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byline: Kate Andrews

LL Flooring sells Henrico distribution center for $104M

Read more: LL Flooring to sell 219 stores; 211 other stores set to close

LL Flooring has sold its eastern Henrico County distribution center to a limited liability company for $104.75 million, according to documents the Henrico-based flooring company filed with the Securities and Exchange Commission on Tuesday.

Formerly known as Lumber Liquidators, LL Flooring filed for bankruptcy in August and announced it was pursuing a sale of its business, according to SEC documents. Before entering Chapter 11 bankruptcy proceedings, however, the company worked with JLL to find a buyer for its 995,792-square-foot distribution center on 97.55 acres in Sandston.

SNA NE LLC, a Delaware limited liability company, is the buyer of that property, and according to federal bankruptcy court documents, is “the largest landowner in the White Oak Technology Park,” where the LL Flooring property is located. In a document filed with the U.S. Bankruptcy Court in Delaware on Aug. 30, Chad Williams signed an agreement as CEO of the purchaser, SNA NE LLC. Williams is chairman and CEO of Kansas-based QTS Data Centers, which has built a data center campus in Henrico County’s White Oak Technology Park and announced in 2022 plans to expand it by 1.5 million square feet. As of July, QTS has purchased all 622 acres of White Oak Technology Park II but did not share project details.

Under the LL Flooring contract’s terms, the buyer will lease back the building to LL Flooring for six months at no cost, and the flooring company can terminate the lease on 60 days’ notice. The deal must be approved by U.S. Bankruptcy Court Judge Brendan L. Shannon, and the parties are set to hold a hearing Wednesday. The transaction is expected to close Sept. 30.

According to Henrico County property records, an LLC connected with LL Flooring owns the 97.55-acre property at 6115 Technology Creek Drive, which is adjacent to two plots of land owned by QTS Data Centers.

In its August bankruptcy filing, LL Flooring said it planned to close 94 stores out of its more than 300 stores across the country. In 2019, LL Flooring was forced to pay $33 million to settle allegations of securities fraud, and sales fell in fiscal 2023 to $904.7 million, down from $1.11 billion in fiscal 2022. In June 2023, LL Flooring’s board rejected an unsolicited acquisition proposal from Cabinets to Go, a subsidiary of F9 Brands, which then began a proxy fight.

Representatives for LL Flooring and Henrico County declined to comment on the transaction, and QTS did not respond immediately to a request for comment.

W&M gets $100 million boost for coastal research

Jane Batten, the matriarch of a Hampton Roads family known for philanthropy, pledged $100 million to William & Mary in July to boost coastal and marine science research toward finding global solutions for flooding and sea-level rise.

The newly named Batten School of Coastal & Marine Sciences will expand the Virginia Institute of Marine Science and allow it to hire more scientists whose research could have a worldwide impact, officials say.

Batten, whose late husband, Frank Batten, co-founded The Weather Channel and was chairman and CEO of Landmark Communications, set a record for the 331-year-old university’s largest donation. W&M officials also say the gift is “by a factor of four” the largest donation ever made to any research institution focused on marine and coastal science.

W&M hopes to raise $100 million more through private, state and federal sources to complement Batten’s donation, which will go toward the creation of a bachelor’s degree in coastal and marine sciences and building out the VIMS facility on the York River in Gloucester Point. President Katherine Rowe says about $50 million will go toward new learning and research spaces, although W&M is still determining whether to renovate existing structures, construct new buildings or both.

Rowe says that she and Batten have been discussing the gift for the past five years, and both women saw the possibility of expanding VIMS’ marine research to benefit coastal communities worldwide.

“There is no institution better positioned to address the environmental threats, the economic challenges that are faced in the world’s coastlines and oceans,” Rowe says. “We see the Batten School as powering at a much higher level the kinds of ‘science for solutions’ that William & Mary has been producing for decades, and to do that for Virginia, and more broadly to do that globally.”

Batten, whose family has made significant donations in the past to Old Dominion University, the University of Virginia, W&M and other institutions, said in a statement that she is “confident that this will spark significant change, building resilience in coastal communities in the commonwealth and across the globe for generations to come.”

