In May, leaders of the New River Valley Competitiveness Center in Pulaski County asked the center's founding communities for backing to help the center get a $2.6 million refinancing loan. Since then, Christiansburg, Pulaski and Pulaski County have provided backing.

Photos by ALAN KIM The Roanoke Times

Harriet Anderson (left) and her son Bo Keister operate Smiling Bulldog Enterprises, a business that licenses collegiate merchandise including tailgate rugs and SUV mats for about 120 schools. It has had offices in the New River Valley Competitiveness Center since July 2006.

FAIRLAWN -- With a Southern drawl and an easygoing laugh, Harriet Anderson is a welcoming presence at Smiling Bulldog Enterprises.

Smiling Bulldog is a family-run business that licenses collegiate merchandise including tailgate rugs and SUV mats for about 120 schools. It has had offices in the New River Valley Competitiveness Center since July 2006.

Smiling Bulldog's owners went to the Competitiveness Center for support when they started their company, Anderson said. They received help with a business plan and got office space and access to conference rooms, a library, fax machine and copier.

But it's a time of uncertainty for incubator residents.

"We'll take what comes and work with it," Anderson said.

In early May, leaders of the Competitiveness Center asked the center's founding communities for backing to help the center get a $2.6 million refinancing loan. Otherwise, the center will be unable to make loan payments due by the end of June.

"The center is a business like anything else," said David Rundgren, its executive director. "It's difficult to be in business, period."

Since then, Christiansburg, Pulaski and Pulaski County have provided backing. Giving a moral obligation doesn't mean the localities will have to pay, but will only Christiansburg voted to provide $350,000; the town of Pulaski, more than $160,000; and Pulaski County, $1.3 million.

The Blacksburg Town Council and Giles County Board of Supervisors decided against supporting the obligation.

The Radford City Council briefly discussed the agreement at a meeting in May but deferred action until Monday's meeting. Floyd County supervisors discussed the request during their April and May meetings but have taken no action.

The Montgomery County Board of Supervisors received the request but has not considered or voted on a resolution, said Ruth Richey, public information director for the county.

The center had requested backing for three existing loans rolled into one -- $900,000 in rural development loans, $250,000 in construction loans and $1.5 million in loans for the building itself, both from the National Bank of Blacksburg, said John White, Pulaski's director of economic development.

The obligation doesn't mean the localities will have to pay. Rather, the money is used to help the center secure the best loan from a bank.

"I'm certainly much more optimistic than a month ago," White said.

Flexibility benefits tenants, exposes center

Since 2006, Smiling Bulldog has expanded into a second office and rented a warehouse to store the products it ships.

But the business will soon downsize to just office space because its products will be shipped directly from the Georgia manufacturer to customers.

"When we needed to expand, they had space available," Anderson said. "Now that we don't need that space, we can pull back. If we had rented or bought our own building, it wouldn't be that easy."

But the things that help make a business successful -- like the flexibility of rental space, business plan counseling and access to services like an in-house fax machine, copier, conference rooms and library -- are also what's led to the center's current low occupancy rate of 57 percent, from 73 percent at the end of last year, said Yolanda Hunter, business incubator manager.

The low occupancy rates are a major source of the center's money troubles.

When companies move out of the center, it's a victory because the center has accomplished its goal of making a successful business, she said.

But that also leaves empty space that's not generating revenue and the center staff needs to work to fill.

"Our goal is to provide sustainable businesses; that's the emphasis of why we're here," Hunter said. "We do a lot of hands-on, like small business plans, management assistance, business evaluations, and sometimes just a listening ear if a tenant's having a bad day."

Occupancy has gone up and down before, jumping from 96 percent to 67 and back to 86 in the course of a year, Hunter said.

But the unstable economy has added to the usual stress of finding new tenants, Hunter said.

"A lot of it is because of the downturn," Hunter said. "People are hesitant to jump in, but it's still a really good time to start a small business."

Center's usefulness has been called into question

Periods of economic uncertainty are always a good time to start a business, provided the company can fill a real need in its market, said Jim Flowers, director of the Virginia Business Incubation Association.

Flowers said he didn't feel comfortable speaking about the Competitiveness Center because he only marginally knew of the situation there.

Generally, there is no good way to compare one incubator to another or find trends among them, Flowers said. Flowers is also the director of the Blacksburg technology incubator VT KnowledgeWorks.

"The localized economic climate has an effect, but everyone has something special about it that makes management behave in a different way," Flowers said.

Some incubators do well in hard economic times, while others don't, and vice versa, he said.

The economic climate is much different than when the center opened in 1999, said its former director, Wayne Carpenter.

When the center opened, it was estimated that it would take three years to fill it, Carpenter said. Within 18 months, there was a waiting list for spaces in the center, he said.

The center doubled its size from 20,000 square feet to 40,000 in 2005, when the business climate was starting to turn. Occupancy has been on a downturn since then, Carpenter said.

"The biggest difference is the economic times now versus then," Carpenter said.

Even with current concerns, the center is still "a significant economic development program for the New River Valley," said Rundgren, the center's director.

But not all agree.

Although Pulaski voted to support the center May 19, the vote was split 4-2. Councilman Joel Burchett Jr. cast one of the dissenting votes.

The issue, Burchett said, is that town residents also pay county taxes, therefore making them responsible for more than half of the obligation.

He also said that while businesses may stay in the New River Valley, fewer than 10 have settled in the town of Pulaski.

"I'm maybe thinking that the usefulness of the thing has come and gone," Burchett said.

Baby steps allow small companies to grow

Hunter points to the center's 55 successful businesses and more than 450 jobs created as evidence of its success.

Trena Bell of Trena B. & Co., a custom window treatment and bedding maker in Radford, had a space in the center for about two years, from 2005 to 2007, after moving her business out of her home.

The center was helpful, she said, because it allowed her to expand her company without worrying about leasing new space. At the center, she had office assistance and a place to accept deliveries when Bell was away.

"They gave me the moral support I needed," Bell said. "It's a real good place for a new or growing business."

Trena B. & Co. has since moved into a 3,000-square-foot space on West Main Street in Radford, but the company wouldn't have been able to grow without the center's support, Bell said.

"I couldn't have gone to that size space without those baby steps first," Bell said.

Regardless of economic climate and some uncertainty, there is interest in the center, Hunter said. She said three businesses are looking to move into it, regardless of the uncertain financial future of the institution.

But she declined to give details, saying plans have not been finalized.

The businesses are technology-related, which is the kind of business the board is trying to attract to the center, White said, adding that he was in negotiations to bring a fourth business into the incubator.

"It will be here, I'm not worried," Hunter said.