MARYLAND ECONOMIC DEVELOPMENT CORPORATION
MEDCO BOARD OF DIRECTORS

Legislation

The Maryland Economic Development Corporation (MEDCO), which functions under the provision of Article 83A, Sections 5-201 through 5-216 of the Annotated Code of Maryland 1984, as amended in 2005, is a body politic and corporate and is constituted as a public instrumentality of the State of Maryland. “The General Assembly declares and finds that Maryland’s economy continues to experience technological change and restructuring. The General Assembly recognizes that, while technological change sometimes results in economic contraction and dislocation, it also affords opportunities to expand productive employment and to expand the State’s economy and tax base.” (§5-202) The purpose of MEDCO is to assist in the expansion, modernization and retention of existing Maryland business and to attract new business to the State. MEDCO also assists, upon request, local jurisdiction projects. MEDCO borrows money and issues bonds for the purpose of financing assistance.

MEDCO structures its transactions on a non-recourse basis and the State of Maryland, state agencies and MEDCO are not responsible for the repayment of the bonds that are issued by MEDCO. The repayment is limited to the revenues generated by the project.

Operations

Since fiscal year 1996, there has been a significant increase in MEDCO business. Assets have increased as shown by the following chart:

MEDCO is staffed with nine full-time employees and two part-time employees. MEDCO’s responsibilities are ongoing for transactions on its books. Reviewing and maintaining financial records, including MEDCO’s monthly balance sheet and income statements, are a significant portion of the ongoing portfolio management responsibilities. MEDCO also ensures that various requirements of the Internal Revenue Service, the Securities and Exchange Commission and other legal requirements of the transactions are being met by the borrower/lessor. These requirements include ensuring that current financials of the borrower/lessor are available and that current and appropriate insurance requirements are being met. Transactions between MEDCO and the Maryland Department of Business and Economic Development may also include requirements that job counts and other performance criteria are collected from the borrowers/lessors and validated in order to ensure that borrowers/lessors meet the covenants required by the transactions.

MEDCO has a web site which lists all of MEDCO’s projects, presents MEDCO’s annual financials, describes many MEDCO projects, lists MEDCO’s Board Members, and provides other useful information at www.medco-corp.com.

For the fiscal year ending June 30, 2007, MEDCO has been able to provide tax-exempt financing to four (4) manufacturers, five (5) not-for-profit entities, one (1) refinancing project for a golf resort and hotel, and two (2) student housing facilities. Here is a list of the projects initiated during the fiscal year:

1. ARC of Prince George's County
   On July 12, 2006, $2,900,000 of Maryland Economic Development Corporation tax-exempt revenue bonds were issued on behalf of The Arc of Prince George’s County, Inc.. The ARC of Prince George’s County will use the loan proceeds to finance or refinance all or a portion of the cost of the acquisition of certain properties (as listed below), capital improvements to and renovations to said properties, the acquisition and installation of certain necessary or useful furnishings, fixtures, equipment and machinery to be installed in, or used at, said properties, the acquisition of such other rights related to the properties (including appurtenances, rights-of-way, franchises, easements and other interests in land, land and facilities which are functionally related and subordinate to the properties), and to pay for the issuance costs of the bonds.
   
   Here is a list of the properties:
   4217 Brandon Lane, Beltsville, MD 20705
   13223 Ingleside Drive, Beltsville, MD 20705
   4212 Taunton Drive, Beltsville, MD 20705
   5810 Bucknell Terrace, Berwyn Heights, MD 20740
   12300 Starlight Lane, Bowie, MD 20715
   1102 Port Echo Lane, Bowie, MD 20716
   2815 Needlewood Lane, Bowie, MD 20715
   6300 Armor Drive, Clinton, MD 20735
   6913 Briarcliff Drive, Clinton, MD 20735
   6502 Springbrook Lane, Clinton, MD 20735
   3713 Marlbrough Way, College Park, MD 20740
   10902 Phillips Drive, Upper Marlboro, MD 20785
   9608 Tuckerman Street, Lanham, MD 20708
   1401 McCormick Drive, Largo. MD 20774
   12803 Fernwood Turn, Laurel, MD 20708
   6300 Baltimore Blvd, University Park, MD 20782
   12806 Princeleigh Street, Upper Marlboro, MD 20772
   10017 Cedar Hollow Lane, Upper Marlboro, MD 20772
   10510 Woodlawn Boulevard, Upper Marlboro, MD 20772
   
   The Arc is the nation's largest voluntary organization committed to the welfare of children and adults with mental retardation and their families. There are more than 1,000 chapters nationwide, and members include individuals with mental retardation, their families and friends, the professionals who work with them, and other concerned citizens.
   
   Since a group of parents founded the Prince George's County chapter in 1952, the organization has evolved into a driving force in the county. The Arc's primary focus is advocacy--working with families, the school system, local businesses, and community leaders to ensure that people with mental retardation are able to fully participate in their communities however they choose. For more information please visit their website at: www.thearcofpgc.org
   
   
2. BALTIMORE MUSEUM OF ART, INC.: On September 18, 2006, MEDCO issued its non-recourse, tax-exempt revenue bonds in the aggregate principal amount of $2,500,000 on behalf of the Baltimore Museum of Art, Inc. The Baltimore Museum of Art will use the proceeds of the bonds to finance all or part of the cost of the acquisition of a right to use approximately fifty (50) parking spaces in a parking garage (to be constructed on a parcel or parcels of land located on The Johns Hopkins University campus in Baltimore City, Maryland) containing approximately 600 parking spaces and related facilities for joint use with The Johns Hopkins University, converting an existing parking lot into metered parking and certain furnishings, machinery and equipment to be located in (and used in connection with) the parking facilities to be constructed or converted to metered parking.
   
