There are people who spend their days going through the motions of their career. And then there’s Dylan Wiman.
As Wiman climbed the ladder in his fields of construction and private equity, the Grand Junction native was reading, studying, learning. He was looking for something … different.
So in 2022, when the owners of Rocky Mountain Steel Inc. in Olathe started hinting that they were ready to retire, Wiman, with his construction background and expertise in business acquisition and mergers, said he was interested in buying.
It is now Colorado’s newest 100% employee owned business.
“Selling to private equity, you never know what you’re going to get,” Wiman said. “You never know who the new owners are or what their intentions will be. So for the control of the company to now be in the employees’ hands, it means a lot to people.”
The deal came at an opportune time. Since 2020, the Colorado Employee Ownership Office at the Office of Economic Development and International Trade, or OEDIT, has been working to make Colorado an easy place for business owners to explore and convert to employee ownership with things like employee stock-ownership plans, or ESOPs.
OEDIT says that across the United States, an estimated 6 in 10 business owners plan to retire or sell their businesses within the next decade, yet only 15% of businesses are passed on to the next generation and only 20% of listed businesses sell. Employee ownership offers an alternative path that gives business owners a guaranteed succession plan and retains important jobs in local communities, the office adds.
In Colorado, where 48% of the state’s small businesses are owned by people 55 or older, it’s a model that could mean the difference between a lot of businesses shutting down in the near future or a lot of them staying open and thriving. And as Wiman says, it could counter “wealth becoming pooled into a small minority of people” and could “correct a distribution of wealth that I think is a little out of whack.”
A benefit for both sides
Transitioning to an employee-owned company has tax benefits for the owner and the employee. In Colorado, there’s an additional incentive.
OEDIT’s program provides a cash deposit as collateral for a business loan to the transitioning company if employees can’t meet a lender’s collateral requirements. The qualified sellers get a tax credit to cover up to 50% of their conversion costs, not to exceed $150,000 (for an Employee Stock Ownership Plan) to offset their state income taxes.
ESOPs using the Colorado Employee Ownership Tax Credit:
- Apex Analytics LLC
- Jax Mercantile CO
- Edible Beats
- Visual Interest
- Top Notch Logworks
- Apex Plumbing
- Empowered Energy Systems
- Zeitgeist, Inc.
- New Wave Enviro Products, Inc.
- The Brewing-Science Institute, Inc.
- The Baessler Group, PBC
Nikki Maloney, OEDIT’s director of business support, says the programs OEDIT has been activating since 2020 help encourage larger business owners in rural and urban communities to consider employee ownership, because doing so could have “tremendous long-term impacts on rural economic development.”
The Cash Collateral Support Program came about through funding from the State Small Business Credit Initiative Program offered by the U.S. Treasury. So far, Rocky Mountain Steel and Blue Sky Builders are utilizing the cash support and tax credits.
Maloney said OEDIT added special language to the program that allowed for the creation of employee-owned companies, and the U.S. Treasury did a specific callout as well.
“So we’re really excited, because in the last few months, we’ve had the first two businesses that have layered both the use of the tax credit and the loan funding,” she said.
Resources:
Check back at ColoradoSun.com next week to read Tracy’s deeper dive into employee ownership and the state’s program.
Got a question or comment for Tracy Ross, the Colorado Sun’s rural business reporter? Email tracy@coloradosun.com
Fewer employed than we thought?
For those who follow the state and federal job reports, the first time numbers come out for any given month is not the last.
This week, the Bureau of Labor Statistics revised employment data from March. The U.S. added 818,000 fewer jobs than previously estimated, while Colorado’s overcount was 72,700, according to the latest Quarterly Census of Employment and Wages data.
That doesn’t quite add up, said Tim Wonholf, an economist at the state Department of Labor and Employment. It also doesn’t necessarily mean more people have lost their jobs.
“Downward revisions don’t equate to job losses, but rather provide a clearer picture of the jobs that existed to begin with,” he said in an email. “Colorado’s revision looks higher than we would expect.”
His reason is that Colorado’s labor force is 2% of the national labor force. So, 2% of 818,000 should be 16,000 and not four-times higher.
“We are investigating and working with national partners to understand the estimate and dig into potential root-cause factors,” he said.
