Apparel
After a rocky courtship, the marriage of the nation's two biggest men's apparel specialty chains went forward as Hampstead-based Jos. A. Bank Clothiers accepted a $1.8 billion buyout offer from Men's Wearhouse. The deal to pay Bank's stockholders $65 a share cash — $10 more per share than Men's Wearhouse had initially offered — ended months of an acrimonious tug of war between two former rivals and created a $3.5 billion retail powerhouse with 1,700 U.S. stores and 23,000 employees. At the end of May, the Federal Trade Commission ruled that the merger would not violate antitrust laws, and it closed in June. The chains, each of which sells suits and rents tuxedos, have said they will strive to maintain brand distinctions. Men's Wearhouse began taking steps to integrate Bank, and in September hired a former Macy's and I Magnin executive to come in as the brand president of Jos. A. Bank.
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Under Armour continued its growth in 2014, overtaking Adidas in combined apparel and footwear sales to become the second-biggest sports brand in the United States. It targeted the women's sports apparel and shoe markets, expanded its base of retail outlets and continued to spread its brand around the globe. In January, the company announced an outfitting deal with Notre Dame. Notre Dame's iconic "Shamrock Series" gear is designed to pay tribute to the school's main administration building, known as the "golden dome." Under Armour later renewed its deal with the University of Maryland, guaranteeing nearly $33 million in rights fees and athletic apparel to the school over 10 years. In November, Under Armour CEO Kevin Plank said he planned to contribute $25 million to the school to help pay for a planned $155 million athletics and academic complex. The only speed bump came in February when Under Armour speedskating suits for the U.S. Olympic team were initially blamed for the team's disappointing performance in Russia. U.S. Speedskating later cleared Under Armour and renewed its deal with the firm.
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Port and rails
Environmentalists lined up in opposition to a proposal by a Houston-based company to begin transporting crude oil into Baltimore by rail and transferring it to barges at a Fairfield facility for transport through local waters. The groups say crude oil poses a threat to the Chesapeake Bay's vulnerable ecosystem. They called on the Coast Guard to assess the potential impact and joined a growing national movement to bring more transparency to oil shipments nationwide. The Maryland Department of the Environment has suggested that the application by Targa Resources to begin operations in Fairfield will be approved, but the environmental groups have pushed for more public input. Meanwhile, there is a court battle by railroads CSX Transportation and Norfolk Southern Railway to block the state from releasing information on their crude oil shipments through the state.
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The strike by local longshoremen in late 2013 lasted three days, but the effects lingered through 2014. According to a federal arbitrator's ruling obtained by The Baltimore Sun, the effects of the local contract strike by members of the International Longshoremen's Association Local 333 rippled out into global waters, forcing shipping lines to reroute container traffic and increase fuel consumption to continue to serve customers and remain on schedule. The associated costs mounted to nearly $3.9 million, a sum the arbitrator ruled Local 333 owes to the shipping lines because the strike violated a clause in a separate master contract governing container cargo at ports from Maine to Texas. Now, the local union and the shippers are locked in a court battle over the money even as contract negotiations remain stalled and national ILA officials have taken over the local by placing it under trusteeship.
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In August, residents in the West Baltimore neighborhood of Morrell Park proved that vocal, grassroots opposition can sometimes prevail over big business — and cause economic ripple effects. That month, the Maryland Department of Transportation announced that it was withdrawing more than $30 million in funding for a cargo transfer facility proposed in the neighborhood by CSX Transportation. The decision was made after the residents' opposition forced city leaders to withdraw or qualify their own approval of the project. The project would have boosted the efficiency of freight shipments through the port of Baltimore by allowing containers to be double-stacked on trains. Some observers pointed to the scuttled plans as a loss for the city in terms of jobs and economic opportunities at the port, including from increased Asian container traffic following the widening of the Panama Canal.
Health care
After embracing passage of the federal Affordable Care Act, Maryland officials developed an online insurance marketplace. But the exchange built by prime contractor North Dakota-based Noridian Healthcare Solutions struggled to perform throughout last year's open enrollment, and the board began looking for an alternative. Board members voted in April to replace the software with code developed by Deloitte Consulting for the Connecticut exchange and said they would sue the former contractor. The board agreed to pay Deloitte $41 million to retrofit the free code to work in Maryland, which has so far run relatively smoothly during the open enrollment that ends Feb. 15. In all, the board has approved $355 million in contracts to develop and operate the exchange over the next five years, but not all of that money has been spent.
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After months of negotiations, a brief strike and Gov. Martin O'Malley's intervention, service workers at Johns Hopkins Hospital approved a contract in July that set a minimum wage of $15 an hour for longtime employees. It was a hard-fought battle for the 2,100 service workers, cooks, janitors, surgical technicians and other employees who are members of 1199 SEIU United Healthcare Workers East. They complained that wages were so low that some couldn't pay for health care for their children and needed second jobs to make ends meet.
