Spy Chat: Bagels, Elks, and Veterans with Joe Landgraf

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While Joe Landgraf is mildly frustrated at times that a few folks can’t seem to get the full name of “Joe’s Bagel Cafe,” right — including a county sports team he sponsors getting it wrong on their jerseys  — it seems that no one in town is at a loss of where to find Joe’s. Each morning, and now during lunch, a good number of community leaders, civic groups, and assorted coffee clutchers find their way to Easton Plaza Shopping Center for their bagel fix and local chatter.

In his interview with the Spy, Joe talks about his long history with the food scene in Easton, including co-owning The Chambers in downtown, his service with the Elks, his support of war veterans, and the trials and rewards of running your own business.

This video is approximately five minutes in length

Habitat for Humanity Choptank Awarded State Tax Credits

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The Maryland Department of Housing and Community Development has award Community Investment Tax Credits to Habitat for Humanity Choptank in support of its affordable home building program. Tax credits serve as incentives for individuals and businesses to financially support costs of approved projects while decreasing their state tax obligation. Habitat Choptank’s tax credit allocation is available to donors contributing $500 or more. Funds raised from this allocation help with construction costs at the five-home development on Port Street in Easton. Designated contributions earn state tax credits equal to 50% of the gift amount. This is in addition to the standard deductions on Federal and State taxes for charitable gifts.

“The state tax program has proven to be a benefit for our mission and our donors,” explains Nancy Andrew, executive director of Habitat Choptank. “It helps raise much need funds for our affordable housing program and helps our donors decrease their state tax liability.” The credits can be used by the donor in one tax year or carried out over five years.

For the local community and state government, Habitat’s home ownership program in turn helps to increase local property tax revenues. Habitat Choptank sells its homes for the cost of land, materials and supervision to qualifying working people who are not able to purchase a home through the conventional market. Provided with affordable mortgage financing, these home buyers become tax paying property owners thereby investing back into the community that has helped to make their dream of home ownership a reality. Since 1992, Habitat Choptank has completed 63 homes between Dorchester and Talbot counties. While selling its homes to mostly first time and even first generation home buyers, the nonprofit continues to maintain a less than 2% foreclosure rate with only one foreclosure to date.

For additional information about the tax credits, contact Nancy Andrew, executive director, at 410-476-3204 or director@habitatchoptank.org .

Habitat Choptank has Maryland state tax credits to offer donors contributing to its five-home development in Easton.  The first three homes on the site are completed and have been sold to home buyers.  The two home duplex is now under construction.  Tax credits provide donors with a tax credit on their state income taxes in addition to standard charitable deductions. Photo by: Tim Poly

Habitat Choptank has Maryland state tax credits to offer donors contributing to its five-home development in Easton. The first three homes on the site are completed and have been sold to home buyers. The two home duplex is now under construction. Tax credits provide donors with a tax credit on their state income taxes in addition to standard charitable deductions. Photo by: Tim Poly

Spy Spotlight: Easton Business Alliance’s Julie Corson

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Over the years there has been a few organizations dedicated to supporting businesses and retail operations for the town of Easton. But for some it has been a bit confusing on which group is helping which part of town. That seemed to be a challenge for the leaders of the Easton Downtown Partnership a few years ago. So much so that the organization renamed itself the Easton Business Alliance recently to emphasize their commitment to the entire town as well as their traditional mission in keeping downtown Easton vibrant.

And once there was consensus on how to reorganize, they turned to local native Julie Corson to take on the role as the organization’s their new staff member.

In her interview with the Talbot Spy, Julie talks about Easton’s post-recession commerce and the increasingly effective role that events and special weekends play in the town’s retail and hospitality businesses.  She also highlights the importance of having  a “think and buy local” message for the community.

The video is approximately three minutes in length

Supreme Court to Hear Case on Right of States to Tax Out-of-State Income

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The U.S. Supreme Court is set to hear a case involving a Maryland couple who believe their out-of-state income should not be taxed by their state of residence.

Brian and Karen Wynne of Howard County argue the income they earn in several other states through Maxim Healthcare Services Inc., a company Mr. Wynne partially owns, should not be taxed by Maryland if they pay the income taxes in those other states.

Maryland has an out-of-state income tax credit that can be used to offset state income taxes. But there is no equivalent credit that can be used to offset county income taxes, so counties can tax the out-of-state income.