Ryan Gedney, a Denver economist who tracks labor trends, said that if the numbers are true, “Colorado jobs are actually declining over the year,” he said in an email. But he, too, questions the accuracy of the QCEW data.
Final revisions come out in February 2025. So, stay tuned …
➔ Companies warn of more layoffs. When companies know they’re about to cut a number of workers permanently, many are required to give workers 60 days’ notice and let the state labor department know, as per the Worker Adjustment and Retraining Notification Act. Not all do, but so far in August, official notices coming in include 85 workers at TPS Parking Management; 49 employees at True Value’s regional distribution center in Denver due to a decision to stop service to retailers; 63 at Casey’s Pond in Steamboat Springs which owners are selling; and 70 at the Wells Fargo office in Greenwood Village (the second round this summer). >> More Colorado WARNs
Reader poll: How’s the economy treating you?
We’re still taking responses for the latest What’s Working reader poll! Denver led the way to lower inflation in July. Did your wallet notice?
Share your thoughts to help us report on Colorado’s economy: cosun.co/WWCOeconomy2024
Sun economy stories you may have missed
➔ Colorado, U.S. Department of Justice sue RealPage over alleged price-fixing scheme to drive up rent. The federal lawsuit says RealPage controls as much as 80% of the national market for landlord revenue management software, giving it outsize power to “subvert competition” and distort the free market to the detriment of renters >> Read story
➔ Closed meetings and backroom negotiations ahead of Colorado’s special session frustrate open government advocates, lawmakers. The public was kept out of two Democratic caucus meetings earlier this month in one of the first tests of Colorado’s new open meetings law. An even smaller group negotiated a proposed property tax deal behind closed doors. >> Read story
➔ Eldora Mountain Resort listed for sale as Utah-based operator Powdr sheds ski areas. Powdr owner John Cumming is selling Vermont’s Killington and is prepping three other resorts in Colorado, British Columbia and Oregon for sale >> Read story
➔ A strike against the National Audubon Society gains support from Colorado bird workers. Bird Union is ready for tougher action after three years of fruitless negotiation and claims of federal labor law violations >> Read story
➔ In a time of challenge and innovation, a Colorado library card checks out more than books. Lots more. Transformed by the pandemic, buffeted by politics and nudged to reinforce a diminishing social net, public libraries continue to reinvent themselves >> Read story
➔ CU Boulder’s new $43M energy plant is not green enough for its faculty experts. Faculty and staff experts push an alternative to a $43 million power rebuild, but top brass say they’ve done their homework >> Read story
➔ Large number of customers starting lawn-watering cycles on Mondays is stressing Denver Water’s system. The state’s largest water utility is asking customers to consider shifting away from a Monday start, using Tuesdays to begin their three-day weekly watering schedules instead >> Read story
Other working bits
➔ Need rent help? State rental fund opens Monday. A new round of emergency rental assistance opens Monday at 11 a.m. Struggling renters in Colorado must pre-apply before 5 p.m. Wednesday in order to be considered. There are a lot of eligibility requirements, such as Coloradans falling behind on their rent, but those who are randomly picked can qualify for up to seven months rent or $10,000, whichever is less. >> Apply (en Espanol), or call the CARE Center at 303-838-1200 or 1-888-480-0066.
➔ Boulder County honors business leaders. Tom Cech, a professor at University of Colorado, became the state’s first recipient of a Nobel Prize back in 1989. The award was in chemistry and the discovery of the catalytic properties of RNA. Cech’s latest award? He’s one of nine locals getting inducted into the Boulder County Business Hall of Fame. >> Check out the 9 new awardees
➔ Stay cool Colorado, says Pinnacol Assurance to workers. That is What’s Working’s interpretation of the state’s largest workers’ compensation insurer PSA to workers in Colorado. When it’s hot outside, workers are 52% more susceptible to injuries, including strains, cuts and falls, according to the company. But it’s not just construction workers. Local teachers, restaurant workers and maintenance workers also have increased risk due to the state’s elevation and record-setting days of heat this summer. Tips for employers to help workers stay cool? Provide adequate hydration, rest breaks and shade and establish a buddy system to help workers help one another. >> More tips
Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww
Thanks for sticking with me for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
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