Too Much Growth?

Can a place that's good for business survive as a great place to live?

Eleanore Towe is proud to represent what she calls "my Loudoun." Towe, the Loudoun County supervisor for the Blue Ridge district, walks into the office of Scott York, chairman of the Board of County Supervisors, and points to her right, to a cluster of pastoral photographs on the wall. Horses, green grass, and barns portray the bucolic essence of her Loudoun -- western Loudoun County, an area grounded in agriculture and small-town living. On the left side of York's office are photographs of the other Loudoun -- eastern Loudoun County, with its glass-walled office parks and sparkling new housing developments. Eastern Loudoun used to be as genteel and unhurried as western Loudoun. But as the high-tech boom that has transformed northern Virginia cries for more room, the borders between east and west are blurring.

Drastically different in culture, industry, and landscape, the two Loudouns are bound together by geography and must work as one for tax dollars and state appropriations. Towe and seven other county supervisors were swept into office on a slow-growth -- or "smart-growth" -- platform, which favors saving Loudoun's rapidly disappearing green space. The board of supervisors must bridge the divide between those who champion residential development -- Loudoun's population has doubled since 1990, from 86,100 to 172,200 -- and those who want to keep their green space and unobstructed views.

The county's expanding business community, which depends on Loudoun's increasing population for employees and customers, must adapt to an economy that -- in a line that flows from east to west -- is leaving its agricultural history behind in favor of a future fueled by fast-growing start-ups and information technology. Family farmers and small retailers are closing up shop, making way for national chains and billion-dollar corporations. The traditional businesses that remain are finding that in order to compete, they must adjust.

The split between eastern and western Loudoun doesn't fall exactly in the middle. If there is a border town in this clash of old and new, it is Leesburg, the county seat, which is located somewhat east of center. From that point west, the county has retained much of its colonial and agricultural charm. Holstein and Angus cattle graze behind white-slat fences and old stone walls. Horse farms back up to old country roads, helping the area maintain its red-jacketed, fox-hunting, jodhpur-legged equine heritage.

What Towe and her colleagues call eastern Loudoun is actually a piece of the Dulles Corridor, a proportionately small area that lies 16 miles southeast of Leesburg and 27 miles from Washington, D.C. Clusters of housing developments and glassy office parks encircle the Washington Dulles International Airport. Before the airport opened, in 1962, little had changed in Loudoun since 1757, including its population, which remained static at 20,000.

Even now, the abundance of agrarian culture in the west makes it seem laughable that 50% to 60% of all Internet traffic flows through northern Virginia, but it does, thanks to giants like AOL, PSINet, and WorldCom, which are all nestled in or on the edge of the Dulles Corridor. The area also boasts a hearty start-up community and a support network of venture-capital and law firms that followed the money to Dulles.

Western Loudoun is the kind of place where longtime residents such as Asa Moore Janney are as well known as AOL's Steve Case is in eastern Loudoun. Janney and his brother, Werner, wrote a few small books about the area's history -- with titles like Ye Meetg Hous Smal and John J. Janney's Virginia -- which reveal a fondness and respect for the Loudoun of old. Janney, 92, sells the books, as well as replicas of an 1853 map of Loudoun County, from an old building next door to the Quaker meetinghouse. In his authoritative tone, Janney will happily engage any visitor in a tutorial of Loudoun's rich agricultural history.

Janney grew up on a 300-acre farm and surrendered 50 acres to development. About the rampant growth, he says, "You can't stop it, so let 'er rip."

But letting 'er rip has increased the demand for schools, wider roads, and county services -- most of which Loudoun has been unprepared for. Just this fall the county had to hire more than 400 new teachers to meet the needs of the families moving into the area. It also needs to build more schools and beef up its volunteer fire department with professionals.

And there's no sign that the economy is cooling off. Attracted to the human, service-oriented, and capital resources that eastern Loudoun promises, 243 new businesses settled there in 1999. Most are led by entrepreneurs like Jim Fox, who started EqualFooting.com, an online marketplace for small businesses, in Sterling in 1999. "In terms of people, there are lots of companies out here that breed the kind of skills and talent base that you're looking for," Fox says.

But while Fox may have found a tech-employee nirvana, Loudoun's real estate market is so red-hot that office space is difficult to come by. "If there's an empty field in Loudoun County that's off a major road, there's a sign on it that says Future Office Park," says Fox.

Some company owners are finding that all that space pressure has transformed Loudoun from a place they wanted to settle in to a place they'd rather leave. Take Chad Akhavan, president of Allied International Corp. of Virginia/Papillon Stores. He chose to house his $50-million specialty foods and accessories import and retail business in Sterling six years ago because of the proximity to the Dulles Airport and the Port of Baltimore. His current, albeit temporary, headquarters is an expansive warehouse.

Akhavan had planned to build and occupy his own office building. Three years ago he purchased enough land to be able to build an executive suite of offices and a separate warehouse. But now he has decided to lease the property to someone else or sell it altogether at a potential 40% profit over his initial investment. "By force, we got into building development as well," he jokes.

Space isn't the only crunch in eastern Loudoun. For Jeffery Payne, CEO of Cigital, finding top-notch, reliable service contractors can be tough in the Dulles Corridor's booming labor market. "They turn over like mad," he says. For instance, Payne tried to hire a law firm to help his software-security company with intellectual-property and patent dealings. "Both times, the sales pitch sounded great, we got started, and we spent a lot of time getting them up to speed on business," he recalls. "And within a week, the key lawyer on the account left the firm."

