Glenwood Springs, CO (October 20, 2021) – One of the most successful pool and spa companies in the Rocky Mountains, Colorado Pool + Spa Scapes, has become 100% employee owned, effective April 1, 2021. The new ownership structure, known as an employee stock ownership plan (ESOP), is the most common form of employee ownership in the U.S. The plan is highly tax-advantaged in which employees own shares through a trust funded by the company.
Colorado Governor Jared Polis, in recognition of October being National Employee Ownership Month, recently toured the Colorado Pool + Spa Scapes Avon location. He congratulated employees on the company’s recent transition to ESOP.
Colorado Pool + Spa Scapes serves the Roaring Fork and Vail valleys, and has offices in Glenwood Springs and Avon. “Our company was owned for the past 20 years by partners who could have sold the business to another buyer, yet the partners wanted instead to find a way that the employees who helped build the company could become owners and preserve the business culture,” says Chief Financial Officer, Paula Busk Cross.
An ESOP allowed Colorado Pool + Spa Scapes to transition ownership with substantial tax benefits and provide long-term wealth building for employees, and support a high-involvement work culture where employees are given the opportunity to think and act like owners.
Busk Cross adds, “We wished to continue the legacy of employees that live the core values of the company, reaping the benefits of their hard work. We task all of our people with seeking quality in their work, doing the right thing, being customer driven and a team player, maintaining a positive attitude, showing initiative, and being dedicated.” Such core values have been directional in leading the company to the ownership change and enabling Colorado Pool + Spa Scapes to be a sought-after employer. Adding the benefit of employee ownership to the compensation package has differentiated Colorado Pool + Spa Scapes from most other companies.
The Rocky Mountain Employee Ownership Center (rmeoc.org) believes that an economy should work for everyone – and broad-based ownership is one of the most effective tools to make that happen. Employee ownership builds stronger businesses, creates better jobs, and helps develop more sustainable and resilient local economies — and it’s a powerful way to address racial and social inequality. Busk Cross agrees and says that Colorado Pool + Spa Scapes is proud to have brought an ESOP program to the Roaring Fork and Vail valleys.
Approximately 6,500 U.S. companies are ESOP-structured, and roughly 14 million U.S. workers are ESOP participants. Construction is the largest industry segment of ESOP companies. There are more than 150 employee-owned companies in Colorado, including ESOPs and worker cooperatives. Employee-owned firms experience 5-10% higher growth in employment and sales. ESOPS are 25% more likely to stay in business than traditional firms. Employee owners are four times less likely to be laid off during economic downturns.
Hands down, Colorado has become the most employee ownership-friendly state in the country. With an existing state-funded outreach program that helps companies convert to employee ownership and one of the most active and effective nonprofit state employee ownership centers (The Rocky Mountain Employee Ownership Center or RMEOC), Colorado has created a national model for how states can help move employee ownership forward.
Colorado passed a law that would help cover some of the costs to convert to employee ownership. H.B. 21-1311, a bill that would make sweeping changes to Colorado tax law, includes a provision to provide $10 million annually in tax credits over the next six years to fund the professional service costs of conversions to employee ownership (EO). The funds could be used to convert to an ESOP, an employee ownership trust, or a worker cooperative. ESOPs would qualify for a credit equal to 50% of the conversion costs up to $100,000; cooperatives and employee ownership trusts could get up to $25,000. The proposal was strongly supported by Governor Jared Polis, who has long been both an advocate for employee ownership and a practitioner, sharing ownership with employees in his prior career as an entrepreneur. The credit would only be available if the company actually sets up a plan.
In 2020, Colorado became the most recent state to create a state employee ownership center. Governor Polis created the Employee Ownership Office as a standalone center in the Colorado Office of Economic Development and International Trade (OEDIT). In its first year, the office helped shepherd two EO transactions. Just halfway through 2021, it has already assisted with 20 transactions, a rate that would put Colorado well ahead of any other states in new EO conversions per capita. A state the size of Colorado might typically expect fewer than 20 conversions to ESOPs and worker cooperatives in a year.
The state office operates an “Employee Ownership Navigator” to provide advice to business owners about ownership models, as well as to connect them to local approved advisors. The office also offers a new certification for companies that provide ownership to 20% or more of workers. The companies will be included in statewide branding campaigns and will be listed on its website.
The state program received $1.75 million in funding in 2020 for a two-year period to cover the costs of a loan program to support employee ownership conversions as well as small grants to help pay for setup costs.
