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byline: Kate Andrews

Washington Wizards, Capitals reach deal to stay in D.C.

The Washington Wizards and Capitals NBA and NHL teams are staying put in the District of Columbia and will not be moving to Alexandria, according to announcements from Washington, D.C., and Virginia officials Wednesday. These events put the final nail in the coffin of a controversial $2 billion Alexandria arena proposal touted by Virginia Gov. Glenn Youngkin.

“We’re going to be together for a long time,” Washington, D.C., Mayor Muriel Bowser said at a news conference Wednesday evening, joined by Monumental Sports & Entertainment CEO Ted Leonsis.

Bowser said that she and Leonsis had just signed an agreement to keep the teams in Washington through 2050, in exchange for D.C.’s pledge to pay $515 million over the next three years to upgrade and modernize Capital One Arena in downtown D.C.

According to Leonsis, he and Bowser continued discussions regularly after his and Youngkin’s December 2023 announcement of the proposal to create a $2 billion arena and entertainment district in Alexandria — a nonbinding deal that was opposed by some Virginia Democratic lawmakers and Alexandria residents.

Youngkin, whose efforts to build the arena were blocked by Virginia State Senate Democrats during the General Assembly session, said in a statement Wednesday afternoon that “personal and political agendas drove away a deal with no upfront general fund money and no tax increases, that [would have] created tens of thousands of new jobs and billions in revenue for Virginia.”

He also referred to the possibility of 30,000 new jobs and $12 billion in economic activity that the deal could have brought to the state, which “just went up in smoke,” according to the statement.

“This should have been our deal and our opportunity,” the governor continued. “All the General Assembly had to do was say, ‘Thank you, Monumental, for wanting to come to Virginia and create $12 billion of economic investment. Let’s work it out.'”

The proposed sports arena and entertainment district faced significant pushback from state Sen. Louise Lucas, the powerful chair of the Senate Finance & Appropriations Committee, who prevented the Virginia State Senate from voting on a measure to create a state authority that would control the project’s approximate $1.3 billion in public funding.

Answering a reporter’s question about what had happened with the Virginia negotiations and opposition among state lawmakers, Leonsis didn’t speak specifically about the state Senate’s roadblocks or any other missteps among state officials.

But D.C. officials “did everything right from December on. And when I looked at the other side of the board,” Leonsis said, referring to Virginia, “some of them weren’t scoring as high, and they weren’t together.

“We are an incredibly valuable company,” he added. “Forbes just said we’re worth $6 billion. That would make us one of the 10 most valuable companies in Virginia, one of the 10 most valuable companies in Washington, D.C., [and] we should be treated with that kind of respect. The city [of Washington] treated us that way. And that really was what the game changer for us.”

Leonsis said at the news conference that he would talk about Virginia at a later time, but he complimented Youngkin as “a good man,” who was aware of his ongoing negotiations with Bowser.

At the news conference, held Wednesday evening at Capital One Arena, Leonsis said that in recent months, he and Bowser met nearly weekly on the “main couch in the lobby at the Waldorf, and I would jump up and run to the bar and get some drinks, and we would talk about what’s the vision for the city.”

The option of more space

Another key factor in D.C.’s negotiations with Monumental was the recent closure of a shopping mall near the current arena. Washington, D.C., officials and the mall’s owner offered to let Monumental expand into about 200,000 square feet of that space, Leonsis said. The 12 acres on the Potomac River, where the arena would have been part of 9 million square feet of new multiuse buildings, was part of that proposal’s appeal, he added.

Lucas opposed the amount of public spending on the arena — saying that schools and toll relief should be higher priorities for the state — and tweeted Wednesday afternoon, “As Monumental announces today they are staying in Washington, D.C., we are celebrating in Virginia that we avoided the Monumental Disaster! Thank you to everyone who stood with us in this fight!”

Other Virginia Democrats took Lucas’ side in the battle, and some were put off by the governor’s apparent lack of interest in compromising on their party’s priorities, including a $15/hour minimum wage starting in 2026 and setting up a recreational cannabis retail structure in the state.

Matt Kelly, CEO of Bethesda, Maryland-based developer JBG Smith, which would have developed the entertainment district, released a statement Wednesday, blaming the project’s failure on “partisan politics and, most troubling, the influence of special interests and potential pay-to-play influences within the Virginia legislature.

“The scheming and special interests that plagued this opportunity in the Virginia legislature will no doubt cause future employers and the next Monumental to question whether their opportunity will get a fair hearing,” Kelly’s statement continued.

“This opportunity also brought with it the potential to add tens of thousands of jobs and needed housing units, including 1,000 units of affordable housing preservation in Alexandria which we had pledged as part of the arena proposal. Traffic and transportation investments, including possible Metro funding, are also likely gone. Instead, the existing surface-parked, single-story shopping center on the site will remain through the remaining 20-year term of the Target lease, and development on the remaining land will likely be far less dense. To say we are disappointed is an understatement; we are disgusted with the backroom-dealing and opaque scheming that took place as this played out.”

