Archived Articles: August 2017

Reaching for the Sky in Downtown Columbia

Kevin Peterkin lives and works in Washington, D.C.’s Virginia suburbs. But he could very well qualify for honorary citizenship in Columbia.
Peterkin is director of multifamily development for Kettler, the development company that built The Metropolitan Downtown Columbia, its first new upscale apartment building, and is putting the finishing touches on two neighboring apartment projects, Ten.M and m.flats. Together, the three projects will have more than 800 units within the boundaries of the Downtown Columbia Plan, which includes 13 million square feet of mixed-use development: 4.3 million square feet of commercial office space, 1.25 million square feet of street retail, 5,500 residential units and 640 hotel rooms.
Peterkin has been involved in the Kettler projects since 2011, when the McLean, Va.-based company pitched itself to the Howard Hughes Corp., Downtown Columbia’s master developer, for The Metropolitan site. He recently sat down to answer some questions about Kettler’s projects and the future of Downtown Columbia.

What can you share about the two new projects?
It is two buildings being developed at once that are both very similar in style and design in terms of functionality to The Metropolitan. With three different buildings, we’ve tried to give each building its own identity.
Ten.M is the building closest to the Cheesecake Factory. It has 170 units, which makes it the smallest of the three. The building has 55% two- and three-bedroom units; by comparison, The Metropolitan only has about 35% two- and three-bedroom units. This building is targeting the renter who wants a little bit bigger unit and is possibly downsizing from a single-family home.
The m.flats building is between The Metropolitan and Ten.M. It’s 267 units, and it introduces studio apartments to the market and includes a high percentage of one-bedrooms. The units are distinctive, something that you’d see in D.C. or Downtown Baltimore.

Will the amenities in the new buildings will be like those in the Metropolitan?
One of the unique features in the Ten.M building is gas cooking in the units, which is uncommon in apartment living. It also has many of the same features as The Metropolitan. It’s got structured parking within the building, retail on the first floor, a bike room and all the good stuff that we put in our buildings.
We did not do gas cooking in m.flats, but the other amenities there will set it apart. The Metropolitan’s amenities, if you include the leasing office, are about 14,000 square feet. At m.flats, it will be well over 16,000 square feet. It will be stunning, to some, to see what we have going on inside.
We’ve put in a half-court basketball court, a large fitness facility with a yoga studio, an even larger pet grooming room and a catering kitchen. We’ve put in a library feature that has some study nooks for people who work at home.
But the real centerpiece is the sports bar. It’s got this multi-sport simulator, so you can play baseball, basketball, soccer, hockey; it also does “zombie” dodgeball and has a large video wall, which is great for football Sundays. We’re targeting LEED Silver for both buildings.

What retail tenants does Kettler have lined up?
I can’t go into detail on retail yet. We’ve been trying to work with a really distinctive Baltimore food operator to open a restaurant in the project. It’s not a chain, it’s someone who is very highly thought of in Baltimore City.

What is the timeline for both buildings?
Our first move-ins in Ten.M will be in August. And the first move-ins for m.flats will be in the fall.
What drew Kettler to Columbia?
One of the things that drew us to Downtown Columbia was the mix of great uses there. You have the best retail mall in the Baltimore region, the Howard County General Hospital (HCGH) less than a mile away and Howard Community College (HCC) right down the road. You have Maple Lawn and Fort Meade not far away, and now Columbia has added Whole Foods and several new office buildings to Downtown.
But the real beast that sets downtown apart is Merriweather Post Pavilion. You’ve got this world-renowned music theater in a beautiful park across the street. They’re spending a ton of money to upgrade and expand it. The Chrysalis Amphitheater adds a beautiful, smaller venue to Symphony Woods. Over time, it will evolve into a true year-round entertainment venue, a place that is unparalleled in the U.S., frankly. It sets Downtown Columbia apart from any other location.

You are required to spend 1% of your hard costs on public art. How are you going to satisfy the requirement?
Baltimore-based artist Rodney Carroll, who has worked all over the U.S., is going to do a couple of pieces for us at Twin Rivers and Broken Land Parkway. So essentially, it’s going to be a gateway to Downtown. One of the elements is a beautiful 35-to-40-foot-tall sculpture that is going to go in one corner and will be an iconic piece that announces that you’ve arrived.

These are Kettler’s first projects in Howard County. Would you like to do more?
Howard County was always on our radar because of its great demographics. Its location is unmatched. It’s not quite equidistant between Baltimore and D.C., but it’s also a short drive to Fort Meade. Then you add in all the great amenities, including the trails, the Columbia Association facilities, Merriweather, HCC and HCGH, there are just so many superlatives about the community. We’d love to keep doing work there.

Looking Ahead: Winter Is Coming

 

Strong headwinds will slow U.S. growth and the federal budget process, and those forces could harm Maryland’s economy in the near-term.
The Trump administration, in its six month of office, has failed to produce any substantial legislation and has signaled its desire to pull out or renegotiate several trade agreements. The lack of legislative progress, especially in the areas of tax reform infrastructure spending and the Affordable Care Act (as of this writing), have created a climate of uncertainty in the broader business community in the U.S.
While there has certainly been a flurry of executive orders signed by President Trump, these likely will be overturned if a democratic candidate gets elected to president in 2020. For many firms, making long-term capital investment decisions on short-term executive orders is a non-starter. Many economists have revised their growth projections for the Gross Domestic Product downward in light of this, as well as the lack of legislative progress.

Continuous Growth
As of this writing, the U.S. economy has enjoyed eight years of continuous GDP growth and monthly job creation of about 175,000 jobs. Moreover, all of the economic indicators point to an economy that has recovered and is growing, albeit slowly compared to historical standards.
Housing prices have rebounded in most major metropolitan areas, interest rates remain low, energy prices are relatively low, median household incomes have risen for all household quintiles (bottom 20% to top 20%).
However, many regions in the U.S. have not recovered and, as manufacturing jobs and jobs requiring less than a college degree have disappeared, there are many parts of the U.S. that have not recovered since the 1990s. Finally, many homeowners have been shut out of the refinancing option due to the stricter lending requirements in place now.
For Maryland, which has about 5% of its labor force engaged directly with the federal government, as well as an additional 10% indirectly engaged to support the missions of the federal agencies and military installations, any budgetary cuts will have an adverse impact on the state’s economy. Maryland lost approximately 21,000 jobs due to the sequester and any future budget cuts could have a similar impact. Maryland is home to the federal headquarters of the Centers for Medicare and Medicaid Services (CMS), the National Institutes of Health (NIH), the Agency for Healthcare Research and Quality (AHRQ), the Health Resources and Services Administration (HRSA) and several other component organizations of Health and Human Services. If funding for health research and services are cut as proposed, many Maryland workers will lose their jobs.
During the past year, Maryland has gained almost 13,000 jobs in the professional, scientific and technical services and health care and social assistance sectors, and these gains could be in jeopardy if budget cuts get pushed through.

Defense Benefits
Although some aspects of Maryland’s economy are vulnerable to proposed budget cuts, the proposed increase in defense funding stands to benefit the state. Maryland’s 20 military installations power local and regional economies across the state and are well-positioned to take advantage of shifting military priorities.
For example, the military’s increasing emphasis on cybersecurity stands to benefit Fort Meade, located in Anne Arundel County, home of U.S. CyberCommand; and Naval Air Station Patuxent River, in Southern Maryland, is a leading center for the development of drones and other unmanned aerial systems.
While shifting budget priorities are never without casualties, Maryland is well-positioned to adapt to new industries and federal-level priorities. Limiting Maryland’s ability to prepare for new paradigms is the same uncertainty that affects companies and policymakers across the country.

Daraius Irani is chief economist of the Regional Economic and Studies Institute at Towson University. He can be contacted at 410-704-6363 and dirani@towson.edu.

Gateway in the Plan With the HCEDA

The Howard County Economic Development Authority (HCEDA), the Maryland Center for Entrepreneurship and the Howard Tech Council (HTC) have had what the HCEDA has deemed “another successful year of supporting the business community in Howard County.”
The organization has invested considerable time and resources into businesses that already call Howard County home. The HCEDA continues to have a leading business economy that stands out, not just across the state, but across the region; with key pieces already in play, it is important to support enterprises that have bought into the community and to ensure they have the opportunity for continued success.
No example of this dedication to the community could be greater than the work that was embarked upon during the recovery of Historic Ellicott City. There were times when the need for assistance was so great that this was the only project that the entire organization worked on. More than a year later, the HCEDA continues to provide regular support to the businesses that reopened, as well as those that plan to reopen. Thanks to working alongside County Executive Allan Kittleman; the departments of Public Works; Emergency Management; Planning and Zoning; Inspections, Licenses and Permits; and other partner organizations, 92% of the businesses that were impacted by the flood have reopened.
For those efforts, the response and recovery the team at the HCEDA received awards from the Maryland Economic Development Association, Small Business Administration and Preservation Maryland. Two HCEDA staff also received recognition from Gov. Larry Hogan for Acts of Excellence during the response to the flood.
Ellicott City was not the only project the HCEDA worked on during fiscal 2017, however. It worked on 55 projects, which helped retain 546 jobs and add 1,500 new jobs to the county. These efforts resulted in more than 500,000 square feet of development and $29 million in capital investment.
The HCEDA’s Business Development team also provided a total of 791 individual instances of technical assistance to businesses in the county, helping them to work through various challenges. The HCEDA Catalyst Loan Fund supported small business by issuing $2.3 million in loans to 15 businesses this past year.
The Maryland Center for Entrepreneurship (MCE) continued its mission of helping small businesses start and grow. During the past year, more than 8,500 people visited the center to access resources or visit a member company. The MCE well represents the buzzing entrepreneurship ecosystem that calls Howard County home.
Through the combined programs and events put together by the HCEDA, the MCE and the HTC, the HCEDA helped more than 3,300 people connect at events. From CEOs to students, the programing conducted by the HCEDA deliberately impacts individuals at all stages in their careers and across all industries.
At the start of a new fiscal year, the HCEDA continues to have multiple business development projects in the pipeline, with a focus on the redevelopment of Columbia Gateway Business Park. Soon, the organization will release its new strategic plan, which will guide the organization’s vision for the next five years.

For more information about the HCEDA, call 410-313-6500 or visit www.hceda.org.

A Message From Julie Mussog, CEO of AA Economic Development Corp.

It has been an incredibly busy first half of 2017 for the Anne Arundel Economic Development Corp.
When I came on board as CEO in November of last year, we embarked on a staff-wide review of every program and service offered by the AAEDC to see if it met the needs of the business community. It was helpful to understand which services were the most beneficial to our companies and how to further incentivize businesses to locate in Anne Arundel County.
One of the sectors for which this exercise proved particularly helpful was the technology sector.
As home to Fort Meade and premier defense agencies such as the National Security Agency (NSA), Defense Information Systems Agency (DISA) and U.S. Cyber Command, Anne Arundel County is the nation’s most prominent government and cyber technology hub.
Over several months, we met with many tech entrepreneurs to understand their challenges. They provided valuable suggestions on what resources would be most helpful, particularly those who pursue business opportunities at Fort Meade, a prominent economic driver and job center in our county and in the state of Maryland. Their feedback is the foundation of our new Arundel Defense Tech Toolbox.
While the incubator model did not propel the growth of as many businesses as we had hoped, we learned important lessons that have been helpful in the development of the Arundel Defense Tech Toolbox. We understand that many Anne Arundel County technology businesses start in someone’s basement and are financed by personal savings. We know that, for these businesses, many of which have experienced initial success, cash and customers are the drivers of expansion. That is why we believe this initiative is a better strategy to impact growth.
The signature component of the Arundel Defense Tech Toolbox is the Next Stage Tech Fund. For companies with less than 100 employees and $5 million in revenue, this financing program offers 0% loans ranging from $50,000 to $250,000. Loans can be structured with flexible payment terms between one to five years to accommodate a company’s cash flow. Businesses also can access AAEDC’s current workforce training grant program which offers a reimbursable grant of up to $1,000 per employee. A new service within this initiative provides complimentary consultations with prominent experts in the fields of commercial technology marketing, federal contracting and intellectual property.
To connect businesses to the Toolbox, we hired Sarah Purdum in May to serve as a business development associate. Her past professional experience includes working as the cyber incubator manager for bwtech@UMBC Research Park, and within the Maryland Department of Commerce’s Cyber Division. As a business development associate, Purdum will be focused on attracting, retaining and growing technology-focused companies in Anne Arundel County.
Another priority has been to enhance the county’s community revitalization efforts. We advocated for legislation and received an extension of the community revitalization tax credits, which were set to expire in April. This county incentive is available to commercial projects in designated commercial revitalization areas. Property owners apply for the tax credit after making improvements that trigger $100,000 or more in new assessed value. Tax credits are granted for a period of five years and equal the full amount of the increase due to the improvements. Such properties also are eligible for the Arundel Community Reinvestment (ACR) Loan, an interest-free loan up to $50,000 for exterior improvements.
We also reassessed the list of community revitalization districts. By eliminating some districts that have shown marked improvement, adjusting boundaries and combining some areas, we went from 16 to eight districts. This change will allow us to better target resources and incentives to the most commercially challenged communities in the county.
Relatedly, in June, the Maryland Department of Commerce conferred the enterprise zone designation to 1,600 acres in Brooklyn Park in northern Anne Arundel County. Along with our county community revitalization program, this designation gives Brooklyn Park more tools to continue the momentum that started with last year’s implementation of the Greater Baybrook Vision and Action Plan. Enterprise zone property and income tax credits will incentivize more businesses to participate in the revitalization of this community by strengthening local commerce and creating jobs.
Another recent benefit of our partnership with the state of Maryland is the state’s approval of legislation that will allow Anne Arundel County to implement a Payment in Lieu of Taxes (PILOT) agreement for economic development projects of significant public benefit. Unlike TIF or loan financing, a PILOT will allow the county and the developer to agree on an annual fee to be paid instead of property taxes. By having options such as periodic re-evaluations and the ability to end the agreement when benefits to the county cease, a PILOT is a simpler approach that provides more control for local government.
AAEDC continues its commitment to put in place programs and services that are worthwhile and effective for businesses. By continually reviewing the effectiveness of programs, we can make changes to suit the market and move closer to realizing County Executive Steve Schuh’s vision for Anne Arundel County, which is to be the best place to live, work and start a business.

For more information on Anne Arundel Economic Development Corporation’s programs and services, visit its website at www.ArundelBiz.org.

