than they did 10 or 20 years ago.

“There are always tensions between political figures and economic development organizations,” he said. “They might have different priorities; they might see different industries as more valuable to the future of the county.”

No Timetable to Replace Small Business Services

In Manassas, the city’s Economic Development Authority approved a plan for the
Mason Small Business Development Center — part of the George Mason University–Mason Enterprise Center in Fairfax — to hold weekly office hours at the downtown co-working space CenterFuse, beginning in January.

But Prince William County officials have just begun looking for a replacement for the Flory Center, Grant said. They are seeking proposals, which could be part of the upcoming annual budgeting process this spring, to determine the specific needs for small businesses, what services already exist, and what new services the county could offer.

In the FY 2019 budget, adopted earlier this year, the Board of County Supervisors earmarked $398,000 for a small business program to help business owners navigate the process of planning, permitting and inspections. In addition, officials allocated $169,000 specifically for development efforts on the eastern side of the county.

Grant emphasized that while the officials want to continue supporting small business growth, there is no definitive timetable for replacing the Flory Center’s services. It’s possible these proposals could be part of the FY 2020 budget, which will be adopted in April.

“It’s too early to say this is exactly what we’re looking for, or here are the people who could do that,” Grant said. “If we’re going to the market, doing a different way of supporting our small business, let’s make sure we have what the need is clearly articulated first.”