Wilbur Guzman worked on a tent for the groundbreaking ceremony for the CityCenter D.C. complex in April. (Matt McClain/The Washington Post)

This has been a year of starts and stops, a reflection of the economically volatile times we live in. For every new Wal-Mart coming to town, a Filene’s or Borders is pulling up stakes. Fresh new developments and a convention center hotel are taking root around the region while the federal government calls a halt to its own real estate plans. A biotechnology company wins approval for a promising drug; a local beverage maker inks a deal with a corporate juggernaut. And yet a defense giant cuts jobs and a corporate titan decides it is time to step aside. Business is like that sometimes, choppy, neither straight up nor down, and the Washington area is rolling with the waves.

Ground broken on long-awaited projects

After years of delay, the District of Columbia broke ground in 2011 on two colossal projects, CityCenter D.C. and the Washington Marriott Marquis convention center hotel. Once considered key to starting a rejuvenation of the city’s downtown, the developments have taken so long — and the rest of the area has progressed so far — that the projects are likely to feel more like final pieces to the puzzle when they are complete in coming years.

In April, Hines and Archstone began work on CityCenter D.C., a development of the city’s former convention center that is to feature 458 apartments, 216 condominiums, 185,000 square feet of retail and 515,000 square feet of offices. CityCenter is expected to attract a bevy of new retailers downtown and may have a law firm as a tenant. The hotel is to have 1,175 rooms, should provide a boost to the city’s convention business and may be followed by two other Marriott hotels next door.

— Jonathan O’Connell

Northrop Grumman
Contractor left L.A. for home in Falls Church

After plenty of ado — including a secretive selection process that had Virginia and Maryland officials each courting the company — Northrop Grumman this year relocated from Los Angeles to a 14-story building in Fairview Park in Falls Church.

Honest Tea co-founder Seth Goldman at the tea brewer’s laboratory in Bethesda. The company was sold to Coca-Cola. (Jeffrey MacMillan/Capital Business)

The new facility is home to about 500 employees, and features a restaurant-like cafeteria, high-tech conference rooms and an executive top floor with views of Falls Church and Fairfax.

Wes Bush, the company’s chief executive, chairman and president, said the building is saving Northrop money as it provided an opportunity to reduce its headquarters staff.

Other contractors, too, relocated this year. The U.S. division of Munich-based global conglomerate Siemens, which opened a new federal unit, moved its corporate headquarters from New York to Washington, while ammunition and rockets manufacturer ATK transferred its corporate office from Minneapolis to Arlington.

— Marjorie Censer

Bank made two deals to become bigger

It was a busy summer for Capital One Financial. In June, the McLean-based banking and credit card giant struck a $9 billion deal to acquire the online bank ING Direct, a move that would catapult Capital One from being the eighth largest U.S. bank by deposits to the fifth.

Two months later, the firm announced a $2.6 billion deal for the U.S. credit card portfolio of London-based HSBC Holdings. Once the deal closes in the second quarter of 2012, it will make Capital One the nation’s third-largest issuer of private label, or store branded, plastic.

If only the ING transaction was as simple. Consumer groups complained the merger would create another behemoth bank whose failure could cripple the financial system, and asked the Federal Reserve to hold hearings on the matter. Three public meetings were held across the country, but the Fed has yet to give the deal the go-ahead. Still, Capital One anticipates the acquisition will close in the first quarter of 2012.

The former Borders store at 14th and F streets NW. as it was being remodeled to become a restaurant. (Jeffrey MacMillan/Capital Business)

— Danielle Douglas

Gov’t’s first CIO exited

After launching an ambitious set of policy initiatives including the government’s “cloud-first” policy pushing Web-based computing, Vivek Kundra, the federal government’s first chief information officer, stepped down this summer.

Steven VanRoekel, executive director of citizen and organizational engagement at the U.S. Agency for International Development and a longtime Microsoft employee, was appointed his successor.

Kundra took office in early 2009 and quickly made an impact, forcing agencies to restructure or cancel troublesome information technology projects and pushing them to consolidate data centers. Kundra left his post for a joint fellowship at the Shorenstein Center on the Press, Politics and Public Policy at Harvard Kennedy School and the Berkman Center for Internet & Society.

