Local Real Estate: Eastern Shore Holds Promise for 2015


The real estate market looks positioned for a good year according to an overview put together by Coldwell Banker Chesapeake Real Estate.

They just released their “Eastern Shore Real Estate market 2014 Year End Numbers” with a forecast for a climb back to normal to continue through 2015.

“We’re bullish on both Kent and Talbot markets for 2015, ” says Hugh Smith, broker/owner of Coldwell Banker Chesapeake. “If you look at economic indicators in the national economy like lower unemployment, we’re seeing this as a tipping point for an upswing in Kent and Talbot sales. Even a stock market correction can be a good thing as people start to look for different kinds of investments and the possibility of an interest rate increase will probably knock some people off the fence from watching to buying,” he added.

The study and projection include Caroline, Dorchester, Talbot, Queen Anne’s, Kent and Cecil Counties:

Sold Dollar Volume: Sellers on the Upper Eastern Shore closed $890,448,394 in real estate sales in 2014 – down 42% from the peak of the last boom market in 2005. This represents only a marginal improvement year-over-year and but a 45% improvement over the bottom of the market which was achieved in 2011. Every year since 2011 has shown a slow but steady improvement in this metric. Look for this trend to slowly accelerate in 2015 and thereafter as national economic fundamentals and consumer confidence continue to improve and waterfront buyers return to the shores of Chesapeake Bay.

Average Sold Price: The average sold price of an Eastern Shore residential property was $282,772 in 2014 – down from a high of $383,488 achieved in 2007 and down marginally year-over-year. The average sold price continues to suffer for the continued absence of luxury and waterfront buyers from the eastern shore markets. Look for this number to improve as the tax climate for high net-worth buyers improves with the new administration in Annapolis.

Median Sold Price – The median sold price of $210,000 continues to hover near the bottom of its 10-yr range. This reflects the continued high number of foreclosures and short sales in the market and the previously mentioned absence of luxury buyers. The median Sold Price will improve in 2015 and thereafter as the inventory of foreclosures declines and luxury buyers return to the market.

Units Sold – The absorption rate of Eastern Shore real estate was still off its 2005 highs (when 4,411 units were sold) but at 3,149 units it is a vast improvement over the low of 2,050 units posted in 2008. Look for this trend to continue as gas prices continue to fall in 2015 and the Washington/Baltimore metroplex becomes more congested and expensive for first-time and first move-up buyers.

Average Days On Market – The average of 160 Days on Market (DOM) for all sold listings is a significant improvement over the high of 203 experienced in 2011. Look for this trend to continue in 2015 as value conscious buyers recognize the good values to be found in most Eastern Shore markets. A rising interest-rate environment will also prompt buyers to jump of the fence in 2015.

Average List Price For Solds – The average list price for solds at $302,572 is just off its bottom of 299,425 experienced in 2011This metric has experienced considerable downwards pressure from short sellers and sellers will continue to make significant concessions to achieve timely sales for lifestyle reasons. Look for this trend to continue through 2015 as excess and shadow inventory continues to be absorbed.

The real estate markets of the Eastern Shore are slowly returning to normal market conditions and should continue to improve in 2015 along with consumer confidence and national economic conditions. There is no reason to believe that we will return to the bubble conditions of 2005 anytime soon nor is there any reason to anticipate another bust like 2008-2011. Sellers who position their asking prices well relative to the market should anticipate selling in a reasonable period of time. Buyers who jump in in 2015 should find excellent choice and good values. Buyers who wait until late in 2015 or beyond, risk missing the most pronounced Buyers’ market conditions in a generation.

Mark Calendar: Young Professionals in County Meet Today


The newly created Kent County Young Professionals Association meeting on January 15  the Chestertown Visitors Center. It’ll be at 7:30pm.