Last week, JBG Smith pledged to double the number of preserved workforce-priced affordable residential units near the complex from 500 residences to 1,000, an attempt to save the deal, and previously, the governor put forward a $322 million Hampton Roads toll relief proposal, a priority for Lucas.

In February, George Mason University’s Center for Regional Analysis found in a study requested by JBG Smith Properties that the project would include the construction of 5,405 workforce-affordable housing units, more than twice the 2,250 affordable housing units the City of Alexandria aims to have by 2030.

The Democratic-controlled House of Delegates passed the authority legislation in a bipartisan vote during the General Assembly’s regular session, but the bill faced a roadblock in the Senate. Some Alexandria residents also opposed the project over costs, traffic and infrastructure stress.

Ted Leonsis, founder, CEO and chairman of Monumental Sports & Entertainment, owner of the Washington Capitals and Washington Wizards, speaks at a Dec. 13, 2023, news conference in Alexandria announcing a plan to invest $2 billion in a new arena and accompanying entertainment complex in Potomac Yard. Virginia Gov. Glenn Youngkin is at left. Photo by Will Schermerhorn

Big numbers touted

In December 2023, Youngkin and Leonsis, with Mayor Wilson on hand, announced the 9 million-square-foot entertainment campus project as close to a done deal, saying it could create up to 30,000 jobs for Virginia over several decades. With a 2025 groundbreaking, the arena was expected to be completed by 2028 on an accelerated construction schedule, and an economic and fiscal impact report conducted for the city anticipated up to $7.96 billion in annual economic output for the state if the arena was open by 2028.

However, in March, The Washington Post reported that a separate economic analysis commissioned by the Youngkin administration and not released publicly had assumed fans would pay $75 for parking and that a new luxury hotel would book rooms at $731 a night, with the state using parking fees, ticket taxes and other revenue in order to pay off $1.5 billion in debt.

Earlier this month, Bowser said the District’s offer to fast-track a $500 million deal to update the teams’ current arena and keep them in Washington, D.C., was still on the table, after Virginia legislators omitted the authority wording from their budget amendments — a decision Youngkin called a “colossal mistake.”

“As stewards of the city’s economic health and development, city leaders believed the Potomac Yard entertainment district opportunity was worthy of community discussion and [city council] consideration,” Wilson said in a statement Wednesday. “We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity. We trusted this process and are disappointed in what occurred between the governor and General Assembly.”

The 2024-26 state budget negotiations between state lawmakers and Youngkin remained the final avenue to create the state authority by including it in the finalized budget in April, but Wednesday’s events closed the door entirely on the proposed arena move.

Baltimore bridge collapse will drive ships to Port of Va.

After a container ship struck the Francis Scott Key Bridge in Baltimore early Tuesday, causing the bridge to collapse and possibly claiming multiple lives, ships bound for the Port of Baltimore will be diverted to other ports, primarily the Port of Virginia and the Port of New York and New Jersey.

The Virginia Port Authority, which oversees the Port of Virginia, issued a statement Tuesday morning, saying that the container vessel that hit the Key Bridge at approximately 1:30 a.m. Tuesday, called at Virginia International Gateway’s terminal and left March 22 for Baltimore, its next scheduled port of call.

“Our operating team is already working with ocean carriers whose vessels were due to call Baltimore and offering the capability of our port to discharge cargoes as requested,” Port of Virginia spokesman Joe Harris said in a statement. “The Port of Virginia has a significant amount of experience in handling surges of import and export cargo and is ready to provide whatever assistance we can to the team at the Port of Baltimore.”

Danish shipping company Maersk confirmed in an email that it chartered the Dali container vessel — owned by Grace Ocean and operated by Synergy Group — that collided with the Key Bridge. As of 10 a.m. Tuesday, six people who were repairing the bridge at the time of the collision were unaccounted for, according to The Washington Post.

Maryland Gov. Wes Moore said the ship lost power and issued a mayday call shortly before crashing into the bridge, which immediately fell, the Post reported. The ship was traveling at eight knots at the time of the collision, Moore told reporters.

According to an email Tuesday from Rachel Shames, vice president of pricing and procurement for CV International, a Norfolk-based international logistics and transportation company, the collision is expected to create a temporary increase in cargo volume at other East Coast ports, including Norfolk’s terminals.

“The full impacts of this disaster are not yet known, but it’s likely that nearby East Coast ports, including Norfolk, Philadelphia, New York and others will absorb cargo traffic from Baltimore in the short term,” she wrote. “This sudden increase in volume may strain operations at other ports.”

All vessel traffic in and out of Baltimore’s port has been suspended until further notice, Maryland’s transportation secretary announced Tuesday morning, though the port is still open and trucks are being processed within marine terminals.

Maersk sent its customers an email notifying them of the collision and said that due to the bridge collapse, ships will not be able to reach the Baltimore port “for the time being. In line with this, we are omitting Baltimore on all our services for the foreseeable future, until it is deemed safe for passage through this area. For cargo already on water, we … will discharge cargo set for Baltimore in nearby ports. … Delays may occur, as they will need to discharge in other ports.”