According to court documents, Comptroller of the Treasury of Maryland v. Wynne (No. 13-485) asks the question: “Does the United States Constitution prohibit a state from taxing all income of its residents — wherever earned — by mandating a credit for taxes paid on income in other states?”

The Wynnes argued in Maryland Tax Court that the partial credit violates the dormant Commerce Clause.

University of Maryland Carey School of Law Professor Mark Graber said the dormant Commerce Clause says “there are some state regulations of interstate commerce that are unconstitutional even when Congress does not act.”

“So there is no federal law that prohibits or requires states to give tax credits for taxes paid in other states,” Graber said. “But the claim the Wynnes are making is that, in fact, Maryland’s failure to do so sufficiently burdens interstate commerce.”

When the Maryland Tax Court sided with the comptroller, the Wynnes appealed to the Maryland Court of Appeals, the state’s highest court, which sided with them.

Dominic Perella, the Wynne’s counsel, said his client believes he “shouldn’t have to pay double taxes” and that the way Maryland structures its taxes punishes him for growing a successful business.

But Maryland has argued in court documents that, among other points, it has the right as a sovereign state to tax the entirety of its residents’ income, regardless of where the income was generated or if taxes on that income were paid in other states. The Maryland Attorney General’s office said it does not comment on pending litigation.

A brief filed by organizations representing local governments also contends that counties would suffer if they offered credits against county income tax for income earned out-of-state.

“There would be significant financial implications for counties,” said Andrea Mansfield, legislative director of the Maryland Association of Counties.

According to the brief, if the Supreme Court sides with the Wynnes, estimates from the comptroller’s office are that it could cost local governments $120 million in retroactive refunds, and could reduce local income tax revenues by about $50 million annually going forward.

The Bureau of Revenue Estimates says the initial cost to local governments could actually be higher – $190 million plus interest in protected claims and retroactive refunds.

Graber said if that happens, the Maryland tax bill for all residents who earn out-of-state income will go down.

“Conversely, the revenue obtained by Maryland will also go down,” Graber said.

He said if the high court sides with Maryland, life will probably go on as usual as the Supreme Court has in the past left states alone to tax the income of their residents as they see fit.

The Supreme Court begins its next session Monday. This case is set to be argued Nov. 12.

By Ashley S. Westerman
Capital News Service

Real Estate Agents Build Houses As Well As They Sell Them on the Shore

Tracy Stone. Edey Cross, Gwen Eskridge, and Sharon Rieck

Coldwell Banker Chesapeake Real Estate agents sell a lot of houses every year on the Eastern Shore of Maryland. “We have been fortunate in these challenging times”, says sales associate Tracy Stone “My colleagues and I feel the need to give back to the community that has been so good to us.”

Tracy Stone. Edey Cross, Gwen Eskridge, and Sharon Rieck

Tracy Stone. Edey Cross, Gwen Eskridge, and Sharon Rieck

On Wednesday, September 24th turned out at 233 Port Street in Easton to volunteer a day of labor with Habitat For Humanity Choptank – a local affiliate of Habitat For Humanity International – the ecumenical homebuilding ministry which has built 64 houses in Talbot and Dorchester Counties since its founding in 1992. Hugh Smith, the Broker and an Owner of Coldwell Banker Chesapeake, is also the Founding and First President of Habitat for Humanity Choptank.

Building a Habitat House and Community years to come and know we helped to make a big difference in two family’s lives”.

“We believe that everyone deserves a decent house in which to live”, says Smith, “This program appeals to our sense of fair play”, says Smith

“Home ownership, sweat equity and community participation appeals to our business instincts”.

The build was organized by sales associate Peggy Neviaser, also a long-term volunteer of Habitat locally. “I have served on the Partner Family committee for years” said Peggy, “it’s fun to get outside and swing a hammer for a change.”

The “build” was led and supervised by Habitat for Humanity Choptank Construction Supervisor Steve Thomas

The real estate industry was well represented on the build site. Coldwell Banker Chesapeake agent and current Mid-Shore Board of Realtors President Gwen Eskridge helped her colleagues from the Easton Office to disassemble a scaffolding on the second floor of the house then re-assemble it on the ground outside to prepare for roofing the duplex. Easton associates participating also included Carol Harrison, Sharon Rieck, Chata Smith,Juliet Wells, Heather Hardisty and Laurie Renshaw to frame and erect interior walls.