Art As Economic Engine: The A and E District Advantage


As the town council readies to submit an “Intent to Apply” request to the State to designate Chestertown as an Arts and Entertainment District, the Greater Chestertown Initiative (GCI) committee has identified some of the economic advantages to artists, businesses and individuals living and working within an A & E District:

The 2014 legislature defined a Qualified Residing Artists (QRA) as an individual who: owns or rents residential real property in the state; conducts a business in any A&E district; and derives income from the sale or performance within any A&E district, or any artistic work that the individual wrote, composed, or executed, either alone or with others, in an A & E district.

Income Tax Subtraction Modification: Any QRA who resides in Maryland, creates artistic work in any of the 22 A E districts and sells that work in any of the 22 districts will be eligible for the artist’s income tax incentive. The act took effect July 1, 2014 and is applicable to all taxable years beginning After December 31, 2013.

Exemption from Admission and Amusement: In addition, admission and amusement tax gross receipts for any amusement charge levied by an A&E enterprise or any QRA, are exempt for a period of (1-10) years

Property tax credit: Property tax credits are available for the owner of a building located within the A&E District. The building must be partially built or renovated for the use by a Qualified Residing Artist (QRA), or an A&E enterprise can be eligible for a property tax credit for (1-10) years, as long as the building is used by the QRA or an A&E enterprise.

The owner will work with the State Assessment Office to determine the qualified renovations and previous assessment to determine the amount of the credit. If less than the whole building is used by the QRA, the credit is only for the portion used by the QRA. The town may choose any period of time up to 10 years to determine the credit.

 Examples of Property Tax Credit

(It is important to note that these are possible guidelines and may not be the actual percentages sought during the application process and will depend on how the request is packaged. Lani Seikaly, President of RiverArts and spokesperson for Greater Chestertown Initiative wrote to the Spy that the State recommended asking for the highest percentage of property tax credit. The State pointed out that Leonardtown was granted a 100% incentive for all ten years)


100% —1st and 2nd years

80% —3rd and 4th years

60% —5th and 6th years

40% —7th and 8th years

20% —9th and 10th years

0% —after 10 years


A 2013 Towson State economic analysis of the 22 A&E districts and their impact on jobs, wages and income, maybe be found here:

Form 501ae lists qualifications needed for tax reduction here.

Compiled with research help from Jeff Grotsky, Greater Chestertown Initiative.

Benchworks Names Melissa Johnston as President

Melissa Johnston

Melissa Johnston

Benchworks is pleased to announce that Melissa Johnston has been named to the position of President. She will be responsible for all agency functions and executing the company’s vision and strategy, as well as overseeing sales and marketing. Melissa will also support Benchworks’ market development initiatives focusing on the Boston, Washington, DC, and Virginia markets.

Previously, Melissa held the title of Senior Vice President at Benchworks. As a member of the leadership team, she helped manage the company’s daily operations, implementing business procedures and controls, and supervised the project management staff. Melissa also directed Benchworks’ pharmaceutical/life science segment serving clients including Shire, West, and Supernus.

Melissa commented on the appointment, saying “I am looking forward to working closely with Thad Bench (CEO) and Renee Bench (Chairman) to help execute the overarching vision and strategy for the Benchworks marketing business unit. This is an exciting time. With our recent acquisition of Safe Chain Solutions and the creation of our consulting division, we continue to expand our support for our pharmaceutical and life science clients as well as build a solid portfolio of middle-market accounts.”

Benchworks CEO Thad Bench said “Melissa’s impressive accomplishments and dynamic work style have earned her this important role. I am confident that under her leadership, Benchworks will flourish and continue to meet and exceed our clients’ expectations as I shift my responsibilities to managing an expanding number of business units. I look forward to working closely with Melissa in her new position.”

Melissa earned a BA in Business and Economics from Washington College. She also completed the Project Management Certificate Program from the University of Delaware.

Benchworks, a comprehensive marketing services firm headquartered in Chestertown, MD, was founded in 1991. The company specializes in the design, production, and launch of complete marketing and branding services. Additional Benchworks operating units include Benchworks Consulting, Safe Chain, and a licensed products division. Clients include a wide variety of companies in the pharmaceutical, beverage, manufacturing, marine, tourism, and education industries in North America and Europe.