“I think there is definitely a concern that we will see some congestion on the East Coast now, because other ports are having to absorb traffic,” Shames said later in an interview with Virginia Business.

She said that the impact of the port’s temporary closing “could end up rippling down to Wilmington, [North Carolina], Charleston [South Carolina] and Savannah, [Georgia],” although, she noted, “Norfolk is probably the most practical place to absorb most of the capacity. You want to keep the cargo that was supposed to go to Baltimore…as close as possible to Baltimore.”

Shames also noted that Baltimore’s port is the top U.S. port for the import and export of automobiles, light trucks, wheeled farm vehicles and construction machinery, which often move on specialized vessels and not in containers.

The Port of Virginia’s Newport News Marine Terminal has facilities that accommodate vehicles, including ramps that allow workers to load and unload rail cars and ships, but not on Baltimore’s scale, Shames said. “There is capacity at [Newport News Marine Terminal] … but not a lot, nothing like what Baltimore can do. It will not be as simple as just shifting. Unfortunately, I think we are going to be looking at congestion, and I just don’t know how long. That can mean delays for cargo [and] probably extra costs. It’s a ripple, a domino effect.”
Wider channels

Earlier this month, widening of the Port of Virginia’s shipping channel was completed, allowing two ultra-large container vessels to pass at the same time. The shipping channels are now up to 1,400 feet wide in some areas, although the completed deepening of the commercial shipping channel and the Norfolk Harbor to 55 feet and the ocean approach, set to be 59 feet deep, has been delayed until fall 2025, the port announced.

David H. Sump, a Norfolk-based maritime attorney with Willcox Savage and a former Coast Guard officer, says it’s too soon to tell what exactly happened to the ship in Baltimore, but after he watched a video of the collision, he noted, “This vessel appeared to lose power. It appeared to go dark for about a minute,” shortly before crashing into the bridge. If there were a power outage on the ship, “you don’t have control of the vessel during that time. It’s floating. The momentum of the vessel was proceeding, [and] there may not have been anything the pilots could have done.”

The Dali, with 22 crew members on board, had made its scheduled import deliveries to U.S. ports and was likely heading back to Asia when the collision occurred. No Maersk crew and personnel were on board the vessel, according to an email from Maersk to customers.

Sump and fellow maritime attorney Deborah Waters of the Norfolk-based Waters Law Firm note that large container ships in Maryland and Virginia are required to have local ship pilots on board when the vessels are moving in and out of rivers, bays or harbors — basically guiding them safely past structures such as bridges or other ships. “Pilots are the expert navigators of the local waters,” Sump said.

Local pilots often require five years of training in Virginia to be licensed to navigate vessels in tighter quarters. Sump acknowledges that ultra-large container vessels stopping at the Port of Virginia’s major terminals — the Norfolk International Terminals and Virginia International Gateway — do not go near or through bridges like the Key Bridge in Baltimore, although ships moving up the James River to the Richmond Maritime Terminal would encounter bridges.

Frank Rabena, vice president of the Virginia Pilot Association, told Virginia Business that this improvement and the port’s other recent infrastructure changes allow the port to assist in a situation like this. “The Port of Virginia is already prepared,” he said. “We are already in that position to handle pretty much any ship that comes our way.”

In terms of local impact, Rabena said, it’s too soon to tell what will happen.

“We’re not sure how shipping companies would reroute cargo,” he said. “That will unfold in the next couple of days.”

In 2022, the Port of Virginia processed more than 3.7 million 20-foot-equivalent units at its terminals, and cargo tonnage was up 11% from 2021. For fiscal 2022, the port generated $124.1 billion in output sales, $41.4 billion in Virginia labor income and $5.8 billion in state and local taxes and fees.

David White, executive director of the Virginia Maritime Association, said he’s already had some members reach out to offer assistance, but it’s going to take a little while to understand how the industry can best help. “It’s going to be a prolonged incident,” he told Virginia Business.
“Right now, it’s just so early, everyone’s minds are focused on the search and rescue,” he added. “We stand by as needs are identified to facilitate the capabilities our member companies have. … It’s just still too early, but we are ready, as those needs are identified, to reach out to our members [and] to get information to our members, so they know how they can … support our maritime friends in Baltimore.”

Boeing CEO Calhoun to step down by year-end

Amid ongoing bad press over production problems and fallout from a high-profile January incident in which a 4-foot wall panel blew out of a Boeing 737 Max 9 jet cabin in mid-air, Boeing announced Monday that its president and CEO, Dave Calhoun, would step down from his position leading the embattled Arlington County-based Fortune 500 aerospace company and defense contractor by the end of 2024. 

Additionally, Boeing Board Chair Larry Kellner will not stand for re-election during the company’s April 18 annual shareholders meeting. The board has elected a new independent board chair, Steve Mollenkopf, to succeed Kellner. The former CEO of semiconductor manufacturer Qualcomm, Mollenkopf will lead the board in selecting Boeing’s next CEO. Kellner, who has chaired Boeing since 2019, joined the board 13 years ago, and Mollenkopf has been on the board since 2020.

