Gov. Jared Polis created a commission Wednesday to boost Colorado’s employee-owned businesses, signing an executive order where he began his gubernatorial campaign nearly two years ago — in the produce section of the Save-A-Lot grocery store on North Academy Boulevard.
As he launched his campaign, Polis said he wanted to position the state as a leader in fostering employee-owned businesses to ensure that the economy works for everyone, not just the wealthy.
But, despite the strong statewide economy, Polis said wages in Colorado haven’t kept up.
“A big part of that solution is participatory capitalism, allowing people to own part of the upside that they create through the value of their labor,” Polis said. “The companies I started had stock options for every employee. Another way to do that is ESOPs (employee stock ownership plan), like Save-A-Lot, which is entirely owned by the bagger and the butcher and the people that work here.”
Co-ops and credit unions are additional models that fit the initiative, Polis said.
The newly created commission will be tasked with building a technical support network for businesses seeking to convert to an employee ownership model, educating businesses and communities about the benefits of such a model and removing barriers to the creation of more employee-owned businesses.
Polis will appoint between 10 and 18 commission who will serve two- or four-year terms and will make recommendations directly to the governor’s office, the order says.
Employee-owned businesses are less likely to lay off employees during economic downturns, which is when communities need stability the most, said Betsy Markey, executive director of the state’s Office of Economic Development and International Trade.
The model also offers buy-in for employees who then take greater pride in their work, in turn providing a greater customer service experience, Markey and Polis agreed.
“Look at the size of these papayas,” Polis joked. “The out-of-state chains have much smaller papayas than employee-owned stores.”
The newly created commission will bolster the ongoing work of John Kovac’s Small Business Program within Markey’s OEDIT.
Kovacs and his team provide one-on-one coaching and consulting for entrepreneurs and education, which includes business courses at little to no cost, he said. But the commission will act as eyes and ears for the state, identifying problems for entrepreneurs and offering solutions to coincide and boost the program’s existing services.
There are around 135 ESOPs in the state, Kovacs said, with at least one large ESOP headed for Colorado Springs.
In February, the City Council approved a controversial $16.2 million tax incentive deal to lure Scheels All Sports to town.
The outdoor apparel and sporting goods store offers employees stock options and the planned 220,000-square-foot store is estimated to cost $84 million, create 145 construction jobs and employ 400 once it opens in early 2021, city officials have said.
But additional help from the state is always welcome, said Rachel Beck, vice president of government affairs for the Colorado Springs Chamber & EDC. The organization’s goal is to bring sustainable and high-paying jobs to town from a variety of different industries and that goal appears to coincide with that of Polis’ new commission, she said.
“We’re happy to have all hands on deck when it comes to promoting economic development in the state and in the region,” Beck said.
It’s not immediately clear how many employee-owned businesses are operating in the Pikes Peak region, Beck said, adding that determining that could be a starting point for the commission.
Consumers are shifting away from big-box stores and more toward locally owned and operated establishments, said Aikta Marcoulier, executive director of the Pikes Peak Small Business Development Center.
“If you have a company that employees are truly buying in on, it’s a different culture when you walk in the door,” Marcoulier said.
Consumers are seeking that type of culture, she said, and they’re ushering in a new business model.
“Buying behavior has changed, so the business behavior has to change with it,” she said.