Main Street, Ellicott City, One Year Later

On July 30, 2016, Old Ellicott City experienced devastating flooding when nearly six inches of rain fell in less than two hours. The town was declared a Federal Disaster Area and Main Street was shut down for two months as cleanup efforts commenced.
The 2016 Economic Impact Study for the Ellicott City Flood highlighted that the flood caused a reduction in economic activity of $67.2 million, reduced labor income of $27.2 million, and brought about the loss of 151 jobs and a decrease in county government revenue as much as $1.3 million. But that was last year.
On the eve of the one-year anniversary of the flood, Old Ellicott City is “back on its street.” About 90% of the businesses have reopened, and they have been joined by 15 new ventures, demonstrating the vitality and spirit of this small town.
The Ellicott City Partnership (ECP) is leading this Maryland Main Street Community into a bright future. “The strong partnerships we’ve forged with our business community and Howard County Government agencies, especially with Tourism and Howard County Economic Development Authority,” said ECP President Karen Besson, “will be key in the continued economic recovery of our historic town. We’ve been presented with the unique opportunity to revitalize our business district.”
Also, the ECP has engaged the services of retail and restaurant industry specialist and high impact consultant Garrett Glover for one year. So far, 70 businesses have taken advantage of Glover’s advice on a variety of topics, including business improvement, appearance, strategic growth, media and marketing programs — free of charge — thanks to the U.S. Small Business Administration and the College Park-based Small Business Development Center. The results are notable.
• 12 businesses have added e-commerce to their sites.
• One local business was recently nominated for 2017 eBay Shine Awards’ Global Small Business of the Year.
• In addition to one-on-one consultations, monthly peer-to-peer dialogues give merchants the opportunity to discuss ideas and share successes.
Howard County is currently developing a master plan that will take a fresh, creative look at potential long-term flood mitigation solutions and strategies, as well as new infrastructure design concepts. This comprehensive, community-driven vision for rebuilding a stronger and more resilient Ellicott City is the future.
Go to www.VisitOldEllicottCity.com for more information.

Programs in Place to Boost City of Laurel’s Bottom Line

The City of Laurel has continued to focus on economic development efforts, with business recruitment and retention key for the city’s Main Street and other commercial areas. The Main Street Economic Development Program was established to provide relocation grants to participants up to $10,000 to relocate new or existing business to the Main Street area.
Also, the Retail Storefront Façade Improvement Program grants participants up to $5,000 for approved façade renovations to commercial properties; in addition, incentives are available for property owners to maintain the aesthetics of their property.
Furthermore, the Economic Development Commercial Corridor Program was created to revitalize vacant properties that would support city businesses. The program also serves as a means for business growth in the city that results in increased job opportunities, an expanded tax base and an improved quality of life. Its target areas are along Route 1, Laurel City Center, the Highway Corridor and the Route One Historic District area.
Currently, there are two mixed-use communities constructed within the city, which include Westside and Avalon Bay. Westside includes an apartment complex, townhouse community and a future commercial component; Avalon Bay includes an apartment complex and a pad-site for a Royal Farms convenience store, which recently obtained zoning approval.
Moreover, there are other residential projects currently under construction: the Evolution, an apartment complex at Laurel Towne Centre; the redevelopment of Laurel Gardens apartments; and Sandy Spring Village, a duplex community. For all new multi-family developments of 50 units or more, 6% of the housing stock must be set aside for the city’s Affordable Housing Program. The city is expected to experience much more development, as well as revitalization efforts, in the near future as developers continue to reach out to the department.
In addition to the new construction and revitalization efforts, there is an annexation currently pending to annex 32.68 acres of land into the Laurel’s incorporated city limits for future development. Annexing property into the city serves as a means to stimulate the economic base, provide increased real estate values and add marketability and is a mechanism to create growth for the community.
Finally, Laurel Mayor Craig Moe recently appointed Christian Pulley as director of economic and community development. She has been employed with the city since 2008 and has held multiple positions.

For more information, call the City of Laurel at 301-725-3000 or visit www.cityoflaurel.org.

Hispanic Businesses on the Rise Locally, Nationally

 

There’s proof in the numbers about what you think you may be witnessing in the world around you: Hispanic-owned firms are growing faster than the national average — for all businesses. They’ve generated about $486 billion in revenues during 2016, according to a report by the research firm Geoscape.

Data shows the Hispanic share of all new entrepreneurs is 20.8%, compared to 10% a decade ago. Since Hispanics represent 18.4% of the U.S. population, Geoscape found that Hispanics have a greater tendency to become entrepreneurs. They are the fastest growing portion of the workforce and are 1.5 times more likely than the general population to start a new business, according to the Kauffman Index of Entrepreneurial Activity.

This trend is even more pronounced on a regional level, with one of the fastest growth areas for Hispanic business in the South Atlantic, extending from Maryland to Florida.

Geoscape CEO Cesar Melgoza said one of factors in this growth is that the Hispanic population in the U.S. has been growing very rapidly.
“Another factor,” he said, “is that this population of Hispanics tends to be younger, and they are more likely to start businesses in their 20s and 30s.”

A third factor, he said, is the fact that, in many cases, Hispanics may not be as likely to be engaged by a company for a variety of reasons, partly because they may lack a personal network. “So the doors are not always open,” said Melgoza. “They create other necessary options. They build their own door.”

From the Incubator

Carolina Seldes, CEO and founder of the tech firm ITnova, based in Anne Arundel County, makes every effort to help build those doors for her fellow Hispanic entrepreneurs. ITnova, founded in 2011, provides software technology to the U.S. government, as well as state and local governments.

Seldes serves on the board of both the Center of Help and Anne Arundel Community College. “We were born in the incubator at Anne Arundel Community College,” said Seldes. “Now we have come full circle, and I want to help others.”

The Center of Help has been assisting Hispanic-Latinos and other immigrants socially, educationally and economically in Anne Arundel County since 1999. The center doesn’t focus specifically on entrepreneurs, said Seldes, but on education and skills for the Hispanic community. “There is a strong focus on English as a second language for kids and adults,” she said.

Seldes, who is from Colombia, said she sees many Hispanics connecting with jobs in restaurants, housekeeping, and heating and air conditioning repair.

Seldes first began her career in Colombia, earning a bachelor’s degree in electrical engineering from the Javeriana University of Colombia. “I came here with experience in my career, and I was CEO of a company in Colombia.”

For a Better Life

At the Center of Help, Board President Dr. Rudi Rodriguez talked about his own observations of how Hispanic entrepreneurs are flourishing. “Drive down Forest Drive [in Anne Arundel County] and you will see all kinds of Hispanic businesses,” he said.

Rodriguez, like Seldes, comes from an established career and is giving back to help Hispanic business owners succeed. He practiced emergency medicine for more than 20 years and was residency trained at the University of California at San Francisco. Locally, he worked in the Department of Orthopedics of Patuxent Medical Group.

“Hispanics represent 16 to 18% of the Anne Arundel population,” he said. In a citizenship class that has been going for eight years, more than 100 Hispanic people have become citizens though the Center for Help.
“We all have different reasons for coming here,” said Rodriguez. “My father was a migrant laborer in Texas. He enlisted in the Army in World War II, got accelerated citizenship and finished his career in the Air Force as one of [its] first jet mechanics. My family has done very well once we broke that glass ceiling.”

As diverse as their reasons are for coming to the U.S., Rodriguez said Hispanics do have a common thread.
“They come for a better life,” he said.

Survive, Thrive

Cesar Melgoza said that, besides sheer numbers of Hispanics on the rise, there are also cultural reasons why there are more and more Hispanic entrepreneurs.

“In many of the cultures, there is a very entrepreneurial nature,” he said. “Entrepreneurism is evident in any kind of merchant, in eating or drinking places, and is very commonplace in Latin American countries. So, they become entrepreneurs over here to survive and hopefully thrive.”

The data indicates that, in the local region, Hispanic workers and entrepreneurs are entering the service, construction and hospitality industries.

Melgoza, who started his career working for Apple, then moved to a venture-funded company, founded Geoscape in an effort to develop a deeper understanding of not only Hispanics but other groups, including LGBT and religious groups.

“More needs to be known about these groups to serve them better,” he said. “We build databases and technology to help people understand and serve these populations.”

Business Advocates Question Maryland’s Low Score in Startup Study

 

A WalletHub study released on July 5 ranked Maryland the third worst state in the nation to start a business.

In the study, purported business experts looked at criteria across the key dimensions of business environment, access to resources and business costs.

It’s no secret that Maryland’s office rents are comparatively high, and the state’s legislature has a robust track record when it comes to innovation in new ways to wring money from citizens and corporate entities. But business advocates at the state and local levels say the study hardly paints an accurate picture of Maryland’s startup friendliness.
First the findings.

In the study, WalletHub’s analysts compared the 50 states across 20 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise.

Maryland ranked dead last in a comparison of labor costs, 46th in terms of office space expense, and somehow managed to get beaten by states like Mississippi and West Virginia in access to financing — despite West Virginia posting the lowest average growth in the number of small businesses.

Interesting to note, the experts cited in the study did not share the same viewpoint on the use of tax breaks or other incentives as a tool to encourage new business growth.

“They are a bad investment for states,” said Stephen Martin, professor of economics in the Krannert School of Management at Purdue University, terming them “beggar-my-neighbor policies” that end up reducing and shifting revenues from one state to another.

Conversely, Ron Duska, an adjunct professor at St. Joseph’s University and at Villanova University, said tax breaks and other incentives “are not only a good investment, but seem to be called for. As the old adage goes, you catch more flies with honey than with vinegar.”

Most of the other experts cited in the study hedged their responses to give the standard non-committal “it all depends” answer.

Survey Says

WalletHub posted its findings online, but did not provide access to its raw data and only included the top and bottom five states in the key indicator categories, making it difficult, if not impossible, to discern just where Maryland really stands in comparison to other states in the categories of availability of human capital, total spending on incentives as a percentage of Gross Domestic Product and, for some reason, longest average work week.

“We’re a little disappointed with the study,” said Maryland Department of Commerce Deputy Secretary of Commerce Benjamin Wu. “We really don’t think it accurately reflects the positive environment that we have to offer here in Maryland, particularly when other studies put us in the top 10.”

The latest Ewing Marion Kauffman Foundation’s Index of Startup Activity ranked Maryland No. 2 in terms of startup growth.
“[WalletHub] didn’t measure things like intellectual capital or access to a skilled workforce,” said Howard County Economic Development Authority CEO Larry Twele. “That’s our strong suit. It’s a spurious method of ranking states.”

Also missing from the data points were criteria such as connectivity, proximity to research institutes and other means of government support, all things that make Maryland an attractive location for startups.
“TEDCO [the Maryland Technology Development Corp.] does a lot of startup financing on the technology side,” Wu said, while a thriving incubator system and spin-off activity from larger firms add considerable muscle to the state’s startup ecosystem.

Access to financing is important, he agreed, but access to capital in general — another facet the study didn’t consider — is of more use to startup businesses and provides a more accurate gauge of a supportive environment.

TEDCO officials were unavailable for comment.

“Gov. Hogan and the Department of Commerce are trying to improve the access startups have to different sources of funding,” Wu said. “We’re trying to connect venture capitalists, both nationally and locally, and introduce them to the opportunity that we have here in the startup community.”

It’s a strategy aimed at trying to position Maryland on the same level playing field that Silicon Valley and Boston enjoy.

Few venture capitalists look to West Virginia for opportunity, Wu said, because the access to an educated and skilled workforce there is limited.

Apples/Oranges

Most entrepreneurs would consider it pointless to compare the tax environment of their home state with any noncontiguous state, and even then it might be a stretch.

“It does not seem likely that an entrepreneur in California will start a business in, say, Indiana, because of the difference in corporate tax rates,” as Martin said.

Hobson’s choice or not, it’s primarily the merits of the startup itself, not the environment it inhabits, that plays the most significant role in its success.

“How many times do we hear about growth in the startup environment in Silicon Valley, yet nobody ever talks about the tax rate in California as a negative,” Twele said. “Silicon Valley is in the heart of one of the highest taxed and overregulated states, but nobody’s scared away by that.”
And even if corporate taxes may be higher in one state than another, “what do you get for those taxes?” Twele asked. “A study like this should also consider the value gained from those taxes: a good education system, infrastructure, not just access to a workforce, but access to a skilled, educated workforce.”

Streamlining

“Being a startup is not easy, and we recognize that here in Maryland,” Wu said. “The governor is working with us to help streamline the process and make [government] work a little more efficiently for business,” Wu said.

Transitioning the Department of Business and Economic Development into the Department of Commerce in October 2015 helped bring more of a customer focus to the forefront, he said, enabling greater inter-agency collaboration.

“Gov. Hogan’s More Jobs for Marylanders Act that became law during the last session is also a positive step in this direction, bringing more incentives to help new businesses get started and create new jobs,” Wu said. “We don’t necessarily see any particular industry sectors that are struggling in terms of startups, but they all share a need for capital. It’s our job to try to provide the resources startups need.”

“From what we see at the local level, activity is very brisk,” Twele said. “The [WalletHub] study doesn’t tell the whole story, and there are certainly a lot of startups out there that can refute the notion that this is a bad place for business.”

Electric Bus Project Arrives on Schedule in Howard County

 

Public transportation passengers can take a ride into the future aboard three new, state-of-the-art, zero-emission electric buses plying Howard Transit’s appropriately named Green Route.
Taking the place of three aging diesel buses, the new vehicles were made possible through a Federal Transit Administration (FTA) Transit Investments for Greenhouse Gas and Energy Reduction (TIGGER) program grant acquired by Howard County in partnership with the Regional Transportation Agency of Central Maryland (RTA), the Maryland Transit Administration (MTA) and the Center for Transportation and the Environment (CTE).
“This project has been a long time coming,” said Howard County Executive Allan Kittleman. “We are here to deliver once more on our promise to improve the quality of the transit fleet.”
Seven new traditional diesel buses will also join the fleet by the end of the year, he said, followed by seven more at a later date, helping to retire some of the aging fleet of buses that were already 13 years old when the county acquired them.
Operated by the RTA, the three electric buses are part of a demonstration project to evaluate the energy efficiency and cost effectiveness of electric buses and the integration of fully wireless opportunity charging. The transit hub at The Mall in Columbia will host one of the innovative inductive charging stations on space donated by mall owner General Growth Properties (GGP).

Modern Transport
The electric powered buses will assist the county in reducing greenhouse gas emissions, Kittleman said. “As gas prices increase over time, they will be more cost effective and cheaper to run than our other diesel buses. They will be quieter than our typical buses and will have USB ports for phone charging,” as well as free Wi-Fi service for passengers.
The buses utilize a 270 kWh lithium iron-phosphate energy storage system that is environmentally safe and has a long service life. The vehicles are powered by a battery-electric propulsion system that features an electric-driven rear axle.
“Another key feature is the inductive charging station,” Kittleman said, technology that was provided by Momentum Dynamics of Malvern, Pa. The system utilizes a secondary pad on the bus that aligns with a primary pad in the pavement at the transit hub, where energy is transferred through an air gap, conditioned and used to charge the bus batteries.
According to Momentum Dynamics CEO Andrew Daga, the 50 kW system is the first of its kind on the East Coast and boasts an efficiency of 95%, comparable to traditional plug-in charging systems.
“It is modular in design, so we can easily upgrade it to a higher capacity in the future just by adding another component, if demand calls for it,” Daga said. “What’s more important is that the induction charger effectively doubles the driving range of each electric bus.”