   The Baltimore Museum of Art is home to an internationally renowned collection of 19th-century, modern, and contemporary art. Founded in 1914 with a single painting, the BMA today has 90,000 works of art—including the largest holding of works by Henri Matisse in the world. Throughout the Museum, visitors will find an outstanding selection of European and American fine and decorative arts, 15th- through 19th-century prints and drawings, contemporary art by established and emerging contemporary artists, and objects from Africa, Asia, the Ancient Americas, and Pacific Islands. Two beautifully landscaped gardens display an array of 20th-century sculpture that is an oasis in the city. For more information please visit their website at: www.artbma.org
   
3. ACADIA TODDS LANE, LLC: On September 22, 2006, MEDCO issued its non-recourse revenue bonds in the aggregate principal amount of $6,910,000 on behalf of Acadia Todds Lane, LLC. MEDCO loaned the proceeds of the bonds to Acadia Todds Lane, LLC to finance the real property known as 930 Todds Valley Lane, Baltimore County, Maryland 21237 containing approximately 13 acres and a single storey industrial building thereon containing approximately 51,683 square feet (of which 3,319 is located on a mezzanine level within the building), improvements (including fixtures and building equipment) and the acquisition of additional equipment.
   
   Acadia Windows & Doors, Inc. (the "Facility User") will lease the entire 2006 Facility from the Acadia Todds Lane, LLC pursuant to a Lease Agreement dated September 22, 2006 for an initial term of five (5) years, on a triple net basis, and has the right to renew for four (4) additional terms of five (5) years each.
   
   Acadia Windows & Doors is a fabricator of technologically advanced vinyl windows and doors for replacement and new construction. For more information please visit their website at: www.acadiawindows.com
   
4. UNITED STATES PHARMACOPEIAL CONVENTION, INC.: On November 1, 2006, MEDCO issued $10,100,000 in non-recourse, tax-exempt revenue bonds on behalf of the United States Pharmacopeial Convention, Inc. ("USP"). The proceeds of the bonds will be loaned to USP, pursuant to a Loan Agreement, dated as of September 1, 2004, as amended and supplemented by a First Supplemental Loan Agreement, dated as of November 1, 2006, (both by and between USP and MEDCO) for the purpose of financing the costs to complete the development and expansion of the Borrower’s headquarters located in Rockville, Maryland, paying the cost of bond insurance on the Series 2006 Bonds, and certain other related costs.
   
   The USP is the official public standards-setting authority for all prescription and over-the-counter medicines, dietary supplements, and other healthcare products manufactured and sold in the United States. USP sets standards for the quality of these products and works with healthcare providers to help them reach the standards. USP's standards are also recognized and used in more than 130 countries. These standards have been helping to ensure good pharmaceutical care for people throughout the world for more than 185 years. For more information please visit their website at: www.usp.org
   
5. GARRETT COMMUNITY COLLEGE FOUNDATION, INC.: On November 9, 2006, MEDCO issued $7,005,000 in non-recourse, tax-exempt revenue bonds on behalf of Garrett Community College Foundation, Inc. MEDCO lent the proceeds of the bonds to the Garrett Community College Foundation to finance the acquisition, construction and equipping of an approximately 126 bed student housing facility for Garrett College located in McHenry, Maryland.
   
   The Garrett College Foundation is a 501(c)(3) non-profit charitable organization under the United States Internal Revenue Code and is incorporated in the State of Maryland. The single purpose of the Garrett College Foundation is to support and promote the mission of Garrett College. For more information please visit their website at: www.garrettcollege.edu/services/foundation/
   
   
6. EASTER SEALS GREATER WASHINGTON-BALTIMORE REGION, INC.: On December 15, 2006, MEDCO issued its non-recourse, tax-exempt revenue bonds in the aggregate principal amount of $6,900,000 on behalf of the Easter Seals Greater Washington-Baltimore Region, Inc. (the "Easter Seals"). MEDCO loaned the proceeds of the Bonds to finance all or part of the cost of the construction of a building containing approximately 41,000 square feet above grade and underground parking containing approximately 34,000 square feet on a parcel of land containing approximately .6 acres owned or to be owned by the Easter Seals and located at 1414 Spring Street, Silver Spring, Maryland, the acquisition and installation of certain necessary or useful furnishings, fixtures, equipment or machinery, and acquisition of such interests in land as may be necessary or suitable for the foregoing, including roads and rights or access, utilities and other site preparation facilities.
   
   Easter Seals has been helping individuals with disabilities and special needs, and their families, live better lives for more than 85 years. From child development centers to physical rehabilitation and job training for people with disabilities, Easter Seals offers a variety of services to help people with disabilities address life's challenges and achieve personal goals. For more information please visit their website at: www.easterseals.com
   
   
7. BINDAGRAPHICS, INC.: On January 2, 2007, MEDCO issued its non-recourse, tax-exempt revenue bonds in the aggregate principal amount of $5,490,000 for Bindagraphics, Inc. (the "Borrower"). MEDCO loaned the proceeds of the bonds to finance the cost of the purchase and installation of vehicles and various pieces of equipment and machinery for use in the Borrower’s business of binding and specialty packaging and to be installed in and/or used for its facility located on a parcel of land in Baltimore, Maryland owned by Crossroads Limited Partnership. Bindagraphics, Inc., a privately owned company located in Baltimore, Maryland, is the largest trade bindery and finisher on the east coast and the sixth largest in the country. For more information please visit their website at: www.bindagraphics.com
   
   
8. Gamse Lithographing Company, Incorporated of Delaware: On April 26, 2007, MEDCO issued its non-recourse, tax-exempt revenue bonds in the aggregate principal amount of $2,600,000 on behalf of the Gamse Lithographing Company, Incorporated of Delaware ("Gamse"). MEDCO loaned the proceeds of the Bonds to finance the cost of the acquisition, construction, furnishing and equipping of manufacturing equipment and machinery, including, without limitation, a Heidelberg Press and related equipment and accessories, to be installed at the Borrower’s existing manufacturing facility located 7413 Pulaski Highway, Baltimore, Maryland.
   