Derek Aday, VIMS’ director and dean of the Batten School, says he hopes other philanthropists will follow Batten’s lead and contribute funding toward climate change research, coastal resilience and other environmental factors. “There will be imitators, as there should be.”  

North Anna gets federal OK to operate through 2060

The Nuclear Regulatory Commission has approved 20-year extensions for North Anna Power Station’s two nuclear reactors, allowing them to operate through 2058 and 2060, Dominion Energy announced Wednesday.

The two reactors in Louisa County were originally licensed to operate for 40 years, beginning in 1978 and 1980, and in 2003, the licenses were renewed for an additional 20 years, permitting the two reactors to operate through 2038 and 2040. Dominion Energy Virginia began the application process for North Anna’s most recent renewal in August 2020, according to the NRC’s website, and went through an environmental audit, a safety evaluation and public hearings over the past four years. In October 2023, the NRC revised the license renewal schedule, delaying the approval from July to August.

North Anna, which is owned and operated by Dominion, generates enough electricity to power 500,000 homes, and along with Dominion’s Surry Power Station, the two nuclear plants generate 40% of the state’s electricity and about 90% of carbon-free power in Virginia. Surry Power Station received NRC approval in 2021 to extend its operating license through 2053.

Nuclear power has received a great deal of attention lately in Virginia, as Dominion announced plans in July to potentially develop a small modular reactor (SMR) at North Anna, issuing a request for proposals to nuclear technology companies as a first step in evaluating the feasibility of building a smaller reactor there.

Gov. Glenn Youngkin, who was at the announcement at North Anna, has championed nuclear energy as a key part of fulfilling the Virginia Clean Economy Act, which requires Dominion and Appalachian Power to shift to carbon-free, renewable energy sources for electricity generation in the next 26 years. Youngkin signed a bill in July that permits Dominion to petition the Virginia State Corporation Commission at any time before the end of 2029 for its approval of a rate adjustment clause to recover development costs for an SMR.

“For more than 50 years, nuclear power has been the most reliable workhorse of our fleet and the largest source of carbon-free power in Virginia,” Eric Carr, Dominion Energy’s chief nuclear officer, said in a statement Wednesday. “North Anna operates around the clock and generates the reliable, clean energy that powers our customers’ homes and businesses every day. With this 20-year extension, our customers can continue counting on North Anna for reliable, carbon-free power for another generation to come.”

According to Wednesday’s announcement, Dominion plans to make several upgrades to the North Anna plant, including replacing generators and condensers, refurbishing reactor coolant pumps and converting instrument and control systems from analog to digital. The Fortune 500 utility will seek recovery of these costs from the SCC later this year, it said in the news release. Dominion Energy’s affiliated companies also plan to seek NRC approval to extend operating licenses for power stations in South Carolina and Connecticut, according to the statement.

Community banking association head Yeakel to retire; successor named

Steve Yeakel, president and CEO of the Henrico County-based Virginia Association of Community Banks, announced Tuesday he will retire at the end of the year, and will be succeeded by Corey Connors, executive director of the Virginia Forestry Association.

Connors will join the professional organization in September and assume duties as president and CEO of VACB beginning Oct. 8, according to a news release. Founded in 1977, VACB represents more than 100 community banks and vendor partners. Yeakel departs the organization after 13 years, 12 of which he spent as VACB’s leader.

“Corey’s strategic drive and his long, distinguished career in the association management community make him the perfect choice to further define the VACB’s value proposition, expand its professional development programs, and engage a new generation of community bankers,” VACB Chair Joseph Witt said in a statement. “We’re thrilled to welcome Corey aboard.”

Corey Connors

Connors was executive director of the forestry association for nearly five years and was responsible for its direction and annual budget, and before, he served in senior management positions at several other state and national associations, according to Tuesday’s announcement.

“I am excited to join VACB,” Connors said. “Having advocated on behalf of small businesses throughout my entire career, I understand the importance of community banks as the lifeblood of local cities and towns across Virginia. I look forward to working with the board, staff and key stakeholders to uphold the organization’s strong priorities while expanding VACB’s reach.”

