Leesburg EDC: flex-space shortage amid low commercial vacancy spurs zoning, permitting fixes

Leesburg economic development staff reported at the May 8 Economic Development Commission meeting that the town’s overall commercial vacancy is about 2.1–2.4%, but vacancy for “flex” space — single-floor, mixed-use buildings used by light manufacturing, technology and small production firms — is roughly 0.3%. Commissioners discussed zoning changes, targeted-industry incentives and faster permitting to encourage development that produces local jobs rather than primarily residential units.

The commission heard the vacancy figures during a staff report from Russell, an Economic Development staff member. Russell said the town’s aggregated commercial vacancy (industrial, retail, office and flex) sits a little over 2% and that Loudoun County’s comparable figure is “just over 4%.” He said the town’s industrial vacancy is effectively near zero in areas such as Cardinal Park, and that the tightest market is flex space: “The vacancy rate right now for that in Leesburg is point 3%,” Russell said.

That shortage matters, the commission was told, because developers frequently choose residential projects over commercial or flex development for greater short-term return. Russell and commissioners said that pattern reduces the town’s capacity to attract and retain firms that provide daytime employment and the kinds of businesses that feed the town’s restaurants and services.

Commissioners and staff discussed several levers they can use to change developer incentives. Those included: participation by the Economic Development Commission in the town’s zoning-ordinance rewrite; prioritizing “targeted industry” projects (developers who meet predefined criteria for square footage, investment and jobs would get expedited reviews); and clearer application checklists so incomplete submissions are not repeatedly resubmitted and delayed. Russell described a proposed “badge” or identified-project status that would move eligible applications to the front of the review queue.

During the meeting staff emphasized that some financial incentives are limited by state law; a staff member observed that Virginia law restricts tax-abatement approaches, so the town is weighing non-tax mechanisms such as prioritization and permitting speed. Staff and commissioners also repeatedly urged applicants to submit complete packages if they want expedited review: incomplete submittals, they said, are a frequent cause of delay.

The commission reviewed recent and planned development examples. Russell said the JK Moving project on the former golf course site has considered including flex space, and he noted a longstanding flex cluster near the Leesburg airport. He also warned that some marketed vacancy numbers on commercial listings services can be stale or misleading: buildings shown as available may already be occupied or not zoned for the kind of flex operations prospective tenants seek.

Commissioners asked about tools beyond zoning to attract desired firms. Russell said the town is using data sources such as CoStar for vacancy reporting and Placer AI to analyze visitor patterns and event attendance; the tools, he said, help staff and commissioners pick a small set of measurable performance indicators to track progress. "Placer AI... is something we've put in place to actually track cell phones," Russell said, explaining the technology is used to compare event weeks and analyze where visitors come from.

Data-center capacity and utility constraints also surfaced. Commissioner Eric asked about water use associated with data centers; Russell and other staff explained the town’s utility director, Amy Weichs, is part of predevelopment conversations and that the town evaluates peak seasonal demand rather than annualized averages. "Don't look at annual consumption with a data center. Look at peak," Russell said, adding that cooling and peak-period needs determine whether the town can safely support a new large water user without affecting existing residents and businesses.

Commissioners emphasized the need to tie any measurement program to action. The EDC agreed to a working session on July 17 to review Placer AI and CoStar capabilities and to develop a short set of quarterly metrics (vacancies, new business counts, sales tax trends, permit turnaround times and flex-space availability) to track over time.

The discussion concluded with staff and commissioners urging continued work on zoning language and application checklists so that the town can steer development outcomes toward job-generating commercial uses while maintaining the town’s stated planning goals.