Operational Efficiencies
A spec sheet on the electric charging technology indicates that full overnight charging at 80 kW takes up to four hours from a 0% state of charge, taking advantage of lower, off-peak energy rates.
While in operation, the new electric buses are able to recover approximately 8 kWh (or a 3% state of charge) during a 10-minute layover at the transit hub.
“With the additional charging station, the buses will have a range of 190 miles,” Kittleman said, or an average range of 130 miles without charging, depending on passenger load, HVAC load in hot or cold weather, route conditions and driver habits.
The buses can reach top speeds approaching 55 to 60 miles per hour.
“They travel primarily on local roads with lower speed limits, so there’s no need for a higher speed capability,” said Howard County Transportation Planning Manager David Cookson.
“All of the service will be performed at the RTA facility,” Cookson said, by RTA technicians who completed a training program conducted by the Los Angeles-based manufacturer, BYD. “BYD will also provide one staff member on-site for about a year to assist with additional training and tech support.”

Next Stop?
Data loggers on board each bus will provide the county and other stakeholders with information as to the efficiency and cost-effectiveness of inductive charging, and that data will be used to calculate estimated emission reductions as a result of operating the battery electric buses in place of diesel buses.
“We’re going to find out if the use of this charging station is warranting that we do this in other places throughout the county,” Kittleman said. “With no fuel costs, it improves our ability to do more with the [transportation] budget. There is also a 12-year warranty on the batteries, as long as the lifetime of the buses themselves. Add all that together with the cost of electric vehicles going down, and we might determine in the future that it’s a more cost-effective way to go.”
The battery packs, in fact, contribute to more than half the cost of each vehicle at present, Cookson said. “The good news is that battery prices continue to drop every year as more and more [vehicles] become battery powered.”
The new buses operate on the Howard Transit Green Route (Route 401) servicing The Mall in Columbia, Village of Wilde Lake, Howard Community College and Howard County General Hospital. Data collection and reporting will continue through August 2019, and the buses will remain the property of Howard County after the project comes to a close.
“I can see us having more electrical buses in the future, but we want to do our due diligence and find out if that’s a good decision,” Kittleman said. “That’s what these three buses are all about.”

Flood Mitigation Projects Announced, Check Presented to Recovery Project

Howard County Executive Allan Kittleman has announced plans for four major flood mitigation projects totaling approximately $18 million for Ellicott City. These projects were selected after a comprehensive analysis was completed with extensive input from the community.
The announcement came during a ceremony where Kittleman and Council Chairperson Jon Weinstein presented the One EC Recovery project with a check for $50,000 to continue its efforts to support the recovery of residents. The projects consist of several large stormwater retention facilities in the watershed, as well as a series of culvert and channel improvements in Ellicott City’s West End. In order to accomplish these projects, Kittleman will look to partners at the state and federal levels as their support is crucial to the projects’ implementation.
“These four projects will have the largest immediate impact to mitigate future flood damage in Ellicott City,” said Kittleman. “These are our next best steps as we continue to rebound from last year’s flood and rebuild Ellicott City as a model resilient community.”
Kittleman said that while these projects will alleviate a significant amount of the flooding, building owners still must do their part to flood-proof buildings and property.
The projects that will be pursued are as follows.
• A Tiber Branch stormwater retention facility, which will cost approximately $4,167,000
• A New Cut Branch stormwater retention facility, which will cost approximately $3,587,000
• A Hudson Branch stormwater retention facility at the US 29/40 interchange, which will cost approximately $5,112,000
• Storm drain improvements along Frederick Road, which will cost approximately $5.3 million
For the complete press conference, go to https://youtu.be/W4r84jT4SRQ.

After Years of Slow Growth, Senior Housing on the Rise

 

In Crofton, new development was supposed to rise on Route 3 North, next to the suburb’s iconic front gates (see The Business Monthly, November 2015).
That hasn’t happened. Not yet, anyway.

But a glance almost straight across the highway, to its south side, reveals that — with the demolition of the former Uncle Nicky’s restaurant and an old-school home that housed a psychic reader — Brightview Crofton Riverwalk is absolutely happening, and it’s happening within a market sector that has been relatively quiet for the past several years: senior housing.

In Howard County, there’s nothing coming out of the ground at this point, but there might be in the forseeable future. Catonsville-based Erickson Living Management (ELM) recently held its first public meeting to discuss the concept of a fourth senior living community.
The as-yet-unnamed project would be built in the vein of the company’s other area projects, Charlestown, also in Catonsville; Oak Crest Village, in Parkville; and Riderwood, in Silver Spring.

Making the Move

Andrew Teeters is vice president of development for the Baltimore-based Shelter Group, which is building the Brightview project in Crofton. The company already owns and operates similar properties in Anne Arundel County in Severna Park and Edgewater, and is building another project, Brightview Annapolis, on Route 178, near Westfield Annapolis Mall.
The Crofton project is rising on a 20-acre site, five of which are set aside for the 158-apartment senior living project that will offer “everything but nursing care,” Teeters said, so it will include independent living, assisted living and dementia care. The rest of the acreage is slated for 172 townhomes to be built by another to-be-determined builder, and open space.

“One of our points is to integrate senior housing into a regular community, because they can become isolated in their old homes,” he said. “We’re going to have a park, paths and the Riverwalk to create an intergenerational community to avoid that issue.”

Teeters stressed that right now appears to be the right time to build more senior housing.

“We’ve been monitoring this market for years,” he said. “We have yet to purchase our five-acre site, which was developed by The Gilbane Co., but we’ve had it under contract since 2014. We’re just waiting for permit approvals.”

He added that Shelter will “go vertical” with the project this fall and shoot for completion in 2019, adding, “there are very limited options in the Crofton area.”

Early Plans

As for the project that’s planned for the River Hill section of Clarksville, located near the intersection of routes 108 and 32, between Clarksville Commons and Sheppard Lane, “There’s no estimated cost yet, due to evolving site plan,” said Scott Sawicki, senior director of government affairs for Erickson.

The current proposal calls for 1,200 units, plus a health care facility. “We see this as a great opportunity,” said Sawicki. “We already have three successful communities in Maryland and all are highly occupied,” at around 95% in each case, “with strong wait lists. We’re to the point where we get vacant residences that need to be refurbished and repaired, and by that time we already have a number of people who are looking at those vacancies or perhaps condos. That tells us that it’s time to start building a fourth community.”

He said another factor in proceeding with the plan is a Howard County report on aging that indicates that county residents “age 85 and older will increase from 6,606 to 23,334 by 2035.”

ELM hosted its first public meeting in July but hasn’t “filed anything yet,” Sawicki said. “There was some opposition from [the community], as well as some who attended that want us to work with political leaders as we move forward,” adding that about 150 people attended and “only about a dozen people asked questions, mostly about density and traffic.”
The next step at the soon-to-be-proposed community, which ELM executives are tentatively referring to as Erickson Living at Limestone Valley, is to create a second version of the plan after the company works with the State Highway Administration to address traffic improvements. ELM would then file formal plans with Howard County Planning & Zoning, which it hopes will happen by early August.

So from ELM’s point of view, it’s so far, so good, as it braces for the Silver Tsunami. “We appreciate the initial support and look forward to working with opponents to persuade them of the merits of the project.”

Meanwhile, Charlestown is renovating and expanding on the west side of the campus with a new building called Wilton Overlook, which will house residents in need of skilled nursing with memory care. It is slated for initial occupancy in January 2019.

Sprucing Up

Speaking of renovations, that’s just what another long-time player in the field has been doing. Vantage House, in Columbia, is in the process of renovating public spaces and its other features, and repositioning itself in the market.

Like the local ELM communities, the occupancy rate at Vantage House is about 95%. “We have waiting lists for two-bedroom apartments,” said Marketing Director Andrew Morgan, noting that 64% of its inventory is one-bedroom apartments, with the rest two-bedroom dwellings.
Morgan said the shift at the Columbia staple is that its residents, and potential residents, “are more focused on lifestyle, not care or services. We are a life planning community, and [residents] have to be independent to come in. The step up here is more to satisfy other areas of life.

But he also stressed that Vantage House is set up to accommodate the physical changes in life and health. As for the topic of expansion, Morgan said that topic hasn’t moved onto the radar screen, at least not yet. “The topic has arisen,” he said, “but we haven’t really focused on opportunities to add rooms to the campus.”

The reason for the movement in the senior housing market is that “its demographics are growing,” said Geary Milliken, president and CEO with Carroll Lutheran Village, in Westminster, and the new-ish Lutheran Village at Miller’s Grant, in Ellicott City.

“Maryland is a highly-regulated market, and that means it’s growing a little slower,” said Milliken, pointing out that seniors often relocate to other states, notably Delaware, because it does not tax retirement income.

Universal Design is another reason for the recent sluggishness in the state’s market, he said. “That’s an important point, because the market is ripe for retrofitting, especially with high tech products like motion detectors. That trend, combined with the costs of new construction, could also be part of the reason why senior living communities haven’t been coming out of the ground as much in recent years.”

Then comes the matter of aging construction. “Seventy percent of senior housing [in the area] is 25 years of age or older, and doesn’t include Universal Design. That bodes well for new construction in the state, too.

Overbuilt?

Milliken also feels like assisted living communities across the country, and maybe in this area, “may be overbuilt,” hence “a slowdown in that sector,” he said. “We are faith-based nonprofit. There is a split between corporations that are in it for money and faith-based organizations. Our Miller’s Grant project was the first CCRC that had opened in Maryland in several years, the last being Ingleside at King Farm,” in Rockville.
However, be that as it may: “The good news,” he said, “is that Miller’s Grant’s 241 residential units are filling up ahead of schedule and are 88% filled; Carroll Lutheran Village, in Westminster, an older product, encompasses 398 units, and sits at 97% occupancy,” which has further tightened the area market.

As for new construction, “It’s almost cost-prohibitive to start a new project in Maryland due to the regulatory environment, which protects consumers but inhibits new business growth,” Milliken said, “but if you’re already a provider in Maryland, that’s better than coming in from out of state. That bodes well for our company and for Erickson.
“Around the country we’re seeing the highest growth in the past decade,” he said, “and there will eventually be pent-up demand here.”

Three Factors

While the Brightview Crofton Riverwalk rises and the discussions intensify concerning the ELM project for Clarksville, Phyllis Madachy, who most recently served as director of the Howard County Department of Citizen Services and is a former director of the county’s Office on Aging, offered her insights into today’s senior living market.

“Howard County was like the Bermuda Triangle. Developers were sitting on a lot of land due to the Adequate Public Facilities Ordnance, which meant they couldn’t build in areas where schools were over enrollment,” Madachy said, “but during my last job, the county started a new ordnance to allow development that doesn’t not impact schools or roads. So there was an explosion in senior housing, not so much [in the rise of new, large places] like Vantage House,” but smaller projects, like Miller’s Grant and Snowden Overlook.

Another factor, she said, was “rapid growth” in Howard’s 60-plus population, “because people who moved here want to stay, and baby boomers moved in to be near their kids.” The third factor is the county’s attractiveness as a destination, partially due to its health care options.
“Still, we’re not seeing large facilities being built as fast as one might think,” she said, “as we did in early ’90s and again 10 years later. And there are people who feel that the market is already oversaturated.”
So given other factors, such as the popularity of universal design (“I never thought that would catch on the way it has”) and the fact that many seniors would really rather age in their own homes, Madachy likes how the market is evolving.

“Another factor is small group homes, which tend to be more affordable and are in line for subsidies,” she said. “All told, it’s good for a community to have various and affordable options.”

Q&A With UM BWMC President and CEO Karen Olscamp

By Mark R. Smith, Editor-in-Chief

As president and CEO of University of Maryland Baltimore Washington Medical Center (UM BWMC), Karen Olscamp has had a significant impact on the health of residents in Anne Arundel County. Born in Niagara Falls, N.Y., Olscamp received a Bachelor of Science degree from the University of Rochester and completed her Master of Health Services Administration at The George Washington University, Washington, D.C.
Olscamp began her career at UM BWMC in 1987, and first served as an administrative resident. She advanced to vice president of operations, then served as senior vice president and CEO for 10 years; in August of 2008, she was appointed president and CEO. During this period, the hospital saw significant growth and development. In 2009, UM BWMC completed a $117 million expansion project during which Olscamp oversaw the opening of a new, eight-story patient tower and obstetrical services unit at the medical center; it also expanded the number of operating rooms from 14 to 17, allowing for the ability to add to the complexity of surgical cases performed in neurosurgery, vascular and robotics.
UM BWMC also has received numerous quality awards under Olscamp’s leadership. In 2017, it was honored with three awards by the American Heart Association and American College of Cardiology for high quality cardiac and stroke care. UM BWMC was recognized by Healthgrades with the 2015 Patient Safety Excellence Award; this award was given to the top 10% of hospitals that were top performers for their scores related to patient safety.
In addition, UM BWMC’s Tate Cancer Center received a three-year accreditation in 2015 by the Commission on Cancer and the American College of Surgeons as an Academic Comprehensive Cancer Program (ACAD). Only 13% of all cancer programs in the nation have achieved this status; and UM BWMC’s Aiello Breast Center was accredited by the National Accreditation Program for Breast Centers.
Olscamp has held numerous roles with civic, community and professional organizations, as she currently serves on the boards of the BWI Business Partnership and the Anne Arundel County Community Partnership. She is also on the Executive Committee of the Maryland Hospital Association and is a fellow in the American College of Healthcare Executives; and she also has been involved with Leadership Anne Arundel and the Anne Arundel County Chamber of Commerce.

What are the featured services at UM BWMC?
We are a comprehensive, high-quality medical center with a broad range of services and advanced capabilities. We also offer specialized centers of excellence, such at the Tate Cancer Center, and perform advanced surgical care, including vascular and aortic surgeries, neurosurgeries and robotic surgery.

What’s new at the hospital?
In January, we opened three new state-of-the-art operating rooms, which will handle the most complex surgical cases. In response to the increased needs in our community, we also have begun expansion of our inpatient psychiatric unit from 14 to 24 beds. UM BWMC provides the only inpatient psychiatric beds in Anne Arundel County, which has a population of more than 500,000 people. Construction is underway, and we anticipate that the additional beds will be operational in 2018.

How did the 2000 merger with the University of Maryland Medical System (UMMS) strengthen UM BWMC’s place in the market?
The primary goal of joining the UMMS was to bring more comprehensive, sophisticated and high quality services directly to our community. Being part of an academic health system brings a breadth and depth of resources that are simply not achievable to the majority of independent hospitals. The UMMS provides tremendous value as a differentiator in this market.

