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Raytheon moving global HQ to Arlington

Raytheon Technologies Corp. announced Tuesday that it will relocate its global headquarters from Massachusetts to Arlington in the third quarter of this year, a move that will see four of the top five U.S.-based aerospace and defense contractors headquartered in Virginia. Raytheon is the second-largest defense company in the world, just below Lockheed Martin, and will be the commonwealth’s largest aerospace and defense contractor.

Raytheon’s new corporate headquarters will be in Arlington’s Rosslyn neighborhood, near  company’s existing Raytheon Intelligence & Space business located there. Raytheon has not sought or accepted financial incentives from the state, it said in a release. A spokesperson said that Raytheon expects to “slightly expand the scope of our existing leased space in Arlington,” where 130 corporate staff members currently work. Chris Johnson, senior director of global media relations, said that the company does not expect its corporate staff to increase significantly as a result of the move.

“I commend Raytheon Technologies’ leadership and pledge that Virginia is committed to being a partner in their mission to build a safer, more connected world,” Gov. Glenn Youngkin said in a statement. “With four of the top five major U.S. aerospace and defense leaders now based in Virginia, [Raytheon’s] decision to headquarter in Arlington demonstrates the commonwealth is the best destination for the aerospace and defense community.”

Raytheon has 600 facilities in 44 states and territories, and all four of its business units have operations in Virginia, where it has more than 1,000 employees and is a top employer in Loudoun County and Falls Church. The company, which employs more than 180,000 people worldwide, reported $64.38 billion in 2021 sales. Raytheon Technologies formed in 2020 following the merger of Raytheon Co. with the aerospace business of United Technologies Corp.

Raytheon’s announcement comes after The Boeing Co. said in May that it would move its global headquarters from Chicago to Arlington. The world’s third-largest defense contractor joins Falls Church-based Northrop Grumman Corp. and Reston-based General Dynamics Corp., which rank fourth and fifth respectively among the world’s largest defense contractors.

Raytheon Chair and CEO Gregory J. Hayes was elected chairman of Raytheon’s board in 2021 and worked for nearly 21 years at UTC in several senior roles across finance, corporate strategy and business development. He was appointed UTC CEO in 2014 and named chair in 2016 and led UTC’s reshaping into a company focused on aerospace, spinning off Otis Elevator Co. and Carrier Global Corp. in 2020. He led UTC’s merger, including its remaining aerospace businesses, Pratt & Whitney and Collins Aerospace Systems, to form Raytheon Technologies in April 2020. Hayes received his bachelor’s degree from Purdue University, in Indiana, and is a certified public accountant.

“We are thrilled to welcome Raytheon Technologies’ global headquarters to Virginia, America’s corporate hometown,” Virginia Economic Development Partnership President and CEO Jason El Koubi said in a statement. “Raytheon and other leading firms are attracted to the commonwealth’s world-class talent, dynamic industrial and innovation ecosystem, strategic location, global connectivity and exceptional quality of life. Raytheon Technologies’ global headquarters location will reinforce strategic partnerships and further strengthen Virginia’s aerospace and defense ecosystem in areas like avionics, cybersecurity, directed energy, electric propulsion, hypersonics and quantum physics. We look forward to a continued partnership with Raytheon Technologies as we begin this exciting new chapter.”

Shannon Flanagan-Watson, interim director for Arlington Economic Development, said, “Raytheon’s announcement, as well as that of Boeing last month, show that more companies are choosing Arlington for their headquarters. Our skilled, highly-educated workforce, key investments in public infrastructure and our exceptional tech ecosystem are factors companies desire when locating a company. We welcome Raytheon’s global headquarters and look forward to their continued presence in Arlington.”

Raytheon Technologies traces its origins to the 1922 founding of Raytheon Co. in Cambridge, Massachusetts. Raytheon became the supplier of magnetron tubes, essential in the Britain’s air defense, to the Allies during World War II. Today, Raytheon businesses provide the U.S. Navy’s F/A -18 fighter jets with precision weapons, radars, sensors and other systems.

In April, Raytheon Missiles & Defenses received a $483 million contract from the Navy to activate, sustain and modernize the service’s fleet of three Zumwalt class of guided missile destroyers. The contract includes options that, if exercised, will total $1.68 billion over five years. The contract also includes additional design, integrations, test and evaluation and other services for the Zumwalt, a stealth destroyer that has been beset by development problems.

