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Maryland showed more signs this year of recovering from the Great Recession, but the road remained bumpy.

The state added about 27,000 jobs from January to November, according to federal figures — the most in that time period since 2005. That 1.1 percent employment growth rate was the same as the national average but higher than in most other regional jurisdictions, including Virginia and Pennsylvania.

The private sector drove the job increase in Maryland as only 400 net government positions were added through November. Bethesda hotel giant Marriott International tacked on some 1,000 jobs in the state in the past year to reach 10,000, while delivery company United Parcel Service beefed up its Maryland work force by 450 to reach 7,260, according to figures from the Maryland Department of Business and Economic Development.

The federal sector — a big concern in the state, with congressional Republicans pledging to drastically cut future budgets — actually added 3,500 jobs, due to the Pentagon’s base realignment program, even as many agencies and government contractors in Maryland trimmed staff.

Fort Meade in Anne Arundel County has added about 3,500 employees this year, while Walter Reed National Military Medical Center in Bethesda boosted its work force by almost 3,000 positions.

Meanwhile, local government employers such as school districts and counties have slashed employee numbers by 4,000 this year.

Still, Maryland’s job growth was a little slower than anticipated, said economist Daraius Irani of Towson University. The federal government standoffs this year over debt ceilings and shutdowns took some of “the wind out of the sails” of the state’s economic progress, he said.

But with gains in cybersecurity and other sectors, Maryland should not be hurt by future federal budget cuts as much as some fear, Irani said.

“There may be more of a transfer of skills from one industry to another,” he said.

Maryland’s seasonally adjusted unemployment rate dipped to 6.8 percent in April before rising to 7.4 percent in September and sliding back down to 6.9 percent in November.

New programs and projects

State officials unveiled some new programs to try to boost local businesses this year. The state hopes to start funneling money to venture capital firms by June through InvestMaryland, in which the state is selling tax credits at a discount to insurance companies that officials say will result in at least $70 million in venture capital for businesses.

Holy Cross Hospital this month broke ground on a 237,200-square-foot campus at Montgomery College in Germantown. The 93-bed center is slated for completion in 2014 and is expected to add about 1,500 jobs, according to a DBED report.

In January, the Maryland Health Care Commission chose Holy Cross’ $202 million project over one proposed in Clarksburg by Adventist HealthCare.

Also in Montgomery County, franchiser Choice Hotels International broke ground in August on its new corporate headquarters in Rockville, marking the beginning of construction of a 197,866-square-foot office building. The company executed a 10-year lease as part of a $4.4 million deal struck to keep the company in the county. The money comes from loans, tax breaks and other incentives from the city of Rockville, the county and the state.

Choice Hotels will add 75 people to its work force in Rockville as part of the deal, said Heather Soule, company spokeswoman. The company employs about 400 people at its headquarters in Silver Spring, where they have been since 1968.

Another major project was retailer Kohl’s opening a $90 million distribution facility in Harford County this summer with plans for as many as 1,200 employees.

Grocer and retailer Wegmans opened a 500-employee store in Frederick in June and a 520-worker store in Abingdon in September. The Rochester, N.Y., company opened a 600-employee store in Landover last year.

But other major employers slashed their work forces in Maryland. In November, Bechtel executives announced plans to move 625 workers from Frederick to Northern Virginia, in part to be closer to federal clients. The shift is expected to be completed by Sept. 30. However, the state worked out a deal to retain Bechtel's power division in Frederick with a $9.5 million loan that becomes a grant if the company retains 1,250 full-time jobs there through 2018.

Retail giant Wal-Mart’s work force in the state dropped by 300 in the past year, while military and aerospace giant Lockheed Martin of Bethesda shed a net 245 employees, according to DBED figures.

Among the major deals this year was the $2 billion sale of Hughes Communications, parent of Hughes Network Systems, by EchoStar. The deal merged two large manufacturers of satellite television and Internet equipment. When the sale was announced in February, Hughes employed about 1,200 workers in Maryland.

Also, Coca-Cola acquired the balance of Bethesda organic beverage company Honest Tea for an undisclosed amount. The Atlanta giant had paid $43 million for a 40 percent stake in Honest Tea in 2008.