Steve Mollenkopf
Boeing’s board elected Steve Mollenkopf to serve as its next board chair on March 25, 2024. (Photo courtesy Boeing)

As part of the management shakeup, Boeing Chief Operating Officer Stephanie Pope has been appointed to lead the company’s Boeing Commercial Airplanes business unit, replacing BCA President and CEO Stan Deal, who retired from Boeing effective Monday.

“It has been the greatest privilege of my life to serve Boeing,” Calhoun wrote in a letter to employees. “The eyes of the world are on us, and I know that we will come through this moment a better company. We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do.”

In a statement, Mollenkopf said, “I am honored and humbled to step into this new role. I am fully confident in this company and its leadership – and together we are committed to taking the right actions to strengthen safety and quality, and to meet the needs of our customers. I also want to thank both Larry and Dave for their exceptional stewardship of Boeing during a challenging and consequential time for Boeing and the aerospace industry.”

In January, terrified Alaska Airlines passengers were exposed to open air at 16,000 feet. Reports followed that the wall panel that blew out was missing bolts and Alaska Airlines found loose bolts on other Boeing aircraft. Amid questions about whether Boeing cut corners on quality control, the incident is under investigation by the National Transportation Safety Board and the Federal Aviation Administration. The Justice Department opened a criminal investigation into the incident, and on Friday, it was announced that the FBI notified passengers of that Alaska Airlines flight that they may be crime victims.

Following the blowout, the FAA conducted a six-week examination of the company’s 737 Max jet production process, including 89 product audits. According to The New York Times, Boeing failed 33 of the audits.

The FAA halted expanded production of the 737 Max, and customer United Airlines has approached competitor Airbus. Boeing reported that it had net-zero orders for new commercial aircraft during January.

The writing was on the wall for Calhoun, with one industry veteran telling Reuters in February, “I can’t see how the CEO can survive and how he should survive.” Last week, Boeing board directors, including Kellner, said they would conduct a “listening tour” with their largest airline customers — sans Calhoun — Bloomberg reported. 

Following the Alaska Airlines incident on Jan. 5, all Boeing 737 Max jets were grounded temporarily in the U.S., although flights were allowed to resume later in the month. In February, the company announced it would rework 50 undelivered 737 Max jets after finding mistakes in drilled holes in the fuselage of some of them, Reuters reported.

Meanwhile, some Alaska Airlines passengers filed a $1 billion lawsuit against the airline and Boeing, and Boeing’s chief financial officer said in March at a Bank of America conference that the company would burn between $4 billion and $4.5 billion in the first quarter of the year because of lower delivery volume and pressure on working capital, according to Reuters.

There was more financial fallout over recent weeks, as some travelers changed plans to avoid flying on Boeing planes and air carriers said they would be cutting back flights this summer and seeking alternatives to 737 Max planes they had already ordered.

Also in March, a former Boeing quality manager-turned-whistleblower, John Barnett, was found dead of an apparently self-inflicted gunshot wound. Although he left the company years earlier, Barnett had called attention to safety concerns regarding Boeing 787 jets under construction in South Carolina, where he started working in 2010. Several former Boeing employees alerted authorities to a series of quality control problems at Boeing plants dating back several years, according to a Washington Post story. In December 2021, the Senate Commerce Committee produced a report following the two deadly 737 Max crashes in October 2018 and March 2019, documenting metal shavings and tools left on jets in production.

A Virginia Tech alumnus, Calhoun has steered Boeing through strong headwinds since becoming its CEO in 2020, including the aftermath of the deadly 737 Max crashes off the coast of Indonesia and in Ethiopia, which together claimed 346 lives. Following the January Alaska Airlines incident, Calhoun said Boeing will “cooperate fully and transparently” with federal investigators in the most recent probe.

Calhoun previously held C-suite positions at Blackstone, Nielsen Holdings and General Electric.

Boeing, which moved its headquarters to Arlington from Chicago in 2022, has about 170,000 employees worldwide, including 400 workers in Arlington.

 

JBG Smith pledges 1,000 affordable housing units if arena passes

Developer JBG Smith pledged Friday to preserve 1,000 workforce-affordable housing units in Alexandria near the proposed sports arena and entertainment district, up from its previous promise of 500 units — upping the ante on the controversial project, which has one more chance to succeed this year.

The $2 billion public-private project championed by Gov. Glenn Youngkin — which would move the Monumental Sports & Entertainment-owned Washington Wizards and Capitals teams to Alexandria — has faced significant opposition in the Virginia Senate, led by Sen. Louise Lucas, chair of the Senate Finance & Appropriations Committee. She blocked every opportunity for a Senate floor vote on a state sports arena authority that would own the buildings and property in Potomac Yard, but there’s still a slim chance for the deal if the arena authority is part of the state’s finalized 2024-26 budget expected to be enacted in April.