How has the 2005 name change from North Arundel Hospital to UM BWMC benefitted the hospital?
The name change more accurately portrayed the organization that we had evolved into and our vision for the future. We wanted to embrace the larger communities we serve and emphasize our role within the UMMS. Baltimore Washington describes a broader geographic focus for the hospital and the communities where our patients live and work.

Where do most of your patients come from?
As you might expect, many of our patients come from Anne Arundel County, particularly as we are located within its most densely populated areas. For specific specialized services, however, we draw from a considerably larger geography. For example, in neurosurgery, a third of our patients come from across the state of Maryland and beyond.

What is the financial status of UM BWMC?
We just finished our fiscal year on June 30, and at this time we are projecting about a 2% operating margin, on an annual operating budget of approximately $400 million. Operating margins for the hospital industry in Maryland are relatively modest compared to other industries, largely driven by our system of reimbursement. We have a consistent track record of meeting our financial targets so that we can continue to produce sufficient working capital for the hospital to reinvest in our organization and provide high quality care.

You recently installed the co-generation energy plant. What has the effect been?
We recently installed a new cogeneration power plant that will significantly reduce emissions and cut energy costs. The new system allows us to be cleaner, greener and more efficient, while saving approximately $750,000 per year in operating costs. This helps to drive a stronger operating income, which is then used to support our mission.

How much money is in your capital fund?
A complex medical center like UM BWMC is a capital intensive organization. Providing high quality care requires sophisticated technology and up-to-date facilities, and that is not inexpensive. This year we will spend approximately $30 million on capital projects. About a third of that amount will be used for information technology; and another third will be used on construction projects to expand our inpatient psychiatric unit and renovate one of our inpatient units.

The maternity center is one of your more recent offerings. How has it benefitted the community?
The opening of the Pascal Women’s Center several years ago was a prime example of providing easier access to services to the community, and last year approximately 1,000 babies were delivered at UM BWMC. We also have, on-site, the University of Maryland Center for Advanced Fetal Care office and a Neonatal Special Care Unit.
But the service that we provide extends well beyond the care provided within the walls of the hospital. In partnership with the University of Maryland School of Medicine, physicians and midwives practice at three office locations in our service area. We also added a program called Stork’s Nest. The aim of this program is to increase the number of women receiving early and regular prenatal care in order to prevent low birth weight, premature births and infant deaths.

How have electronic health records (or EHRs) been integrated into the treatment process at UM BWMC?
That began here several years ago. The value of an EHR is that it enhances the safety and quality of care and allows for better coordination of care across multiple settings. Most recently, in May we upgraded our system to also include revenue cycle management.

How is UM BWMC addressing the opioid crisis?
We have initiated several important initiatives to meet the needs of our community, but let me just highlight a few. We have been proactive in distribution of naloxone kits. In fact, last year we distributed more than 250 kits to patients treated in our Emergency Department (ED). Beginning in August, we will be holding community educational sessions on opioid overdose awareness.
Last year, we also implemented an Opioid Overdose Survivor Outreach Services program. This program uses peer support specialists to support and facilitate access to treatment. Of the 550 patients referred, only 10% have had a return visit to our ED. Because many patients with substance abuse also are dually diagnosed with mental health disorders, we are also expanding our inpatient psychiatric unit.  In fiscal 2106, we saw more mental health patients in our ED than any other hospital ED in Maryland.
Last, but not least, to address this issue involves working collaboratively with other organizations, and we are doing just that with Anne Arundel County and other health care providers.

Might UM BWMC add more satellite offices, perhaps a location by Fort Meade?
As part of our strategic plan, we continue to add ambulatory services across our service area. We currently have about 10 off-campus locations, including a new urgent care center in Severna Park (near Robinson Road) which we opened in March. As part of the UMMS, we have 150 locations statewide, and we’ll continue to open new facilities as needs dictate.

Where do you want UM BWMC to be in five years?
To be the preferred regional medical center. Whether for a primary care physician or for the most complex medical needs, I want our community to think of BWMC and the UMMS for all of their health care needs. Our mission compels us to be integral and indispensable to the community we serve.

What’s the hardest part of your job?
There are many challenges with, and significant uncertainty in, health care today. What will happen with the Affordable Care Act? Will we see an increase in people who do not have health insurance? How will the unique Maryland hospital payment system be revised? How do we improve the health of our population?
Our response to that uncertainty is to stay focused on the fundamentals. Providng high quality care at an affordable cost is always the right strategy.

What do you consider your greatest triumph at UM BWMC?
I’m most proud of how far the organization has come, the elevation of the quality of care and the extraordinary people who work here. It is an honor and privilege to work with them.

Project SEARCH Celebrates Class of 2017

The 3rd Annual Project SEARCH Celebration honoring the Class of 2017 featured a dozen individuals who have completed internships in Howard County Government departments. Project SEARCH helps ready students with intellectual and developmental disabilities for paid employment.
The Class of 2017 includes Josh Adelegan, William Alexion, Keith Cranska, Meaghan Hyer, Chaz Kurtz, Matthew Martin-Swint, Kamau Mbugua, Zachary McKay, Colin Pierre, Becca Quintern, Joshua Sites and Julian Than.
Project SEARCH is a community partnership of Howard County Government, The Arc of Howard County, The Howard County Autism Society, the Howard County Public School System and the Maryland State Department of Education Division of Rehabilitation Services.
Barbara Moyer is Project SEARCH Howard program manager. Businesses that have hired Project SEARCH students include MOBERN Lighting, Turf Valley Resort, Little Lighthouse Childcare, Long Gate Safeway, Roger Carter Center, The Colosseum Gym, Patapsco Builders, Green Valley Marketplace, Impact Marketing, Win Kelly of Clarksville, DXL in Dobbin, Fulton Harris Teeter, Mom’s Organic Market, Rob’s Barber Shop, Shady Spring Pet Retreat, Ellicott City Giant, Jiffy Lube of Clarksville, Tino’s Italian Bistro and Zips of Scaggsville.

Sach’s Book Chronicles a Losing Campaign

There are certainly books by people who lose elections. Sarah Palin comes to mind.

You can buy Palin’s recounting of her losing bid for vice president, “Going Rogue,” for 99 cents on Amazon, or 10 times that much if you insist on getting it electronically for a tablet.

But it is virtually unheard of for a candidate who badly loses a primary for the Maryland House of Delegates to examine the campaign in as much excruciating detail as does Adam Sachs. His book, “Don’t Knock, He’s Dead: A Longshot Candidate Gets Schooled in the Unseemly Underbelly of American Campaign Politics,” came out last year. It has sat on my office floor waiting for an opportunity to write about it.

Who is Adam Gordon Sachs? That, of course, was his problem from the start. And why does he have such a negative view of campaign politics?
Sachs has put together many more words about the 10-way race for three open delegate seats in legislative District 12 than was written in all the publications and all the blogs that even mentioned the race to represent an area that stretches from West Columbia to Lansdowne and the Baltimore City line.

It is a long book, 344 pages, and I was put off by that subtitle. “Unseemly Underbelly” seemed a far stretch in the highly competitive race for three open seats, in which at least seven of the 10 candidates were as qualified as any non-incumbent could be. Adam Sachs may have been one of them.
One candidate did wind up getting prosecuted for anonymous attacks on an opponent, and there was a smidgen of negative campaigning. But it appeared, from the outside, as clean and as hard-fought a race among 10 non-incumbents as you might find.

Why Bother?

Why even write about such a book?

Besides feeling guilty for not having written about it earlier, it contains a lot of good information about the candidates, campaigning and politics, down to the nitty-gritty of fundraising, door knocking, endorsements and candidate forums. It also contains interesting references to research on why candidates run and why they win.

The many novice candidates who are popping up this year and next could learn a lot from Sachs’s detailed descriptions.

A former Sun reporter, Sachs writes well and has a keen eye for detail. He accurately describes his fellow candidates. But first you must overcome the stylistic choice that the candidates, and most other people in the book, are known by nicknames and pseudonyms, not their real names. Some of the nicknames are pejorative.

If, like me, you know all the public figures in the book, it is obvious who the characters are. Sachs changes none of their personal details.

Nicknames for Opponents

The three winning candidates, who went on to win the general election and are now seeking re-election, are Terri Hill (whom Sachs calls “Anointed One”), Clarence Lam (called “Zelig”) and Eric Ebersole (“Energy”). The others are Brian Bailey (“Man of the People”), Jay Fred Cohen (“Spare-a-Dime”), Rebecca Dongarra (“Gadfly”), Michael Gisriel (“Joker”), Renee McGuirk-Spence (“Ballerina”) and Nick Stewart (“Next-Big-Thing”).

Sachs found redeeming qualities in most of his opponents, except for Gisriel, a lobbyist who had been disbarred, moved into the district to run in the race and spent the most money, mainly his own and big checks from groups he had lobbied for.

To Sachs, Gisriel, a former delegate, represented all the things wrong with the political system, particularly the influence of money and special interests.

In fact, Sachs paints, with disdain, the strong points of his opponents, and especially the winners — their ability to get influential endorsements, to raise money, to recruit volunteers, even to knock on doors effectively.
Early in the book, Sachs said, “You’ll get a vicarious glimpse into the experience of an amateur politico trying to fit his round personality and sensibilities, and lack of political chops, into the square hole of American campaign politics.”

In many ways, Sachs resents the experience and qualities that the others bring to the campaign.

 

A Terrible Candidate

What becomes clear in the book is that Sachs is a terrible candidate: shy, filled with self-doubt and a lack of confidence. He blames the system for his personal failings and inability to raise funds.

He has run before, for County Council, getting a lot more votes in a much smaller district — and ultimately runs ninth in the House race with 757 votes, getting just 187 votes more than Cohen, who spent no money and did little (if any) campaigning. The top winners got 6,300 votes (Lam), 6,057 (Hill), and 4,427 (Ebersole).

The reason they are called campaigns is because they are like military battles, depending on resources, planning, vision, strategy and logistics. Money is important, but it not the only thing of importance.
Ebersole, who came in third, spent only $38,000, while Hill and Lam spent more than $100,000; three other candidates spent more than Ebersole, with far less effect.

For my nonprofit news website, MarylandReporter.com, I have raised more than $200,000 in individual and business contributions over the years. I don’t like fundraising, and it is not one of my best skills. However, it is a necessary fact of life.

Sachs is not only bad at fundraising, but he wants public financing to avoid it. Yet any public campaign financing scheme requires some personal fundraising to receive matching funds to show that others will support you.

Sachs views himself as highly principled, but he was a single issue candidate focused on single payer public health care. Advised that he should broaden the issues he embraces, he does little to change his message.

Door Knocking

Candidates, like Ebersole, who don’t have as much money, make up for it with door knocking and volunteers. Sachs expresses grudging admiration for how hard and effectively Lam knocked on doors, leaving personal notes and remembering personal details about voters. Sachs admits he stopped knocking at 1,307 doors. All of the winners and some of the losers, too, knocked on thousands more in a district with 39,000 registered Democrats.

All told, setting aside the snide remarks and snarky comments, Sachs provides a lot of detail about what works in a political campaigns — what the winners did, and didn’t do — basically Sachs’s ineffective campaign.
Any decision to run should probably start with an honest assessment of what it takes to win an election — however distasteful you might find them — and what you, as the candidate, are capable of doing. Running for office is neither easy nor pleasant, and that can also be true of serving as an elected representative, despite the supposed glamour.

Medinger

Dan Medinger, owner of Advertising Media Plus and a former editor of the Catholic Review newspaper, clearly made the assessment that he has what it takes to run a successful campaign. Medinger, a moderate Democrat who has been president of Ellicott City and Western Howard Democratic Club, would like to challenge Republican Del. Bob Flanagan in district 9B, the single-member swing district in the very Republican district 9 that encompasses Western Howard County.

“I have the plan, the team and the resources to flip this district from Red to Blue,” Medinger said, in announcing his run last month. “For Maryland to flourish in the 21st century, we need new people with new ideas in Annapolis.”

Medinger lost a close primary race for the District 9 Senate seat held by Republican Gail Bates, who is likely unbeatable in a district drawn by Democrats to pack in as many Republicans as possible.

Others Democrats are likely to join this race. The options are limited for other Democrats who might want to be elected to the Maryland General Assembly, like the three Democratic County Council members who must leave due to term limits. The four incumbent Democrats in District 12 filed for re-election as a team in July, and the four in District 13 did the same in June.
That sends a clear message to any Democratic challengers that they plan on coming back.

Faddis Targets Career Politicians in Senate Run

Sam Faddis said he led the first CIA team into Iraq nine months before the U.S. invaded that country in 2003, so the Davidsonville resident is used to operating in hostile territory under one-party rule.

“I think we are in trouble as a country,” said Faddis, explaining why he’s running for U.S. Senate. “We are being led to ruin by a class of professional politicians,” and that includes people of both parties. “We have too many career politicians.”

That class especially includes Maryland’s senior U.S. senator, Ben Cardin, whom Republican Faddis describes as “the poster child of what we’re talking about. He’s never done anything else.”

First elected to the House of Delegates at the age of 23, Cardin has spent 50 years in elected office — 20 years in Annapolis, including the final eight years as speaker of the House; 20 years in the U.S. House of Representatives; and now finishing his second term as senator.
Cardin, 73, has not officially announced his re-election plans, but he has been raising money aggressively and maintaining a full schedule of public appearances around the state, in addition to his Washington duties.

“I’m presuming he’s going to run,” said Faddis. And he’s checked with other Republicans who have run for Senate in the past, such as Del. Kathy Szeliga, and they are not running. Richard Douglas, a Bladensburg attorney who has run twice for Senate, has endorsed Faddis, saying, “Imagine a competent, engaged and well-informed U.S. senator more concerned about serving Maryland than raising cash for his Senate cronies.”

That’s a backhand slap at the state’s new U.S. Senator, Chris Van Hollen, a freshman who heads the Senate Democrats campaign committee, a role similar to one he had in the U.S. House of Representatives. Van Hollen was first elected to the House of Delegates in 1990.

Security Background

Faddis’s entire background is in national security, first as an Army lawyer, then the CIA, and now as a Homeland Security consultant who occasionally appears as one of those talking-head experts on cable news. He has also written two books: “Beyond Repair: The Decline And Fall Of The CIA” and “Willful Neglect: The Dangerous Illusion Of Homeland Security.”

But Faddis is running on what he calls “kitchen table issues,” including jobs, trade, economic growth and personal standards of living.
“The economic situation is not good,” Faddis said. “For several years now, we’ve had declining life expectancy,” due to what he called “deaths from despair” that resulted from alcoholism and opioid abuse, as many people lost hope about their future prospects.