   In the year 1896, Gamse Lithographing Company, Inc. was founded in Baltimore, Maryland. By 1910, the company produced beer and liquor labels and was entering the mail order liquor catalogue business. Larger presses were installed along with cutting, die cutting and collating equipment. The business grew, and in 1955, the firm moved to its present location on Pulaski Highway. By 1960 the building expanded by 8,000 additional square feet to house a new 6 color gravure press. More modern methods and techniques reduced waste, increased production and improved quality. The Pulaski Highway building was further expanded to its present 70,000 square feet. Today, Gamse Litho ranks among America's top label producers, making labels for the world's largest corporations. For more information please visit their website at: www.gamse.com
   
9. St. Stephens Economic Development Corporation.: On January 3, 2007, MEDCO reissued its non-recourse variable rate demand revenue bonds in an aggregate principal amount of $1,350,000 on behalf of St. Stephens Economic Development Corporation for the purposes of financing or refinancing the acquisition and construction of a child care facility located in Howard County, Maryland.
   
10. Local Government Insurance Trust (LGIT): On April 5, 2007, MEDCO issued its non-recourse, tax-exempt revenue bonds in the aggregate principal amount of $4,260,000 on behalf of LGIT. MEDCO loaned the proceeds of the bonds to finance the acquisition of an approximately 1.46 acre parcel of land located at 7225 Parkway Drive, Hanover, Maryland (the "Land") and an approximately 13,680 square foot building (the "Building"), renovations and expansions to the Building, reconfiguration and expansion of parking spaces on the Land, and the acquisition and installation of furnishings and equipment on the Land or in the Building.
    
    Since 1987, many local government entities in the State of Maryland have covered their primary and excess liability, auto, environmental, property, boiler & machinery throughthe Local Government Insurance Trust (LGIT). LGIT was founded by the Maryland Association of Counties (MACO) and the Maryland Municipal League (MML) in answer o difficulties towns, cities and counties then faced in securing affordable insurance.LGIT is a non-profit association authorized by state law, wholly-owned and managed by its local government members. The Trust’s main purpose is to provide joint self-insurance programs or "pools" for towns, cities and counties in the State of Maryland. The concept is simple: rather than paying premiums to buy insurance from an insurance company, local governments contribute those premiums into a jointly-owned fund. The money in that fund is used to pay for the members’ claims, losses, and expenses. For more information please visit their website at: www.lgit.org
    
    
11. Towson University – West Village: On May 30, 2007, MEDCO issued its non-recourse, tax-exempt revenue bonds in the aggregate principal amount of $33,485,000 Series 2007A and $940,000 Series 2007B bonds. The proceeds from the A Bonds will be used by MEDCO to construct, furnish and equip a 668-bed student housing facility on a parcel of land owned by and located on the campus of Towson University and ground leased to MEDCO (the “Project”), establish a debt service reserve for the A Bonds, pay interest to accrue on the A Bonds through February 1, 2009, pay working capital and marketing costs associated with the opening of the Project, and pay the costs of issuance of the A Bonds and the B Bonds. The B Bonds represent a deferred development fee due to Capstone Development Corporation (the "Developer") and will be payable solely from revenues of the project to the extent available. MEDCO has authorized the issuance of an additional $1,860,000 in B Bonds subject to conditions in the trust indenture which will be issued upon satisfactory completion of construction.
    
12. Chesapeake Bay Conference Center Project: On October 11, 2006 MEDCO issued $145,950,000 Senior Lien Refunding Bonds Series 2006A and $18,170,000 Senior Lien Project Revenue Bonds Series 2006B. The Senior Lien Bonds were issued together with other funds to pay the cost of advance refunding $10,000,000 of the Issuer’s Senior Lien Revenue Bonds (Chesapeake Bay Conference Center Project) Series 1999A and $117,165,000 of the Issuer’s Senior Lien Revenue Bonds (Chesapeake Bay Conference Center Project) Series 1999B, to finance the costs of furnishings, fixtures and equipment for the existing conference center and various capital improvements thereto including, without limitation; expansion of the marina, to prepay a portion of the outstanding principal balance of the FF&E Loan, establish a debt service reserve fund, and to pay the costs of issuing the Senior Lien Bonds.
    
    The Facility which opened in late August 2002 consists of a hotel and conference center, golf facility, marina, European health spa, and water-related recreational facilities. The Facility is owned by MEDCO and managed by Hyatt Corporation. The hotel and conference center components were designed by RTKL Associates, Inc. The Facility’s golf course was designed by Keith Foster Golf Course Design and the marina was designed by Andrews, Miller and Associates, Inc., a civil engineering and surveying company. The Clark Construction Group, Inc. of Bethesda, Maryland acted as the general contractor. The Facility is built on an approximately 260-acre site with approximately one mile of frontage on the Choptank River and over one mile of frontage on U.S. Route 50 which is located in the City of Cambridge, Dorchester County, Maryland. The Facility includes the following amenities:
    
    
    • Hotel and Conference Center:
      - 400 guest rooms, including 16 suites;
      - a 136-seat main restaurant, a 154-seat lounge, a 40-seat pool side snack bar, a 100-seat specialty restaurant with outdoor seating, a self-service convenience store, and reception and lobby seating areas and lobby retail space of approximately 4,000 square feet;
      - a total of 38,000 square feet of function space, including ballrooms, pre-function space, exhibit space, 24 meeting/banquet rooms, one large board room, a business center, an outdoor function area, and circulation and service areas; and
      amenities including multilevel indoor and outdoor pools and outdoor deck, exercise and fitness facilities with a cardiovascular circuit and weight room, and spa facilities including hair and nail salon, a retail area, two saunas, two steam rooms, two relaxation rooms, nine dedicated massage rooms, one wet room with vichy table and three dedicated facial rooms.
    • Golf and Other Recreational Facilities:
      - an 18-hole championship, Keith Foster-designed golf course with a 70-seat bar and grill, a pro shop/retail shop, and men’s and women’s locker rooms, including showers and steam rooms;
      - a theme party pavilion of approximately 6,000 square feet, a game room, and a children’s recreation center;
      - a 9-hole miniature golf course;
      - outdoor, lighted tennis courts and beach volleyball; and full-service marina with 150 slips, expandable to 450 slips.
    