— M.C.

Venerable law firm shut its doors

It was the bankruptcy heard ’round the legal world: Howrey, the once-venerable Washington law firm, dissolved in March. At its peak, the 55-year-old firm had more than 700 attorneys worldwide and some of the country’s best antitrust litigators. Throughout 2011, the Howrey estate continued churning out work for lawyers — bankruptcy counsel Wiley Rein has earned more than $1 million in fees — and its dissolution presented a golden opportunity for other law firms to snap up attorneys. Many former Howrey lawyers are now at Winston & Strawn; others landed at Baker Hostetler, Morgan Lewis, Wiley Rein and other major firms.

In September, after months of litigation with its health provider Cigna over thousands of former employees’ unpaid medical claims, Howrey said it would pay the claims out of its cash collateral. Some loose ends won’t be tied up anytime soon. Howrey continues to battle its former Washington landlord over alleged unpaid rent, and faces a temporarily halted lawsuit filed by former employees suing to recover wages and bonuses they say are owed to them because the company didn’t give them enough notice before mass layoffs.

— Catherine Ho

Moves completed

The years-long process to realign Defense Department bases came to a close in September. The effects of the move were felt locally at Fort Meade, which gained thousands with the arrival of the Defense Information Systems Agency as well as the Defense Media Activity, a Pentagon agency that provides news and entertainment to U.S. forces, and defense adjudication entities. Additionally, the base continued to see growth from the National Security Agency and U.S. Cyber Command.

In Alexandria, the Mark Center, built to house more than 6,000 employees from 24 Pentagon agencies using leased space in the region, provoked outrage among residents and congressional representatives concerned about a significant uptick in traffic in an already choked area.

The National Geospatial-Intelligence Agency completed a new headquarters in Springfield that is home to about 8,500 employees, and the main Fort Belvoir campus added about 3,400 employees, primarily through the new Fort Belvoir Community Hospital.

— M.C.

Developers lined up with their proposals

When the Fairfax County Board of Supervisors adopted a master plan for Tysons Corner in the summer of 2010, it set the stage for a flurry of zoning proposal applications under the new rules. Barely a month after the plan passed, landowners including CityLine Partners, the Georgelas Group and Capital One all proposed adding millions of square feet of new buildings to their properties. So many applications came in during the end of 2010 and beginning of 2011 that concerns grew about a cap on the amount of office space that would be approved.

The next step for Tysons developers was getting approval for their plans. The Georgelas Group went first in September, and it won approval for new high-rise apartment buildings, the first of which will be a 400-unit apartment tower built by Greystar on what is now a parking lot at the corner of Leesburg Pike and Spring Hill Road.

— J.O.

More jobs eliminated

Bethesda-based Lockheed Martin, the world’s largest defense contractor, continued to make big cuts in its workforce this year after buying out hundreds of top executives in 2010. The company, like many other contractors, has been under pressure because of reduced government budgets.

This summer, Lockheed offered a buyout to U.S.-based salaried employees in its headquarters and its internal business services organization, which handles areas such as payroll for the company. About 340 of the 6,500 eligible employees accepted the offer, and another 150 in the internal business services unit were laid off.

The company also cut about 1,500 positions in its aeronautics workforce. The unit, which is primarily based in Texas, Georgia and California, laid off about 1,200 employees and opted not to fill another 300 spots, said company spokeswoman Jennifer M. Whitlow. Lockheed reduced its space systems workforce by about 900, she said. Those cuts were anticipated to hit most severely in Sunnyvale, Calif.; the Delaware Valley region of Pennsylvania; and Denver.

— M.C.

Icon passed torch

After 39 years at the helm, J.W. Marriott Jr. announced this month he would be stepping down as chief executive of Marriott International in March 2012. Marriott, who will stay on as executive chairman, is being replaced by his second in command, Arne Sorenson.

— D.D.