For more information, visit www.benchworks.com, or call 800-536-4670.


Spy Chat: Downtown Chestertown Association with Kristen Owen


Like her famed real estate intuition, out-going Downtown Chestertown Association (D.C.A.) president and realtor Nancy Mcguire hit the bullseye with her recruitment of Chesapeake Bank’s Kristen Owen to succeed her last year. As if sent from the central casting office, Kristen combines an almost perfect profile of the new era of leadership the town is experiencing.

Kirsten, who grew up in Chestertown, comes to her volunteer position with ten years of banking experience, a young family, and a first-hand knowledge of the challenges on High Street. That’s a hard combination to beat when being asked to lead an organization dedicated to supporting the downtown merchants in a town of 5,00o.

In her interview with the Spy, Kristen talks candidly about downtown Chestertown and its various challenges, and equally frank about the future of DCA’s I-sign on Cross Street. But in the end, she also expresses as genuine conviction that Chestertown is finding a way to move forward in a very exciting fashion.

This video is five minutes in length

Maryland Film Tax Credits at Risk; No More Wedding Crashers for Shore


Frank Underwood may be looking for a new base of operations.

Maryland tax credits worth millions have kept “House of Cards” in the state for three seasons, but a real-world budget crunch may mean Kevin Spacey — who plays the political villain — and rest of the cast and crew will head elsewhere.

A state legislative committee held a public hearing Tuesday on the feasibility of Maryland’s film production tax credit, most notably associated with the Netflix series.

Hannah Byron

Hannah Byron,, assistant secretary for the Maryland Division of Tourism, Film and the Arts

Film productions are exempt from state tax when purchasing goods or services related to the production, but the state is reaping only 10 cents for every dollar it gives up, according to a report from the state’s Department of Legislative Services.

The report concludes that the credit does not promote long-term economic growth for Maryland and recommends that the General Assembly allow the film production activity tax to expire as scheduled on July 1, 2016.

Legislative Services staff members who contributed to the report were present at the meeting to defend their recommendations.

“The current funding amount is about $25 million (per year). But is that what optimizes economic benefits to the state?” said Robert Rehrmann, a policy analyst who contributed to the report.

Film production tax credits have become more popular in the last decade, with 37 states and the District offering some form of incentive in 2014.

In a letter to Gov. Martin O’Malley last year, Charlie Goldstein, senior vice president of MRC Studios, which produces “House of Cards,” warned that if the show does not receive tax credits, they will look to film in another state.

In total for all productions, Maryland has provided or set aside $62.5 million in tax credits from fiscal year 2012 through 2016.

Supporters of the tax say the film industry promotes economic growth in Maryland by bringing in jobs and more local spending, and that we need to offer at least $25 million in credits each year to be competitive with what other states offer.

“For many small businesses in the state, it has made the difference for keeping their doors open, the difference in hiring new staff, or the difference in making capital improvements to their property, ” said Hannah Byron, assistant secretary for the Maryland Division of Tourism, Film and the Arts.

While some small businesses are reaping the benefits, the Department of Legislative Services’ report estimates that Maryland is only getting a 10-cent return for every dollar of tax credits provided to the film industry.

Byron countered that another independent study calculated a return of $1.03 — or 3 percent — on every dollar in credits, and that the Legislative Services report did not focus enough on indirect benefits of production, such as the potential for film tourism.

Still, the report has a few more criticisms, one being that 96.5 percent of all credits are going to only two productions — “House of Cards” and HBO’s “VEEP.”

The report also points out that a few jurisdictions benefit much more than others, and also that the productions are short-lived and will not add any permanent benefit to the economy because jobs provided will be temporary.

Michael Davis, a scenery builder in Maryland for over 27 years, disagreed with this idea Tuesday in testimony before the committee.

“I worked on project after project, sometimes more than one at a time, and other times no work at all … and the pay is at least 30 percent more per hour and we will work 50 to 60 hour per week during a production,” Davis said.