VACB advocates for smaller community banks, many of which are merging or being acquired by larger banks in recent years, and representing their interests in state and federal legislature.

Va. job creation up in July, but filling jobs remains challenge

Total payroll employment in Virginia grew by 4,800 jobs in July, the Federal Reserve Bank of Richmond reported in its regional economic snapshot Friday, but some employers are having difficulty filling jobs. A U.S. Bureau of Labor Statistics survey released Tuesday said that the number of hires in Virginia in June dropped by 33,000 since May.

The state’s unemployment rate stayed the same at 2.7% in July for the third consecutive month, according to the Richmond Fed report, and the lion’s share of new jobs were in the leisure and hospitality sector, totaling 4,600 statewide, followed by 2,100 jobs in the professional and business services sector and 800 jobs in trade, transportation and utilities. These gains are offset by job losses in financial services (1,800 jobs) and information (600 jobs) last month.

“With businesses steadily hiring and expanding and consistent unemployment, we’re on a stable path to continue Virginia’s growth,” state Secretary of Commerce Caren Merrick said in a statement. “Our focus remains on continuing to foster a business-friendly environment that attracts investment and promotes long-term economic growth across all sectors of the commonwealth.”

The BLS Job Openings and Labor Turnover Survey (JOLTS) noted that although the number of hires in Virginia dropped to 147,000 in June, down from 180,000 in May and 186,000 in June 2023, it’s comparable with the hiring rate from five years ago, in pre-pandemic times. On the last business day in June, there were 250,000 job openings in Virginia, a seasonally adjusted number that remained the same as May’s revised figure, and the June job openings rate was 5.5%, also similar to May’s rate, and up from 4.9% job openings nationally, which stayed steady from the previous month.

The survey reported that the labor force in Virginia decreased by 0.1% since May to 66.1%.

Virginia’s sectors with job growth over the past year include education and health services topping the list with 24,900 jobs, followed by 14,500 jobs in professional business services, 11,900 government jobs and 11,300 construction jobs, according to the Richmond Fed.

In the Fed’s Fifth District, which covers Maryland, North and South Carolina, Virginia, Washington, D.C., and West Virginia, the commonwealth’s job creation rate was in the middle, with South Carolina and Maryland reporting the addition of 8,400 and 6,100 jobs, respectively, in July, and North Carolina with 700 new jobs. Washington’s job rate was unchanged, and West Virginia’s number decreased by 700 jobs.

Appalachian Community Capital to launch Green Bank

Appalachian Community Capital, the Christiansburg-based community development financial institution for the Appalachian Valley, plans to launch the Green Bank for Rural America with a $500 million award from the Environmental Protection Agency, it announced Friday.

Focused on financing up to 2,000 new energy projects that could create up to 13,000 jobs, the Green Bank will leverage private capital to fund $1.6 billion in projects across the coalfields of Southwest Virginia and parts of Alabama, Georgia, Kentucky, Mississippi, North and South Carolina, Ohio, Pennsylvania, Tennessee and West Virginia in the Appalachian region, as well as other rural communities nationwide. ACC’s statement notes that the projects also could reduce up to 850,000 tons of pollution annually and generate 460 megawatts of clean energy or establish storage for clean energy by 2030.

“The Green Bank for Rural America is a place-based effort that will be a hub for investment and technical assistance to community lenders, local leaders and workforce development partners across the United States,” Donna Gambrell, ACC president and CEO, said in a statement. “We are grateful to the EPA for this recognition. We want to ensure that no communities are left behind and that low-income and disadvantaged communities in Appalachia and other parts of this country benefit from efforts that will result in healthy communities for generations to come.”

The EPA awarded $500 million to ACC as part of the Greenhouse Gas Reduction Fund, a $27 billion federal initiative under the Inflation Reduction Act. The award came from the $6 billion Clean Communities Investment Accelerator, which provides grants to nonprofit organizations in struggling communities, focusing on new technology projects.

According to the award’s structure, the Green Bank must provide $300 million in capitalization funding to community lenders by March 31, 2026, and it must raise $180 million in private capital and reduce or avoid 47,000 tons of pollution by the same deadline. By year four — a deadline of March 31, 2028 — the bank must have provided $400 million in capitalization funding to lenders and mobilized $780 million in private capital, as well as reducing pollution by 595,000 tons.