Federal spending cuts took toll on real estate

Leasing and new construction by the federal government drove the Washington area to the top of the list for commercial real estate investors shortly after the recession, but gridlock in Congress and cutbacks at the General Services Administration in 2011 have stalled that growth and then some.

The GSA announced that it was no longer funding new construction projects in November. But the effects of those cutbacks already were under way as austerity measures led the GSA to cancel a major lease competition for the Department of Homeland Security and set back the timeline for consolidation of the agency at St. Elizabeths Hospital.

As a result, developers with their eyes on federal office deals from Prince George’s County to Loudoun County were forced to lower their sights.

— J.O.

Successor named for longtime president

Angel Cabrera, 44, was chosen in December to serve as the next president of George Mason University after longtime leader Alan G. Merten announced his intention to retire earlier this year. Cabrera, a native of Spain, hails from the Thunderbird School of Global Management in Arizona, where he has served as president since 2004. His term begins in July 2012.

— Steven Overly

Bethesda tea brewer sold to beverage giant

It wasn’t too much of a surprise when Coca-Cola tucked Bethesda-based Honest Tea into its portfolio of brands in March. The beverage giant made its intentions clear at the start of the year by seeking antitrust approval for the buy. That followed its $43 million investment three years earlier. In the interim, Honest Tea more than tripled its revenue to $71 million in 2010.

Some devotees of the organic tea brewer were dismayed by the idea of it being taken over by a huge corporation. But Honest Tea co-founder Seth Goldman said the company will continue to operate a stand-alone business in Bethesda, with the same senior management team. Goldman even retained a stake in the company through a reinvestment of his proceeds from the sale, in an arrangement that is fairly unique for Coke.

— D.D.

Hotel REIT became a public company

Taking its place as one of the largest public hotel companies in the country, RLJ Lodging Trust made its debut on Wall Street in May. The Bethesda-based hotel company, is run by industry veteran Thomas J. Baltimore Jr., and its board is chaired by Robert L. Johnson, the founder of Black Entertainment Television.

The real estate investment trust picked up a 176-room Courtyard by Marriott Charleston Historic District for $42 million in October to add to its portfolio of 141 hotels in 20 states.

A number of hotel owners, including Pebblebrook Hotel Trust and LaSalle Hotel Properties, were active buyers this year, though not to the same degree as 2010. Rather than keeping up a frenzied pace of buying, many owners are renovating their properties to justify higher rates.

— D.D.

Dispute with GPS industry continued

Reston-based LightSquared spent the year battling representatives from the global positioning system industry who contend that the company’s proposed wireless broadband network would interfere with the GPS signal on devices.

That fight rages on. The federal government released a report earlier this month that was not in LightSquared’s favor, after which the firm’s executives asked the Federal Communications Commission to issue a declaratory ruling that asserts its right to use the spectrum.

— S.O.

Initiatives focused on entrepreneurship

Washington investor and former AOL chief executive Steve Case played a high-profile role in two Obama administation initiatives to promote entre­pre­neur­ship.

Startup America got under way in February. The initiative champions public policies that would be favorable to start-ups and encourages companies such as Intel, IBM and Facebook to also lend a hand (or financial investment).

That same month, Case sat in on the first meeting of the President’s Council on Jobs and Competitiveness, a group of 27 business executives charged with recommending policy changes that could lift the economy.

After the council’s report in October, Case said that startups are essential to job creation and economic prosperity. He then put his money to work, teaming up with two former AOL colleagues, Ted Leonsis and Donn Davis, to form a new $450 million venture capital fund.

— S.O

Financial regulation was boon for K Street

With the Dodd-Frank financial reform bill passed, law and lobbying firms spent the first several months of the year trying to influence how some 2,300 pages of new rules and regulations for banks, lenders and other financial institutions should be implemented.

Many law firms recruited hard to beef up their financial services, corporate and securities practices, and cashed in on the investment when waves of new business from banks, hedge funds and investment advisers came rolling in, all seeking legal advice on how to navigate the new regulations.

— C.H.

First lupus drug in 50 years got approved

Rockville-based Human Genome Sciences nabbed a significant win in March when the Food and Drug Administration approved Benlysta, the first drug created to treat systemic lupus in 50 years.