Raytheon manufactures Stinger anti-aircraft missiles, which the U.S. is providing to Ukraine in its defense against invading Russian forces. In May, Raytheon won a $624 million U.S. Army contract to produce 1,300 more of the Stinger missiles. The contract is being funded through a provision of the Additional Ukraine Supplemental Appropriations Act.

No 2022 delegate elections, judges rule

Virginia politico Paul Goldman’s quest to force new elections of state delegates this fall ended in defeat Monday, after a panel of three federal judges ruled that he lacked standing as a voter and a prospective candidate to bring the legal challenge, which focused on the state’s newly redrawn political districts based on the 2020 U.S. Census.

In a lawsuit filed last year against state voting officials Robert Brink, John O’Bannon, Jamilah D. LeCruise and Susan Beals, Goldman argued that voters were being disenfranchised while represented by delegates elected in the state’s former districts. Virginia’s new districts for congressional representatives and state House and Senate members weren’t settled until December 2021, after a bipartisan commission’s gridlock forced the Virginia Supreme Court to finish the job.

Meanwhile, in federal court, U.S. District Judge David J. Novak handled former state Democratic Party chairman Goldman’s lawsuit, which was filed in June 2021, months before Republicans regained control of the House of Delegates. Novak dismissed former Gov. Ralph Northam and the Virginia State Board of Elections from the suit and later scolded former state Attorney General Mark Herring for ignoring a request for an official opinion on the issue for months, prolonging the matter. In January, newly elected Republican Attorney General Jason Miyares began defending the state against the lawsuit.

In Monday’s opinion, Novak — also representing U.S. Circuit Judge Stephanie Thacker and Senior U.S. District Judge Raymond Jackson — wrote, “This case has languished for far too long, largely due to defendants’ efforts to engage in piecemeal litigation and plaintiff’s unorthodox (and occasionally improper) filings,” ruling unanimously as a three-judge panel to adjudicate the matter of Goldman’s standing.

Goldman, who lives in the state’s new District 78 in Richmond, “failed to demonstrate a cognizable injury as a voter,” and in fact “benefited from overrepresentation of his vote during the 2021 House election,” in which he voted in former District 68. Novak also said that Goldman’s argument as a prospective candidate for the House of Delegates in his new district didn’t hold up because he had not declared his candidacy.

In a statement Monday, Miyares said, “The 2021 Virginia elections were legal and constitutional. Record numbers of Virginians went to the polls to vote and had their voices heard. I’m glad that the court agreed with my office, that there is no more uncertainty for voters and legislators, and that we were able to protect the sanctity of our 2021 elections.”

The next elections for state delegates and senators will take place in 2023.

Second Richmond casino referendum is off ballots

The Virginia General Assembly’s two-year budget, which was passed by both houses Thursday and sent to the governor, includes a provision that would delay a second casino vote in Richmond, where voters defeated a referendum last year. The language would not allow the referendum to appear on Richmond’s ballots until November 2023 — leaving the door open for a possible casino in Petersburg instead.

However, Richmond city officials and casino developer Urban One Inc. are not letting this happen without a fight.

In a joint statement Thursday, the Maryland-based company and the city said that the state budget amendment “seeks to unconstitutionally invalidate a final court order and inappropriately constrain the Virginia Lottery in fulfilling its regulatory authority in the same manner it has done for other casinos.” Urban One says it plans to “partner with the city of Richmond, including through litigation, to ensure that the people of Richmond have the final say on what happens in their community and that the rule of law is protected.”

An amended statement Thursday from Urban One and the city added the phrase “if necessary” after the mention of potential litigation.

The proposed November referendum, which was passed 8-1 by Richmond City Council and approved by a Richmond Circuit Court judge in March, would be the city’s second attempt to get voters to approve Urban One’s $565 million ONE Casino + Resort. In November 2021, a 1,200-vote majority of city voters defeated the original measure — making Richmond the only one of five Virginia cities to reject a casino project since they were legalized in 2020.

However, Richmond Mayor Levar Stoney and most of the City Council have continued to pursue the project, although state Sen. Joe Morrissey, who represents Petersburg and parts of Richmond, has pushed since last November to allow a casino in Petersburg. CEO Alfred Liggins of Urban One, which owns 55 radio stations and a cable network, did not receive assurance from Petersburg’s mayor that the company would be the “preferred vendor” there, Morrissey said in February, leading the company to join forces with Richmond officials.