However, Rehrmann reminded, the report shows less than one-tenth of 1 percent of Marylanders are employed by the film industry.

The decision on whether to extend or modify the current tax credit will have to be made by the General Assembly by July 1 and could be influenced by Gov.-elect Larry J. Hogan Jr.

“We’ll take a look at (the report) and have something to talk about later … there’s one governor at a time,” Hogan said Tuesday.

By Dani Shae Thompson

Benchworks Acquires Safe Chain Solutions

Thad Bench, CEO; Pat Boyd, Executive Director/Partner; Charles Boyd, President

Thad Bench, CEO; Pat Boyd, Executive Director/Partner; Charles Boyd, President

Benchworks is pleased to announce that it has acquired Safe Chain Solutions, a rapidly growing pharmaceutical drug wholesaler serving hospital pharmacies nationwide, with a combination of cash and stock. Safe Chain Solutions has a pharmaceutical distribution facility in Cambridge, Maryland, a sales office in Miami, Florida, and a digital development office in Nagpur, India. Safe Chain Solutions also has a vibrant Third Party Logistics (3PL) business serving a wide variety of clients in the beverage, apparel, and manufacturing sectors.

“The acquisition of Safe Chain Solutions demonstrates our continued commitment to the life science industry,” said Benchworks CEO Thad Bench. “The pharmaceutical division at Safe Chain which is currently engaged in supplying hospital pharmacies will eventually be able to produce patient starter kits and support Rx sample programs for our existing and new pharmaceutical clients upon regulatory approval. This is a significant step in growing our revenues and adding strategic capacity to our family of companies.”

President of Safe Chain Solutions Charles Boyd commented, saying, “We are excited to be aligned with Benchworks and look forward to continuing our rapid growth and expanding our service offering. We could tell almost immediately that Benchworks’ and Safe Chain’s cultures meshed very well.”

Benchworks, a comprehensive marketing services firm headquartered in Chestertown, Maryland, was founded in 1991. The company specializes in the design, production, and launch of complete marketing and branding services. Clients include a wide variety of companies in the pharmaceutical, beverage, manufacturing, and education industries in North America and Europe. Additional Benchworks operating units include Benchworks Consulting and a licensed products division. For additional information, please visit www.benchworks.com or call 800-536-4670.

Exelon Commits to Pepco Charities


Local charities are looking forward to continued support from Pepco, the region’s oldest utility provider, even as state authorities review a proposed merger with Chicago-based utility Exelon.

Philanthropies were initially concerned that management changes would affect Pepco’s commitment to non-profits. But Exelon has issued assurances that the company will remain committed to Pepco’s 2013 level of philanthropic giving.

That is good news for charities throughout the region.

“I look forward to watching our Pennies for Patients program surpass the million dollar mark,” said Beth Gorman, executive director for the Leukemia and Lymphoma Society, speaking of one of her organization’s regional projects. “With Pepco’s help and commitment I know that we’ll be able to get there.”

The Leukemia and Lymphoma Society is one of the world’s largest health organizations, dedicated to funding blood cancer research and helping patients through more than 60 chapters in the U.S. and Canada.

Pennies for Patients has been around for about two decades. In the metro area, the majority of the approximately 470 participating schools come from Maryland.

In the last two years combined they raised close to $1.7 million by encouraging schoolchildren of all ages to bring spare change and dollars to school to support the society’s mission.

Exelon has pledged a total commitment of about $50 million in charitable contributions over 10 years in the Pepco service territory, which spans D.C., Maryland, Delaware and New Jersey. That’s about equal to the $5 million a year, or so, that Pepco has been giving.

“We’re…going to…continue to work with non-profit partners without missing a beat. We have already been there. And Exelon’s support to what we have been doing is just going to continue,” said Debbi Jarvis, Pepco’s vice president of Corporate Citizenship and Social Responsibility.

Gorman said she would like to see the partnership with Pepco expand.