According to JBG Smith Chief Strategy Officer Evan Regan-Levine, the company had committed to “preserving the affordability of more than 500 affordable workforce housing units in Alexandria — with a specific focus on the Arlandria neighborhood near the site — to avoid displacement of existing vulnerable residents.” In Friday’s announcement, JBG Smith said it would instead preserve 1,000 units of workforce housing, in response to discussions with city officials, state lawmakers, Alexandria residents and the Virginia Department of Housing and Community Development — contingent on the General Assembly’s passage of a budget that includes the arena authority.

“Our extensive conversations with members of the Alexandria community, leaders such as Mayor Wilson, the council and legislators from the commonwealth further reinforced the centrality and necessity of housing preservation efforts in Alexandria,” said AJ Jackson, JBG Smith’s executive vice president of social impact investing. “As a result, we are doubling the number of units we are preserving to maintain affordability and prevent displacement in advance of the arena’s opening so that as many Alexandrians as possible are able to take advantage of this incredible economic development opportunity.”

In announcements about the arena project, Youngkin touted the possibility of up to 30,000 more jobs in Virginia and billions in tax revenue, and a report released in February by George Mason University’s Center for Regional Analysis found that the project would include the construction of 5,405 workforce-affordable housing units, more than twice the 2,250 affordable housing units the City of Alexandria aims to have by 2030.

JBG Smith said in its announcement Friday that the increase of preserved affordable housing from 500 to 1,000 units would help toward the city’s housing goal. If the arena authority is passed by state lawmakers, the developer will collaborate with the city to “proactively identify and preserve the affordability of 1,000 workforce housing units within the City of Alexandria, with a particular focus on the neighborhoods adjacent to the proposed arena development.”

Earlier this month, as the Virginia General Assembly regular session ended without arena legislation passed, Youngkin declared, “I believe the Senate is about to make a colossal mistake,” but Lucas has held firm. A major holdup for Lucas and some other Senate Democrats was Youngkin’s apparent unwillingness to make compromises on Democrats’ priorities, including setting a $15 per hour minimum wage in Virginia by 2026 and setting up a structure for recreational cannabis sales and taxation.

According to a Washington Post story published Wednesday, the Republican Youngkin met virtually with Lucas for budget negotiations, and she said, “He brought up the arena again, and I told him that was a nonstarter for me.”

First of two new SCC judges sworn in

Samuel T. Towell, a former Virginia deputy attorney general and Smithfield Foods associate general counsel, was sworn in Wednesday as the Virginia State Corporation Commission’s newest judge.

The SCC governs utilities, state-chartered financial institutions, securities, insurance, retail franchising and the Virginia Health Benefit Exchange. Its three-judge panel had been short two judges since the December 2022 resignation of Judge Judith Jagdmann, and nominations were held up by partisan politics.

In January, the Virginia General Assembly unanimously elected two attorneys to fill the two vacancies: Kelsey Bagot, a former legal adviser with the Federal Energy Regulatory Commission who lives in Loudoun County, and Towell. Bagot’s six-year term is expected to start after her swearing-in on April 1, while Towell’s term is set to expire Jan. 31, 2028, as he is replacing Jagdmann, who left during the fourth year of her third term.

Since January 2023, Judge Jehmal T. Hudson has been the only sitting Virginia SCC commissioner and is currently the chair. Having taken office in July 2020, Hudson is serving his first six-year term on the commission.

SCC judges are named by state legislators or, if they can’t agree on a candidate, the governor can name a commissioner on a temporary basis, although the state Senate and House of Delegates must elect a judge to a six-year term.

A graduate of the University of Virginia School of Law, Towell was also deputy secretary of agriculture and forestry under Gov. Terry McAuliffe and was a litigation attorney at McGuireWoods. Bagot, a graduate of Harvard Law School, was a trial attorney at FERC and a legal adviser to former SCC Judge Mark Christie during his recent term as a FERC commissioner. She also was an associate at Troutman Sanders.

W&M receives $30M anonymous donation

An anonymous William & Mary alumna has donated $30 million to renovate and rename a building in honor of former U.S. Secretary of Defense Robert M. Gates, who is currently the university’s chancellor.

Robert M. Gates Hall will house three academic centers — the Global Research Institute, the Institute for Integrative Conservation and the Whole of Government Center of Excellence — W&M announced Wednesday. Brown Hall, a currently vacant building on the Williamsburg campus, will be renovated to become Gates Hall, a LEED-certified facility with gathering spaces, in addition to the three centers. The W&M Foundation, which owns and operates Brown Hall, will partner with the W&M Real Estate Foundation in the renovation, which is expected to be finished by 2026, in time for celebrations marking the nation’s 250th anniversary.

“I have long admired President [Katherine] Rowe’s leadership and am thrilled to support her bold vision through reimagined spaces where new knowledge can grow, and grand challenges find solutions,” the anonymous donor said in a statement. “I am thankful for the opportunity to recognize Chancellor Gates. Given the divisions in our nation and world, we need leaders of his caliber, patriotism and integrity — now more than ever.” The anonymous alumna is a member of the W&M Foundation board, according to the university’s announcement.