Democrat Morrissey’s bill to get the state’s approval for a Petersburg casino referendum on the city’s ballot was killed in a Senate committee during the General Assembly’s regular session. Morrissey’s hopes remained alive, though, with the state budget amendment — added during negotiations in recent weeks — that would force Richmond to wait until 2023 for a second referendum vote, and move forward with a Joint Legislative Audit & Review Commission (JLARC) study on a possible Petersburg casino.

“We’re disappointed the Virginia General Assembly has amended the state budget in a way that will deliberately harm the city of Richmond by denying economic opportunities for its residents,” Stoney said in a statement Thursday. “Our City Council voted 8-1 and the circuit court has ordered that Richmond voters should have the opportunity to be heard on this issue this November. We are still assessing our legal options, but remain firm in our belief that the citizens of Richmond should not be disenfranchised just months before they would have the opportunity to vote.”

Billed as the nation’s only Black-owned casino and resort, the proposed project was expected to produce an anticipated 1,300 jobs, as well as a $25.5 million upfront payment to the city government. ONE Casino + Resort was to feature 250 hotel rooms, a 3,000-seat theater, 100,000 square feet of gaming space, 15 bars and restaurants, and a 15,000-square-foot soundstage for Urban One film, TV and radio productions.

Boeing will move global HQ to Arlington

The Boeing Co., the world’s third-largest defense contractor, is moving its global headquarters from Chicago to Arlington, the company announced May 5.

With more than 141,500 employees worldwide and operations in more than 65 countries, the aerospace and defense company will be the largest defense contractor headquartered in Virginia.

Boeing already employs 400 people at its 4.7-acre campus in Arlington’s Crystal City — near Amazon.com Inc.’s HQ2 and Virginia Tech’s Innovation Campus. Boeing spokesperson Paul Lewis told Virginia Business that there will be “no major job relocations” accompanying the headquarters move. Boeing also plans to develop a research and technology hub in the area, leveraging a $50 million gift to Virginia Tech that Boeing made in May 2021, according to another company spokesperson, Connor Greenwood. Boeing did not provide details such as a time frame for the move or how much the company is investing.

In a statement following the announcement, Boeing CEO Dave Calhoun, a Virginia Tech alumnus, thanked Gov. Glenn Youngkin and U.S. Sen. Mark Warner for helping to secure the deal, which The Wall Street Journal reported had been in the works for months.
In 2017, Boeing moved its defense unit from St. Louis to Arlington to be closer to the federal government and Pentagon officials.

“We are excited to build on our foundation here in Northern Virginia,” Calhoun says. “The region makes strategic sense for our global headquarters, given its proximity to our customers and stakeholders and its access to world-class engineering and technical talent.”

Youngkin says the move shows Virginia “is the premier location for aerospace companies.”

Virginia Economic Development Partnership President and CEO Jason El Koubi agrees. “Boeing and other high-caliber firms are attracted to the commonwealth’s combination of diverse, world-class engineering and tech talent, strategic location and exceptional quality of life,” El Koubi says. “Boeing’s new research and technology hub will further strengthen Virginia’s innovation ecosystem in areas like cybersecurity, autonomous operations, quantum sciences and software and systems engineering.”

Boeing also has research centers in St. Louis; Huntsville, Alabama; Charleston, South Carolina; and Cambridge, Massachusetts. A Boeing aeronautics research subsidiary, Aurora Flight Sciences, is located in Manassas. Boeing’s new Arlington-area research center will provide the company “with the ability to develop technology and talent, and see its implementation in real systems,” Lewis says.

Virginia Business Associate Editor Courtney Mabeus contributed to this article.

Gift of a lifetime

For Dr. Todd Stravitz, February was an opportune time to make the largest gift in the history of Virginia Commonwealth University — a $104 million donation to support liver research.

The retired medical director of VCU Health’s Hume-Lee Transplant Center, Stravitz is an heir to the Boar’s Head Provisions Co. Inc. fortune. His mother, Barbara Brunckhorst, died in late 2020. Her father, Frank Brunckhorst, founded the delicatessen products company, which is now based in Florida, in 1905.

“One of the things that she and I discussed when she knew that she was dying of this brain cancer is opening up the [Brunckhorst] Foundation to donate to medical causes,” Stravitz explains. “And since I knew nothing about neurosurgery or brain cancer, but I knew quite a bit about liver disease, that was really sort of what pushed me into it.”

A Virginia native who lives in Richmond, Stravitz is a co-executor of his mother’s estate. Her shares of the deli meats company are the subject of a still-pending court dispute between two branches of the family. Boar’s Head brings in approximately $1 billion in annual revenue.