Each year about 20 local high schools compete against one another in a fundraising effort as part of the Pennies for Patients program.

“In fact, our two top high schools typically come from the Maryland area,” said Gorman, adding that out of all the participating institutions, Walt Whitman and Walter Johnson high schools each raised more than $80,000 this year.

The society’s goal for the program in the upcoming season, which lasts January through April, is $900,000.

Pepco became involved with the program three years ago, Gorman said.

In addition to a direct contribution of about $45,000 a year, Pepco has provided a summer internship to one student from the school that raises the most money, Jarvis said.

“Over the next five years, Exelon alone on the utility side of the business will be investing $16 billion in the communities we serve,” said Chris Crane, Exelon’s CEO, when questioned about implications of the acquisition for the local philanthropies at an October event in Washington.

The Federal Energy Regulatory Commission approved the proposed merger of Exelon Corporation and Pepco Holdings last Thursday.

The company is now awaiting approvals on the deal from public utility commissions in the district, Maryland, Delaware and New Jersey.

According to the Maryland Public Service Commission, the next set of hearings where public comments about the merger will be heard are scheduled for January.

By Yevgeniy Trapeznikov
Capital News Service

Oyster Aquaculture in MD, VA Hits Snags in 2014


Oyster aquaculture production continues to rev up the seaside economies in Maryland and Virginia, but the need for better leasing laws and procedures coupled with a tough year for hatcheries slowed production in 2014.

Hatcheries from Maryland to North Carolina experienced water-quality problems, and scientists haven’t figured out why. Unlike in 2011, when hatchery managers and scientists blamed a slog of freshwater from hurricanes for poor production, this year’s problems seem site-specific.

Technicians at the Horn Point Laboratories warm up the water to induce spawning in brood stock oysters in 2010. Production was down about 30 percent in 2014. (Dave Harp)

Technicians at the Horn Point Laboratories warm up the water to induce spawning in brood stock oysters in 2010. Production was down about 30 percent in 2014. (Dave Harp)

At the University of Maryland’s Horn Point Hatchery in Cambridge, production was down about 30 percent, according to Don Webster, an extension agent who specializes in aquaculture. Horn Point is the largest hatchery in Maryland, and the state owns and operates it. Unlike many private hatcheries, Horn Point’s is loaded with top-notch equipment and several filtration systems. Webster said Horn Point staff consulted with oyster experts elsewhere, but couldn’t figure out the problem, which lasted from May until July.

“This was the first time we’d seen it widespread, and for that long,” Webster said. “Nothing seemed to work on it.”

Horn Point will close the year with about 900 million spat, which oyster farmers and the state plant on the bottom after the larvae set on oyster shells. In 2013, Horn Point announced it produced more than 1 billion spat, more than any other hatchery in the country. That was after several years in the 500-million range.

Spat-on-shell is how most oysters are grown in Maryland and Virginia’s aquaculture operations. These oysters largely go to the shucking house market.

In Virginia, the half-dozen private hatcheries cater to both the spat-on-shell market and those who grow individual oysters in floats and cages. They fared better than Horn Point overall, said Jim Wesson, who is the head of conservation and replenishment for the Virginia Marine Resources Commission.

But individual hatcheries had their own crises. One on the Eastern Shore lost several days of production because a neighbor removed creosote from pilings during the spawning season.

Another, on Gywnn’s Island, was having its most productive year on record until the Virginia Department of Transportation began sandblasting paint off the island’s tiny bridge. Two days later, nothing would grow, Wesson said.

When asked what specifically killed the larvae, which are extremely sensitive, Wesson said it was a combination of the zinc, copper and cadmium in the paint and stripping materials, all of which got into the water.

“If you had to list things that would kill an oyster larvae, those would be on it,” he said. “Whatever this was, it was messing up their digestion. You could see it in the microscope. The metals are definitely there.”

State officials persuaded the transportation department to halt the project, and production resumed. But much had been lost because of the timing of the painting. Wesson said his department is trying to educate environmental engineers so they plan around the spawning season. Had the bridge been painted anytime between July and December, he said, the larvae probably wouldn’t have been harmed.

