Unfinished business '07 - Washington Business Journal:

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After a series of layoffz since it was bought by in AOL announced in the clincher inSeptembedr -- it would move its headquarters from Dullews to New York. The Big Apple is where its paren TimeWarner reigns, and it'ws the epicenter of the advertisintg world. At the time, the company insisted the only changes forthe 4,000 employeeds on the Dulles campus would be the senior managemen team trekking north in the But a month the media giant said it would cut 2,000 including 750 employees in Northern Virginia by the end of the as part of its shifting strategy.
The prooft was in the earnings: AOL continued to lose subscribers througg the year and its revenue continuedto plummet, a trendr that upset Time Warner investors lookinbg for returns. All of the free CDs AOL sent to homes over the years to get them to signon didn't pay off: AOL was forceed to alter its focus to generat e money through advertising. The strateguy was also reflected through the four advertising companiesa AOL boughtin Quigo, Third Screen Media, and AOL first set up its regional operationsw with an office in Tysons Cornere 20 years ago and expanded to the sprawlinhg Dulles campus in 1996.
AOL was bough by Time Warner in January which left AOL with sweeping layoffs and the campua withless vitality. Dimensionw Healthcare System found itself in the same financial straitas as it was at the dawn of with little cash to spare and its hat extendef to state legislators in the hopes of somebudgetary generosity. The Prince George'z County hospital chain must repeat its stepas nearly a year after apotential state-countgy $329 million funding plan dissolved in wee-hour divisiveness on Aprikl 9, the final day of the Marylaned General Assembly session.
After debates and appeals lasting into the earlhy morning ofApril 10, the Princde George's County Council gave an ironclad thumbs down to the seven-yearr plan because it felt the countg shouldered more of the financial burden with less long-termk payoff. The county, as a result, took on total financial burden alone, through June 2008 at least. But even that plan hit delayzs as the county called for a Dimensionsboard shakeup, the system retaliated with a $14 milliojn lawsuit and the county retaliated with various The system's annual fall electionse ultimately forced the management change that county leaderx long desired.
One dropped lawsuit later, the countyg began routing money once again in November to thetroubles system, as state legislators once agaij hunkered down to arrive at a long-ternm funding plan. The approacuh Mayor Adrian Fenty has takejn to deals he inherited from the previous administration andits semi-private development corporations, the NCRC and AWC, is Get 'em done. Except for Poplar that is.
While Fenty put his back into deals-in-progressx for a new conventioncenter hotel, the Southwest Waterfronr and the return of Radio One to the he did the opposite with Popla Point, opting to end negotiations with , owner s of soccer franchise , and open the project to That may well result in a better deal for the city -- it has bids from four developmenf teams to consider -- but there could be collateral damage. Shots from Marion Barry, D-War d 8, angry that economic development seems to be movingt forward everywhere except east of theAnacostiaw River, has hurt Fenty's image And MacFarlane, if it can't reach a deal to build on has threatened to move to Stay tuned.
used to be one of the fastest-growing companiesd in Washington, and now it's quickly fading. The Lanham-basex broadcast company that focuseson African-Americaj and urban listeners exited severa markets in 2007, including Georgia and Minnesota. In August, Chief Financiall Officer Scott Royster announcec he would stepdown Dec. 31 after 11 yearas with the company to pursue othefrcareer opportunities. The company has not announcedfa replacement. Citing what it calledc a "challenging radio industry environment," Radik One struggled to generate revenue as its profits Inits third-quarter earnings, Radio One reported net income of $4.
8 million, down 40 percent from $8 milliob in the same quarter a year ago. Revenu e for that quarter was $90.4 million, down 1.7 percentr from a year ago. In October, Radio One agreed to sell its Miamji radio station tofor $12.25 million and its five Georgia radi o stations to in August for $3.1 The company also sold its Minneapolis station KTTB-FM to Northern Lights Broadcasting for $28 millionn and 10 stations in Dayton, Ohio, and Ky., to for $76 million. In a twistg and despite its unpromisingg financials, Radio One agreed to acquir WPRS-FM in Washington from in Aprilfor $38 The deal is expecte to close in the first quarte 2008.
In April, a group of investorsa agreed to buy studentlender $25 billion. Analystx hailed the deal as a win bothfor Reston-based Sallie Mae and the buyout group, led by privates equity firms by LLC and , along with financial servicee giants and But that seemingly rosy courtshilp never panned out. Two things in particular causeds the Sallie Mae buyoutto wither: a creditf crunch that brought debt markets to a halt over the and new federal legislation that cuts subsidiesd to student lenders such as Sallie Mae.
Thesr two factors caused the buyout group to rethink its proposal for the company formallhy known asIn October, the buyout group sent a revisexd offer to Sallie Mae's board, an offer that some analystsx who cover Sallie Mae say amounted to an insult. Sallie Mae wouldn'gt accept the new offer, insisting that the originalk dealgo through. When that didn'gt happen, Sallie Mae filed a lawsuit against the buyout claiming that a material adverse effect had not and that the Reston company could terminatse the transaction and collect damagesof $900 A trial is set for July 2008.
In Sallie Mae said that it had held discussions with representatives of the buyout group to resolvee the dispute between the Sallie Mae said that the buyout group has indicatex that it is unwilling to pursue submitting a new proposal to buy thestudenty lender. Sallie Mae said that its board remains committed to protecting the right s of its shareholders and will pursue allavailablw recourse, including the company's existing lawsuigt against the buyout group. Sallie Mae said that it has indicationsd of interest from 10 financial institutions for new secured fundinv in excessof $30 billion. It's not until ...