“I think President Trump has tapped into something very real and very troubling,” the hollowing out of the middle class, their incomes and jobs.
“The government does not create jobs,” but it does create or undermine the conditions for job growth through taxes, regulations and trade policy.
“I’m for fair trade, not free trade,” Faddis said. He supports renegotiation of NAFTA (the North American Free Trade Agreement), as Trump said he plans to do, and revamping other trade deals that have led to loss of jobs in the U.S.

“These are not particularly good deals for the workers in foreign countries” or the U.S. “Somebody’s getting rich, but it’s not the workers in either country.”

Heroin From Mexico

Related to the epidemic of opioid overdoses, “we need to take control of our southern border,” he said. “Virtually all [of the heroin] comes from Mexico. It’s fueling the violence in Baltimore and the destruction of local neighborhoods.

“This is a question of national resolve,” Faddis said. “It comes down to political will.”

As his book titles suggest, he’s not a big fan of U.S. foreign policy and how the war on terrorism is being fought.

“I don’t see an end in sight” on the fight against terrorism, he said, but “we need to regain our focus on American national interests.”

“I have a son who almost died in Helmand province” in Afghanistan, as a marine fighting there. After the Taliban and al-Qaeda were eliminated after several months, the U.S. focused on nation building that has not gone as well.

“Before you commit military force, you have to identify our national interest,” the candidate said. “You define victory before you start the war.”

Not enough members of Congress have children fighting our overseas wars, Faddis said. They are not feeling the pain of permanent war the way military families are.

He said the Affordable Care Act “is imploding, so the status quo is not an option. You have to find a way to end this spiral of out-of-control health costs” and “taking this back in the direction of the free market.”
When it comes to defeating Cardin, Faddis said, “Donald Trump tapped into some things that are very real,” as did Vermont Sen. Bernie Sanders on the left. “There’s a lot of anger; there’s a lot of discontent.”
He hopes that will translate into discontent with a politician who has won 17 general elections in a row. “There has to be something more important than getting re-elected next time,” Faddis said.

McMillan-George

Getting re-elected next time is what the Republican establishment hopes Del. Herb McMillan will focus on — and not running for the state Senate in District 30 against former delegate Ron George, who has been endorsed by County Executive Steve Schuh and other elected Republicans. In the 2014 election, McMillan got 195 more votes than House Speaker Mike Busch, despite a redistricting that took away some of McMillan’s best precincts.

McMillan, a maverick legislator not considered a team player by many fellow Republicans, had a poll done pitting him against George. It included negative statements about George that pushed voters toward supporting McMillan.

But Republican Party officials think George has a good shot at capturing the seat, especially if Democratic Sen. John Astle wins the race for mayor of Annapolis, and they want McMillan to hold onto his delegate seat.
Republican Dr. Mark Plaster, who got only 34% of the vote running against Rep. John Sarbanes last year, is also running for delegate in the Annapolis-area district in 2018. Speaker Busch filed for reelection May 19, prior to his unexpected liver transplant June 1, partly to quell the rumors and speculation about his health. He is now recovering at home, and pledging to return as speaker.

 

Dog Bites Kipke

“Dog bites man” is not typically news, but it is when an unleashed pit bull took a bite of House Minority Leader Nic Kipke’s right arm. The dog bite sent him to the hospital for stitches, and his poodle Tucker got chewed up, too.

Republican Anne Arundel County Councilmember John Grasso is term limited, but is running for something next year. First he was running for state Senate in District 32, represented by Democrat Ed DeGrange for the past 19 years. Grasso is now saying he may run for county executive or even governor, two offices already held by Republicans.

I ran into Astle on Bladen Street, near the State House, after he had spent the afternoon door knocking. He shared an interesting factoid that may give him the edge in a Democratic primary, when he faces restaurateur Gavin Buckley. Astle, who is 74, said 78% of Democratic voters in the capital city are older than 60.
And, of course, seniors vote. And many of them look like him.

Howard Council Considers Special Taxing District for Laurel TOD

The Stronach Group, owner of Laurel Park racetrack, has requested the creation of a special taxing district for approximately 64 acres of adjoining land that it intends to sell off to a developer by the end of the calendar year.

The measure is required ahead of any tax increment financing (TIF) deal with the county that would divert future taxes into a special fund to enable the construction of two parking garages and improvements to upgrade a MARC commuter platform on the property. The stop, which serves the Camden Line, would elevate from a flag stop to a limited service station with three morning and three afternoon stops.
The measure would also enable the county to issue bonds to help finance public infrastructure improvements, such as roads, sidewalk and stormwater management systems.

At a July public hearing before the Howard County Council, Stronach’s Development Manager Jeff Hayes said the owner views the project as a regional development to serve the entire district, and has worked with the county on a land transfer and design of a cost-sharing storm drain overflow system through its property to benefit other property owners in the area.

The TIF is stipulated as part of a proposed Transit-Oriented Development (TOD), which received zoning approval from the council in 2004.

As currently planned, Laurel Park Station would deliver a total of six parking garages, 1,000 residential units, 650,000 square feet of office space and 127,000 square feet of retail, with housing built in four phases.
According to Howard County Director of Planning and Zoning Val Lazdins, housing units specified on a sketch plan approved in 2010 include a mix of apartments, condominiums and townhouses.

Local Pushback

At the council’s July work session, county bond counsel Lindsey Rader of the Baltimore-based Funk & Bolton law firm said the resolution is necessary to protect the county and the public.

“From a disclosure standpoint we think it’s important that potential property owners are put on notice to the fact that their properties may in the future be subject to special taxes,” she said. “That is all this resolution does at this time, it does not approve anything related to a TIF, TIF bonds or special taxing district bonds.”

At its July public hearing, the council heard opposition to the actual project from local residents, as well as the Savage Community Association and the Howard County Citizens Association.
“One thousand units is especially dense for that area, especially considering our public transit system,” said Christiana Rigby, of Columbia. “Our connections to the region need significant investment prior to additional residential units [in this area].”

Councilwoman Jen Terrasa (D-Dist. 3) said she was surprised to hear some local residents register opposition to the MARC station upgrade.
Howard County Deputy Director of Finance Rafiu Ighile said the project is anticipated to be constructed over four possible phases beginning in 2018, with completion expected in 2025.

“This is a 64-acre parking lot, so the tax base and tax assessment is incredibly low,” said Aaron Greenfield, an attorney for the Stronach Group.

The project could move forward without the special taxing district or the TIF, “but we would be looking at redesigning the orientation of the project,” said Hayes.

Education Leadership

On July 18, Howard County Public School System (HCPSS) Interim Superintendent Michael Martirano announced new additions to his leadership team effective Aug. 3.

Rafiu Ighile was appointed chief business and technology officer, overseeing all financial and technology operations, and ensuring responsible stewardship of school system resources.

Frank Eastham was named chief school management and instructional leadership officer, overseeing a vertical educational delivery model that encompasses preschool through Grade 12, and William Barnes was named chief academic officer, overseeing shared accountability, curriculum and instruction, special education and student services. Barnes is currently director of secondary and Pre-K–12 curricular programs, while Eastham currently serves as executive director of school administration and Improvement.

Jahantab Siddiqui, currently deputy chief of staff for the Howard County executive, was appointed chief communication, community/workforce engagement officer, overseeing communications, workforce engagement and partner engagement.

Also in July, Martirano joined Howard County Executive Allan Kittleman (R) and County Councilmember Mary Kay Sigaty (D-Dist. 4) to announce the Launch Into Learning initiative at a meeting of the Howard County Early Childhood Advisory Council.

Encompassing resources and support from various agencies and programs available to all Howard County families with children from birth to age 8, Launch Into Learning connects parents, caregivers, education and child care programs, businesses and county agencies, and also serves as a community hub to access information about early learning.

Inconvenient Incumbents and Other Interesting Implications

Grant Thornton, an independent audit, tax and advisory firm, recently published the 2016 Government Contractor Survey. It includes analyses of data sets, including incumbent win rates, overall pricing strategies, labor rates and other cost accounting practices, contracting strategies, government regulations and revisions in policies. It also touches on other issues affecting profitability in the federal government marketplace.
Bill Johnston, Grant Thornton’s national government contracting industry practice leader, authored the report along with Rich LaFleur, audit partner.

A number of notable trends stated in the report include an overall profits increase, diversification into non-federal markets, decreases in recompetes and new proposal win-rates, and adjustments in current pricing strategies.

Respondents reported a surge in higher profit rates (before taxes and interest), with approximately 56% of respondents identifying profits greater than 6%; many said that this could be a result of a larger mix of non-federal projects with higher profit margins and cost-saving initiatives being driven by uncertainties in federal funding.
On that note, many federal contractors are diversifying into other market segments, such as state and local government, commercial and international markets.

Data Reveals

Participating firms reported the following revenue percentages by specific markets: 30% non-DOD federal government; 24% federal government DOD; 13% state and local government; 21% commercial and 12% international.

As relates to Indefinite Delivery-Indefinite Quantity (IDIQ) contracts, 51% of companies saw an increase in revenues, 16% a decrease and 33% no change. This is a telling statistic, as the growth of IDIQs across civilian and defense agencies have had other impacts on businesses of all sizes.
The study further states: “The 2016 survey indicated decreases both in new proposal win percentages and incumbent follow-on win percentages. This gives a strong indication that competition is increasing, and possibly driving down, pricing and profit percentages on federal contracts. Companies should be looking at their current pricing techniques to determine if adjustments are necessary to win greater percentages of proposals.”

The data in 2015 reflected a 35% proposal win rate, with a decline to 26% in 2016, which was the lowest win rate since the survey began in 2010. Incumbent contractor win rate was 75% in 2015, with a dramatic drop to 54% in 2016. While incumbents still have an advantage on new bidders in some contracts, the market has opened to those companies who want to directly compete with incumbents.

Those companies that formed joint ventures or other special units, such as limited liability partnerships, often for the purpose of improving pricing structure competitiveness, also saw a decline in win rate. It dropped from a high of 64% in 2015 to 36% in 2016.

Still Solid

LaFleur said in an interview with Federal News Radio that, “Given the respective amount of profitability, 66% say they are growing. This will continue to be a strong and stable industry. What will be interesting is how the change in the White House and any additional spending on infrastructure and so forth will impact the survey in the future.”
Interpreting these results is complicated and many factors are involved, including more sophisticated contractors, lower federal budgets demanding tight pricing models, larger IDIQ contracts, lowest-price technically acceptable (or LPTA) contract types and demanding negotiation processes from the contracting officers and the Defense Contract Audit Agency (or DCAA).

As federal contractors move forward to accelerate growth and profitability, one must plan effectively to proactively address these and the issues discussed in this report. For the full Grant Thornton 2016 Government Contractor Survey, use the shorted url at https://tinyurl.com/y8agxhft or visit www.grantthornton.com/~/media/content-page-files/public-sector/pdfs/surveys/2017/government-cntractors-survey-view-online.ashx.

Gloria Larkin is founder and CEO of TargetGov and a national expert in business development in the government markets. Email glorialarkin@targetgov.com, visit www.targetgov.com or call 866-579-1346 for more information.

‘We Can Do It the Hard Way or We Can Do It the Harder Way’

 

When asked how she got into family law, Linda Ostovitz said: “It found me, instead of me finding it.”

After serving as the first victim witness coordinator in Howard County’s State’s Attorney’s Office from 1979–81, she became a senior assistant state’s attorney upon her graduation from the University of Baltimore law school.

In 1988 she left the State’s Attorney’s Office and went into private practice, handling criminal defense and other civil matters. Soon, she found she was developing a caseload that involved a lot of family law work, and in 1999, her firm made the decision to do family law exclusively. “That’s been the case [for me] ever since,” said Ostovitz, now a principal at Offit Kurman, in its Maple Lawn office, which she joined in 2015.

Ostovitz, who has a reputation for being direct, is also the kind of person people turn to for help, both professionally and personally. “I advocate for things being done the right way,” she said. “I advocate for the resources in Howard County to get to those who need them.”

She can readily name the characteristics — in herself and others — that mean a lot to her: “I have high standards. I put my family and my friends first, and also [value] loyalty and responsible ownership of what you do.”
She tries to work efficiently because, especially in family law, she said, “Cost is not just money; it’s emotional as well.”

As a Baby Prosecutor

Ostovitz enjoys being a mentor, defining it as sharing her experience with those who aren’t as experienced.

She had a mentor to whom she gives a lot of credit and a lot of thanks: noted criminal defense lawyer Alan Goldstein, who died in 1991 from cancer at age 48.

“I was a baby prosecutor, and I was in district court one day when it seemed like the Red Sea parted, and this man walked up with a big pile of papers and said, ‘Hi, I’m Alan Goldstein, and I’m filing these motions today.’”

They agreed to postpone the case so Ostovitz could do her research and respond to the issues. “He taught me that this is not personal. It does not need to be personal, nor should it be between attorneys. He also taught me how to think at a very high academic level.”

Ostovitz remains thankful that, at a young age, she learned those important lessons: Be professional, and remember that it’s not personal. “I’ve been doing this for 36 years, and you can be the strongest advocate for your client without losing objectivity by making it personal with the other side.”

Life at Offit Kurman

After leading her own firm for so many years, has Ostovitz adjusted to life in a larger firm? “I love not being the owner anymore,” she confessed, adding that her partners at Offit Kurman, collectively, have a tremendous amount of depth.

The firm has grown to 140 attorneys, from New York City to Virginia, with plans to have 200 attorneys by 2020.

“We have practice areas that are so expansive. No matter why my client is here, if they have a need, I can direct them. The family law cases we do are complex, and they involve a lot of issues that require the expertise that we have here.”

What’s the most important observation Ostovitz makes when she’s helping someone file for divorce? “The individual parties are in different places at different times,” she said. “One may be ready to move on and resolve things, but the other party may be hurt, angry, mourning or in denial.”

While mediation is a good tool, someone who’s reeling emotionally may not be ready for that. In reality, divorce is a hard process, whether you mediate or litigate. In Ostovitz’s words: “We can do it the hard way or we can do it the harder way.”

 

The Most Important Advice

If Linda Ostovitz can help someone live a happier, fuller life, she will. She keeps moving, with the mantra of helping people be their best, and sometimes that means helping them go their separate ways.

Several months ago, instead of saying, “Have a good day,” a friend said to Ostovitz: “Go save somebody today.”

She hadn’t thought of it that way before. “He said that I’m saving people from whatever bad situation they’re in.”

Ostovitz is, by all measures, an accomplished businessperson and community leader. She’s co-president of the Business Women’s Network of Howard County (after serving as president for two years previously). She’s on the board of the Howard County Chamber of Commerce, vice president of the Columbia Patuxent Rotary Club and a graduate of Leadership Howard County, for which she co-chairs its Business Day.
When asked about her work as a volunteer for Gilchrist Hospice, she delivers her most important advice yet. “I was fortunate enough to have the kind of marriage people dream about,” she said. “I had a wonderful and fabulous life — and I lost him four years ago.”