Despite the setback, oyster aquaculture in both states seems to be steady, with the Chesapeake Bay bivalves in both states plentiful enough to send to Louisiana for shucking.

Laws in both Maryland and Virginia have focused on making it easier for entrepreneurs to enter the oyster farming business. In 2009, Maryland passed a law legalizing oyster aquaculture in every county and requiring oyster lease-holders to work the leases they had or lose them. Now, Maryland has 318 shellfish aquaculture leases on nearly 4,000 acres. Karl Roscher, who manages aquaculture at the Maryland Department of Natural Resources, said he’s not certain how many jobs have been created. But the department has permitted and registered more than 1,400 individuals to have some role in leased-bottom aquaculture.

This number is poised to grow, as the department is reviewing 77 lease applications. Since the law changed, Maryland officials have struggled with the time it takes to issue leases, which has been up to a year and even longer in some cases. State officials have said they would like to reduce the time to three months, which is the average time in Virginia. The difference between the states is in the oversight of the Army Corps of Engineers. The Baltimore District’s review process takes much longer than the Norfolk District’s, even though the Baltimore district did adopt some of Virginia’s permitting practices.

Also helping Maryland’s numbers of aquaculture operations grow are several state programs that help watermen transition to aquaculture. Low-interest loans are available through the state agency, Maryland Agricultural and Resource-Based Industry Development Corp. Several programs within the Maryland Department of Agriculture have funded capital investments in oyster farms. Webster runs a remote-setting training program that teaches budding aquaculturists how to set oyster larvae on shells. He has established 32 tanks in 10 locations.

Virginia’s government has also invested in cultivating its oyster industry, and used some of the $15 million crab disaster funds it got in 2009 to help watermen buy materials and build cages.

In the past, Maryland has looked south and groused that Virginia had a better system for setting up and cultivating an aquaculture industry. A private oyster fishery, which is largely spat-on-shell aquaculture, has been thriving in Virginia for more than a century. It has 100,000 acres under lease. Last year’s combined public and private harvest topped $22 million, with the private leases comprising more than half of that.

But Virginia’s famed structure has hit a snag. It has no use-it-or-lose-it law. Anyone who pays the $500 application fee can get a lease of up to 250 acres and keep it for 10 years. It costs $1.50 per acre. After that, they have to show a plan to plant shellfish, but even that requirement is full of loopholes, Wesson said.

About five years ago, Wesson noticed many waterfront homeowners applied for large leases in front of properties with the hope of blocking would-be farmers from trying to plant oysters there. Those applicants are still holding on to those acres, many of which could be productive and contribute to both the ecology and the economy.

But another group has emerged: Poachers. They apply for leases on dead bottom just to have access to good bottom, so they can steal the crop. They will take oysters from private beds or the public bottom, Wesson said.

Many farmers will have oysters reach market size in March or April, but they won’t harvest them until the summer, when the wild fishery no longer operates and the price is high. Longtime watermen know that, he said, and will poach the crop and take the lower price. And they can see the police coming, if they’re on the waterways, and get away quickly.

Wesson said he can spot the applicants who are not serious; they’re asking for large plots, of 100 acres or more, and they’ll often apply for one in their name and then their spouse’s name. He knows they won’t plant the leases; there isn’t enough shell in the Chesapeake Bay for that kind of acreage.

Those who are serious about getting into the business will ask for one or two acres; those that are already in it might ask for 25 to 50. In the real industry, Wesson said, the trend is to get smaller; in “the lawless one,” as he calls it, it’s to get bigger.

Wesson is hoping to make the law change at an administrative level. If it’s not, he said, the commission will work through the legislature.

“It’s not doom and gloom. People are making money and people are doing this. But if we don’t get those loopholes closed up it’s going to get worse,” Wesson said. “We have got to change that old law.”

By Rona Kobell
Bay Journal News Service