The $30 million donation is William & Mary’s third largest individual gift. Earlier major donations include an anonymous couple’s $50 million donation in 2015 to the university’s law and business schools, 1955 alumna Martha Wren Briggs’ $31.7 million gift in 2016 for the Muscarelle Museum of Art, 1932 alumnus Roy R. Charles’ 1999 bequest of $24.5 million to start the Charles Center for Academic Excellence, and Walter J. Zable’s $23.9 million bequest in 2013, which funded football scholarships and stadium renovations.

The Global Research Institute was founded in 2008 as a multidisciplinary center that applies research to worldwide issues, and according to W&M, has collaborated with the Bill & Melinda Gates Foundation, the World Bank, the State Department and other organizations. The Institute for Integrative Conservation was established in 2020 to focus on ecological conservation issues. The Whole of Government Center of Excellence was launched in 2017 as part of W&M’s master of public policy degree offerings, and it focuses on national security and interagency collaboration.

“This is the greatest honor I’ve received in my lifetime,” said Gates, a 1965 W&M graduate. “William & Mary is where I felt called to public service, and I can see that the call to make a difference is still felt strongly here. This building will serve as a hub for generations of students and faculty to cultivate new ideas to contribute to the nation and the world.”

A rendering of the future Robert M. Gates Hall on William & Mary’s campus in Williamsburg. Image courtesy William & Mary

Gates served as defense secretary under President George W. Bush and President Barack Obama, and is the only person to serve as head of the DOD under two consecutive presidents of different political parties. In 2022, William & Mary started the annual Gates Forum, in which political leaders gather to discuss U.S. policies, and the new Gates Hall will host future forums and other events.

Brown Hall was built on the corner of Prince George and North Boundary streets, near Colonial Williamsburg, in 1930 as an off-campus residence for Methodist women students at William & Mary, and later served as a male student dormitory, Army housing, rented space for military families, upperclassmen residences and, most recently, a freshman dorm. In 2021, the building ended its use as student housing.

Gates Hall will include two wings with a courtyard in the middle, including a balcony and an outdoor learning space.

Before work starts to convert Brown Hall to Gates Hall beginning this fall, archaeologists will conduct excavations at the site, where the Williamsburg Bray School for enslaved and free Black children was started in 1760. William & Mary and the Colonial Williamsburg Foundation plan to collaborate on preservation and documentation of the school’s history, continuing excavation work begun several years ago. Gates Hall will host exhibits on the Bray School’s history and legacy, according to W&M.

“We are deeply grateful for our trustee’s passion for conservation and sustainability — so important to the work that will take place in this special building,” W&M President Katherine Rowe said in a statement. “Like the chancellor, she is a true servant leader; she does not seek recognition for herself. Through her partnership, across the university, she has inspired us to aim high. Gates Hall will build on other initiatives that her generosity has brought to life here.”

Alger leaving JMU to head American University

American University announced Monday that James Madison University President Jonathan Alger will be its next president, starting July 1. Alger joined the Harrisonburg public university in 2012.

Alger will be the 16th president of AU, a private university in Washington, D.C., replacing President Sylvia Burwell. During his tenure, JMU received R2 research classification from the Carnegie Commission on Higher Education, and the university joined the FBS level in NCAA Division I football. Alger launched the Valley Scholars program, which provides scholarships for first-generation students from the Shenandoah Valley. Also, JMU’s endowment more than doubled under Alger.

“Encouraging students to dream big is the heart of higher education, and the opportunity to join American University is a dream come true for me and my family. AU’s stellar academic profile and global impact reflect the unique and inspiring characteristics of the faculty, staff, students and alumni,” Alger said in a statement released by AU. “Returning to the Washington, D.C., region where our family has deep ties and collaborating with the AU community to create the next chapter of this great institution is an unparalleled opportunity.”

Alger previously was senior vice president and general counsel at Rutgers University and assistant general counsel at the University of Michigan. He chairs the Association of Governing Boards of Universities and Colleges and is vice chair of the American Association of Colleges and Universities. A graduate of Swarthmore College and Harvard Law School, Alger worked in the U.S. Department of Education’s Office for Civil Rights.

“President Alger elevated the university to a place far beyond where JMU has ever been. Under his leadership, we have turned the page into the next chapter of the history of JMU,” JMU Rector Maribeth Herod said in a statement. “JMU is no longer the hidden gem in the mountains because Jon has led us to national prominence and is leaving the university after accomplishing so much together. While Jon and Mary Ann will be missed immensely, the offerings at American University are a wonderful culmination of everything he is so passionate about.”

According to JMU, the Board of Visitors’ executive committee will recommend an acting president to the full board for a formal vote in coming weeks, and then the board will begin the search process for JMU’s next president.