Business owners and residents alike in eastern Loudoun are experiencing yet another kind of pressure: incredible traffic. Before the boom in Loudoun and neighboring Fairfax County, traffic used to flow into the District of Columbia in the mornings and out in the evenings. But now, Fox says, there's no such thing as a reverse commute. "When you look at the traffic," he says, "it's deep in both directions." Making matters worse is the lack of public transportation. The county still doesn't have a connection to the Metro rail system in the D.C. area.

To ease the pressure in the east, families and business owners are looking west. Land in western Loudoun County is already zoned for residential use, and "we have 69,729 dwelling units in the pipeline," Towe says (adding that there are 94,690 planned for eastern Loudoun). "They just haven't been built yet." But as housing developments, office parks, and traffic congestion move west toward Leesburg, on Route 15, so does the tension.

Downtown Leesburg still boasts original stone structures and a traditional town center with brick sidewalks and row houses. Gone are most of the small retail and general stores that used to line the town square. In their place are high-end antiques and gift shops. Sure, some original businesses remain: the Leesburg Restaurant, the town's greasy spoon; and Caulkins, the local jewelry store. But there's also a brand-new county office building that stands as a glaring symbol of change. And on the edge of town are growing clusters of new houses and a giant outlet mall.

The future of eastern Loudoun seems more certain than that of traditional Loudoun. The old businesses that do survive are those that are skillfully adapting to the changing climate. Loudoun County Department of Economic Development director Larry Rosenstrauch says his office has a few ideas about how to strike a balance between the tensions of east and west. He and his staff are encouraging the growth of businesses that won't add new residents within Loudoun's borders. "Every job in Loudoun isn't necessarily a rooftop in Loudoun," he asserts. He and other officials in his office are trying to understand the relationships between business and residential growth, but they're doing that, he says, "as we're riding the tiger."

What Rosenstrauch knows is that some forms of new business development don't necessarily threaten the aspects of Loudoun County that many citizens are so vigorously trying to save. He suggests luring data centers, secure-network-access centers that store Internet servers but don't require scores of people to operate.

Some high-tech business owners, like Ed Leonard, CEO of Electronic Scriptorium, are trying to find ways for the two Loudoun cultures to coexist peacefully. His company, which enlists monks to catalog digital images, is housed in a small brick building near downtown Leesburg. Leonard says it's hard to lure tech employees west from the Dulles Corridor, so he offers recruits flextime, the option of working from home, and what he calls the more "humane" pace of western Loudoun.

Rosenstrauch says that the county is also looking at ways to conserve its agricultural heritage, which has declined by 21,613 acres of farmland from 1987 to 1997. Chic wineries are springing up in western Loudoun, and Rosenstrauch is hoping to capitalize on what he calls "entertainment farming" -- chintzy farmers markets for the city folk from out East. Then there's what's known as pharming -- the relatively new practice of using genetically altered livestock to produce proteins used in pharmaceuticals. Rosenstrauch says he's beginning to work with Virginia Tech's lauded agricultural department to encourage such high-tech farming in parts of Loudoun.

The Eleanore Towes of the county are hoping to keep Loudoun from being "Fairfaxed," a reference to the seemingly endless development sprawl of neighboring Fairfax County. "I'm trying to help the folks who deserve to remain in Loudoun and benefit from its prosperity," Towe says.

Those businesses that adapt stand the best chance of survival. Ed Nichols's 86-year-old family-owned $1-million store, Nichols Hardware, has thrived while making only subtle adjustments. For Nichols, who does every transaction by hand and has yet to purchase a computer for the business, one of the biggest changes is that the store now opens on Sundays.

Nichols Hardware, situated in the historic downtown section of Purcellville on a pretty, quiet street, sells everything from nails and wrenches to salad spinners. Over the years Nichols has expanded the store's size and adapted to the needs of the locals, old and new, by adding a new line of furniture, among other new products. For longtime Purcellville residents, the Thom Seeley chairs and tables may be a tad on the pricey side. But not everyone feels that way. "Our computer friends don't blink an eye at a $2,000 dinette set," Nichols says.

Those "computer people," as he often calls them, are the new residents who have recently started to trickle into the small town. They're a far cry from Nichols's old customers, mostly locals from the formerly thriving agricultural community. Those old customers, along with some of the merchants that once supported them, have started to disappear. "The area used to have more than 100 dairy farms, now it has 2," Nichols says.

Before the developers started buying up land, "we weren't booming," he says of the local economy. He's been admittedly lucky so far, despite the Home Depot just a 13-mile drive away, in Leesburg. Nichols believes he's managed to compete by offering personal touches that some chain stores may not. "We can tell you how to use the items," Nichols says. "I've gone into Wal-Mart, and nobody knows what to do sometimes."

But with the emergence of more developments -- the Nichols family recently sold its 127-year-old family farm to a developer, who has already built 60 houses on the 112 acres of land -- the promise of more commercial merchants looms large. Nichols has no idea what's in store for him or his business. "How this plays out is the $64-million question," he says. "Can you stop growth? It's hard to put the brakes on it once it's started."

Anne Marie Borrego is a reporter at Inc.

Click here for more on the Best Cities to Start and Grow a Company in Now.


Please e-mail your comments to editors@inc.com.