Dr. Arun Sanyal (L) will be director of the Stravitz-Sanyal Institute for Liver Disease and Metabolic Health. He has known Dr. Todd Stravitz (R) for more than 30 years. Photo courtesy Allen Jones/VCU Marketing
Dr. Arun Sanyal (L) will be director of the Stravitz-Sanyal Institute for Liver Disease and Metabolic Health. He has known Dr. Todd Stravitz (R) for more than 30 years. Photo courtesy Allen Jones/VCU Marketing

Although Barbara Brunckhorst’s philanthropic interests primarily lay in environmental causes, Stravitz’s donation will go toward establishing the Stravitz-Sanyal Institute for Liver Disease and Metabolic Health, which VCU announced in December 2021, as well as establishing two endowed chairs at VCU’s School of Medicine. One chairmanship is named for Stravitz’s former colleague, Dr. Arun J. Sanyal, a gastroenterologist and liver specialist who has known Stravitz for more than three decades.

“He was one of our fellows going through specialized training,” Sanyal explains. “I actually taught him how to do a liver biopsy. But I’ll tell you, the thing that always struck me was his sincerity … and how important it was for him to put the patient first and to go the extra mile for each and every patient. Even when he was a researcher, he was just very thoughtful and very methodical.”

Sanyal will be director of the new institute, which will align and expand VCU Health’s existing liver disease departments that are spread among the School of Medicine’s internal medicine department, the transplant center, Massey Cancer Center and the Pauley Heart Center.

Currently a professor in the medical school specializing in transplant hepatology, Stravitz built his expertise in acute liver failure, which can cause a patient to bleed to death.

Liver disease is common in the United States — affecting about one in 10 people — but does not have a cure, other than liver transplant, Stravitz notes.

Stravitz’s patients at VCU, where he started as a fellow in 1990, ranged from a 4-year-old to people in their 80s. Many were memorable, Stravitz says, but he was most struck by those he met at New York City’s Bellevue Hospital, where he interned in the mid-1980s during the height of the HIV and AIDS epidemic.

Most liver patients he saw there were young “and often didn’t have any medical care,” Stravitz says. “Some of them were brought in from the street. That was what kind of shocked me into realizing that all of them were going to die, back in the ’80s. We had no treatment for these folks.” 

The combination of a challenging disease and its surrounding social issues led to his specializing in liver disease and heading to VCU, which has been a cutting-edge leader in liver research since the 1970s and was one of the first three hospitals to transplant the liver of a living donor in 1998.

His interest in attending medical school, however, started even earlier. “My mother was a determined, intelligent, frustrated doctor herself,” Stravitz says. “She would have gone to medical school 60, 70 years ago, but my grandfather wanted her to go into the family business, which she did for a little bit, and then had a family.”

Brunckhorst gave her son an anatomy book when he was about 3 or 4 years old, he recalls, and “that’s where I got my interest in science and in human anatomy.” After graduating in 1982 from William & Mary, Stravitz earned his medical degree from New York University’s Grossman School of Medicine.

Stravitz says that scientists started studying liver disease only in the 1970s “and really caught traction from the ’90s on up, but research in human liver diseases was really relatively modern. The science [has] accelerated so tremendously around molecular biology and genetics, especially within the last 10 years.”

That makes it an optimal time “to seize the science by the horns and direct it to VCU for this project and for this gift,” Stravitz says. He’s particularly excited about gene therapy as an alternative to transplants, which often entail long waits for patients. 

With the donation, VCU will be able to recruit 30 to 60 more researchers, faculty and staff members, as well as establish new degree programs at the graduate, postgraduate and postdoctoral levels.

Over the past decades, “we relied heavily on the National Institutes of Health … but NIH funding is very focused,” Stravitz says. “It doesn’t allow exploration so much. It’s a finite grant. You have three to five years to show what you have done with their money, and if you’ve not been productive and published, you might not get your next grant. That’s a lot to be looking over your shoulder all the time.”

With Stravitz’s gift, researchers and physicians will be able to focus on their work, rather than worrying about where the next grant will come from, he says. “I’m hoping that VCU, under Dr. Sanyal’s direction, can grab it and run with it, and explore things that haven’t been explored before.

The gift givers

While 2020 represented a significant year for philanthropic shifts toward social and racial justice causes, 2021 and early 2022 have seen a return to traditional giving, with many of Virginia’s largest donations benefiting universities, medical research and the arts.    

