year of broken deals
Layoffs and closings, but also development and hope for future
Businesses in the Baltimore area weathered failed deals, layoffs, closings and restructuring in 2018. But some started new chapters by expanding or merging, new development sprouted all over and one new industry spread like a weed.
One of the biggest and most closely watched deals of the year, Sinclair Broadcast Group’s bid to acquire rival Tribune Media for $3.9 billion, fell apart in August. The controversial merger would have cemented Sinclair’s spot as the nation’s largest broadcaster, reaching nearly three-quarters of U.S TV households.
The deal appeared on track under a pro-business Federal Communications Commission and progressed through months of protests by opponents arguing that no single owner should control so much of the nation’s airwaves.
Then FCC Chairman Ajit Pai, viewed as friendly to Sinclair and such a merger, raised “serious concerns” whether the deal would serve the public interest. Commissioners questioned a divestiture plan that could have left Sinclair with too much control over some big stations. Tribune called it off in August and filed a $1 billion breach-of-contract lawsuit. Sinclair counter-sued. The collapse stunned some analysts.
“Ultimately, it appeared that the criticisms were just too much to ignore,” Tuna Amobi, CFRA Research senior analyst, said in July.
One of the city’s most prominent companies, Under Armour, also saw its share of troubles in 2018, missing out on a contract to outfit Major League Baseball players, likely to rival Nike, then later facing criticism for workplace policies seen as demeaning to women. In November, The Wall Street Journal reported that company employees were allowed to charge strip club visits and other adult entertainment to expense accounts and that the company ended that practice only this year. The sports apparel maker says it has been working to transform its culture.
But the athletic apparel brand appeared to make progress on a restructuring plan to reverse slides in sales and stock price that followed years of rapid growth. Since the end of 2016, Under Armour has struggled amid intense competition, closures of key retailers and changing consumer tastes.
In the past year, the company closed under-performing stores and facilities, laid off 400 people — about 3 percent of its workforce, shortened how long it takes to design and bring merchandise to market and trimmed its product offerings.
Some analysts applauded the moves. And company leaders, including Under Armour CEO Kevin Plank, said the multiyear turnaround plan has begun to take hold.
Plank’s non-Under Armour venture, South Baltimore’s massive Port Covington redevelopment, was passed over in January in its bid to house Amazon’s second headquarters. Sites in Howard, Prince George’s and Montgomery counties missed out too. But disappointed state and local officials had something to cheer when McCormick & Co. reopened its global headquarters in its longtime home of Baltimore County.
In October, the spice maker celebrated the completion of a new corporate office in Hunt Valley. The $170 million project was designed to house 1,100 employees who had been scattered, attract and retain top talent, and give the brand an edge over rivals.
While McCormick looked to grow, other businesses scaled back, reflecting changing habits in shopping for everything from cars to clothing to appliances. Corporate decisions by General Motors, Saks and Sears trickled down to affect operations and employees in Maryland.
In October, Sears Holdings Corp. filed for bankruptcy protection and announced the shuttering of 142 unprofitable stores by the end of the year, including five in Maryland — Sears mall stores in Columbia, Westminster and Bowie and two Kmarts.
In mid-November, Saks Fifth Avenue said it would close its Aberdeen distribution center early next year and lay off about 150 workers.
Later that month, GM, which once employed thousands in Baltimore, said it will stop production at its 300-employee White Marsh transmission and electric motor plant. The automaker is idling five North American plants and laying off up to 14,000 factory and white-collar workers to focus more on electric cars and trucks.
In other business sectors, multimillion-dollar acquisitions by and of Maryland companies made headlines. Gaithersburg-based Emergent Biosolutions, a pharmaceutical company with significant Baltimore operations, said it planned to help combat the nation’s opioid addiction crisis with its $735 million purchase of Adapt Pharma, the Ireland-based maker of overdose reversal drug Narcan. And Hunt Valley-based Dunbar Armored, the fourth-biggest U.S. company of its kind, ended a 95-year run when it was gobbled up by rival security company Brink’s Co. for $520 million.