By March 31, 2031, the bank must have provided $450 million in total funding (including $400 million in capitalization funding) to lenders, and mobilized $1.2 billion in private capital, as well as reducing pollution by 2.5 million tons.

“With climate impacts increasingly impacting all Americans, and especially those in communities that have been historically left behind, EPA knew it had to move swiftly and deliberately to get this historic funding out the door,” EPA Administrator Michael S. Regan said in a statement. “American families will soon feel the benefits in the form of lower energy costs and revitalized communities, while the United States leads the clean energy economy of the future. The [awardees] announced today will deliver transformational investments for American communities, businesses and families and unleash tens of thousands of clean technology projects like putting solar on small businesses, electrifying affordable housing, providing EV loans for young families and countless others.”

In addition to ACC’s $500 million award, the Opportunity Finance Network received $2.29 billion to provide capital and assistance to community lenders nationwide, and Inclusiv received $1.87 billion to deliver funding to credit unions to help customers get loans for energy-focused projects. Other recipients are the Justice Climate Fund and the Native CDFI Network.

Gambrell will serve on the Green Bank’s steering committee, which includes leaders from multiple organizations that will guide and support the Green Bank. Other members represent Main Street America, Grow America, CommunityWorks Carolina, Kentucky Highlands Investment Corp. and regional organizations in other parts of Appalachia. The Green Bank’s CEO has yet to be selected, according to documents provided by the EPA.

At first, the Green Bank will prioritize investments in 582 Appalachian counties — including those in Southwest Virginia — and rural communities across the nation, as well as rural communities of color and Indigenous communities. In addition to financing energy projects, the Green Bank will offer technical assistance to eligible rural areas nationwide.

“I praise the coalition of organizations — close to 50 lenders, community organizations, educational institutions and assistance providers — who came together to contribute to the proposal,” Clint Gwin, ACC board chair and president and CEO of Pathway Lending in Tennessee, said in a statement. “Their participation and collaboration have been phenomenal. This will be a game changer for historically under-invested communities and the community development finance field that supports underserved areas.”

Mars to purchase Cheez-It, Pop-Tarts maker in $35.9B deal

Updated Aug. 16

McLean-based snack and pet care giant Mars announced Wednesday it has entered into a $35.9 billion, all-cash deal to purchase Kellanova, the maker of Cheez-It, Pop-Tarts, Pringles, Eggo and other food brands.

Kellanova, created in October 2023 when Kellogg split into two companies, had 2023 net sales of more than $13 billion, while the privately owned Mars had net sales of more than $50 billion, according to a news release Wednesday.

“In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future,” Mars CEO Poul Weihrauch said in a statement. “We will honor the heritage and innovation behind Kellanova’s incredible snacking and food brands while combining our respective strengths to deliver more choice and innovation to consumers and customers. We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team.”

Kellanova will become part of the Mars Snacking division, and will be headquartered in Chicago and led by Mars Snacking Global President Andrew Clarke after the deal is completed, the statement said.

Under the agreement’s terms, Mars will acquire all outstanding equity of Kellanova for $83.50 per share in cash, and all of Kellanova’s brands, assets and operations will be included in the transaction. The acquisition is subject to Kellanova shareholders’ approval and regulatory approvals, and is expected to close within the first half of 2025, Mars said. The W.K. Kellogg Foundation Trust and the Gund Family have entered into agreements pursuant to which they have committed to vote shares representing 20.7% of Kellanova’s common stock, as of Aug. 9, in favor of the transaction.

According to Reuters, Kellanova said the closing date of the deal could be extended by up to 12 months if the two companies don’t receive the necessary regulatory approvals by next August. If the deal does not go through due to a failure to receive regulatory approval, Mars must pay $1.25 billion to Kellanova, and likewise, if Kellanova’s board changes its mind and does not support the deal, the snack maker will have to pay Mars $800 million, Reuters reported.