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Media
Sinclair Broadcast Group Inc. wrapped up its largest-ever acquisition in 2014, the purchase of seven ABC television affiliates and Washington-based cable news network Newschannel 8 from Allbritton Communications for nearly $1 billion. The deal, which closed Aug. 1, represented a milestone in the Hunt Valley TV station owner's growth strategy, allowing it to extend its footprint into Washington and become the largest broadcaster of ABC, CBS, Fox and MyTV programming. Besides pursuing TV stations, Sinclair has started its own ventures. The company announced in July that it was forming the American Sports Network to broadcast live collegiate games, including football, basketball, soccer and other sports, from more than 50 colleges and universities. In August, the company launched Sinclair Original Programming to create content.
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The Baltimore Sun Media Group expanded this year after purchasing several publications and websites. In May, the company purchased The Capital in Annapolis and the Carroll County Times for $29 million from Norfolk, Va.-based Landmark Media Enterprises. BSMG also bought the Baltimore alternative weekly City Paper. BSMG operates The Baltimore Sun and several Maryland newspapers it acquired from Patuxent Publishing Co in the 1990s. In August, the Tribune Co. completed the spinoff of Tribune Publishing Co., which includes The Baltimore Sun and nine other daily newspapers.
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A long-simmering dispute over television rights fees between the Baltimore Orioles and Washington Nationals boiled over in court. For several years, the two teams have been unable to settle their dispute over how much more the Nationals should receive in fees from Mid-Atlantic Sports Network, the teams' shared network. In August, MASN, controlled by the Orioles, sued Major League Baseball and the Nationals in a New York court to block an arbitration panel's decision in June to award the Nationals $60 million a year. MASN now pays about $40 million. The arbitration panel of three club owners was supposed to be independent, but MASN alleges that Major League Baseball exerted "dominance and control" — an allegation the commissioner's office disputes. The case is expected to stretch into 2015.
Energy
Dominion, a Richmond, Va.-based energy company, won federal and state approval to build the East Coast's first liquefied natural gas export terminal in Calvert County, despite concerns about the $3.8 billion project raised by neighbors and environmentalists. Dominion's proposal to convert its little-used LNG import terminal at Cove Point drew support from local officials, labor leaders and business groups, who pointed to the project's economic benefits. Once construction is finished and shipments to Japan and India begin in 2017, the revamped facility is expected to support 75 permanent jobs and yield about $40 million a year in tax revenue for the county, according to Dominion. The project sparked opposition from neighbors worried about the risks of a large gas explosion. Environmentalists argued that it would stimulate more shale gas production, increasing contamination of groundwater and aggravating climate change. But the Federal Regulatory Commission dismissed those concerns in September and authorized Dominion to proceed.
Baltimore news
After years of discussion and debate, construction started on Harbor Point, Baltimore's largest remaining patch of undeveloped downtown waterfront. The 27-acre tract sat vacant for about 20 years after demolition of a chrome ore processing plant that had operated there for more than a century. The plant's toxic residue remains entombed there under a "cap" of clean dirt, and some believed the site should never be redeveloped. But after a lengthy review, Beatty Development Group persuaded state and federal regulators it could build there safely, with precautions taken to prevent the release of carcinogenic dust as pilings are driven into the contaminated soil. Crews began peeling back the cap in the spring, and pile driving has been going on since June for a 20-story tower that will be the new headquarters for Exelon Corp.'s renewable energy division, now housed on Pratt Street. The building, to be completed in 2016, will include shops and 103 residential units.
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Several companies relocated their headquarters to Baltimore or announced plans to do so as they looked for greater visibility or room to grow. Pandora, the Danish jeweler known for its charm bracelets, said it would relocate its regional headquarters for the Americas and about 250 workers from Columbia to five floors of 250 W. Pratt St. at the Inner Harbor early next year. In moving downtown, Pandora will join First National Bank, a fast-growing subsidiary of Pennsylvania-based F.N.B. Corp. that in April opened a regional headquarters and branch employing 50 people at 300 E. Lombard St. The Maryland Automobile Insurance Fund moved headquarters and a 240-person workforce from Annapolis to the McHenry Row mixed-use project in Locust Point in the fall. MAIF, a state-created entity that insures drivers who can't get private-market coverage, leased two floors atop the Phillips Seafood headquarters building on Fort Avenue, joining similarly new tenant Mindgrub, a technology company that had outgrown its space in Catonsville. And Kao USA Inc., a unit of Japanese beauty products company Kao Corp., moved from Hanover to the 15th floor of the office tower at 100 N. Charles St., bringing 70 workers. The office is headquarters for the Kao Salon Division, which manufactures and distributes products including the Goldwell and KMS California brands.