    For more information please visit their website at: www.chesapeakebay.hyatt.com

One Maryland

In 2000, MEDCO initiated the first projects under the One Maryland Program. MEDCO continues to work on existing projects. The One Maryland Program is funded by the Maryland Department of Business and Economic Development and provides economic development assistance to economically distressed jurisdictions. Projects have been completed in Allegany County, Garrett County, Dorchester County, Worcester County, Caroline County, Somerset County and Baltimore City.

1. MEDCO developed with Allegany County the Barton Farms Industrial Park located south of Cumberland on US Route 220. The project included land acquisition, permitting, providing all utilities including water and sewer, and site preparation. Allegany County has limited industrial land for industrial use that has access to water and sewer service. In June of 2004, approximately 40 acres were sold to American Woodmark. The Allegany facility assembles wood cabinet components received from other AWC plants and ships completed cabinets to customers located in the Northeast and Midwest regions of the United States. Since its inception on January 5, 2005, the plant has created jobs for 217 employees. The company expects to employ to ultimately grow to 500 people once the plant is fully developed over the next four years. American Woodmark Corporation, located in Winchester, VA, is the third largest manufacturer of kitchen and bath cabinets in the United States. Offering more than 230 cabinet lines in a wide variety of designs, materials and finishes, American Woodmark products are sold through a network of dealers and distributors and directly to home centers and major home builders. MEDCO, the County and DBED are actively offering the remaining property for development to attract technology based businesses to the Western Maryland region.
   
   
2. In 2001 MEDCO constructed a 30,000 square foot industrial building in the Princess Anne, Somerset County industrial park to attract new employment to the County. While the building was on the market for approximately three years it provided immediate available industrial space to attract a new employer to the County. In 2005, ODDI, a packaging manufacturer from Iceland purchased the building for their North American expansion. The company continues to expand by developing surround properties and has added 25 new jobs to the County as of 2007. If the County did not have this building ready to occupy ODDI would have not been able to locate in Somerset County.
   
   
3. In 2002, MEDCO had a 43,000 square foot industrial shell building constructed in Pocomoke City, Worcester County. MEDCO contracted to have the building designed and built. The project provides the town and county with new marketable flex space. Mid-Atlantic Institute for Space and Technology (MIST) has master leased the entire building. MIST works with educational institutions and representatives from Maryland’s aerospace industry to provide engineering, technology and system development for small to medium size payload and orbital launch vehicles. MIST has been awarded an EDA grant in September 2007, totaling $200,000.00; these funds were applied for by MEDCO on behalf of MIST. The award provides for interior improvements to expand existing work space.
   
   
4. MEDCO assisted the Baltimore Development Corporation in financing and constructing a 514-space parking garage opened in November of 2003 in the City of Baltimore. The 210 St. Paul Street Garage is located between Charles Street and St. Paul Place. This project was part of the State’s and City’s contribution to assist in retaining CitiFinancial in Baltimore City and provides additional parking opportunities to the general public. This project was completed and turned over to the City of Baltimore in November 2003.
   
   
5. MEDCO along with the Baltimore Development Corporation arranged for the construction of The Fleet-Eden Garage, located in the Inner Harbor East of Baltimore City to serve Sylvan Learning Systems as well as providing needed parking for the growing business community in the area. The competed project was turned over to the City of Baltimore in May of 2006.
   
   
6. In 2005, MEDCO constructed a 30,000 square foot building (expandable to 50,000) in Mountain Lake Park, located in Garrett County’s Southern Industrial Park. MEDCO contracted to have the building designed and built. The County lacks available industrial buildings for immediate occupancy and this building assists in adding needed flexible/industrial space to the County inventory. In 2007 the original tenant ceased operations and the building is again available for lease/purchase. MEDCO, the County and DBED are currently in discussions with a company which would create 20 new jobs in 2008.
   
   
7. In 2003, MEDCO assisted Garrett County by purchasing land just off Interstate 68 at Kaiser Ridge for the purpose of developing a new industrial park. The County had no available or developed industrial land available in the northern part of the County. The new park consists of 261 acres and the roadways and infrastructure has been completed. The development of this park assisted in attracting American Woodmark to an adjacent parcel accessed through the property. American Woodmark plans to build a dimensional lumber mill in the near future. MEDCO continues to work with the County and State to attract other industrial and commercial users to the site.
   
   
8. In 2004 MEDCO had a 30,000 square foot (expandable to 80,000) building constructed in Cambridge, Dorchester County. ABC Supply, a national building supply company has entered into a lease/purchase contract for an initial 5 year term beginning in November 2004.

Higher Education Financing

MEDCO has provided assistance to Maryland’s public colleges and universities by taking ownership of multiple student housing projects. MEDCO assisted in the financing of these projects through the issuance of revenue bonds to enable the funding of the construction or refinancing of the student housing facilities. A MEDCO revenue bond is non-recourse to MEDCO and is not back by the State of Maryland or the local jurisdiction and is payable solely through the revenues of the project. The financing is for 100% of the cost of the project and is accomplished through the issuance of tax-exempt bonds which provide a low cost of capital. In all instances, with the University System, the ownership of the project will ultimately revert to the host University after the bonds are fully repaid.