Major biotech scores

The state’s bioscience industry provided some bright spots this year.

Human Genome Sciences hit it big in March, when the Food and Drug Administration approved the Rockville company's lupus treatment, Benlysta. Benlysta is the first new approved drug for lupus in more than 50 years and it could be worth billions, boosted by HGS’s partnership with GlaxoSmithKline of the U.K.

In July, HGS CEO H. Thomas Watkins was elected chairman of the Biotechnology Industry Organization for two years. His election coincided with BIO’s annual international convention, which was held in Washington, D.C., and drew more than 15,000 biotech executives. The location helped more than 30 Maryland biotechs exhibit products, with state and other officials pitching the state to the global industry.

Among the other significant deals this year:

— Micromet of Rockville announced a cancer treatment agreement in July with Amgen of California that could be worth about $1 billion.

— United Therapeutics of Silver Spring won a federal contract worth up to $45 million to work on a treatment for dengue fever.

— Novavax of Rockville won $179 million from the federal government to develop seasonal and pandemic flu vaccines.

— MacroGenics of Rockville signed a license agreement with Servier of France worth up to $500 million to develop antibody therapeutics to treat solid tumors.

— Sequella, also of Rockville, agreed to partner with a Russian venture fund to develop a treatment for tuberculosis in the Russian Federation that could be worth $50 million.

But 2011 also brought disappointments. Rockville's Nabi Biopharmaceuticals is considering a sale or takeover after failing two important clinical trials for its quit-smoking vaccine, while RegeneRx Biopharmaceuticals and Rexhan Pharmaceuticals, also both of Rockville, announced weak results from phase 2 clinical trials of their candidates.

Celsion, a Columbia cancer treatment developer, and Vanda Pharmaceuticals, a Rockville biotech that focuses on schizophrenia and sleep disorders, also announced plans to leave the state, with Celsion headed to New Jersey and Vanda to Washington, D.C.

2011 also saw venture capital money drying up. Investments in both the second and third quarters were down from 2010, according to the MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association. Investments in the third quarter fell to $44.7 million from $153.11 million, while they fell in second quarter to $58.83 million from $115.69 million. However, a $54.1 million investment in equity financing for Germantown's Sensors for Medicine and Science could mean a fourth-quarter increase.

Setting sights on Asia and beyond

Maryland pushed its international business agenda in 2011, with two trade missions to Asia in the summer and fall raking in more than $150 million in business deals and partnerships. Gov. Martin O'Malley (D) led both missions, accompanied by business executives, academic leaders and government officials.

The 10-day trade mission to East Asia, which included stops in China, Korea and Vietnam, returned with $85 million, including a pledge by Shanghai’s Tasly to invest $40 million in building a 430,000-square-foot production and training center for traditional Chinese medicine in the 4,360-acre Science City between Gaithersburg and Rockville.

The weeklong mission to India yielded $60 million in deals, including a $23 million expansion investment from Jubilant Life Sciences, an Indian pharmaceutical company in Salisbury.

“Maryland companies need to be where the best opportunities are,” Christian Johansson, DBED secretary, said at the time.

O’Malley said he also wants to conduct similar trade missions to emerging markets in Brazil and South Africa.

Tourism still growing

The tourism industry built on its 2010 success, taking in $359 million in fiscal 2011, according to state information. That was up 5.1 percent over fiscal ’10, outpacing the 3.6 percent growth of overall sales taxes by 40 percent, according to the Bureau of Revenue Estimates.

Much of this success came from crowd-drawing events such as the U.S. Open Championship in Bethesda in June, which drew 230,000 fans and generated as much as $150 million for county businesses; the Dew Tour in Ocean City, which drew 73,000 spectators; and the inaugural Baltimore Grand Prix, which drew more than 160,000 and generated $47 million in spending. However, the Grand Prix's spending was still $23 million less than race organizers predicted.

"The bottom line is Maryland realizes $43 in state sales tax for every $1 invested in tourism promotion. Tourism is also a major generator of jobs, directly employing 130,000 Marylanders," David Reel, president and CEO of the Maryland Tourism Council, said in an email to The Gazette.