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The Baltimore Development Corp. experienced a year of turnover, punctuated by the announcement in August that City Councilman William H. Cole IV would replace Brenda McKenzie in the economic development agency's top position less than two years into the former Boston official's tenure. Cole became only the third leader of the quasi-public agency since its organization in the 1990s. The appointment by ally Mayor Stephanie Rawlings-Blake came as a surprise to many, despite rumblings that the agency was drifting. The mayor followed Cole's appointment by naming six new board members, including former Mayor Kurt Schmoke. Cole pledged to shine a light on the BDC's work in neighborhoods, and make business retention and growth a priority.
Company transitions
A long-standing piece of Maryland's manufacturing economy left the scene, after Sun Products, which makes liquid detergents and fabric softeners such as All, Wisk and Snuggle, announced in February that it would close its Southeast Baltimore plant, taking nearly 300 jobs. Established in 1926, the plant, which once employed 1,500 people, was shuttered and its production work moved to a Sun plant in Bowling Green, Ky. The company said the Baltimore factory, on 49 acres near Holabird Avenue and Interstate 95, was too old and too far from the bulk of its customers. Robert Fisher, a maintenance machinist at the Baltimore plant and president of the International Chemical Workers Union Council 217c, said workers feared the plant would close — in 2013 Sun shut down three production lines and laid off 53 people — but did not expect the end to come so soon. Sun Products is owned by the private-equity firm Vestar Capital Partners, which bought the plant in 2008.
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A group of investors won the region's largest independent bank in a bankruptcy auction in June, beating out a competing bidder from Pennsylvania. Founded in 1995, 1st Mariner Bank struggled with soured mortgage loans amid the recession and could not raise enough capital to satisfy federal regulators. Its parent company filed for bankruptcy protection in February and sold the bank to a purchasing group organized under the name "RKJS Bank." The group paid $18.7 million and agreed to put about $92 million in cash into the bank to recapitalize it. Some members of the group, led by new CEO Jack E. Steil and president Robert D. Kunisch Jr., had tried for years to get a stake in the bank. The purchasers include New York-based Priam Capital, an investment firm run by a Baltimore native. The bank's name is also being removed from the 17-story tower in Canton.
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Hunt Valley's Omega Healthcare Investors Inc. announced plans in October to merge with a Chicago firm, its most significant acquisition during a year of expansion for the publicly traded firm, which owns skilled nursing and assisted-living facilities across the country. If the deal is approved by shareholders, Omega would own more than 870 properties in 41 states. The terms for the stock-for-stock merger valued Chicago-based Aviv REIT Inc. at $3 billion and could make Omega a $10 billion company. Omega's fortunes have soared in the last five years, pushed by investor appetite for real estate deals, particularly in the health care sector. The real estate investment trust spent $47.5 million in the first nine months of the year to purchase and upgrade properties.
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Micros Systems disappeared from the New York Stock Exchange in September, but not from Columbia after it was absorbed by software giant Oracle Corp. in a $5.3 billion deal. The Columbia-based maker of software and hardware systems for restaurants, hotels and retail stores struck a deal in June with the Silicon Valley stalwart. The companies said the deal would let Oracle tap Micros' stable of brand-name customers and give them access to a broader array of cloud-based software and technologies. And they assured economic development officials that the deal would not diminish its presence in Maryland. About a week after the announcement, Micros finalized the purchase of its headquarters in the Columbia Gateway Business Park. Micros employed 900 people at four locations in Maryland and 6,500 people worldwide in 2013.
Jeffrey B. Cohen built his nightclub insurance company's business in part by his prowess fighting for clients in court. Now he's fighting for himself, facing more than 30 federal counts of money laundering, fraud and obstruction of justice. Indemnity Insurance Corp. collected $25 million in premiums in 2012 from clubs, bars and events, but federal authorities now say Cohen duped regulators and other institutions, misrepresenting his assets to keep building the business. When federal agents raided his properties following his indictment on criminal charges, they found an array of weapons, a "target list" and ammonium nitrate. A recording Cohen made during what authorities say was a reconnaissance mission to the home of a Delaware judge discusses how killing "culls the weak." Prosecutors say they have an abundance of evidence to convict Cohen. True to form, he is fighting back. Cohen fired his lawyers and has been sending off legal motions and filing a lawsuit, saying he is ready for trial. He even joined with other federal detainees to call attention to what they say is widespread violation of speedy trial rights.
— Jeff Barker, Meredith Cohn, Scott Dance, Justin Fenton, Arthur Hirsch, Andrea K. McDaniels, Lorraine Mirabella, Kevin Rector, Natalie Sherman, Carrie Wells and Timothy B. Wheeler