Owned by MEDCO – University Systems Program

1. University of Maryland, Baltimore County – $37,500,000 – 581 beds
2. Frostburg State University, Allegany County - $17,915,000 – 406 beds
3. University of Maryland, Baltimore - $34,400,000 – 337 beds
4. Bowie State University, Prince George’s County - $21,470,000 – 460 beds
5. University of Maryland, College Park - $133,645,000 – 2,529 beds
6. Salisbury University, Wicomico County - $16,410,000- 312 beds
7. Towson University, Baltimore County (West Village) – $33,485,000 – 668 beds – under construction and to be ready by 8/2008

Owned by MEDCO – Will be Owned by Sheppard Pratt Health System

1. University Village at Sheppard Pratt, Baltimore County - $27,725,000 – 615 beds

Owned by MEDCO – Will be owned by Morgan State University

1. Morgan State University, Baltimore City - $38,025,000 – 796 beds

Previous “Issuance Only” Student Housing Bond Issues

1. Salisbury State University – Collegiate Housing Foundation
2. Towson State University (Millenium Hall) – Collegiate Housing Foundation
3. Allegany College – Somerset Educational Foundation
4. Garrett Community College – Garrett Community College Foundation

MEDCO InfoTech and Biotech Incubators Overview

MEDCO initiated its involvement with technology incubators in October 1996, with the inception of the UMBC Technology Center Project, in which MEDCO borrowed from the Maryland Department of Business and Economic Development and UMBC to purchase the old Lockheed Martin building on South Rolling Road. Since that time, MEDCO has expanded its role in financing and owning technology incubators and presently owns seven incubators. MEDCO has contracted with property managers to run and oversee the day to day aspects of these projects. MEDCO maintains oversight and sets new policy for these projects through periodic reviews and communications with project managers.

Here is an overview of those seven incubators and an overview of MEDCO’s virtual licensee program:

Maryland Technology Development Center (MTDC)
On June 18, 1998, MEDCO issued $4,490,000 in 20 year, taxable, non-recourse bonds and in combination with the $3,314,414.00 from a Maryland grant the construction of the MTDC was funded. The MTDC contains approximately 57,000 square feet of space and is specifically designed to meet the requirements of both information technology and biological technology startup companies. Overall, the MTDC creates an environment in which entrepreneurs involved in info and bio technology can share experiences and best practices, and develop partnerships, joints ventures or other collaboration.

Since its inception, the MTDC has successfully graduated over 65 bio and info tech companies. Of the 65 successful graduates, 60 are still in business in the State of Maryland and have created approximately 1400+ jobs.

Currently the MTDC has approximately 47 companies licensing space, 29 info tech companies and 18 bio tech companies. Companies in the MTDC presently employ over 172 employees.

Silver Spring Innovation Center (SSIC)
The SSIC is a free standing building, located in Montgomery County and owned by the County that contains approximately 40,000 square feet of space and offers 40 individual offices of virtually every shape and size. The SSIC offers the same business support services made available at the MTDC and excels in providing fast and efficient telecommunication connections for all of its companies.

Since its inception in the summer of 2004, the SSIC has graduated 5 info tech companies that currently employ 80 employees.

Presently the SSIC licenses 33 of the 42 available offices to 18 information technology companies. SSIC companies employ over 105 employees.

Emerging Technology Center @ Johns Hopkins Eastern (ETC Eastern)
MEDCO received financial commitments from Maryland Department of Business and Economic Development, the Maryland Technology Development Corporation, US Department of Commerce-Economic Development Administration, U.S. and Maryland Historic Tax Credits, Baltimore Development Corporation, and The Johns Hopkins University to assist MEDCO in building out space located in Baltimore City.

The ETC Eastern facility contains approximately 45,000 square feet of fully wired office space distributed over 37 separate offices. ETC Eastern is managed and financially supported by the Baltimore Development Corporation and provides its companies with an assortment of business assistance services. Due to its affiliation with NASA, ETC Eastern also provides fast tracking for those companies who develop technology of special interest to NASA.

Currently ETC Eastern has 34 companies licensing space at the facility. The 34 companies at ETC Eastern currently employ 194 employees.

Emerging Technology Center @ Canton (ETC Can)
In March 1999, renovation began on improvements at the Emerging Technology Center at the old Can Company building on Boston Street in Baltimore City. ETC Can is another NASA Incubator Program that contains approximately 48,909 square feet of fully wired office space distributed over 27 separate offices. ETC Can is managed and financially supported by the Baltimore Development Corporation and provides its companies with the same business assistance services that are made available at ETC Eastern, including NASA fast tracking.

Currently ETC Can has 24 companies licensing space at the facility. Those 24 companies presently employ 246 employees. ETC Can has graduated 31 companies, 27 of which are still in business and currently employ 372 employees.

Techcenter @ UMBC
The Techcenter @ UMBC contains approximately 170,000 square feet of space, including 75,000 square feet of specialized laboratory space. Techcenter @ UMBC offers a variety of office and business support services. The Tech Center is managed by the University and focuses on creating collaborative relationships between the incubator businesses and the University.

Currently the Techcenter @ UMBC has 34 start-up companies, emerging high-tech and bio tech companies licensing space at the facility. The companies at the Techcenter @ UMBC provide over 100 jobs, including more than 30 UMBC students.

Since its inception, the Techcenter @ UMBC has accommodated 90 start-up companies, of which more than 30 have successfully graduated, and have moved into the independent business world and currently employ 260 employees.

Wheaton Business Innovation Center (WBIC)
On April 6, 2006 MEDCO entered into a Management Agreement with Montgomery County, Maryland for the management oversight of several business and technology incubators within Montgomery County, including the WBIC. MEDCO acts as a conduit property manager in this transaction and has hired SPI Asset Management, LLC to perform the day to day management details necessary for the Center. SPI Asset Management and County representatives work closely and collectively to administer the tasks necessary for the operations of the WBIC, which is located at 11002 Veirs Mill Road, Wheaton, Maryland.