Mars, the maker of M&Ms, Snickers and Twix, as well as the owner of a growing pet food and pet care business, is the largest privately held company in Virginia and the fourth largest in the nation, employing about 150,000 people worldwide. Under Weihrauch, who became CEO in 2022, Mars has aimed to double its sales by 2033 and has acquired six candy and veterinary companies over the past two years. Mars Petcare veterinary care and pet foods branch accounted for about 60% of the company’s 2023 revenue, according to the company.

However, the purchase of Kellanova is the largest acquisition proposed by Mars, which has 15 brands that marked more than $1 billion each in annual sales. On Kellanova’s end, Pringles and Cheez-It both exceed $1 billion in annual sales.

In October 2023, Kellogg Co. finalized the separation of its North American cereal and snack businesses, resulting in W.K. Kellogg Co. — owner of Frosted Flakes, Rice Krispies, Corn Flakes and other cereals — and Kellanova, which includes snack food brands such as Pop-Tarts, Pringles, Nutri-Grain, Cheez-It and Eggo, as well as vegetarian brand MorningStar Farms.

 

LL Flooring to be delisted from NYSE

Updated Aug. 14

The New York Stock Exchange has informed Henrico County-based LL Flooring Holdings that its common stock will be delisted from the stock exchange and that trading was to be immediately suspended after the company filed for Chapter 11 bankruptcy Sunday, LL Flooring announced Tuesday.

In a news release, LL Flooring said that the NYSE will “apply to the Securities and Exchange Commission to delist the company’s common stock,” although the flooring company’s stock is expected to continue trading on the OTC market.

In an Aug. 14 filing with the SEC, LL Flooring shared the stock exchange’s announcement that it would remove the flooring company’s common stock from listing and registration at the opening of business on Aug. 26, after having suspended trading of its stock on Sunday. LL Flooring said it would not appeal the NYSE’s decision.

On Sunday, the company formerly known as Lumber Liquidators announced it had entered Chapter 11 bankruptcy proceedings and was pursuing a sale of its business, which saw a financial downturn in 2023, with revenue falling from $1.11 billion in fiscal 2022, when it opened 17 stores, to $904.7 million in fiscal 2023. According to the company’s news release, it intends to close 94 stores out of more than 300 nationwide, and has multiple potential buyers interested in purchasing the business, as well as a prospective purchaser of its eastern Henrico distribution center for $100 million.

In documents filed with the U.S. Bankruptcy Court in Delaware this week, LL Flooring requests that the court set an Aug. 26 deadline to enter into an acquisition agreement, with an auction to be held in September if more than one qualified bid is received. LL Flooring did not disclose names of the interested buyers.

LL Flooring, according to the court filing, began working with JLL Capital Markets in the first quarter of the year to pursue a buyer for the Sandston distribution center, “in an effort to inject liquidity into the company.” In a nonbinding letter of intent, the bidder proposed a $100 million payment, and LL Flooring paid a $350,000 work fee and agreed to seek authorization of a 3% breakup fee calculated from the purchase price to be paid if another buyer purchases the center, whether as a standalone sale or part of the overall acquisition of LL Flooring’s business.

LL Flooring files for bankruptcy

LL Flooring, the Henrico County flooring company previously known as Lumber Liquidators, announced Sunday it has entered Chapter 11 bankruptcy proceedings and is pursuing a sale of its business.

Also, according to documents filed with the Securities and Exchange Commission, the company has received a nonbinding letter of intent to sell its Henrico County distribution center for approximately $100 million.

The company has more than 300 stores across the country, and it plans to close 94 stores, according to the Sunday news release. Meanwhile, LL Flooring is “in active negotiations with multiple bidders and hopes to seek bankruptcy court approval of a sale of its business in the first few weeks of the Chapter 11 proceedings,” it said.

“After comprehensive efforts to enhance our liquidity position in a challenging macro environment, a determination was made that initiating this Chapter 11 process is the best path forward for the company,” LL Flooring President and CEO Charles Tyson said in a statement. “Today’s step is intended to provide LL Flooring with additional time and financial flexibility as we reduce our physical footprint and close certain stores while pursuing a going-concern sale of the rest of our business. As we move through this process, we are committed to continuing to serve our valued customers, and to working seamlessly with our vendors and partners. I am appreciative of our associates for their ongoing hard work in providing the best experience for our customers.”