The company often is counted among the biotechnology gems in Maryland’s Interstate 270 corridor, but Benlysta marks its first commercial and potentially blockbuster product on the market. HGS is developing the drug with GlaxoSmithKline.

HGS chief executive H. Thomas Watkins was named chairman of the Biotechnology Industry Organization’s board in June when Washington played host to the trade group’s annual international conference.

— Steven Overly

Big-box store closings left major holes to fill

Big-box retailers took a few hits this year. The pain of long-slumping sales crippled Borders bookstore and Filene’s Basement, which both filed for Chapter 11 bankruptcy protection.

All of Borders’ stores in the area closed by the summer. Of the eight Borders sites to close as part of the bankruptcy, two have been leased to Morton’s The Steakhouse and Big Lots. Many of the remaining sites have housed temporary tenants.

Meanwhile, Filene’s four locations in the Washington area are set to go dark in January 2012, once all of the merchandise is liquidated. Syms Corp. bought the discount retailer out of bankruptcy in 2009, but could not revive the flagging chain.

— D.D..

EagleBank, Alliance deal fell apart

In July, Bethesda-based EagleBank reached an agreement to acquire Alliance Bankshares of Chantilly for approximately $31.2 million, or $6.11 a share. The deal would have given Eagle an additional $536 million in assets, $412 million in deposits and six branches in Northern Virginia. If it hadn’t fallen apart, that is.

The banks called off the merger at the end of November citing irreconcilable differences. During the due diligence period, one Alliance shareholder filed a lawsuit to block a deal that he alleged undervalued the company. Alliance chief executive William Doyle Jr., however, said the action had no bearing on the decision to end the deal. Neither side would discuss the particulars, citing a confidentiality agreement.

Meanwhile, Synergy One Federal Credit Union of Manassas received regulatory approval to merge with Fairfax-based Apple Federal Credit Union in August. The move gave Apple FCU, which serves schools in Northern Virginia, $1.53 billion in assets, some 143,000 members and 22 branches.

Last week, Olney-based Sandy Spring Bank struck a $25.4 million deal to acquire CommerceFirst Bank of Annapolis. The move will give Sandy Spring, with $3.6 billion in assets, an additional $205 million in assets and $180 million in deposits once it closes in the second quarter of 2012.

— D.D.

Spending gridlock kept lobbyists on toes

When the federal debt ceiling deal threatened to slash government funding for thousands of programs and projects, lobbyists kicked it into high gear.

From the creation of the “supercommittee” in August, lobbyists scrambled to gain access to the 12-member bipartisan congressional panel tasked with identifying $1.2 trillion in spending cuts.

Some shops formed internal supercommittee task forces, funneling resources and manpower on reaching the committee that, in the end, turned out to be a bust.

By Thanksgiving, the panel admitted failing to reach an agreement on the cuts; lobbyists readjusted quickly, shifting their strategy to focus on automatic cuts known as “sequestration” that are scheduled to go into effect in 2013 if Congress doesn’t hit the $1.2 trillion target by 2012.

Still, for most of K Street’s top firms, year-over-year lobbying revenue stayed flat or dipped, which many attributed to legislative gridlock.

— C.H.

Retailer made impact with store plans

Perhaps no company had a more active year in Washington than Wal-Mart. The world’s largest retail chain spent much of 2011 pushing expansion plans in the District and inner suburbs. Wal-Mart now plans stores for Tysons Corner, Chantilly, Oxon Hill, Aspen Hill and in Rockville.

Contrary to the company’s traditional warehouse-like stores, some of the proposed stores are part of mixed-use developments and don’t always feature acres of surface parking.

In the District, Wal-Mart initially announced four stores and recently upped it to six, including Skyland Shopping Center, where D.C. Mayor Vincent C. Gray personally asked that the chain open a store.

Anti-Wal-Mart activists held protests, marches and even flash mobs, but the store signed a community benefits agreement with the city in which it agreed to fund job-training programs and open hiring centers as part of its entrance into the city.

— J.O.