Currently the WBIC has 19 companies licensing 34 of the 36 office available. WBIC companies employ 36 employees.

Rockville Innovation Center (RIC)
On July 12, 2007 MEDCO obtained a loan in the amount of $4,700,000.00 with Mercantile Potomac Bank for the construction of a two story information technology incubator as part of a five story mixed use building in Rockville, Maryland. The other stories of said building shall be occupied by a local cultural center, retail spaces and condominium space. The RIC is backed by a reimbursable construction grant agreement (by and between TEDCO, Montgomery County and MEDCO) and an operational grant agreement (by and between MEDCO and Montgomery County). MEDCO acts as owner and as conduit property manager in this transaction and has hired SPI Asset Management, LLC to perform the day to day management details necessary for the Center. SPI Asset Management and County representatives work closely and collectively to administer the tasks necessary for the operations of the RIC. Currently the RIC has 11 companies licensing 20 of the 53 office at the facility. RIC currently employs 31 employees.

Montgomery College Germantown Innovation Center
Montgomery College and the County (DED) are renovating a vacant 67,000 square foot commercial building adjacent to the Germantown Campus. The Montgomery College Foundation will lease the entire building until 2011. In 2011, the Foundation will purchase the building for $13 million, plus interest. The College will renovate the first floor to create classroom space and office space for the Provost. The County will sublease the second floor (roughly 35,000 SF) from the College and renovate it for the Germantown Innovation Center at a cost of 6.9 million dollars. This incubator will include 12 labs, two clean room facilities, 8,500 SF of office space and typical incubator common areas including a multi-purpose room, smaller conference rooms, a lunch room, mail/copy room. Montgomery County has requested MEDCO’s assistance in the construction and project management to complete this project.

Virtual Licensees
In the spirit of Great Britain’s HUB concept, MEDCO and Montgomery County collectively designed a concept that would allow researchers, scientist and entrepreneurs with limited capital to have usage of certain incubator resources on a scheduled basis for a minimal monthly fee. Such resources include mailbox space, shared office resources (phone, fax, copy machine, computers, etc.), conference rooms and access to programs offer at the various incubators located in Montgomery County (business advice counseling, intellectual property/legal advice, etc.). This program presently extends to the MTDC, SSIC, WBIC and RIC incubator facilities, but shall extend into future Montgomery County incubators as well. There are currently ten (10) virtual licensees.

Advisory Capacity

MEDCO, through the direct attendance of its executive director, assists in the expansion, modernization and retention of existing Maryland business by maintaining board memberships and advisory positions with various organizations throughout the State. Such organizations include:

1. Maryland Industrial Partnership (MIPS) – Initiated in 1987, MIPS is an organization which promotes the development and commercialization of products and processes through research partnerships between universities and industries. Since its inception, 687 projects, 286 companies and 11 University System of Maryland institutions have participated. MEDCO’s executive director is a member of MIPS’ advisory board.
   
   
2. Maryland Technology Development Corporation (TEDCO) - Created by the State legislature in 1998, TEDCO facilitates the creation of businesses and fosters their growth through the commercialization of technology. MEDCO’s executive director serves as a member of TEDCO’s Technical Advisory Board for Small Business Incubation.
   
   
3. PenMar Development Corporation - Established in 1997 as a public instrumentality of the State, the purpose of the PenMar Development Corporation is the redevelopment of the Fort Richie site, located in Washington County, as a corporate conference and training center. MEDCO’s executive director serves as an ex-officio member of the board of directors.
   
   
4. Bainbridge Development Corporation - Established in 1999 as a public instrumentality of the State, the purpose of the Bainbridge Development Corporation is to develop the Bainbridge Naval Training Center, which closed in 1976, and to accelerate the transfer of the site to the private sector. MEDCO’s executive director is an ex-officio member of the board of directors.
   
   
5. Emerging Technology Centers (ETC) - The ETC is a non-profit business incubator venture of the Baltimore Development Corporation that helps early-stage companies grow and prosper. As part of the Baltimore Development Corporation, the ETC also uses its resources to promote economic development specifically in Baltimore City. MEDCO’s executive director serves as a member of the ETC’s advisory board.
   
   
6. Adventure Sports Center International (ASCI) - ASCI was created in order to establish an International Adventure Sports Center (the “Center”)as a focal point in the emerging and expanding adventure sports industry worldwide. The Center is designed to promote, educate and facilitate participation in a wide range of adventure-based recreational activities while simultaneously creating a unique destination that serves to support local economic development and as a model for communities wishing to capitalize on their intrinsic natural resource base while protecting its integrity. MEDCO’s executive director serves as a member of the ASCI board of directors.
7. Germantown Incubator - MEDCO’s Director of Development has been providing an advisory role for Montgomery County’s Economic Development Office to assist in developing an appropriate scope of work through MEDCO’s retention of an Construction consultant. MEDCO expects to be requested to provide additional services once the scope of work and budget is completed.
8. Lexington Park Flattops - MEDCO has been providing advice to St. Mary’s County’s redevelopment organization on numerous issues to have this site redeveloped for industrial purposes and at the same time meet the Navy’s concern for land use within their flight zones.
9. Washington County Public Schools Barbara Ingram School of the Arts - MEDCO Executive Director was invited to be part of a group to assist the WCPS in arranging the financing for the renovation of a downtown Hagerstown art school. The Facility was donated to the City and is in the heart of the Hagerstown Arts District. MEDCO provided alternative structures to finance the cost of renovating and equipping the facility as well as advice and assistance in establishing the partnerships to take advantage of the Maryland Historical Tax Credits. While MEDCO did not participate in the final financing, advice and guidance was provided which ultimately allowed for the arrangement of an alternative financing scenario.