Donations to Virginia institutions — topped by a $104 million gift in February from Dr. Todd Stravitz to VCU Health to support a new liver research institute — continued to grow during the past year, and some universities marked record donations. An anonymous alumna gave $75 million to Hollins University in December 2021, a three-installment gift that will establish the Levavi Oculos Endowed Scholarship Fund to support undergraduate scholarships, reportedly the largest donation ever made to a women’s university and among the biggest gifts to any Virginia university.

In September 2021, Charlottesville philanthropist Tessa Ader gave $50 million to the University of Virginia toward building a performing arts center with a 1,100-seat concert hall. It will be sited near two other philanthropy-driven projects: U.Va.’s School of Data Science and the Karsh Institute of Democracy. Meanwhile, Virginia Tech received its largest single-donor alumnus gift in December 2021: a $35 million donation from Norris E. and Wendy Mitchell that will help replace Tech’s 60-year-old engineering college building on its Blacksburg campus.

Leaving an impression

In the art world, part-time Bristol, Virginia, residents Jim and Frances McGlothlin continued their significant support of the Virginia Museum of Fine Arts with a nearly $60 million donation that includes 15 works by American artists, including Norman Rockwell, John Singer Sargent and Andrew Wyeth. This gift follows two other donations by the couple to the Richmond museum, including 73 works of art worth more than $200 million and a $30 million gift in 2010 that made an addition possible. The March donation is also going toward an expansion of the museum that will include a new 170,000-square-foot wing named for the McGlothlins.

VMFA Director and CEO Alex Nyerges says the McGlothlins’ gifts have enabled the museum to grow in size and prominence. Photo by Matthew R.O. Brown

In addition to their gifts to the VMFA, the McGlothlins are major donors to their alma mater, William & Mary, and Mountain Mission School in Grundy, where at-risk students from around the world live and attend school.

Fran McGlothlin, senior vice president of New York-based UC Fine Art Inc., recalls how, early in their marriage, she got her coal executive husband, Jim, interested in collecting art.

“I dragged him into an auction one day in New York, the first one he’d ever been to,” she says. “There was a picture that I had fallen in love with by Robert Henri called ‘Listening Boy.’ I said, ‘Oh, I would really love to have that picture.’ I think Jim wanted to get it for me but was a little unsure about how to pay, so he went to the men’s room. He was talking to some other guy who was in there. That guy said, ‘Yes, it’s a great picture. This is what it should go for.’”

Jim McGlothlin put in a winning bid for the painting, which Fran McGlothlin says is “just dear to my heart for so many reasons.” The couple’s main collecting focus was on American Impressionist works between 1890 to 1925.

“It was a first for me,” Jim says of the auction. “It was very interesting to think about the way you made the transactions there with art. Frances was so excited about it. Twenty-five years later, here we are.” 

The couple’s connection to VMFA happened later, when Jim, chairman and owner of The United Co. and a backer of the Hard Rock Bristol casino, was a patient at the former Medical College of Virginia hospital in Richmond in the 1990s.

Frances Lewis, co-founder of Best Products Co. Inc. with her husband, Sydney Lewis, who also was a patient at the hospital then, met the McGlothlins in the hallway and talked with Fran McGlothlin about the art museum. Sydney Lewis, who died in 1999, and Frances Lewis were also significant VMFA donors, providing $6 million for the museum’s West Wing and donating 1,500 pieces from their personal collection.

“[Frances Lewis] said, ‘I’d love for you to come over and see it,’” Fran McGlothlin recalls. “She arranged so that the museum was closed. She and I walked through it. I really was impressed and taken by it, talked to Jim and essentially we were off and running.”

VMFA Director and CEO Alex Nyerges, who has led the museum since 2006, says that the McGlothlins’ gifts are “a key reason that VMFA has grown in size and prominence. These added works have bolstered VMFA’s American art holdings and provided important access to American art for present and future generations of Virginians.”

Hollins University President Mary Dana Hinton says a recent $75 million anonymous gift underscores the importance of women’s education. Hinton photo courtesy Hollins University
Hollins University President Mary Dana Hinton says a recent $75 million anonymous gift underscores the importance of women’s education. Hinton photo courtesy Hollins University

After building their collection, the couple decided to give virtually all their paintings — most of which were displayed in their home — to the museum in 2015.