According to the most recent figures available, sales tax revenue from tourism tax codes grew 5.4 percent, versus 3.9 percent growth for overall sales-tax revenue for sales through October of this fiscal year, he said.

"We fully expect this positive news to continue in 2012 as Maryland will be in the center of three huge upcoming commemorations — the War of 1812 bicentennial, the Civil War sesquicentennial and the Harriet Tubman centennial," Reel said.

New laws

Among new state laws affecting businesses was one raising the alcohol sales tax from 6 percent to 9 percent, over the opposition of retailers and winery executives.

Lawmakers also allowed wineries to ship directly to consumers, created the Commission on Maryland Cybersecurity Innovation and Excellence and tweaked the biotechnology investment tax credit program, temporarily increasing the age ceiling for eligible biotechs from 12 to 15 years.

Maryland became the first state to pass a law that paves the way for jurisdictions to adopt an industrywide, international environmentally sensitive building construction code, which some say could drive up construction costs. Another bill approved over many business owners’ objections will require employers to annually provide electronic or written notice to employees who may be eligible for the federal or state earned income tax credit.

The Maryland Chamber of Commerce and other business groups were kept busy lobbying for and against various proposals.

Among those was the governing structure of the state health insurance benefit exchange under the federal insurance reform law, which is intended to allow individuals and small employers to purchase insurance at more affordable rates. Maryland’s exchange is structured as a hybrid public-private model, starting as a public entity that will have more flexibility with hiring and procurement practices.

The chamber also lobbied to pass legislation that will allow sole proprietors in the small group health insurance plan to continue participation through 2013. A key win for pharmacies was a bill that lowered from 18 to 9 the age of customers to whom they can administer flu shots.

Comings and goings

2011 also saw some notable executive moves and announcements.

J.W. Marriott Jr. is stepping down after 40 years as CEO of the eponymous hotel company, but will stay as chairman. He will be succeeded by President and COO Arne Sorensen. And W. Mitt Romney resigned from the Marriott board as he pursued a significantly higher-profile opportunity.

Top bioscience executives who announced their resignations this year include Fuad El-Hibri, CEO of Emergent BioSolutions of Rockville, and Paul H. Fischer, CEO of GenVec in Gaithersburg. El-Hibri, who has been Emergent chairman and CEO since its founding in 1998, will continue as chairman and be succeeded by Daniel J. Abdun-Nabi, who has been president and COO since 2008. Fischer has been a director, president and CEO of GenVec since 1996.

Meanwhile, a major shakeup at Rockville vaccine developer Novavax sparked the departure of Rahul Singvhi, who had been president, CEO and a director since August 2005. He was succeeded as president and CEO by Stanley C. Erck, former executive chairman, and James F. Young was named chairman.

Science Applications International of McLean named David Heimbrook CEO of its SAIC-Frederick subsidiary, succeeding Larry Arthur, who was CEO since 2000 and stayed on as chief scientist.

After two years as CEO, Renée Winsky resigned from the Tech Council of Maryland.

Gilbert Levin left the board of Spherix, the scientific company he founded in 1967.

In Baltimore, trial lawyer Francis B. Burch Jr. was elected chairman of Johns Hopkins Medicine, succeeding C. Michael Armstrong.

Catalyst Health Solutions of Rockville named its CEO, David T. Blair, chairman, succeeding Edward S. Civera. Civera was with the pharmacy benefit management services company since it was founded in 1997 and had been chairman since 2005.

And a high-profile criminal case concluded in November when a federal judge sentenced John T.C. Yeh, former CEO of Rockville deaf services business Viable, to nine years in prison and ordered him to pay restitution of $20 million for his role in a multimillion-dollar government fraud case. His brother, former Viable vice president Joseph Yeh, received a prison sentence of 55 months and also was ordered to pay $20 million in restitution.

The Yehs were among 26 people nationwide to be indicted in 2009 for conspiring to defraud the Federal Communications Commission’s Video Relay Service program, which helps deaf people communicate, by billing the government for millions of dollars in illegitimate calls. They pleaded guilty to conspiracy to commit mail fraud in October 2010.

kshay@gazette.net

lrobbins@gazette.net.