Colorado launches initiative to boost employee ownership

Gov. Jared Polis is taking action on one of his top economic development priorities — promoting employee ownership of businesses and companies in the state.

Polis, when in Congress, was on the Cooperative Business Caucus and has long supported sharedownership models, which have a rich history in Colorado and are seeing a resurgence.

His administration is putting together an Employee Ownership Center within the Colorado Office of Economic Development and International Trade, executive director Betsy Markey announced Thursday.

The center is working with law firms and accountants to simplify the process and reduce costs associated with converting to an employee-owned model, she said. The center hopes to become the go-to place where owners and workers can turn to and tap state resources.

“It is a way to help businesses that want to be employee-owned,” Markey said of the new center.

John Kovacs, program analyst for the state’s Employee Ownership initiative, said workers who have an ownership stake earn higher wages, build a higher net worth and are more engaged in their jobs than those who don’t.

“We are looking to make Colorado the Delaware of employee ownership,” Kovacs told the Colorado Economic Development Commission on Thursday. Delaware has laws that make it easy to incorporate and courts with expertise in corporate law.

Two years ago the legislature approved a fund that can provide up to $10,000 toward the cost of accounting and legal services involved with forming an ESOP, which Kovacs said can be an expensive process.

As baby boomers move deeper into their golden years, many are finding that their children and family don’t want to take over. Willing buyers can be hard to find, especially in parts of the state that aren’t seeing growth.

“This could be a game changer in rural Colorado,” said EDC director Tara Marshall.

She pointed to the example of a family-owned dry cleaner in Trinidad that closed after the owner failed to find a buyer. Seven people lost their jobs, and residents of the city are now having to drive 87 miles to get dry cleaning done.

A better solution for the community would have been to craft a transition plan that would have allowed the workers to take over, Marshall said.