No one was ready to quit at the end of the day. “We want to do it again” was the common sentiment. To help pay for all the nails they bent, Coldwell Banker Chesapeake announced a matching gifts program to its sales associates and employees. “The company” says Smith, “will match our associates donations

“It is hardly glamorous work”, said Eskridge, “but it sure is rewarding. We will drive past this site for to Habitat for Humanity dollar for dollar through the end of the year.”

Cautious Optimism Over Maryland-India Trade

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Despite exports from Maryland to India decreasing by almost 15 percent in recent years, Maryland businesses are optimistic about growth in trade between the two ahead of Indian Prime Minister Narendra Modi’s visit to Washington.

Modi, who was elected earlier this year, will make his inaugural trip to Washington Sept. 29-30. It comes amid a downward trend in Maryland and India trade following a period of stalled diplomatic relations between the U.S. and India.

However, Maryland businesses are hopeful, based on Modi’s priorities and a recent trade delegation from the state, that they can benefit from trade with one of the largest economies in the world.

Economic Ties

Maryland exports to India have decreased from $233 million in 2010 to $202 million in 2013, according to the U.S. Census Bureau. During the same period, imports from India fell from $465 million to $416 million, a drop of more than 10 percent.

But Maryland is looking to change that.

One sign is an upcoming Montgomery County delegation to India, said Dr. Vinod Jain, president and CEO at the Maryland-based India-US World Affairs Institute.

The delegation, which will be led by County Executive Isiah Leggett and leaves for India in November, is focusing on culture, education and business, Jain said.

Currently, trade between the two varies wildly from information technology to coffee. For example, the U.S. subsidiary of the Indian IT company Infosys has its headquarters in Rockville, while Eight O’ Clock Coffee, which has a production plant in Landover, was bought by the Indian company Tata Coffee in 2005.

Jain said the upcoming delegation would focus on improving trade and investment specifically in the biotechnology, manufacturing and pharmaceutical industries.

The trip is looking to build on another Maryland trade delegation in 2011, when Gov. Martin O’Malley led more than 100 business leaders, educators and government officials to India.

It was the largest delegation to India ever sent from Maryland, and the first ever by a sitting Maryland governor. Jain believes it was among the largest sent by any U.S. state to India.

The trade delegation resulted in business deals worth almost $60 million being signed, a press release from the governor’s office said.

The hope among analysts is that trade delegations can overcome some of the hurdles in improving economic ties between the two.

Despite being the third largest economy in the world based on a metric known as the purchasing power parity (PPP), India ranks only 18 out of Maryland’s top 25 international trading partners in terms of exports from the state. That is well below exports from Maryland to smaller economies like Saudi Arabia and Belgium, according to data from the Census Bureau.

This can primarily be explained by the internal situation in India under the previous government led by Manmohan Singh, said Elisha Pulivarti, executive director at the Maryland India Business Roundtable.

“There were a lot of problems in India,” said Pulivarti, mentioning low investor confidence because of the perception of high corruption and bureaucratic red tape.

Based on 2013 data, India ranked 186 out of 189 countries when it came to enforcing contracts, according to the World Bank’s ease of doing business ranking. Only Timor-Leste (East Timor), Myanmar and Angola ranked lower, all countries that have suffered major internal conflicts in the past decade.

However, there is optimism that the issues can be overcome and Modi’s trip can foster better trade relations between India and Maryland.

“Economic ties are No. 1 on the list,” said Milan Vaishnav, an associate at the South Asia Program at the Carnegie Endowment for International Peace, a Washington-based think tank.

One Maryland business that made the 2011 trip to India was Shah and Kishore, a Rockville-based immigration law firm.

Calling the delegation a success and saying the results from the trip would take longer than three years to have an impact on Maryland, Devang Shah, the firm’s managing partner, said the future for Maryland-India trade is likely to improve.

Much of the optimism is based on Modi’s reputation as a business-friendly leader willing to create investor-friendly policies, said Shah.

Diplomatic Tensions

But bilateral ties must overcome recent diplomatic tensions at the national level, said Michael Kugelman, senior program associate for South and Southeast Asia at the Woodrow Wilson Center, a Washington-based think tank.

