EMPLOYEE OWNERSHIP, ESOPs and ECONOMIC DEVELOPMENT
 
State Agencies
and Employee Ownership
 
According to research done in 1991, that year approximately fifteen states had established programs that encouraged employee ownership.  Today, however, only about four states do -- New York, Ohio, Wisconsin and Michigan.  The cause of the decline is mainly political -- upon their inauguration, new governors conduct thorough inventories of all state programs and eliminate those identified too closely with past administrations and those with small constituencies.  Employee ownership programs have tended to fit both categories. 

State programs have have varied in size, focus, and structure.  Most programs have been housed in departments of labor or commerce, although some states have provided funds to nonprofit or university-based programs.  The following components are common, regardless of where the effort is housed: 
 
  • technical assistance -- helping employees navigate the complicated legal, procedural and financial process of investigating the feasibility of becoming an employee owned firm.
  • financial assistance -- grants or loans for feasibility studies, loans to help set up the ESOP, loan guarantees or interest rate write-downs on loans to set up the ESOP.
  • political support -- providing public support to employees in their bid for ownership and  helping to persuade reluctant sellers to cooperate.
  • ownership transition services -- helping small and family-owned businesses plan for the  founder's retirement by investigating a full or partial sale of the firm to employees, or a sale to outside investors. 
  • referral services -- maintaining lists of experts in employee ownership, employment law, and corporate finance so a firm can get the assistance it needs. 
  • ongoing training -- coordinating training conferences and helping establish and maintain links with other employee-owned firms.
  • with most housed in departments of labor or commerce. 
 
 
STATE PROGRAMS
the following states have programs that encourage employee ownership:
 
Michigan
Michigan Jobs Commission 
Workforce Transition Unit 
201 North Washington Square 
5th Floor, Victor Office Center 
Lansing, MI  48913 
tel: 517/373-2162 
contact: James Houck 

This program has been scaled back significantly since the late 1980s, but still provides technical assistance, referrals, and some funding to employee and management groups interested in ESOPs. 
 

New York
Ownership Transition Services 
Empire State Development 
633 Third Avenue, 33rd Floor 
New York, NY  10017 
tel: 212/803-2400 
contact: Martin Kinsella 

This agency was founded with a focus exclusively on ESOPs, but now more broadly helps businesses develop succession plans and employee groups decide if employee ownership is feasible. 

 

Ohio
Ohio Employee Ownership Center (OEOC) 
309 Franklin Hall 
Kent State University 
Kent, OH  44242 
contact: John Logue 
tel: 330/672-3028 
website: www.kent.edu/oeoc 

This is a nonprofit university-based organization that receives some of its funds from the Ohio Department of Development Labor-Management Cooperation Program.  Programs include training, referrals, loan funds, conferences, and ESOP networks in the state of Ohio. 
 

Wisconsin

Cooperative Development Services 
608/258-4393 (general # - 4396) 
contact: E.G. Nadeau 

This is a nonprofit organization that can help access small loans from the state for employee ownership feasibility studies. 
 
 
 
 
Top of this page
What is Employee Ownership?
Role for Economic Developers
Links and Resources
 
To Econonomic Development Topics Page
 
Send comments and suggestions to jps@email.unc.edu  
 
updated: 12 April 1998