Tyson became CEO of LL Flooring in 2020, a year after the company was forced to pay $33 million to settle allegations of securities fraud, and although the company opened 17 stores in 2022, sales fell from $1.11 billion in fiscal 2022 to $904.7 million in fiscal 2023. In June 2023, LL Flooring’s board rejected an unsolicited acquisition proposal from Cabinets to Go, a subsidiary of F9 Brands, which then began a proxy fight.

In July, news broke that LL Flooring was considering filing for Chapter 11 bankruptcy, and shareholders elected three F9 nominees to the company’s board. However, in the August SEC filing, LL Flooring revealed that the three F9 board members resigned shortly after the decision to enter Chapter 11 proceedings.

Boeing names Ortberg as new president and CEO

Updated Aug. 1

Boeing’s board of directors announced Wednesday that Robert K. “Kelly” Ortberg will be its next president and CEO effective Aug. 8, succeeding Dave Calhoun, who previously announced his intention to step down after a turbulent, nearly four-year tenure as the Arlington County Fortune 500 aerospace and defense giant’s chief executive.

According to Boeing’s announcement, Ortberg started as an engineer at Texas Instruments in 1983, and then joined Rockwell Collins in 1987 as a program manager, becoming its president and CEO in 2013. In 2018, Rockwell Collins integrated with United Technologies and RTX — formerly Raytheon Technologies. Ortberg retired in 2021 but still sat on RTX’s board of directors before resigning on Tuesday, according to a document RTX filed Wednesday with the U.S. Securities and Exchange Commission.

According to a Seattle Times story, Ortberg will be based in Seattle, Boeing’s original headquarters and near its large Puget Sound workforce, a person with knowledge of the situation said. Boeing’s headquarters moved in 2001 to Chicago and then to Arlington County in 2022. Although Boeing has not announced any plans to move its headquarters to Seattle, Commercial Airplanes CEO Stephanie Pope, head engineer and Chief Technical Officer Todd Citron and Ortberg will all be in Seattle, the article notes.

“The board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing, and Kelly has the right skills and experience to lead Boeing in its next chapter,” Boeing’s board chair, Steven Mollenkopf, said in a statement Wednesday. “Kelly is an experienced leader who is deeply respected in the aerospace industry, with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies. We look forward to working with him as he leads Boeing through this consequential period in its long history.”

In late March, Boeing President and CEO Calhoun said he would step down by the end of the year. The announcement came 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. The board also elected a new independent board chair, Mollenkopf, to succeed its previous chair, Larry Kellner, and lead the search for Calhoun’s replacement. 

In addition to National Transportation Safety Board and the Federal Aviation Administration investigations, the incident also was investigated as a criminal matter by the U.S. Department of Justice.

In July, Boeing finalized a guilty plea to a federal criminal fraud conspiracy charge under which it will pay at least $243.6 million in fines related to Boeing’s violation of a 2021 deferred prosecution agreement with the U.S. Justice Department that stemmed from Boeing’s role in two fatal 737 Max crashes in 2018 and 2019.

Boeing, which employs 170,000 workers worldwide, posted 2023 revenue of $77.79 billion, up nearly 17% from its 2022 revenue of $66.6 billion. For the first half of 2024, Boeing has posted $33.43 billion in revenue, down 11% from the first half of 2023, when it reported $37.67 billion.

In April and May, Boeing received no orders for its 737 Max planes, and only four new orders for any planes in the month of May, the company reported in June. In June, Boeing sold 14 new jets and three 737 Max jets, including one to Alaska Airlines to replace the one that experienced the blowout.

In July, the company announced it was going to purchase Spirit Aerosystems in a $4.7 billion, all stock transaction; the fuselage maker, responsible for manufacturing the part that blew out in the Alaska Airlines flight, was spun off from Boeing in 2005. In addition to the $4.7 billion payment, Boeing agreed to take on Spirit’s net debt, making the deal’s total value $8.3 billion. The acquisition is set to be finalized in mid-2025.