Fran and Jim McGlothlin visited the museum recently and saw a mother and son talking about one of their paintings. “It was so interesting to get someone else’s take on it and the pleasure that they were getting out of looking at it all,” she recalls.

Impactful giving

This is typical of many major philanthropists, who are often driven in part by personal passions and experiences to make donations in the public interest.

“It’s not just about heartstrings but about what people care about,” says Mark Luellen, U.Va.’s vice president for advancement, who is in charge of directing the university’s
$5 billion Honor the Future capital campaign, which launched in 2019.

As of April, the university has fulfilled 80% of its capital fundraising goal, surpassing $4 billion three years before deadline.

Private philanthropy, Luellen says, “is extremely important. It’s really thinking critically about where all those external stakeholders and internal stakeholders connect and how they all link together.” State funding has declined at U.Va. and other Virginia public universities over the decades, and tuition rates were frozen during the past two academic years, although U.Va. and other schools have agreed to increase tuition during the 2022-23 year. That leaves a heavy reliance on private funding at most universities.

One area in which he’s seen greater donor interest recently is in need-based scholarships, a trend that’s reflected at other schools, including Hollins University.

Hollins President Mary Dana Hinton hopes that the anonymous alumna’s
$75 million donation will hopefully drive more prospective students to “take the time to research Hollins. Don’t self-select out, but lean into.”

As universities receive less state funding, private donors are more important than ever, notes University of Virginia Vice President for Advancement Mark Luellen. Luellen photo courtesy Dan Addison/U.Va. University Communications
As universities receive less state funding, private donors are more important than ever, notes University of Virginia Vice President for Advancement Mark Luellen. Luellen photo courtesy Dan Addison/U.Va. University Communications

While all types of higher education institutions generally saw lower enrollment amid the pandemic, private, liberal arts institutions have had the most difficult time keeping enrollment levels up. And though interest has increased in single-gender education in recent years, that tends to fluctuate. Just down the road from Hollins, the all-women Sweet Briar College nearly closed a few years ago.

“The higher education landscape is incredibly complex right now, and it has been challenging for quite some time,” Hinton says. “But my hope is that other donors are inspired by this gift. I would celebrate any of our sister colleges getting this gift. I hope similar gifts to other institutions will allow us to really reclaim the power and importance of the liberal arts, the importance of women’s education, and the importance of investing in the missions of those institutions that you care about deeply.”

Noting that billionaire philanthropist MacKenzie Scott’s donations to higher education — notably at traditionally underfunded historically Black colleges and universities  — have made a significant impact in the world of philanthropy, Luellen sees another new trend. “I think [Scott’s] team does tremendous research, and I think that will be a growing trend. It’s setting a tone more quantitative and qualitatively driven than, ‘I went to school here and met my spouse here.’”

Scott’s donations, which included record-breaking gifts to Hampton, Norfolk State and Virginia State universities, are good for all schools, Luellen says, helping “all ships rise.”

Nonetheless, a lot of charity does start at home, as in the case of Norris Mitchell, a 1958 Virginia Tech alum who, with his wife, Wendy, has been a reliable university donor. Last fall, the couple pledged $35 million to replace the aging Randolph Hall, home of Tech’s College of Engineering. Virginia Tech’s Innovation Campus, now under construction in Alexandria, also is a gleaming target for philanthropy and has already benefited from major individual and corporate gifts, but Engineering Dean Julia Ross says that there’s plenty of motivation to give to the home campus.

“Investing in Blacksburg, investing in something like this — that is also supporting the Innovation Campus because it’s allowing us to teach the [undergraduate] students who would then go on to the Innovation Campus as graduate students,” Ross says. “You have to support all parts of the pipeline. You can’t think about them independently. You have to think about them as part of the whole system.”

Editor’s note: This article has been amended to reflect that Best Products Co. co-founder Frances Lewis is still alive. The print version of this story incorrectly reported her death. Virginia Business sincerely apologizes for the error.

Va. ABC telework plan diverges from Youngkin mandate

Employees at the Virginia Alcohol Beverage Control Authority’s Mechanicsville headquarters will be returning to in-person work three days a week, not the four or five days a week that will be required of many state workers beginning July 5, following Gov. Glenn Youngkin’s telework order earlier this month.

Virginia ABC CEO Travis Hill sent an email to ABC employees Thursday, noting that the plan to work in person at the authority’s new Hanover County office three days a week, with two days working remotely, is “the final part of our return to office strategy, originally announced in August 2021 and reaffirmed last December. This approach was based on survey feedback from employees and our long-term operational needs and completes a six-month effort on returning to the office.”

