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Top 10 business news events of 2009

Aaron Kremer December 29, 2009 2

Good riddance, 2009.

Companies that have been around for decades dropped like flies. RIP S&K Menswear, Circuit City, LandAmerica and Roper Lumber. It’s also time to start saying our goodbyes to Ukrop’s, although the stores won’t be changing over just yet.

But there were some more uplifting moments, and some funny ones, too. Plus, tough times are instructional.

We tallied the Top 10 biggest moments in business, and there is some painful medicine there. But there’s lots of reasons for encouragement – some of which we’ll be getting to in tomorrow’s Top 10 trends to watch.

10. Flying Squirrels land in Richmond:
Local sports fans said Richmond was a bad sports town. But for Lou Dibella, Richmond couldn’t possibly be a worse market than Norwich, Conn., where his team was operating as the Connecticut Defenders. So now Richmond has a AA baseball team with passionate management. And the team will play at the Diamond. No more stadium debate — at least for now.

The managers have been making the rounds and seem to be avoiding many of the mistakes, or more accurate, apathy, of the Richmond Braves.

Also in sports this year: The Richmond Renegades minor league hockey folded. And that team’s former home — the Richmond Coliseum needs around $3 million in repairs to remain functional. Two arena football teams are in formation, including one that has some financial backing by Genworth CEO Michael Frazier.

9. Development at West Broad Village grinds to halt; local investors jump in:
Developers at West Broad Village are building a new town with a typical American main street. But building a new village takes lots of cash, and Florida-based Unicorp started running low, judging by several rounds of mechanics liens filed by contractors. For the first time since it ceased to be a cow pasture, the fastest-growing part of Richmond is slowing. To keep the process moving, this month the owners of Eagle Construction pooled $8.9 million to pay off some of the mechanics liens. Now time will tell if the Richmond consumer is interested in shopping at a “Main Street” concept, and living above stores.

8. Bars go smoke free:

The naysayers were loud on this one, like a chorus of drunks singing out-of-tune karaoke.  You couldn’t ban smoking in a city that use to rely on the tobacco industry, and one that houses Philip Morris, they said. There would be revolt. Gov. Tim Kaine called that bluff, and now Richmond is like D.C. and New York, sporting a thriving nightlife where most bars are smoke free. So what does it mean? Business owners tend to frown on government regulation, but this might be one case where regulation seems to have few negative side effects for the industry being regulated.

7.S&K goes under

In February, Richmond-based men’s clothier S&K Famous Menswear filed for Chapter 11 bankruptcy. The company’s bank and its suppliers lost faith that they would see their money, so that was it. By May the company was holding going-out-of-business sales. At its peak, S&K had more than 200 stores and 1,000 employees across the nation. But profits fell from about $3 million in 2007 to a loss of $4 million in 2008.

6. Qimonda closes

After more than a decade in Richmond, German computer chip manufacturer Qimonda closed its Sandston plant in January, laying off more than 1,500 workers. In October 2008, the company let go 1,200 workers, which means the loss of Qimonda cut about 3,000 jobs from Richmond. The plant was the No. 1 recruiter for graduates at VCU’s engineering school. The trickle-down effects are still rippling through the local economy. Former employees have taken jobs with the Navy. Others have moved to Texas to work at Texas Instruments. It means a lot less money working through the local economy.

5. Andy Azula rises to the pinnacle of pop culture: mocked on SNL

You can’t watch TV, surf around the web or even get coffee in Shockoe Bottom without seeing the Martin Agency’s most visible mop of hair – Andy Azula, of UPS ad fame. This fall he was spoofed on SNL. (You can see the two clips here and here.)

4. Office vacancy nears 25 percent at Innsbrook:

In no part of town is the recession as visible as the “for rent” signs out in front of almost every office building in Innsbrook. The vacancy hit 24 percent in the third quarter, and it’s not going to drop quickly. Huge blocks of space are available (tenants let go more than 1 million square feet through the third quarter of 2009), including the former Circuit City headquarters and the LandAmerica headquarters. One trend to watch for 2010 will be if economic developers can lure a big office user to that part of town. If not, those buildings could remain vacant for a while. There won’t be much of a need for construction until the vacancy rate falls.

3. LandAmerica bankruptcy:
If there is a local documentary film maker in need of a suspenseful drama, the final month of LandAmerica’s existence is ripe for the camera. It has all the key ingredients: greed (why did the company take a little extra risk for a little bit more return on investments called auction rate securities?) misplaced trust (SunTrust had no idea what it was advising) and politics (the executives begged the Treasury for a last-minute loan). And there are some very dramatic stories of victims who have been devastated without access to their funds. Those former customers are getting some of their money back.

What makes is so interesting is that the company wasn’t intending to rip off its customers. It wasn’t a Ponzi scheme; it was normal business, but sometimes the two blur. Through the proceedings, we got a rare glimpse at how decisions are made inside a big company, and also how troubles on Wall Street can cause catastrophe locally. Had the obscure credit markets still been functioning, the company would be around today.

2. CenterStage/Miller and Rhoads open downtown:
Maybe it’s a new day in downtown Richmond. CenterStage, completed in September after a $73.5 million renovation, may be the spark to jumpstart a faster renaissance downtown. The former Miller & Rhoads department store also opened as a Hilton Garden Inn with 80 condos. The next year will be important to see how Richmond home buyers react to downtown living.

1. Ukrop’s sells
When the news started leaking out that the Ukrop’s family was considering selling the grocery chain, Richmonders were incredulous. Surely Ukrop’s won’t sell. The company denied rumors, so it sounded mostly like gossip.

Then on Dec. 20, the company announced that it was selling the bulk of the grocery business to Royal Ahold, a Dutch company that owns Giant, for $140 million. After the debt is paid off, the Ukrop family will be left with around $50 million. Royal Ahold is not a family grocer, and as such is unlikely to continue supporting local merchants or spending as much to support the local community.

The Monument 10K may have a new name in coming years, and other local charities should start looking for other benefactors ASAP. The lesson in all this is that Ukrop’s was facing all sorts of stiff new competition – from Trader Joe’s, Whole Foods and even Kroger. And Richmond consumers voted with their dollars, defecting from Ukrop’s to competitors.

Other big news in 2009:

–    MeadWestvaco moves downtown
–    Furloughs and more buyouts at the Times-Dispatch
–    hhgregg comes to Richmond
–    Elephant Insurance opens in Western Henrico
–    ICL leaves Port of Richmond for South Carolina, leaving only one ship making a call at the port each month.
–    VCU opens $350 million critical care center, and Bon Secours opens the Heart Institute
–    Philip Morris offers buyouts to about one-third of non-factory workers

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  1. Kent Brockwell December 30, 2009 at 10:09 am - Reply

    As a former CCer, I love the fact that the fall of (Short) Circuit City didn’t make this list. Haha. Ha. Ha. Ha. That proves that the writing was on the wall so long it wasn’t a real story. My seven-month string of unemployment, rejection letters and subsequent hard drinking, however — now THAT was a story.

    • Richmond BizSense
      admin December 30, 2009 at 10:17 am - Reply

      It was clear in 2008 that it was a cooked goose.

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