Problem Bond Issues

MEDCO Owned Projects

1. Rocky Gap Golf and Resort: The Resort has been generating sufficient cash flow to cover its operating cost but not been able to generate sufficient cash flow to pay all of the interest on the debt. While investors/lenders have not been paid, the facility has operated under a forbearance arrange for the past four year. The investors are actively in negotiations with MEDCO to create a restructuring plan that would be a permanent fix the financial structure of the transaction. The outlook remains optimistic as increases in revenues and operating income before debt payment have been realized. To fully realize the project potential, the resort needs to generate an annualized occupancy in excess of 60% and at the same time maintain a strong average daily rate. MEDCO expects Rocky Gap will remain a viable Resort and is working to restructure the debt in a manner that will ensure its long term viability.
2. University of Maryland, Baltimore. MEDCO is the owner of a student residence designed to provide living quarters for students at the Baltimore City graduate school complex. The original manager was new to the student housing management and did not achieve the required performance goals and agreed to be replaced. The new manager was brought in June of 2006, and along with the University and MEDCO a turnaround plan was created to stabilize the operations. The plan was to first focus on increasing the occupancy to a level over 93% and than begin to increase the lease rates to ultimately achieve the required coverage ration of 1.2 times. For the fall of 2006 the leasing activity generated a significant increase in occupancy to nearly 100%. The manager also created a long term plan that assumes occupancy will remain high as rates will be increased at approximately 7% per year such that the coverage ratio can be achieved. At this time the results of the plan continue to be achieved and MEDCO projects the coverage ratio will be met for the 2010/2011 academic year.
3. Bowie State University. MEDCO is the owner of a student residence designed to provide student living quarters. Place Properties (an Atlanta developer selected by the University) was the developer and manager, MEDCO recommended terminating the manager due to poor performance and Capstone was brought in as the new manager. The status of the lease payments due from the students was significantly delinquent and upon investigation by the new manager the prior records had been improperly recorded and the accuracy of the information was questionable. The project also had significant cost variance in security as the appropriate electronic security system has not been installed.
   
   MEDCO leased the necessary security equipment in late 2006 which will reduce security cost $350,000 per year. A construction payment issue also arose in a dispute between Place as developer and its general contractor in which claim was also made against MEDCO as owner, and these claims were resolved by settlement among the parties. Thereafter, deficiencies in the roof were revealed. MEDCO has retained outside consultants to quantify the problem and propose solutions, and has engaged a roofing company to repair the secondary, low-lying roofs, using a combination of MEDCO funds and funds made available by University System participants in the MEDCO student residence fund program. MEDCO is working with counsel to resolve the main roof problems with the developer.
   
   The operations have not been sufficient to meet the coverage ratio as the project has continued to experience high levels of write offs. MEDCO and the manager in co-operation with the University have installed rent collection systems for the project to receive rent payments from students intending to pay with their financial aid directly from the University. Additional collection efforts are being undertaken to improve on the overall collections.
   
   MEDCO expects the collection issues to be resolved with steady improvements over time and the coverage ratio will be met for the 2009/2010 academic year.
4. Frostburg State Univesity Student Housing The project has had difficulties in achieving the projected and necessary occupancy levels to be financially stable. MEDCO, the manager and the University have collaborated to enhance occupancy and the fall 2007 occupancy is in excess of the projected level to achieve financial viability.
   
   The coverage ratio should be achieved in 2008/2009 if occupancy levels are maintained and expenses are controlled.
5. Salisbury University Student Housing The project did not meet the targeted coverage ratio of 1.2 times for FYE June 30, 2006. While the 2007 coverage ratio initially appeared slightly below the 1.20 target, the target was achieved after recording certain adjustments with the year end close out.
6. Chesapeake Hills After re-establishing operations after an arson fire, in July of 2006, to the cart barn and golf carts, this public course continues to suffer with cash flow issues. The debt service on the bonds is current as Calvert County has honored its obligations to fund debt service on the bonds (which obligations continue through 5/20/2008). The operations have not generated sufficient cash flow to fund the operating expenses and MEDCO has invested in excess of $400,000 to provide necessary working capital for the operation. Based on the inability of the operations to generate sufficient cash flow to cover the operating losses MEDCO has notified the County and the investors of its intent to cease operation. The County, MEDCO and investors have been meeting to pursue a resolution. MEDCO expects a resolution will be proposed but as of this writing one has not been put forth.
7. Maryland Technology Development Center: The MTDC did not achieve its debt coverage ratio for the year ending June 30, 2006. This was primarily the result of a $310,000 increase in expenses due to higher utility cost and the project paying for the County incubator representative. The funding provides the County will assure all payments are made on a timely basis including debt service and operating expenses. The initial proforma financial for FYE June 2008 provides for better than 1 to 1 coverage but does not meet the 1.2 target. MEDCO has retained a consultant to review the operations and make recommendation that would improve the financial performance of the project.