Hill, who was appointed by former Gov. Ralph Northam to lead the ABC in 2018, notes that as an authority instead of a state agency, the ABC has “greater latitude in how we manage our telework and hybrid work status.” The memo also says that the authority will use a new telework agreement form distributed by Youngkin’s office, and that all applications will be due June 15.

“All employees choosing to work a portion of the week remotely will need to complete the agreement and submit to human resources,” Hill wrote.

Currently, most of ABC’s roughly 500 administrative staff members are working two days a week in the office and three days remotely. The authority employs about 5,000 part-time and full-time employees, some of whom can’t telework due to the nature of their jobs, such as staffing retail ABC stores. In January, the authority changed its daily opening hours to noon in part due to retail workers being affected by COVID-19, which created a staffing shortage. In fiscal year 2021, Virginia ABC brought in a record $1.4 billion in gross revenue, including $237.3 million in profits from retail sales.

Youngkin’s mandate requires state workers who have been working from home since March 2020 to return to the office in person starting July 5, and it renders all prior telework agreements null and void, even for employees who live outside the immediate region of their workplaces and were hired with the understanding that they could work remotely. Agency heads can approve one telework day a week, while a cabinet secretary must approve two days a week. Anything above that will require the approval of Youngkin’s chief of staff, Jeff Goettman.

In a memo released May 5, during Virginia’s Public Service Week, Goettman announced the order and said that the governor’s office’s goal is “completion of all telework agreements by June 3.”

Some state employees and Democratic legislators have denounced Youngkin’s telework policy, saying that it will cause some workers to leave their jobs for more flexible opportunities in the private sector, and that the new policy is more restrictive than pre-pandemic standards.

Some state employees — including those who are among faculty and professional staff at state universities — are not subject to the policy, and it doesn’t apply to legislative or judicial agencies.

 

Richmond names 3 Diamond District finalists

City of Richmond officials announced Tuesday that three development teams have continued to the finals for the Diamond District, which includes replacing the baseball stadium and revitalizing the area near the Scott’s Addition neighborhood.

The announcement also gives more details than previously available about the plans submitted by the finalists, which include Richmond Community Development Partners, RVA Diamond Partners and Vision300 Partners LLC. According to the city’s statement, the finalists will be asked to respond to a request for offers issued the week of May 30, with a deadline of June 28.

RCDP’s plan includes a new baseball stadium, as well as walking and bike paths, affordable housing and green space. Partners in this group include San Francisco commercial real estate agency JMA Ventures, Houston-based Machete Group and Tryline Capital, which has offices in Connecticut and New York, as master developers; Florida-based EDSA Inc. as master planner, Richmond and North Carolina-based Odell Associates Inc. as stadium architect; and Gilbane Building Co. and Davis Brothers Construction Co., both based in Richmond, as contractors. Virginia Commonwealth University’s School of Regional Studies and Planning will be part of the community engagement team.

Diamond Partners’ proposal includes  “large-scale, mixed-income, mixed-use and stadium-integrated development,” with partners including national developer Republic (which has a presence in Richmond), Richmond-based Loop Capital and Thalhimer Realty Partners, plus Henrico County-based Capstone and San Diego venue developer JMI Sports, among others. The design team includes Chicago and New York design firm SOM and Charlottesville landscape architects Nelson Byrd Woltz, and Nebraska-based DLR Group in charge of stadium design.

Vision300 also promises a new stadium, as well as a concert venue and a YMCA facility, surrounded by residential, retail and office space. As reported previously, Vision300 is a group of 40 Richmond-area businesses and community organizations, including lead developer Freehold Communities, developer Spy Rock Real Estate Group; building company Hourigan; staffing firm Astyra Corp.; Canterbury Enterprises; Shamin Hotels; lead architect HKS; and engineering firm Timmons Group.

The three finalists were chosen from six groups that were asked to provide additional information last month. A group of 10 city and VCU representatives are involved in the review process, which is expected to conclude with a City Council vote that requires seven out of nine votes to pass since the project involves the city selling property. In early June, the city is expected to host a public meeting, with details to be released on the Diamond District website.

McLean-based Appian wins $2B verdict in trade secrets lawsuit

Appian Corp., a cloud computing firm based in McLean, won $2.03 billion — an amount estimated to be the largest award in Virginia state court history — in a trade secrets verdict against a competitor Monday in Fairfax County Circuit Court.