“In recent months relations have suffered from some of their greatest tensions in years, and certainly since the early 1990s, when decades of turbulent bilateral ties yielded to a new era of cooperation,” said Kugelman, in an email.

Diplomatic relations stalled last year when an Indian diplomat, Devyani Khobragade, was arrested on charges of visa fraud and underpaying her nanny.

While Khobragade was eventually released to India, Indians were furious over what they perceived as high-handed tactics used by U.S. authorities, including her being strip-searched.

The Indian government responded to the arrest by, at one point, removing security barricades in front of the U.S. embassy in New Delhi and refusing to meet a visiting U.S. congressional delegation.

The meeting between President Barack Obama and Modi is likely to also, at least initially, focus on publicly making the Indian prime minister feel welcome in the U.S., said Jain from the India-US World Affairs Institute.

In 2005, Modi, at that time the chief minister of the Indian state of Gujarat, was the first person denied a U.S. visa under the 1998 International Religious Freedom Act. The primary reason were the riots in Gujarat in 2002 between Muslims and Hindus, which led to almost 1,000 people being killed.

While there was no evidence that Modi, from a Hindu nationalist party, was responsible for the killing of hundred of Muslims, “he was responsible for the performance of state institutions at that time,” said David Mulford, U.S. ambassador to India from 2004-2009, in a statement soon after the visa rejection.

There is an expectation that Modi’s trip will focus more on “ceremony than substance” in order to overcome that incident, said Vaishnav, from the Carnegie Endowment for International Peace.

Optimism Moving Forward

As the Indian economy grows under Modi, it is imperative Maryland position itself to be the “gateway into the U.S.,” said Shah, from the law firm.

India’s economy is expected to become a “global economic giant” by 2050, with a GDP of $ 34 trillion – which would be more than three times that of Brazil – according to the “World in 2050,” a report by the accounting firm Price Waterhouse.

Economic ties between the two are “becoming more and more important,” he said, with the hope being that Maryland can benefit from India’s expected growth.

By Idrees Ali
Capital News Service

Spy Chat with Health Integrity President Sandy Love on Their New Home

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While there might be mild disappointment that the shiny new addition to Marlboro Avenue behind Target in Easton is not the much anticipated Harris Teeter food store, there remains good reason to celebrate. The County’s fourth largest business, Health Integrity, and its philanthropic wing, the Delmarva Foundation, will be moving many of their 230 employees into their digs next Monday.

Rather than relocate off the Eastern Shore, Health Integrity decided to stay put, which means good things to Talbot County’s economy. With most of their employees having advanced degrees, as well as experience as nurses, computer analysts, and law enforcement, those high paying jobs add considerably to the local economy.

But what exactly does Health Integrity do? That’s the question the Spy posed to their president Sandy Love earlier this week.

This video is approximately five minutes long

Mid-Shore Community Foundation Names Morris CFO

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The Mid-Shore Community Foundation (MSCF) has announced that Michael Morris of Easton, Maryland has accepted the position of Chief Financial Officer.

MSCF Staff – Buck Duncan, Robbin Hill, Heather Pickens and Michael Morris

MSCF Staff – Buck Duncan, Robbin Hill, Heather Pickens and Michael Morris

Morris brings over 20 years of finance, accounting and human resource experience to the position. He also brings his knowledge of both the non-profit and for-profit sectors.

Michael and his wife relocated to Easton 4 years ago from Worcester, MA. Michael holds a BS in accounting from Boston University and graduate level credits from Clark University.

“We are pleased to welcome Michael to the Foundation,” said MSCF President Buck Duncan.

With over $52 million in assets, MSCF is the 4th largest community foundation in the State of Maryland and is the largest scholarship provider in the Mid-Shore Region. Since it’s founding (22 years ago), the Foundation has received over $48.3 million in contributions and has given more than $18.3 million in grants and scholarships.

In FY 2014, the MSCF awarded over $2.6 million in grants and related charitable expenses to 271 charities and 91 individuals. The individuals were recipients of $425,752 in scholarships with an average award of $4,700.

“Michael’s extensive experience will be integral as we continue to manage our growth and look for new opportunities to maximize the impact of our work in the community,” said Duncan.