 

Conservative groups sue to stop Dominion wind farm

A nonprofit conservative watchdog group based in Falls Church filed a lawsuit Monday against Dominion Energy, the U.S. Bureau of Ocean Energy Management, the U.S. Department of the Interior and other government bodies, aiming to stop construction of Dominion’s offshore wind farm expected to begin this spring 27 miles off the Virginia Beach coast.

The National Legal and Policy Center and its co-plaintiffs seek a preliminary injunction against the federal government’s approval of Dominion’s $9.8 billion, 176-turbine Commercial Virginia Offshore Wind (CVOW) project, claiming the massive wind turbines pose a risk to North American right whales under the Endangered Species Act. The lawsuit also claims that the BOEM and other agencies illegally overlooked risks to the endangered whales in approving the wind farm — while also criticizing President Joe Biden’s January 2021 executive order mandating an increase in clean energy production, including offshore wind energy.

The National Marine Fisheries Service is also named as a defendant; the lawsuit asks for a court order setting aside an opinion issued by the NMFS regarding the wind farm’s risk to the endangered whale species, part of the BOEM’s approval process.

Construction on the turbines and three offshore substations in a nearly 113,000-acre area is expected to begin in May.

Defendants in the lawsuit, filed in the U.S. District Court for the District of Columbia, include U.S. Commerce Sec. Gina Raimondo; U.S. Interior Sec. Deb Haaland; Elizabeth Klein, the BOEM’s director; and Janet Coit, director of the NMFS. In addition to NLPC and its co-founder and chairman, Peter Flaherty, the plaintiffs are Washington, D.C.-based Committee for a Constructive Tomorrow, a nonprofit organization advocating for free market solutions to environmental issues, and its founder, Craig Rucker; and Illinois-based The Heartland Institute, a libertarian and conservative think tank known for climate change denial.

“The CVOW project — during its construction, operation and decommission phases — will adversely affect the federally listed [North American right whale], which uses the waters within and near the CVOW project area for migration, feeding and other key life history events,” the complaint says, claiming that there are only 340 North American right whales in existence. The NMFS reported in 2022 that there were approximately 360 of the whales, and that since 2017, there have been more than 120 whales injured or killed by “unusual mortality event[s].”

In February 2023, a male North American right whale washed up in Virginia Beach, in which the whale was determined to have died after a blunt force injury likely caused by a collision with a vessel, according to the National Oceanic and Atmospheric Administration (NOAA). Two dead whales washed ashore in Virginia Beach earlier this month, but they were juvenile humpback whales, which are not endangered.

Dominion, which received final federal approvals to start construction in January, responded to the lawsuit with a statement: “The issues raised in this lawsuit have no merit. The Bureau of Ocean Energy Management has done an extraordinarily thorough environmental review of the project and carefully considered potential impacts to marine wildlife and the environment. The overwhelming consensus of federal agencies and scientific organizations is that offshore wind does not adversely impact marine life. We’ve put in place strong environmental protections for this project, and are confident the North Atlantic right whale will be protected.”

NLPC was started in 1991 by Ken Boehm and Flaherty, and reports on ethics of public officials and corporations, as well as issuing some legal challenges. Over the years, the organization has filed election law complaints against former Democratic presidential candidate Al Sharpton, U.S. Rep. Maxine Waters and former U.S. Rep. Alan Mollohan. The group also filed a complaint with the Department of Defense’s inspector general in 2003, producing evidence that a DOD procurement officer had sold her house to a Boeing executive who was working on a tanker deal with the Pentagon, a scandal that led to the firing of Boeing’s chief financial officer, Michael M. Sears, and the procurement officer, Darleen Druyun, who also received federal prison sentences.

Artists pull out of SXSW over Army, RTX involvement

Dozens of bands and solo musicians boycotted Austin, Texas’ South by Southwest (SXSW) festival this week in protest against the Department of Defense’s support of Israel’s war in Gaza. Among SXSW’s sponsors this year are the U.S. Army and Arlington County-based aerospace and defense contractor RTX, which makes weapons and other equipment used by Israel’s military.

According to The Hill, as of Wednesday, 105 music acts and five music labels have dropped out of the nine-day festival, which concludes Saturday. In February, the Austin For Palestine Coalition called for music artists and participants in speakers’ panels to boycott SXSW due to the festival’s financial backing by the U.S. Army, RTX and its subsidiaries, and other defense contractors. Also mentioned by the coalition was Falls Church-based BAE Systems Inc., which was scheduled as an exhibitor at a startup event connected to SXSW, although a BAE spokesperson sent a statement to The Hill that it did not plan to participate in the festival.

Army spokesperson Lt. Col. Lindsey Elder said in a statement to Virginia Business on Thursday that the military branch is “proud to be a sponsor of SXSW, and to have the opportunity to showcase America’s Army. SXSW presents a unique opportunity for the Army to meet technology innovators and leaders, explore new ideas and insights, and create dynamic industry partnerships as we modernize for the future. By engaging with innovators and entrepreneurs, we are able to invest strategically in state-of-the-art systems, allowing us to evolve and adapt to new threats and challenges.”