Jim Ostovitz died from cancer in July 2013. “We were not officially in hospice,” Linda Ostovitz said, “but Gilchrist Hospice took care of me after I lost him.”

She said she’d had a full and wonderful life with her husband. But they didn’t get to retire together.

“My mantra to people: You don’t know what tomorrow is going to bring. Don’t put your life off until some day in the future.”

As time goes by, coping with the loss doesn’t get easier, but it changes, she said. “It’s shades of bad: the permanence of it.”

But Ostovitz, with signature directness, has turned the grieving process on its head. “My life was so good with Jim that I would love to go home at the end of the day and be with him. Now, I’m out in the evenings, at events for my community.”
She’s out giving hope to other people, and perhaps herself, as well. “I do know there’s a lot of good that can be done out there.”

Three’s [Good for the] Company on Corporate Boards

An analysis of U.S. companies over a five-year period (2011–2016) by MSCI, an independent provider of research-driven insights and tools for institutional investors, revealed that the presence of three or more women on a corporate board of directors represents what seems to be a “tipping point” in terms of the effect on the company

’s financial performance.
According to MSCI, “companies that began the period studied with at least three women on the board experienced median gains in Return on Equity (ROE) of 10 percentage points and Earnings Per Share (EPS) of 37%. In contrast, companies that began the period with no female directors experienced median changes of -1 percentage point in ROE and -8% in EPS over the study period.”

The company compared the five-year EPS and ROE performances of companies that it grouped into four categories: 1) those that had three women on the board in 2011; 2) those that had zero women on the board in 2011; 3) those that added any number of women between 2011–2016; and 4) those that lost any number of women between 2011–2016.
Category 3 companies, those that added any number of women during the period studied, experienced median gains in EPS of 22%; and Category 4 companies, that began the period with women on their board but lost any number of them, experienced median gains in EPS of 11%.
Category 1 was the only category in which the companies experienced a greater than 1% median change in ROE.

Linda-Eling Lee, global head of ESG Research at MSCI, surmised that “such superior performance from companies with at least three female board members may derive from better decision-making by a more diverse group of directors, as some studies hypothesize. But outperformance may also be tied to greater gender diversity among senior leadership and the rest of the workforce, which has been correlated with reduced turnover and higher employee engagement.
“Globally, we [have] found that large multinational companies that had a critical mass of female directors tended to have more gender-diverse leadership teams and were more likely to have a female CEO. We also found that such companies were more effectively tapping available female talent supplies throughout the organization. Thus, the presence of at least three women directors may be seen as a doubly positive indicator: of a better-performing company and of a more functional organization overall. In short, having more women directors may lead to a virtuous cycle.”

It is important to note that a direct causal relationship between number of women on a corporate board and increased profitability was not established and other factors most certainly must come into play.

Ethical Leaders and Employee Complaints

Every year, Better Business Bureau (BBB) solicits applications for its Torch Awards for Ethics. This year, we received more than 80 initial entries. The award application seeks to examine the way business leaders strive for excellence, manage employees, treat customers and engage with their communities. Winners will be announced at our Centennial Celebration on Sept. 19.

In order to be a contender, and a good leader, it’s important for the leadership team “to work consistently to ensure clarity of purposes and an adherence to clear convictions that motivate and unite stakeholders.”
But just as every business receives customer complaints, every business with more than one employee will eventually receive employee complaints. Frequent, clear and two-way, communication will often alleviate a problem before it becomes a complaint.

However, BBB offers a few tips for handling the inevitable — but hopefully infrequent — employee complaint.

Listen carefully. If an employee is angry or upset, allow him or her to vent without interrupting. Stopping the employee mid-story to offer a solution or to contradict facts will likely only escalate the situation. Limit your responses to short confirmations that you’re still listening (such as “Uh-huh” and “I understand”) or verifications of the facts (“So, you put in a time off request on Monday?”).

Withhold judgment. Avoid confrontational language like “calm down” or “that’s not possible.” Hear the entire complaint and, if necessary, conduct your own investigation before deciding what action to take.

Document the meeting. If possible, have another supervisor or human resources representative present. Take notes about the employee’s complaint and what solutions you offered. Confirm the details with the employee to ensure you are both on the same page.

Ask questions. Ask for specific dates of the occurrence(s), whether or not the employee has complained to others in the chain of command and, if so, ask for details about those conversations. Make sure you know all details.

Identify the issue. Not all complaints should be taken at face value. The employee may complain about his hours, but is really upset that he isn’t being heard. If the underlying issue involves discrimination or harassment, that opens you up to additional legal concerns. You may want to consult an attorney about your next course of action.
Collaborate on a solution. Ask the employee how s/he would like to resolve the issue. If you are unwilling to meet those conditions, don’t say “no” or “I can’t.” Propose your own solution and stick to positive language, e.g. “Here’s what I can do …”

Stay out of harm’s way. If the employee gets confrontational or makes threats, walk away. If the situation warrants, have the employee escorted out or call the police. Document the threat and your reaction to it.

Angie Barnett is president and CEO of the Better Business Bureau of Greater Maryland. She can be contacted at 410-347-3981 and abarnett@greatermd.bbb.org.

All Things Google

So, was there anything happening last month that didn’t involve Google?
Oh yeah, there is that …

One of the first items was the announcement that “sometime this year,” Google will stop scanning your emails so it can target advertising. Anyone who has observed the ads coming in when they use Gmail has to know that’s what it’s been doing, and a lot of people were unhappy about that, to put it mildly. We know it looks at what we search and targets ads that way, but scanning inside emails always seemed just a little too Big Brother-ish.

And what about the emails coming from friends who used another service? They never clicked the never-read “terms of service” from Google — and, thus, agreed to be scanned.

The fact that Google ignored privacy advocates’ objections to this issue for more than 13 years shows what really motivated the change, which was the objections of corporate customers. Google is pushing an expansion into corporate enterprise with Google Cloud-Internet services that companies pay for.

Corporations do not want their emails scanned, and in fact Google had deliberately stopped doing that for corporate accounts (or so it said). Companies particularly do not like ads popping up on employees’ workstations, which distract them. The expansion of this policy to individual accounts was “to foster consistency,” but it was most likely motivated by sales reports of companies finding the scanning creepy and resisting signing up, despite reassurances that corporate accounts were immune.

Google is still going to serve up lots of ads to individual customers. After all, ad revenue is still its major income source. It will just get its hints from what you search on, or view, via YouTube (yes, it owns that service, too). So, it’s far from private.

If you want to avoid some of that, you can use another search engine, like Bing (just shoot me) or particularly one like DuckDuckGo, which emphasizes that it does not track you. But the phrase “let me Google that” did not come about by chance; we’re all dependent on its quick — and usually correct — results.

Then the EU

The other big story is the record $2.7 billion fine levied by the European Union’s (EU) anti-trust regulators concerning Google’s habit of pushing its own shopping sites up to the top of search results when people go looking for products or services. Google has 90 days to change its ways or face an additional fine of about $12 million per day. Brutal.

The European Competition Commissioner said, “What Google has done is illegal under EU anti-trust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

The investigation started seven years ago and followed years of complaints from rivals, such as Yelp, that Google used its dominance (roughly 90% of searches are done with Google) to guide users and thus control the markets.

Google, of course, is considering an appeal. What else could it do? Even for rich Google, this is not trivial.

That’s Not All

One of the reasons Google may appeal is to try to head off a potentially bigger disaster in another EU investigation into whether Google’s Android operating system is a monopoly for smartphone systems.
So if Android is open-source, anyone can use or modify it to his liking — including phone makers who want to use it.

Then why is Google being accused of monopolizing the market? Well, again, it is used by 90% of non-Apple phones. Microsoft and others hold miniscule slices of the phone system market. The biggest complaint, however, is how it is bundled. Sure the operating system is free, but manufacturers who want to use it must agree to certain conditions, such as installing Chrome as the default browser.

They must also use Google Search as the default search engine. And Google has offered financial incentives to manufacturers not to install other searches. And manufacturers must agree to Google’s rules to be able to use/bundle other applications, such as the Play Store, Google Maps or Gmail.

Without those apps, especially the Play Store, it is relatively useless. So abide by its rules or be inferior. The EU doesn’t like that.

The Crystal Ball

What probably will happen is that the EU will require Google to release users/installers from these kind of restrictions, allowing them to choose independently. The question is whether that will really change anything. After all, Chrome is an enormously popular browser; I highly recommend it over Microsoft’s offerings for security and speed, particularly the latter.
And Google will make tons of money with ads on YouTube, which is the darling of middle-schoolers everywhere (for hours at a time). In any case, it is interesting to watch the Europeans take on companies that have been, and probably will continue to be, immune from investigations about monopoly accusations here in the U.S.
Someone has to do it.

Cliff Feldwick is owner of Riverside Computing and does PC troubleshooting, network setups and data retrieval for small businesses — when not trying to say something besides “Let me Google that.” He can be reached at 410-9880-0171 or at cliff@feldwick.com. Older columns are available online at http://feldwick.com.

Laurel Mayor, Police Department Host Iraqi Delegation

The City of Laurel and the Laurel Police Department served as host on July 27 to a delegation from Iraq touring the United States to learn about community policing. The event was part of the U.S. State Department’s International Visitor Leadership Program.

The delegation’s objective during its three-week visit to the United States was to explore community policing and examine the critical role of transparency and accountability in law enforcement.

“Police departments function better when officers interact with people every day,” Mayor Craig Moe told the group. “That trust has to be there.”
Laurel Police Chief Richard McLaughlin told the visitors that community policing is paramount to successful resolutions of many community issues. “We work very had to be transparent,” he said. “It’s very important that those relationships are maintained.

The delegation members, many from Iraq’s Ministry of the Interior, were interested in learning about resources; cooperation between federal, state and local agencies; and how to get officers to buy into community policing. In the words of Cpl. Joseph Johnson, the unofficial ambassador of Laurel’s community policing effort, “Officers have to be approachable. That’s why I like patrolling on a bike or Segway, rather than encased in a steel patrol car. My message, especially to the youngsters who flag me down to talk, is there’s more to being a police officer than just arresting people.”

City Councilman Fred Smalls helped facilitate the visit, the fifth such event Laurel has hosted in the past four years. Delegations from Estonia, Egypt, Colombia and Palestine have also visited Laurel as part of the program.

See photo in All Around Town on page 35.

From the Desk of CA President Milton Matthews

There is another story about the revitalization going on in Columbia, one that is gaining momentum but has received far less attention than redevelopment in the downtown area and in the village centers.
Columbia Gateway Business Park has, for decades, been the typical suburban office park, with some industrial space, but predominantly office product. This aging concept is now being revisited throughout the country, including here in Columbia in an initiative put forth by the Howard County government and the Howard County Economic Development Authority (HCEDA).

Efforts will focus on repositioning Gateway into an Innovation District, making it more attractive for companies that are seeking, first and foremost, to have their offices in locations that will help them retain current workforce and recruit prospective new employees.

Columbia (and Howard County) is already an ideal location. It’s close to Baltimore, Washington, D.C., and Fort Meade, with a highly-rated school system and numerous other exceptional quality of life features, which led to it being named the No. 1 small city to live in in the United States.

Gateway is located in the northeast quadrant of the community, with easy access to Interstate 95 and other major highways and thoroughfares.
But companies seeking office space and their employees want more than regional access. They want an environment that is walkable and bikeable, and where there are entertainment and dining options nearby.

In the short term, the HCEDA’s plan is to create a sense of community for employees in Gateway — an active social life outside of work — with networking and educational events, and possibly social sports such as running groups and other options. On that note, food trucks, which are experiencing a boom in popularity around the country, are stationed at the business park at lunchtime twice a week.

Howard County’s new innovation center in Gateway, with its goal of becoming a world-class space to drive small business ownership, entrepreneurship and innovation, recently welcomed three companies from neighboring Anne Arundel County; eventually, there are plans to bring the Maryland Center for Entrepreneurship and the Howard County Tech Council to the center, as well.

Long-term, the goal is to redevelop the 920 acres that presently compose Gateway and the Gateway Commerce Center, which are home to 8.1 million square feet of buildings, with more density and a more compact feel; one that is less sprawling and more connected. Right now, the model in place puts the property at a disadvantage. We want the Gateway area to be relevant for the future, just like Columbia Association (CA) wants the nine village centers, Downtown Columbia and the community’s other retail centers to succeed.

CA is one of the larger landowners in the Gateway area. We will be working with the Howard County government, HCEDA and other landowners as the vision for Gateway is developed. Working within the parameters of CA’s mission as a community services provider, we believe we can be a contributor to this multi-year effort, resulting in the repositioning of the Gateway area as a thriving Innovation District.
I have often referred to Columbia as being a community of choice. That applies for the business world as well. We want companies located in or looking at locating in Howard County to have competitive choices. These plans will help ensure that Gateway is among them.

E-mail milton.matthews@columbiaassociation.org with questions/comments.

Central Maryland Chamber

CMC Welcomes Four Dozen New Members
The Central Maryland Chamber of Commerce (CMC) has recently welcomed almost 50 new members. They include Alexan Concorde; American K-9; Arundel Federal Savings Bank; B&R Construction Services; Better Homes & Gardens Real Estate; J .Melvin Group; Caliber Collision; Cambria Hotel & Suites/College Park; CarePatrol; CMIT Solutions of Columbia; Copy Cat; Council, Baradel, Kosmerl & Nolan; Hawkins Insurance Services; Davis & Davis; Dimensions Health Care System; Edible Arrangements #1660; and Epoch Inc.
Family Services; The Hotel at the University of Maryland; Howard Tech Advisors; In His Hands Massage Therapy; Kernel Associates; The Law Office of Steven J. Lewicky; Liberty Mutual Insurance; Mediabilities; Mr. Handyman of Anne Arundel & Northeast Prince George’s; New Penn Financial; Odenton Family Dentistry; Offit Kurman; On the Move Marketing; Precision Background Screening; Pridestaff; Prince George’s County Economic Development Corp.; and Promotionalogix Marketing Company.
Rebuilding Together Anne Arundel County; Renaud Consulting; Savvy Admin; Shaffer Ingenuity; Sharp Energy; Steve Oliff-Coldwell Banker Residential Brokerage-Crofton/Odenton; Success In Style; TeamLogic IT of Ellicott City & BWI; The Arundel; The Bob & Ronna Group; Wabanna Camp & Retreat Center; Wellness by Shari; and ZIPS Dry Cleaners-Harbor East.

Power Connections Breakfast
If you thinking everyone is on vacation in August, think again. The CMC Power Connections Breakfast on Aug. 16, joined by 11 other organizations, is expected to sell out. About 250 attendees will gather for speed networking and a chance to hear Kelly Schulz, secretary of Maryland Department of Labor, Licensing & Regulation, address the crowd.
The event will be sponsored by Washington Suburban Sanitary Commission and Southern Management Corp. For more information, visit www.centralmarylandchamber.org/events.