“I am particularly impressed at the number and size of the scholarships that are funded by MSCF,” said Morris. “I look forward to contributing toward that support of educational opportunities for the young people of the Mid-Shore area, as well as supporting the Mid-Shore nonprofit organizations”.

For more information about the Mid-Shore Community Foundation, visit mscf.org or call 410-820-8175.

Londonderry Breaks Sales Records, Announces Expansion

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As of May 1, 2014, Londonderry on the Tred Avon had 30 homes on the market. To date, the retirement community reports that they have sold 96% of the cottages that were for sale in 3 months, with only 4% remaining to sell. According to Andy Hollis, Executive Director of Londonderry on the Tred Avon, “Londonderry, which currently has 97 cottages and 26 apartments, is over 96% occupied which is well above industry standard.”

Irma Toce, Sales Consultant, who joined Londonderry on the Tred Avon in the spring, adds, “On average in the past three months, the Londonderry sales and marketing team has sold on average seven cottages/apartments per month.”

In addition to the growth in sales, Londonderry on the Tred Avon is expanding by releasing six lots for new construction. Hollis comment, “We are currently working with the architect regarding making modifications/ improvements to the existing floor plans, and adding a smaller one story cottage option as well. All units will continue to have a one car garage and all will have the ability to add a second story for storage or livable space.”

In 1992, Londonderry Retirement Community was built on 24-acres at the head of the Tred Avon Creek, originally part of a 1664 land grant known as Westmoreland that was granted to Irish immigrant Francis Armstrong. As the property changed hands over the next 100 years, it became known as London Derry, and eventually Londonderry on the Tred Avon, as it is called today.

Londonderry on the Tred Avon Easton, MD is a cooperative retirement community. Cooperative senior housing is a unique option for seniors seeking a retirement lifestyle while maintaining control over their investment. There are 98 nationwide and only two in Maryland. At Londonderry, the building and land is owned by the cooperative. Each resident owns shares in the cooperative based on the value of their home. Shareholders have occupancy rights to a specific home as long as they own their stock. The stock may be sold when the resident leaves and the equity returned to them or their families. In this unique cooperative, shareholders may take tax deductions for interest paid on the co-op mortgage and real estate tax deductions.

For further information about Londonderry on the Tred Avon, call 410-820-8732.

An aerial photo of Londonderry on the Tred Avon (Photo by Tim Herlihy)

An aerial photo of Londonderry on the Tred Avon (Photo by Tim Herlihy)

Michigan Manufacturing International Dispels Manufacturing Myths

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There are some common misconceptions in the manufacturing industry about managing suppliers and using specialty components. At the Atlantic Design and Manufacturing Show in June of this year, Jacob Prak, CEO of Michigan Manufacturing International (MMI), discussed how using specialty components can help customers save money.

Special components and assemblies made by MMI.

Special components and assemblies made by MMI.

Prak stated that customers may think it is easier to manage a supplier who is nearby, instead of one that is far away. He said, “The truth is that it is much more important to find the right supplier than to find one that is in close proximity. MMI easily sources products from all over the world.”

When a specialty component is desired, a common idea is that one should find a supplier who specializes in the processes required for that component. However, by sourcing a product from a company who specializes in a certain process, a customer can get locked into using that process. Prak offered a better solution, saying, “It’s better to find a manufacturer who can analyze the function of the part and then offer the most cost-effective, best-performing manufacturing process to suit the situation.”

While it is best to use standard components when possible, Prak noted that innovative products and designs will often require special components due to their new and unique characteristics. Special components are often designed to function more effectively in a given application or to take the place of multiple standard components, often saving money.

In a recent example, a customer came to MMI with a part that consisted of a bamboo shaft that had been reinforced with a carbon fiber rod. The challenge was how to maintain the same weight and strength, but cut the cost. Prak explained how MMI successfully met this goal. “We replaced the carbon fiber with an aluminum extrusion. The strength was maintained, and the result was a cost savings of about 25%.”

Founded in 1991, Michigan Manufacturing International (MMI) specializes in supplying manufactured to print assemblies and components to original equipment manufacturers (OEM). Products include assemblies, castings, stampings, machined parts, gears, bearings and more. Services include product engineering, manufacturing, inventory management and stocking programs — all designed to streamline client operations and increase profitability. MMI designs the most effective, highest quality solutions from anywhere in the world.

For more information about MMI, visit www.michmfg.com or call 800-677-0504.