$4 billiom Metrorail expansion was "It's not over until it's Well, it's over. But it's still not a done Backers of the Metrorail project are still waiting for approval from the Federalo Transit Administrationfor $900 milliohn in funds that will help pay for the In August, federal officials said cost overrunsd and delays were starting to hurt the project's and they ordered at least $250 million in cuts. Virginia officials responded byidentifying $306 millionj in potential reductions to the Metrorail plan, and federal transif representatives spent the latter part of 2007 reviewing the If the FTA signs off on the money, ground couldd be broken in spring 2008.
The projectt was originally scheduled to have the firstr phase through Tysons finishedin 2012. But that work probably won'rt wrap up until March 2014, according to new estimates. Out of tune Much-touted XM, Sirius merger still under review One of themost talked-about potential deals of 2007 was the proposed mergerf of the nation's two satellite radio companies, D.C.-basedd and New York-based Technically, Sirius would acquire XM, thougyh the companies all year long termed the transaction a mergeer of equals. The companies were hoping to seal their dealby year'sw end, assuming approval from the Departmenr of Justice and the Federap Communications Commission.
The and some othed groups vehemently opposed the saying it would lead to a monopoly in the satellitewradio industry. XM and Sirius were granted satellite radio licenses in 1997 fromthe FCC, on the conditioh that they didn't combine operations. But the communicationsw sector has drastically changed in the past and officials with XM and Siriu argue there is so much competitionout there, from iPodz to Internet radio, that a mergee of the two companies would not result in a Both XM and Siriu continued to burn through money as they marketerd their services to win new Officials at the two companies said a combine d firm would be able to offer better prices and more choicesx for consumers.
Analysts said throughout the year that the deal facexs anuphill battle. Many industrty observers give the proposed transaction a 50percent shot, at best, of getting the green light from federalk regulators. D.C. officials are keeping a watchfu l eye on the because the combined company would likelyu put its headquarters inNew York, analystzs say. XM officials said that no matter where the corporater officeends up, XM will maintain a largw presence in Washington.
The localo spate of biotech buyouts in 2007 may represent an industry pinnacle of successfuklexit strategies, but they also robbed the local regiom of a half-dozen homegrown Between April and July, six biotechs from across Virginia and the District announced their inteny to sell for a combined $18.6 billion to larger companies, five of them basedd overseas. While the largest of and , kept a local presence, the six foldedd into companies that hail from eitherf the opposite coast or one of fourforeigm countries. Counted among the losses are the region'zs biggest biotech, a rare profitable two even rarer Northern Virginia biotechs and perhaps the most a D.C.-based biotech. D.C.
's Hamilton Pharmaceuticald Inc. shut down after it sold in a $4.4 milliobn stock sale to Australia's Neuren Another company, , a Reston contract researchh services company that sold to aSan Francisco-based investor for $790 is in the final throes of shifting to Northj Carolina. Lost the plot? Mayor Fenty learns an earlgy lesson D.C. has sold or traded lots of land inrecentr years, dealing it to developers as an incentive to build tax-generating offices, residences and But if Mayor Adrian Fenty learnesd anything from his failed plan to sell off an L Street NW plot in the West End it's that the words "public land sale" should not be utterede in haste.
The storm arrived in July via a long line of protesterx after Fenty convinced the City Council to give developer Anthony Lanieer ofEastBanc Inc. a city-ownecd plot near Foggy Bottom in exchange for a rebuiltyfire station, neighborhood library and some affordablee housing. Maybe it was the combination of the land sale with the appearancre that the city was only interested in buildinyg new libraries if they could make some money doinggso -- a problem in other part s of town as Or maybe it was Fenty's speed in gettinfg the deal passed.
In any case, once the charges of a fire sale of publifc assets came to the Wilson members of the CityCouncil (except for Phil D-at large, who voted "no" in the first couldn't backtrack quickly enough. The West End deal collapsed, and with it went the easy days of selling public land. Goodbye Eli we hardly knew ya Elevejn days intothe year, suddenlu announced it was pulling out of its $325 million insulin production facility at Princwe William County. The Indianapolis-based pharmaceutical companh said it was part of a shift in its strategh towardbiotech products, and the fact that it coulrd boost insulin-production capacity at existint plants to meet demand.
The drugmaker returner the $4 million in subsidies it had received from the county and but that provided little succor to PrinceWillian County. The arrival of Eli Lilly was a feathert inthe county's cap and really, represented a turning of the tidee in its efforts to create a technolog and life-sciences corridor withinm its boundaries. The county's economicx development agency had spent yearsx wooing Eli Lilly and pulled a majo coup when in 2002 it was picked as the site fora 300,000-square-fooyt facility among dozens of competing sitess across the nation.
Even back in 2005, the drugmaker had cut back the scaled of the project froma $425 million, 600,000-square-foo t facility with 700 employees, to nearly half the size with only 350 Even that was not to be, and Eli Lillh now has split the 120-acre site into multipl e parcels. Some salve came in late November, when Eli Lilly sold 47 acrese of the campusto , a New Jersey drug development services company that said it will invesy $175 million, build a 410,000-square-footg facility and hire another 100 employees at that bringing its local head counrt to 450. Provided Covance follows throughb onits plans, that makes it just anothefr 70-some acres to go.