The year also closed out an unpleasant chapter for Baltimore-based Legg Mason, which in June settled a foreign corruption investigation of an affiliate that managed investments for the Libyan government during the rule of Muammar el-Qaddafi. The money management firm settled with the U.S. Department of Justice and the U.S. Securities and Exchange Commission, paying $71 million in penalties and other costs. The probe involved activities of two mid-to-lower-level foreign-based employees at Legg’s Permal hedge fund business more than a decade ago.
There has been a lot of building around the region in the past year, and some considerable new landmarks rose on the landscape, including a record tall apartment tower in the Inner Harbor, a marquee hotel for high rollers at the Live Casino in Hanover and a major research facility for the University of Maryland.
There were also big moves to redevelop underused swaths in the former Sparrows Point steel mill site, where Under Armour and Amazon have committed to warehouses, and in Port Covington, where a trio of tech-related companies pledged to remake the waterfront into a thriving cyber hub.
Whole new neighborhoods began rising near the University of Maryland BioPark and Johns Hopkins Hospital. Other projects were announced around the region, including a new concourse and hangar at BWI for Southwest Airlines, a golfing-related entertainment complex near the Horseshoe Casino Baltimore and a revamped Lexington Market.
In the Inner Harbor, Questar Properties opened a premier 44-story apartment building with expansive water views, top-of-the-line everything and penthouses advertised at $8,000 a month. The building, 414 Light Street, joins a crowded field of new luxury residences competing for well-heeled professionals, retired executives and maybe even visiting royalty.
At the Live Casino at Arundel Mills Mall in Hanover, a posh new hotel opened to serve gamblers and visitors. It features a one-of-a-kind art collection, modern decor and an array of eateries that the Cordish Company says will help it compete with other casinos in Baltimore and the Washington suburbs.
The University of Maryland School of Medicine opened the university system’s largest academic building, a $305 million 11-story research tower on Baltimore Street meant to vastly expand the institution’s ability to understand and treat diseases. About 400 people are expected to work there and generate an more than $107 million in annual research funding.
At Port Covington, three businesses active in the thriving cybersecurity sector — DataTribe, AllegisCyber and Evergreen Advisers — announced plans to open offices in the $5.5 billion project’s first phase, anchoring what they and Weller Development called “Cyber Town USA,” a Silicon Valley of the East Coast with dozens of such companies and hundreds of workers.
To the southeast in Baltimore County, Tradepoint Atlantic continued remaking the Sparrows Point steel mill into an industrial, logistics and shipping hub. With close to $100 million in government aid lined up, developers already have opened or planned several major retail distribution centers and pledged environmental clean-up.
At BWI Thurgood Marshall Airport, designs are in the works for $60 million in improvements, including an expansion of Concourse A used by Southwest, which is responsible for more than two-thirds of the airport’s flights. Southwest also committed to build a $130 million maintenance hangar there, its first in the Northeast.
In the shadow of the Horseshoe Casino and the city’s major sports stadiums, the high-tech indoor driving range company Topgolf said it will open a complex and bring hundreds of workers in 2020, contributing to what officials hope will be a vibrant entertainment corridor where there are now six-acres of parking lots and an animal shelter.
To serve a new crop of residents downtown and in the waterfront communities, several of the city’s historic food markets, including Broadway Market in Fells Point and Cross Street Market in Federal Hill, have begun major upgrades to the facilities and the eat-in and take-out offerings. Lexington Market on downtown’s West Side also announced that it will be next.
On Baltimore’s West Side, New York-based La Cite Development cut the ribbon on two apartment buildings in Center\West, the first of 30 largely residential and retail buildings in a major overhaul of the Poppleton neighborhood adjacent to the University of Maryland BioPark. The $900 million project is expected to attract students and faculty and area residents.
Just north of Johns Hopkins Hospital, the first residents of Eager Park have begun moving in or claiming homes in a massive redevelopment project that began 15 years ago. It aims to turn a downtrodden part of the city into a thriving biotech hub filled with Hopkins-affiliated workers and students and residents who wished to return.
Meanwhile, in shopping centers and storefronts across Maryland, an entirely new industry has spread like a — ahem — weed. The Maryland Medical Cannabis Commission has approved the opening of 69 stores so far, with 33 more in the pipe. For the first nine months of this year the industry recorded $67 million in sales and was expected to pass $100 million by year’s end.
PREVIOUS ARTICLE