How to Benefit From Attending the Breakfast
• Bring 100-plus business cards
• Bring copies of your company brochure or flyer to display on the main event literature table.
• Bring a door prize. Your prize and company will be announced from the podium, giving you event-wide recognition.
• Perfect your 60-second commercial in preparation for the five rounds of speed networking.
If you need help, contact Nancy LaJoice, CMC membership director, at 410-672-3422, ext. 4.
• While meeting each person is fresh in your mind, code the business cards you’ve collected to make your follow-up easier.
For example, try a 1–4 system: 1 = follow up within 24 hours; 2 = follow up within a week; 3 = add to a quarterly mailing or e-news list. 4 = discard (you can’t be all things to all people).

Upcoming CMC Opportunities
• Tuesday, Aug. 8: Bowling Fun Networking Mixer
• Wednesday, Aug. 16: Power Connections Breakfast
• Thursday, Aug. 17: Membership 101
• Friday, Aug. 18: In His Hands Massage Therapy Ribbon-Cutting
• Thursday, Sept. 28: Tour & Taste
• Monday, Oct. 30: Economic Forecast Luncheon

Howard County Chamber of Commerce

Big Changes to Come

Just as Howard County kids are heading back to school this September, the Howard County Chamber of Commerce (HCCC) will be starting a brand new chapter, in a new space and with a whole new look.

HCCC staff will be laboring before and after Labor Day weekend as we pack up and lock the doors to our offices at 5560 Sterrett Place for the last time. But come Sept. 5, we’ll be opening another door to our new offices at 6240 Old Dobbin Lane. The space puts us in a more central location with easy access to the area’s major highways and in close proximity to Columbia Gateway Business Park, Howard County’s largest business center. Stay tuned for details about an Open House this fall.
The chamber is also nearing the end of an exciting rebranding process. We will have a new logo and a whole new style to reveal as we move into our new offices. We can’t wait for everyone to take a peek at the new HCCC and how all of these changes put us in the best possible position to continue to help Howard County’s business community prosper.

Three Big Events

As if new offices and a new look weren’t enough excitement, HCCC staff members are also hard at work making sure our State of the School System Address with Interim Superintendent Michael Martirano on Sept. 14 and our Signature Event on Oct. 6 run smoothly.

The Elected Officials Meet & Greet will be held at new member La Palapa Grill & Cantina on Main Street in Ellicott City. It’s a great opportunity to rub elbows with local politicians, who want to hear your ideas on building a better place to live, work and play.

Our September Member Luncheon will focus on the Howard County Public School System. We are pleased that Martirano will be speaking. He has been a great collaborator already with the HCCC, and we look forward to hearing from him at the event.

Then in early October, just as the temperatures start to drop, we hope you will join the chamber at Turf Valley for A Night of Illusion. We recently revealed that our Signature Event on Oct. 6 will feature Illusionist Jason Bishop. From his breathtaking Double Levitation to his cutting edge plasma illusions, Bishop’s show will leave you breathless.

10 Summer Wines You Might Not Have Tried, But Should

This time around, instead of talking about a specific type of wine or wine region, I am taking you on a trip around the world to explore some wines and grape varieties that may or may not be familiar but are perfect for warm weather sipping.

2016 Les Costieres de Pomerols, H. B. Picpoul de Pinet: Languedoc-Roussillon, France. This wine is made from 100% Picpoul, a local grape from the sun-drenched hillsides of the Mediterranean coastal region. It is the perfect easy-drinking summer wine, with loads of citrus and melon fruit aromas and flavors. The zippy acidity and fresh, clean finish make this the ideal pair with oysters and shellfish, as well as grilled fish and seafood bisque. It’s a bargain at $10.

2015 Herència Altés, Garnatxa Blanca: Terra Alta, Spain. Wines from this remote region of northeastern Spain are gaining a reputation for quality and value. Made from the indigenous Garnatxa Blanca grape, this wine was aged for two months on its lees, adding texture and complexity to its aromas and flavors of peach and citrus, with floral notes and a hint of white pepper. It is fresh and clean but rounded and great with gazpacho, olives and grilled shrimp. Priced at about $12.

2015 Préselő, Tokaji Furmint: Tokaji, Hungary. Furmint is one of the grape varieties used to make one of the world’s great sweet dessert wines, Tokaji Aszú. Here Furmint is used to make this elegant and crisp dry white wine. Most of the juice was fermented in stainless steel, with the remainder fermented and aged in barrel. Intense aromas and flavors of peach, pear, citrus and a hint of salinity lead to the long, clean finish. Serve with grilled fish, chicken and vegetables. Priced in the mid-teens.
2016 Mayu, Pedro Ximenez: Elqui Valley, Chile. Pedro Ximenez, or PX, is the grape usually seen in Spain’s sweet dessert wine of the same name. This single vineyard, old vine, dry PX comes from one of Chile’s highest altitude vineyards. The wine offers up floral aromas with notes of stone fruit and citrus. The palate is balanced with crisp acidity and minerality. Great with shellfish and grilled seafood. Priced in the mid-teens.

2016 Tiefenbrunner, Pinot Bianco: Süditrol-Alto Adige, Italy. Made from 100% Pinot Bianco (also called Weisburgunder), this white wine from northern Italy is aged for four months on the lees in steel tanks. The nose is fruity, with apple and tropical fruit aromas. The taste is elegant, crisp and fresh with a long, smooth finish. Perfect when paired with sushi, linguine with clam sauce and pasta primavera. Priced in the mid-teens.
2016 Hugl Weine, Zweigelt Rosé: Niederösterreich, Austria. Zweigelt was created in 1922, when Fritz Zweigelt crossed the two grape varieties St. Laurent and Blaufränkisch. It is now the most widely planted red grape in Austria. This medium-bodied Rosé is loaded with fruity aromas and flavors of red cherry and strawberry with a hint of cinnamon. The perfect picnic wine, it pairs well with fried chicken and summer salads. Also great with grilled shrimp and will cool the heat of spicy foods. A value at $10.

2016 Elisabeth & Francois Jourdan, Aramon Vieilles Vignes Rosé: Languedoc-Roussillon, France. The Aramon grape variety is grown mainly in this region of southern France. This delicate Rosé is surprisingly complex with citrus, raspberry and strawberry aromas and flavors, with a hint of melon, cherry and minerality. The finish is fresh and crisp. Enjoy with shrimp or crab, grilled fish and mild cheeses. Priced in the mid-teens.

2015 Centonze, Frappato: Sicily, Italy. If you are looking for a summer red, look no further than this wine made with organic Frappato grapes from Sicily. This medium-bodied wine is lush and ripe with raspberry and strawberry fruit. The finish is crisp and fresh and will make your mouth water. Think pork ribs, burgers and barbeque with this versatile red. Priced in the high-teens.

2013 Ramos, Vinho Tinto Reserva: Alentejo, Portugal. This wine is a blend of the native Alentejo grape varieties Trincadeira and Aragonez along with a touch of Syrah. It is unoaked, fresh and fruity, making it a delightful summer red. Aromas and flavors of ripe, red berry fruit and a touch of dried herbs, with soft tannins and a long, smooth finish. Pair with red meats, grilled sausages and strong cheeses. A lot of wine for $14.
2016 Donkey & Goat, Lily’s Pet Nat: Anderson Valley, Calif. Here’s one out of left field. Pet Nat is short for Pétillant Natural, a method for producing sparkling wine that predates the Méthod Traditional process of secondary fermentation in the bottle used to make Champagne. After fermentation begins, but before it is complete, the wine is bottled where the fermentation continues to create bubbles. This is a natural wine produced without stabilization, fining or filtering, so you will find it a little cloudy with some sediment in the bottle. Made with Chardonnay, you get aromas of orchard fruit, bright citrus and a touch of spice with floral and earthy notes. This sparkler is easy to drink, silky smooth with a touch of sweetness and a crisp finish. Pairs well with fried chicken and fried seafood. Priced in the upper $30s.

These wines are available here in Maryland but may be a challenge to find, so ask your favorite wine person to help find these or similar wines. Cheers.

Sam Audia is a former advertising and marketing professional with more than 20 years of experience in the wine and spirits industry. He is a Wine Specialist at Bay Ridge Wine & Spirits in Annapolis, holds a Certification Diploma from the Sommelier Society of America and Intermediate and Advanced Certificates from the Wine and Spirits Education Trust. He can be reached at sippingwithsam@verizon.net.

Business Briefs

Chronicle of Higher Ed Again Selects HCC as Great College to Work For
For the ninth consecutive year, Howard Community College (HCC) has been named a Great College to Work For, according to the results from a comprehensive workplace survey recently released by The Chronicle of Higher Education (TCHE). HCC is the only Maryland community college and one of 22 community colleges across the country to have achieved this year’s recognition. With the ninth consecutive year, HCC joins a prestigious group of three community colleges that have been recognized every year possible.
TCHE recognized HCC for success in the following categories: collaborative governance; confidence in senior leadership; facilities, workspace and security; professional/career development programs; respect and appreciation; teaching environment (faculty only). It also selected HCC for the Honor Roll, a special distinction given to the colleges and universities that received the greatest number of category citations in comparison to other institutions of the same size.
The survey is the largest and most comprehensive workplace study in higher education, consisting of a two-part assessment process: a survey administered to faculty, administrators and staff, and an institutional audit that captures demographics and workplace policies from each institution. The primary factor in deciding whether an institution received recognition is the employee feedback. For more information, visit www.chronicle.com//interactives/greatcolleges17.

Maryland Integrates New Technology Into School Bus Inspections
The Maryland Department of Transportation Motor Vehicle Administration (MDOT MVA) has introduced an approach to school bus inspections that allows inspectors to complete the inspection electronically. The Maryland School Bus Safety Inspection System, implemented with a handheld tablet, replaces a manual paper-based inspection process and lets inspectors use mobile devices to inspect and report results electronically. Additionally, the system creates a database MDOT MVA can use to track all bus inspections.
The state of Maryland requires every one of its roughly 9,000 school buses to be inspected three times a year. After an inspection using a mobile device, the electronically recorded results either indicate the bus has passed inspection or requires a repair order for additional follow-up. The efficiency of the new reporting method has reduced the time it takes to complete inspection reports. In the month of May, 1,582 inspections were completed using the new system.
The Maryland School Bus Safety Inspection System was developed at no cost to MDOT MVA by NIC Inc., a Kansas-based information service provider, through the self-funded digital government services contract with the Maryland Department of Information Technology.

DOC Designates, Redesignates, Expands Five Enterprise Zones
The Maryland Department of Commerce (DOC) has approved the designation, redesignation and expansion of five enterprise zones in the state. They are the Brooklyn Park section of Anne Arundel County, Talbot County, the Town of Easton, and Montgomery County’s Burtonsville and Briggs Chaney areas.
The new Anne Arundel County enterprise zone designation covers 1,600 acres in the Brooklyn Park section of North County. This is the county’s first application for designation since the inception of the program. The goal is to incentivize commercial redevelopment by leveraging public incentives to address vacant properties, as well as encourage business retention, expansion and job creation.
“Along with our county community revitalization finance and tax credit programs, the enterprise zone tax credits give Brooklyn Park more tools to continue the momentum that started with last year’s implementation of the Greater Baybrook Vision and Action Plan,” said Julie Mussog, CEO of Anne Arundel Economic Development Corp. “By accessing enterprise zone property and income tax credits, businesses will be more incentivized to participate in the revitalization of this community, strengthen local commerce and create jobs.”

MDOT MVA Announces Digital Driver’s License Pilot Program
The Maryland Department of Transportation Motor Vehicle Administration (MDOT MVA) has announced the launch of a new, digital driver’s license pilot program. The digital driver’s license serves as a secure companion version of a physical card and features highly secure and easy-to-use technology.
In this pilot program, MDOT MVA is collaborating with Gemalto, a Maryland company that serves the digital security realm and is the manufacturer of Maryland Secure ID. This pilot program is a two-year effort funded by the National Institute of Standards and Technology. As part of this pilot, MDOT volunteers will be working with local institutions and businesses to test the digital driver’s license to determine its effectiveness and identify any need for improvements.
The digital license will enable new security features and provide electronic verification with MDOT MVA data. It will allow digital driver’s license holders to only display what information is required for the end user, without showing all the personal information that is located on the physical license. This feature of the digital driver’s license will create enhanced privacy for users through better control of personal information.

VAYA Pharma Relocates From UMD BioPark to Columbia
VAYA Pharma, a division of Enzymotec Ltd., and a maker of lipid-based medical foods, has announced the relocation of its global headquarters from the University of Maryland BioPark to new offices located at 10480 Little Patuxent Parkway, Columbia. The move signals VAYA Pharma’s rapid growth as it graduates from the University of Maryland BioPark to larger corporate offices in the state.
With more than 70 employees in the U.S., including 15 employees at its Baltimore office, the company has grown more than 30% annually during the last three years.
“Our strategic location within the University of Maryland BioPark gave us access to a diverse group of biotech leaders and resources, which really helped propel our growth and drive success,” said Rob Crim, CEO of VAYA Pharma. “We are excited about the move to Columbia, as we are committed to staying in Maryland, which is a hotbed for biotech and life science innovation.”

Automated Fare Boxes Now Part of Annapolis Transit
Annapolis Mayor Michael Pantelides has announced that the Annapolis Department of Transportation (ADOT) will launch a new automated fare box system on its bus fleet. The fare boxes will provide a customer friendly, efficient and controlled method of handling and reporting fare revenue.
The new system will accept bills and coins, but no change will be provided. Exact cash for the fare is required. All cash transactions will be validated by the electronic fare box. Invalid bills and coins will be rejected. The system will also handle all types of passes, including the barcoded day pass, and smartcards for seven, 30, 90 and 365 days. These smartcards are good for the period specified on them from the day of first use.
The fare box system was purchased from TripSpark Technologies with a grant valued at $483,996. Eighty percent of the grant was provided by the Federal Transit Administration, with the Maryland Transit Administration providing 10% of the funding and local transportation funds make up the remainder of the funding.

ELTA to Open New Cyber Center in Annapolis Junction
ELTA North America, a designer and manufacturer of electronic systems, has selected Maryland for its new Cyber Innovation Center. The announcement follows the May 2017 grand opening of ELTA’s new headquarters in Annapolis Junction, when the company upgraded from a 7,500-square-foot facility to a 21,500-square-foot facility and announced plans to add as many as 50 new jobs.
ELTA North America’s decision to locate the center in Maryland is the direct result of discussions between Gov. Larry Hogan and company leadership, including a site visit to ELTA’s Israeli headquarters during the governor’s economic development and trade mission to Israel in September 2016. State and county incentives for which the project may be eligible include conditional loans, tax credits and training grants.