Previously known as Raytheon Technologies, RTX has three business units: Aerospace and defense technology supplier Collins Aerospace, headquartered in Charlotte, North Carolina; aerospace manufacturer Pratt & Whitney, headquartered in East Hartford, Connecticut; and Arlington-based subsidiary Raytheon, which includes intelligence, space, missiles and defense business segments.

The Austin for Palestine Coalition issued an open letter Feb. 21 demanding that SXSW organizers “disinvite Raytheon (RTX), its subsidiary Collins Aerospace, and BAE Systems to the conference and festivals in the city of Austin. Raytheon, Collins Aerospace and BAE Systems have direct ties to the arming of Israel, supporting their violent oppression of the Palestinian people. Raytheon manufactures missiles, bombs and other weapon systems for the Israeli military to use against Palestinians.”

SXSW organizers said in posts on X this week that “we fully respect the decision these artists made to exercise their right to free speech,” while adding, “The Army’s sponsorship is part of our commitment to bring forward ideas that shape our world. In regard to Collins Aerospace, they participated this year as a sponsor of two SXSW Pitch categories, giving entrepreneurs visibility and funding for potentially game-changing work.”

RTX and BAE Systems did not respond immediately to requests for comment Thursday from Virginia Business.

As of late February, Israel’s war in Gaza has claimed more than 30,000 Palestinian lives, including numerous civilians, and more than 70,000 people have been wounded in the territory, according to health officials in the Gaza Strip. The war in Gaza followed Hamas’ attack on Israeli civilians near Gaza’s border on Oct. 7, 2023, which claimed about 1,200 lives, as well as the kidnapping of about 200 people, according to Israel authorities.

Also, the United Nations and worldwide aid organizations have characterized the situation in Gaza as a humanitarian catastrophe, as Israeli troops have frequently not allowed food and other aid to reach people in the territory. Last month, top U.N. officials said that at least a quarter of Gaza’s population, or 576,000 people, are “one step away from famine” without more aid, according to the Associated Press.

President Joe Biden and other U.S. politicians have received heavy criticism for their support of Israel’s military as the death toll grows in Gaza, and the federal government has increased financial and military aid to Israel in a budget passed by the U.S. Senate and now under consideration in the U.S. House of Representatives.

In Biden’s State of the Union speech, he called for a ceasefire in Gaza and authorized the construction of a temporary port to allow delivery of humanitarian aid to Gaza residents, while still funding weapons for Israel. Also, Senate Majority Leader Charles Schumer, a leading U.S. Democratic ally of Israel, said in a speech Thursday that Israel needs to hold a new election and that the Middle East nation risks becoming a “pariah” under Prime Minister Benjamin Netanyahu, who has authorized Israel’s military campaign in Gaza.

Altria plans to sell 35M Anheuser-Busch InBev shares

Henrico County-based Altria Group announced Wednesday it hopes to sell 35 million ordinary shares in Anheuser-Busch InBev in a public offering. The proceeds — estimated by Bloomberg at up to $2.2 billion — will go toward repurchases of Altria’s common stock, according to the Fortune 500 company’s statement.

Altria, parent company of tobacco manufacturer Philip Morris USA, currently holds about 197 million shares of ABI, or approximately 10% of Anheuser-Busch InBev. The Belgian beer giant owns several global brands, including Budweiser, Stella Artois and Michelob.

In Wednesday’s announcement, Altria says it plans to grant underwriters the option to purchase up to 5.25 million more ABI shares owned by Altria, and ABI has agreed to repurchase $200 million of ordinary shares directly from Altria contingent on the completion of the sale.

With the sale of 35 million shares, Altria would be shedding 17.8% of its InBev holdings, and the additional sale of 5.25 million shares to underwriters would amount to 20.4%. In 2016, Altria purchased approximately 12 million ordinary shares of ABI, giving Altria about 10.2% ownership of the brewer. Altria owned approximately 27% of SABMiller, which produced Miller Lite, Coors and Blue Moon, before ABI purchased SABMiller in 2016.

Altria has agreed to a 180-day lockup with the lead underwriter for its remaining ABI shares, the statement says. Morgan Stanley is acting as the lead underwriter for the offering, and JPMorgan Chase is also an active underwriter.

“As good stewards of shareholder capital, we consistently review options to unlock the value of our ABI investment, and we believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” Altria CEO Billy Gifford said in a statement. “Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”

Altria reported $24.5 billion in revenue in 2023, and it has focused more attention in recent years on alternative tobacco products, as cigarette smoking continues to decline in the United States.

Last June, Altria purchased NJOY Holdings, a manufacturer and distributor of e-cigarettes and vaping products, a move that came after Altria settled more than 6,000 lawsuits related to its 35% stake in Juul Labs in May 2023 for $235 million. Altria purchased the stake in 2018 for $12.8 billion, but months later, Juul’s value plummeted under an avalanche of civil lawsuits over accusations that its products were being marketed to minors, leading to widespread vaping addiction among teens.