Appian sued Massachusetts-based Pegasystems Inc. and an individual, Youyong Zou, in May 2020, alleging that Pegasystems used multiple methods to gain access to its trade secrets to better compete with Appian over eight years, beginning in 2012. According to the lawsuit, Pegasystems hired Zou, an employee of a government contractor using Appian software, to provide Pegasystems with access to the backend of that software.

According to evidence presented at the weeks-long trial, an employee had passed trade secret information via video recordings of Appian’s development environments available only to contractors with licenses. Appian also alleged in court that other Pegasystems employees used false identities to get access to trial versions of Appian’s software and obtained further access through Pegasystems’ partners in India.

In an interview with Virginia Business Tuesday, Appian CEO Matt Calkins said that a former Pegasystems employee informed his company in 2020 about the activity. “We were very surprised,” Calkins said. “It is misappropriation. You can see by the size of the award how serious it was. I can tell you that we take our trade secrets and innovations very seriously. We knew immediately it was going to be huge.”

Appian, which Calkins co-founded in 1999 with Chief Technology Officer Michael Beckley, employs nearly 2,000 people in the Washington, D.C., area. In 2020, it logged $304.6 million in revenue and $369.3 million in 2021.

In court, Appian alleged that it lost 201 customers and claimed $479 million in “unjust enrichment of Pega” between 2012 and 2020, but Pegasystems’ attorneys argued that the information gained by the company was not actually “trade secrets” because some of it was sourced to publicly available materials, according to the trial transcript.

The Fairfax County jury awarded Appian $2.03 billion for misappropriation of trade secrets in its ruling against Pegasystems, and it awarded Appian $5,000 in damages against Zou. According to his LinkedIn page, from 2012 to 2019, Zou was employed as a senior technical architect by Serco in Reston.

Zou, who is alleged to have worked for Pegasystems between 2012 and 2014, was not found liable by the jury for “willful and malicious misappropriation,” but the company was found liable, according to court documents. Pegasystems was also found liable for computer fraud in violation of the Virginia Computer Crimes Act, but the jury awarded Appian only $1 on that count.

“We strongly disagree with the claims and the verdict, and believe the verdict is not supported by the facts of the case or the law and is the result of significant error,” Lisa Pintchman, Pegasystems vice president of corporate communications, said in a statement Tuesday. “We plan to vigorously pursue our post-trial remedies and will certainly appeal what we believe is an unjust result. We believe we have meritorious defenses that have strong grounds to overturn this, although the appeals process could potentially take years to complete.”

The statement adds that the verdict has “no impact on our products or what we are able to sell and service.”

On Tuesday, shares of Appian rose as much as 38%, and Pegasystems’ stock fell by as much as 45%. Pegasystems will not be required to pay the awarded amount until it exhausts all appeals.

Appian was represented by Adeel Mangi, Muhammad Faridi and Jeffrey Ginsberg from Patterson Belknap Webb & Tyler of New York, and Robert Frank Jr. of Choate Hall & Stewart of Boston represented Pegasystems, while Zou was represented by Wayne Travell of Hirschler Fleischer,

 

Peraton named a U.S. Best Managed Company

Peraton Inc. has been named a U.S. Best Managed Company for 2022 by Deloitte Private and The Wall Street Journal, the Herndon-based government contractor announced Monday. It’s among 51 private companies honored and the only one based in Virginia.

“Peraton is honored to be recognized as a Best Managed Company in the U.S. by Deloitte Private and The Wall Street Journal,” Stu Shea, Peraton’s chairman, president and CEO, said in a statement. “This recognition underscores the importance of Peraton’s seven-fold expansion in 2021 and validates the significant progress we have made in integrating three heritage companies to create a $7 billion national security leader.”

This is the first year Peraton has been included on this list, which is determined by four areas: strategy, ability to execute, corporate culture and governance/financial performance. The company, which is moving its headquarters from Herndon to Reston, has 19,000 employees and 150 offices worldwide, and it has been integrating Chantilly IT contractor Perspecta Inc. and Northrop Grumman Corp.’s federal IT and mission support services business since purchasing them for a combined $10.5 billion in 2021.

Other honorees include Blue Shield of California, Mary Kay Inc., Ocean Spray and Standard Textile.

In February, Peraton landed a potential 10-year, almost $2.69 billion Department of Homeland Security contract, and in March a $254 million State Department contract to support the Diplomatic Security Service’s cybersecurity operations.