Exelon’s Merger with Pepco Affirmed by D.C. Court of Appeals
The District of Columbia Court of Appeals affirmed the Public Service Commission of the District of Columbia’s approval of Exelon’s merger with Pepco Holdings (PHI), which combined Exelon’s three electric and gas utilities — BGE, ComEd and PECO — with PHI’s three electric and gas utilities, Atlantic City Electric, Delmarva Power and Pepco.
The court upheld the Public Service Commission’s order, resolving all legal challenges in the District of Columbia.

Historic Ellicott City Cited in
Country Living
Main Street in Ellicott City is included in a list of 23 Best Small Town Main Streets in America that was recently published by Country Living magazine. The local entry was ranked No. 17; the online write-up reads as follows.
“After recovering from a massive flood, Ellicott City has rebounded and rebuilt their Main Street, reaching vibrant new heights. Running parallel to the Tiber River and cutting straight through the historic district, it’s hard to decide where to start. Here are our picks: First, get your flow on at Main Street Yoga, which places a strong emphasis on sustainable and green initiatives. Then drool over the loot at Sweet Elizabeth Jane, a vintage-inspired lifestyle store named for the owner’s grandmother. If you need a pick-me-up, delight in Tea on the Tiber, a Victorian tea room serving up a traditional high tea experience.”

Real Estate Brokerage of 78 Years Converts to RE/MAX
Real estate veteran and new CEO of RE/MAX Aspire Dan Iampieri announced that the Weichert, Realtors – Caton Properties brokerage in Ellicott City has joined the RE/MAX network. Now RE/MAX Aspire, the brokerage has served greater Ellicott City home buyers and sellers for more than 78 years and recorded more than $3 billion in transactions.
“I looked at several brand names when I considered making a change from Weichert Realtors,” said Iampieri. “I was attracted to the entrepreneurial spirit, the winning culture and the strong brand name, and decided it was time to take advantage of the visibility, support and unrivalled benefits of being a part of the RE/MAX network.”

Merkle Acquires Aquila Insight
Columbia-based Merkle has acquired Aquila Insight, one of the largest independent data analytics organizations in the United Kingdom. This marks Merkle’s second European acquisition of 2017, following that of Spain-based, digital analytics consultancy DIVISADERO, in April. These strategic acquisitions are designed to strengthen Merkle’s status as a global, people-based marketing leader.
Founded in 2012, Aquila Insight’s skills in data analytics and the technology used to support the delivery of insight will boost Merkle’s capabilities and scale in the U.K. and European market. Headquartered in Edinburgh and London, with an additional office in Derby, Aquila Insight specializes in predictive analytics, media mix optimization, digital analytics and CRM strategy.

Cory Home Delivery Expands Operations With New Home Center
Cory Home Delivery has opened a 42,000-square-foot distribution center in Jessup to service Bob’s Discount Furniture in the mid-Atlantic region. Cory has experienced 30% growth so far this year, and the new location is part of a strategic expansion plan for Cory as it continues to expand throughout the country.
“This journey began many months ago with the search for a building that could provide a cross-dock operation for Bob’s Discount Furniture. In spite of a few setbacks and challenges, we have been able to provide our client with a great delivery center with quality and execution second to none in our industry,” said retired Cory COO Bob Alter.

State’s Big Three Casinos Report $130M in Revenue
Maryland Lottery and Gaming has announced June 2017 revenue numbers for the state’s six casinos, including Horseshoe Casino Baltimore in Baltimore City, Live! Casino in Hanover, and MGM National Harbor in Prince George’s County, and Maryland’s casinos totaled $130,480,062 in revenue during June 2017 — an increase of $37,114,143, or 39.8%, compared to the June 2016 figure of $93,365,919.
In a year-to-year comparison (not including MGM National Harbor, which opened on Dec. 8, 2016), statewide casino revenue in June 2017 decreased by $13,021,491, or 13.9%; in the region, MGM National Harbor generated $50,135,634 from slot machines and table games, Live! Casino totaled $41,840,229 from slot machines and table games and Horseshoe Casino Baltimore generated $22,096,012 from slot machines and table games in June.

Kupcakes & Co. Opens at
Clarksville Commons
Michelle and Bill Kupiec, owners of Kupcakes & Co., have opened their second location at Clarksville Commons, at 12250 Clarksville Pike, Clarksville. The couple opened their first location in Elkridge in 2011.
After starting out their business by supplying food trucks with cupcakes, the demand for their desserts rose to the point that opening a bakery near their home in Elkridge was a natural next step. Kupcakes & Co. also offers made-to-order cakes and has baked more than 450 wedding cakes.

New App Service Introduced at
BWI Marshall
Airport Sherpa, the only app that offers on-demand food and retail mobile ordering for pickup and delivery inside BWI Thurgood Marshall Airport, is now available for free in the Apple App Store for passengers traveling through BWI Marshall. Airport Sherpa allows travelers to order food and retail items from anywhere inside the airport and have them delivered to their gate.
After launching at BWI Marshall, Airport Sherpa will roll-out to other airports nationwide. “We created Airport Sherpa to enhance the travel experience for passengers by providing them with an on-demand delivery service, something users have grown accustomed to for services outside of the airport,” said Patrick DellaValle, co-founder of the business. “This app will give travelers access to hundreds of stores across terminals right at their fingertips.”

DocPoint Solutions Wins Third Consecutive Nintex Partner Award
Fulton-based DocPoint Solutions has announced that it was a winner in the 6th Annual Nintex Partner Awards within the Business Excellence category for the Americas for the third consecutive year. DocPoint’s recognition stems from driving strong revenue growth by promoting and integrating Nintex Workflows, Forms and suite of products to support customer success.
As the world’s largest Nintex reseller and integrator, DocPoint can provide customers with enterprise content management systems that include Nintex’s Workflow and Forms solutions. In addition, as a Nintex certified trainer, DocPoint is able to develop and deliver customized in-depth training to customers.

Startup Maryland Begins Next Stage of the STRT1UP Roadshow

Startup Maryland has begun Stage Two (which runs through Labor Day) of the STRT1UP Roadshow, the statewide tour and celebration of entrepreneurship and high-growth innovative startup ventures. The STRT1UP Roadshow will continue with Stage Three from Labor Day until November and then culminate with the Pitch Across Maryland/STRT1UP Showcase event in early 2018.

The Stage Two kickoff event was held in mid-July at Regency Furniture Stadium, in Waldorf, the home of the Southern Maryland Blue Crabs. Prior to the baseball matchup, several entrepreneur sessions were held, including a Raise Your Game mini-bootcamp on CEO Pitch Coaching, a session on Benefits in Uncertain Times and an introduction to the Angel Academy.

“The Southern Maryland regional entrepreneurial ecosystem, comprised of Calvert, Charles and St. Mary’s counties and entrepreneurs from across the [Southern Maryland] region, have come together to host this event embodying the collaborative spirit Startup Maryland strives to encourage as a main tenet of its ecosystem model,” said Michael Binko, founder and CEO of Startup Maryland.

Ecosystem partners and sponsors interested in learning more about how the STRT1UP Roadshow supports economic/workforce/venture development, marketing awareness/branding and community engagement efforts are encouraged to contact Startup Maryland Ecosystem Director Mike Venezia at mvenezia@startupmd.org.
Upcoming tour stops include the following.

• Aug. 10: MTC Summer Picnic @ Smokey Glen Farm
• Aug. 16: Tech Expo with MTC at MACo Conference
• Aug. 17: Innovation Village+Seat Pleasant, Kevin Durant Day
• Aug. 18: Voice of Entrepreneurship at MACo Conference
Visit www.startupmd.org for regular updates.

Succession Planning Is Key in a Family-Owned Businesses

 

Roughly 90% of American small businesses are family-owned. But sadly, the majority of these businesses fail to continue on to the next generation.

In fact, only around one-third of all family-owned businesses survive into the second generation, and only a small fraction of those make it to the third generation or beyond. Sometimes, this is because the subsequent generations don’t have an interest in inheriting or running the family business. On other occasions, it’s because they don’t know how to run it.
The problem in either scenario is the same: a failure to plan.

True Story

In 1934, a man started a business in New York City to manufacturer children’s coats. He was very successful, but he died in 1972 without having properly planned how the business would continue on without him. His son, who had worked in the family business his entire adult life, was not prepared to take it over, nor did he have the requisite skill set.
So, 12 years after the original owner died, the business was finished, closing its doors in 1984. Estate taxes were not the culprit. Instead, neither the man nor his son ever created a business succession plan. Nor did either have an exit strategy.

Why Owners Don’t Plan

While many business owners have the intent of passing on the family business to one or more of their children, they are often too busy running day-to-day operations and simply do not have the time or energy to consider business succession planning. Moreover, the stress of identifying and then grooming a family member (or employee) you trust to take over your business is a potential hot potato for many families and is, therefore, often avoided.

However, procrastination can be disastrous. Aside from procrastinating, here are some other ways that owners unintentionally sabotage business succession.

• They mistake succession planning and exit strategies to be one in the same.

• They don’t obtain the proper valuation of the business.

• They fail to identify a succession team.

• They don’t integrate their business succession plan with their estate plan.

• They ignore the Four Ds: death, disability, divorce and departure.

• They treat the business like family, rather than a business involving family.

• They fail to diversify their net worth from the business as a whole.
• They don’t plan for all contingencies.

Strategies for Success

There is no quick or easy answer or solution to this issue. However, in most successful transitions to the next generation or the third-party desired successor, owners have taken the necessary business succession and estate planning steps to minimize the conflicts, minimize estate and income taxes, and ensure that the business is in the right hands to maximize the chances of its success.

Comprehensive business succession and estate planning is the best way to improve the odds that your company will continue when you are gone (and possibly to provide the funds for your retirement, if you want to stop work while you are living).

Moreover, if a family member is not going to run the business when you are gone, then plans must be made for the family business to be sold to a third party, either at your death or when you exit your business.

Tax Considerations

Remember that estates in excess of the amount that passes free of estate tax, currently $5,490,000, are subject to a 40% federal estate tax (plus state estate tax, if you live in D.C. or Maryland). Thus, when doing your business succession and estate planning, you must plan for the need to pay the estate tax.

Where is the source of funds to pay the estate tax? Do you need to plan for liquidity at death, through estate tax planning and/or purchasing life insurance?

The solution to these questions may be setting up a structure within the estate plan that assures that those in the business own and control as much of the business as you want them to — while giving those not in the business other assets (or just an income stream from the business), so they can control their financial destiny, without interfering with the day-to-day operations.

Other Things to Consider

How much is the company worth? This can fluctuate during the life of a business. Should you get an appraisal now?

How long do you want/need to stay involved in the business? Many times, entrepreneurs see themselves as the business and find it hard to let go. There are also cases in which the owner cannot step down because s/he cannot be without the salary, health and retirement benefits being received from the company.

There are ways to plan to allow the owner to continue to receive an income stream, as a part-time employee or consultant, as the family business transitions to the next generations. Another technique is a deferred compensation plan to provide income to the founder.

Alternatively, you can sell or give the business interest to a trust for family members that will pay an income stream to the original owner.
How will the business’s digital assets be managed or transferred? Much of today’s business operations are being run and stored online (financial accounts, passwords, social media content, etc.), so knowing who will receive the business’s digital assets is of utmost importance. How will that person gain access and for how long should s/he have it? In the event that the owner passes away, these details should be spelled out in advance.

General Planning Ideas

• Sell or give assets, possibly including interests in the business, to children (and others) while you are alive.

• Purchase life insurance to provide for liquidity and/or to equalize the estate (the life insurance must be owned by an irrevocable life insurance trust).

• Create voting and non-voting interests in the business to allow for control to be given to one set of family members, while non-voting interests are given to those who are outside of the business.

• Use one or more charitable techniques to minimize income taxes and maximize return.

• Create a buy-sell agreement between you and those children in the business (or with others).

• Create trusts or other structures that control the use of assets after your death or control how business succession is going to occur over successive generations.

You’ve spent too many hours creating and operating your business to allow for it to all fall apart at your death or in other circumstances. Business succession and estate planning is critically important to the future success of your business, as well as to your own personal financial health and wealth.

Gary Altman is the founder and principal attorney at Altman & Associates, in Rockville. He can be reached at 301-468-3220 and gary@altmanassociates.net.

Security vs. Convenience

 

The main questions on users’ minds when talking about information technology (IT) security are: “Am I secure?” and “Is my business safe?”
These are not easy questions to answer. Just as the doctor hears, “Am I healthy?” constantly, it’s clearly a simple question, but the answer is complex and unique to each person.

There are two major principles of security. They are as follows.
1. Security and convenience are in constant tension. Each person or business needs to find the right balance between these.

2. There is no single “key” to good security. Implementing layers of security is the best plan for individuals and businesses.

Finding a Balance

In the simplest form, you can’t have maximum security and high levels of convenience in any one system. The more secure a computer or mobile device or website or database is, the less convenient it will be to access.

Computers

To protect a computer, most people use a password upon login. This eliminates unauthorized users from logging onto your computer. However, if you need to ask a family member, friend or colleague to retrieve something from your computer, it will require you to share the password.

Mobile Devices

With the latest iPhone, you can set up a fingerprint to unlock your phone. This is extremely secure. However, if you leave your phone at home or work and you ask that same family member, friend or colleague to check your messages, s/he will not be able to. That’s not too convenient.

Website

When logging into a website, there may be two-factor authentication (2FA). This is a security measure that requires the user to enter a “known” password, and it requires another component, such as a temporary password, that is sent to your mobile phone.
The chances of a thief or hacker having both your bank account login information and your mobile phone are far less likely. It may be inconvenient in the moment to enter additional information, but it is an excellent way to deter hackers from logging into your accounts.

Company Database

If your company requires the user to change passwords every 90 days, know that this is a very good security practice. Criminals who have stolen your password can’t use it if it’s been changed. That’s a good thing, but isn’t it annoying when a website forces you to change your password?

Not Always Best

On the other hand, the more convenient you make access to a computer or website (or anything), then the less secure it is. It’s certainly very convenient to use the same password for many different systems, but what happens if the password is compromised? You have provided the criminal access to all of your systems.

Using free wireless access in a coffee shop is convenient (and saves your data usage), but it exposes your laptop or mobile phone to a network where criminals might be lurking. It’s often helpful to use public Wi-Fi, but it definitely comes with the price of being less secure.

Other Scenarios

The tension between security and convenience is real. Here are a few other examples to consider how secure it is vs. how convenient you’d like to be.

• Using cloud applications, such as Dropbox or online banking
• Using mobile devices such as laptops or tablets

• Sharing files or passwords among your employees, volunteers, interns or family

• Encrypting emails between you and your customers or vendors

• Storing/saving passwords in your web browser so you don’t have to type them each time you visit a site.

There’s no single, simple answer to these questions, but it’s important to consider this tension in each data scenario you encounter.

Ananta Hejeebu is a partner at Howard Tech Advisors, in Elkridge. He can be contacted at 410-997-2500.