Conduit Issuances

1. RockGlen Healthcare Inc: RockGlen has experienced financial difficulties which have been consistent within the public pay nursing home industry due the federal government revised reimbursement rules, and additionally experienced cash flow problems when its working capital provider filed for bankruptcy. RockGlen has been operating under a Forbearance Agreement with the bondholders and the forbearance expires in July; under this agreement all payments, other than a portion of the interest payable under the bonds, are deferred. Because of federal tax law requirements which require the consent of the issuer, RockGlen has asked MEDCO to consent to a solicitation of bondholders to enter into another Forbearance Agreement. All outstanding fees have been brought current and remain current and discussion for a continued forbearance is in process.
2. Ravenwood: MEDCO issued tax exempt bonds for this nursing care facility, which provides critical care to the aged and to HIV patients in the Baltimore City area. Ravenwood is a debtor in possession in the process of bankruptcy reorganization, with a confirmation order in place which contemplates the issuance by MEDCO of new bonds to refund the original bonds, and replace them with bonds having different, extended repayment terms. Bondholders and other secured claimants approved the debtor’s plan for reorganization during the confirmation process. MEDCO retained Neil Hoffberg of Abramoff, Neuberger and Linder, LLP as special bond counsel to provide opinions with respect to its ability to issue the requested bonds, the form of the proposed transaction and the continued tax exempt status of the new bonds. MEDCO also retained David Musgrave of Ober Kaler as bankruptcy counsel to assist MEDCO in collecting unpaid pre-petition and post-petition issuance fees and in the deposition and proposed court appearances of MEDCO personnel requested by the creditors’ committee. Despite entry of the confirmation order by the bankruptcy court, there have been delays by the bond trustee and its counsel in effectuating required notices which would permit the issuance of the new bonds. If and when the Ravenwood plan is implemented, all bond counsel fees will be paid at the issuance of the new bonds, MEDCO would receive 50% of unpaid issuance fees at closing and the remainder in 12 installments with a priority ahead of debt service on the new bonds, MEDCO’s new issuance fees will have that same priority and MEDCO’s bankruptcy attorneys fees would be paid in nine monthly installments. The restructuring is scheduled to be completed in 2007.
3. AHF Gull Creek, Inc. AHF Gull Creek, Inc. (Gull Creek) has experienced financial difficulties and cash flow problems consistent with the abovementioned nursing home facilities. Gull Creek has been operating under a Forbearance Agreement with M&T Trust and the bondholders since April 2001. The current Forbearance Agreement, under which principal and interest payments are deferred, will expire in September 2008. All fees due to MEDCO have been paid.

MEDCO Pass through Developments

1. Southern Garrett One Maryland project: The Department of Business and Economic Development and MEDCO accepted the termination of a lease with Authentic Woodworking, and agreed to waive certain unpaid rent in the process of that entity’s cessation of business. The Department is in negotiation with other potential users of the facility to either acquire or lease.
2. Stellar: Spectrum Bio Science, the past tenant of this facility, has been delinquent and untimely in remitting their lease payments. The County identified a buyer and a sale has been completed.

MBE Report

The MEDCO Board adopted policies and procedures for procurement in June of 2006. The Policy requires MEDCO to report annually to the Legislature through this report. MEDCO strives to do business by favoring Maryland vendors and service providers as well as small and minority owned businesses as defined the Governor’s Office of Minority Affairs, MDOT’s WBE/MBE certification or the US Small Business Administration.

EQUIPMENT: During the most recent fiscal year ended June 30, 2007, MEDCO acquired only one significant piece of office equipment. At the expiration of the term on our leased copier we upgraded to a copier/scanner. MEDCO contacted multiple office equipment vendors from the MDOT MBE/DBE directory and solicited proposals from two vendors with specifications for a Cannon copier. The proposals were considered non responsive as they did not propose the specified Cannon made product. MEDCO obtained a quote from Capital Office Solutions, a non MBE/WBE, and the current Cannon vendor to MEDCO. The offer extended favorable lease and service terms. MEDCO opted for Capital Office Solutions proposal based on price and service and the offer including the Cannon product. At a fixed cost of $494.00 per month the average savings is $50.00 to $60.00 per month over the other offers.

MEDCO also engaged the services of Rudolph Information Systems, a veteran owned business to service printers. Total equipment rental and maintenance costs for fiscal year 2007 were $9,093.68 with $1,987.50 or 22 percent going to Rudolph Information Systems.

Professional Services: Over the past year, MEDCO utilized the services of Jones Networking an MBE/WBE registered temporary employment service to maintain coverage of the receptionist desk while our permanent receptionist was out on short term disability. Jones Networking was paid $2,380.00. MEDCO also engaged a human resource consultant to assist with rewriting the employee manual and provide HR advice on an as needed basis. Three firms were interviewed two of whom were registered with the State’s MBE program. The firm retained, Five L Company is not registered as an MBE or WBE; however, it is a one person, women owned small business. The proposal from Five L came in at a significantly lower bid than the two other proposals. Women owned Five L was paid $3,623.68. MEDCO spent a total of $33,609.87 on these types of services in fiscal year 2007. Of that total $8,528.68 or 25 percent went to small business and minority vendors.

Supplies/ Office Expenses: MEDCO orders general office supplies such as paper, pens, file folders and other miscellaneous supplies approximately once per month. We have placed orders with Minority owned office supply companies such as Dawns Office Supplies and Impact Office Products. However, we have received the best service and lowest prices from Staples. MEDCO purchased $689.84 in office supplies from MBE owned Impact Office Products. Additionally MEDCO spent $796.07 with Catonsville Framing a WBE. Total supplies and office expenses for the year were $5,705.28 of which $1,505.21 or 26% was paid to MBE or WBE’s.

SPECIAL PROJECTS: MEDCO obtained bids for a database restructuring project from the following minority companies; 1 Source Consulting, The Canton Group and Agnihotri Associates. The project was awarded to The Canton Group a state registered MBE. The project is ongoing and during fiscal year 2007 MEDCO paid the Canton Group $39,018.00 which is 100 percent of the costs related to this project. The Canton Group is also SBE and DBE certified.

Spending Summary: During Fiscal year 2007 MEDCO spent $87,426.83 in the procurement of office equipment, professional services, supplies and related expenses. A total of $48,494.59 or 55 percent was paid to women owned, veteran owned, and SBE, MBE, WBE and DBE certified companies.

Outreach: The internet is checked monthly, at a minimum, for updates to various directories (MDOT, SBDC, and NAWBO) and calendars of events for upcoming exhibitions. On April 19th MEDCO attended a MBE procurement conference and exhibition where over 150 minority business displayed their products and services.

MEDCO initiated a $34,000,000 construction project for Towson University in May of 2007. This project has a minority procurement goal of 25%, which is consistent with the State’s goal.