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The office has been dormant since 2008 when the state cut the budget.

State Budget Funds Office to Increase Employee-Owned Businesses

By Andy McKeeveriBerkshires Staff
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State Rep. Paul Mark filed a budget amendment to restore the funding for the Office of Employee Involvement and Ownership in past seven consecutive years.
DALTON, Mass. — Adam Vartikar grew up in a family-owned business in Brookline and now his parents are looking to retire.
 
But neither he, nor any of his siblings, want to run it. Vartikar has a close relationship with the employees and doesn't want to see his parents close the doors or sell out to a company that will move it away.
 
So he thought he'd help sell the business to the workers. He found out it is not that easy.
 
"You have this great, elegant solution for business succession but you have a problem with things like how to get a loan," Vartikar said.
 
His family's company advisers, bankers, and lawyers were somewhat befuddled, too, trying to figure out exactly how to do it. That led Vartikar down a path of trying to restore the Massachusetts Office of Employee Involvement and Ownership.
 
That office had been in existence for 20 years and provided expertise in converting businesses to employee-owned models or starting employee-owned models. After talking with numerous people and companies about why the model wasn't taking off, Vartikar determined that the office is the best way to encourage those type of businesses.
 
State Rep. Paul Mark, D-Peru, on the other end of the state from Vartikar, had come to that same conclusion. 
 
"It was created in 1989 by former Senator [David] Magnani and exists to help small business convert to cooperatives, employee stock ownership models, employee-owned models. It had a good track record. It was in operation for 20 years," Mark said. "Then in the recession, it was zero funded. When I first got elected I was really interested in co-ops. There are a lot of co-ops in the eastern side of my district and out here as well. I was told that this was the No. 1 thing you could do to help co-ops."
 
Mark filed a budget amendment in 2011 to restore the office. It wasn't adopted. In 2012, he filed again and it wasn't adopted. Nor was it adopted in 2013, 2014, 2015, or 2016.
 
"For six years this was me doing it on my own, completely on my own. For six years it was me on the House side, I'd get co-sponsors, sometimes it'd get traction, sometimes it wouldn't. And then on the Senate, there was nobody to take on the lead," Mark said.
 
In the southeast corner of the state, Julien Cyr was recently elected to the state Senate. The freshman Democrat from Truro had grown up in a family-owned business so when the idea of restoring the office came to him, he took the lead on the Senate side. 
 
And now, after being defunded for nearly a decade, the state budget has $150,000 to resurrect the office, thanks to Mark, Cyr, and advocacy efforts from people like Vartikar. 
 
"Finally on the seventh try it was included in the budget we just sent to the governor," Mark said. "It is one of my original pieces of legislation."
 
Christopher Mackin ran the Office of Employee Involvement and Ownership for eight of those years and said more than a dozen companies were able to convert to employee-owned models during his tenure.
 
"It helped bring companies to the table that otherwise wouldn't explore it," Mackin said. 
 
Mackin performed the duties on a contractual base, said the work was the equivalent of a full-time staff member providing coaching to companies. He said he'd promote the idea by speaking with Chambers of Commerce and at events. He'd consult with some 60 companies about the concept every year.
 
When going to an employee-owned model, there is a required assessment of the business, of which the office would cover half the cost. The federal government provides tax incentives for those type of models, and Mackin would help tap into that resource as well.
 
"The idea of selling internally is not a well-understood option," Mackin said. "It takes some explaining and presentation of the facts ... You're not going to get more companies to do this unless you have people telling the story."
 
The office not only helped companies convert to employee-owned models but also helped new businesses looking to start up with that type of model. Mackin said there are multiple options, with the most popular being employee stock ownership plan, which he explained to the interested businesses. 
 
Cyr said he understands the challenges of making such a transition firsthand.
 
"I know from my own family's experience the challenges that proprietors of small businesses face during an ownership transition," he said.
 
"The return of the MassEIO will give more business owners the information they need to sell to their existing employees, keeping their business legacy intact, and spreading the opportunity for wealth creation. I am glad to have partnered with Rep. Mark, former Sen. Magnani, and leaders of employee-owned businesses across the commonwealth to get this done."
 
Mark said the office also helped provide training, develop business plans, provide the legal work to usher through the actual sale, and even helped secure capital. 
 
"Instead of selling it out to a big corporation and having them move it away and get rid of the jobs, the employees are interested in buying it. This office helps get them the financial skills they need to take over the business, the legal information they need, it helps them with capital if there are any loans that they need, and it helps them set up a new business model," Mark said. 
 
Mark said he likes employee-owned models because it keeps jobs and revenue local.
 
"When they're looking for a co-op model they are making a statement. This is a business that is never going to move to China. We're never going to outsource. We are local, we care about the local economy, we care about the local community," Mark said.
 
"For me, that's a business I want to support. I want to give them my business. I want them to stay here and I want the profits going back to the people who work there and live in our region."
 
Mark had again filed the amendment for the budget this year and he got in touch with Vartikar, who created the Working Wealth Coalition. The coalition advocated heavily for the funding. Vartikar said he reached out to Harpoon Brewery, an ESOP, which joined in the advocacy efforts. The coalition gathered supporters and businesses to write letters to legislators. Vartikar even went to the State House and knocked on office doors.
 
"We reached out to everyone we could," Vartikar said. "We just kept up the pressure. When the budget went to conference committee, we sent even more letters."
 
Throughout the entire process, Varikar became ever more aware of the difference between wealth and income. He said while the employees in his family's company were paid well, but they didn't have the equity to purchase a business. The office is the key piece to helping the employees put together the needed package to do so.
 
"The state centers are the most impactful thing that can happen to spread the knowledge and expertise about employee ownership," Vartikar said. "It is the lowest cost, highest reward."
 
And it is no surprise that the four states with similar offices have the highest percentages of employee-owned businesses. 
 
Vartikar added that employee-owned models aren't just good for the community and for the businesses, it is good for the employees who go to work every single day. He said the model gives them the same feeling going into work every day as business owners have.
 
"When employees own what they are doing, it completely changes the way they go to work," he said. 
 
Mark said the language was adopted into the budget, and he hopes the governor doesn't veto it, and the next step is determining exactly where it will be housed. It was originally in the Commonwealth Corp., then became a contracted service in 2000, and now it will be running either in a state agency or in higher education. Exactly where it will be housed will be determined by Housing and Economic Development Secretary Jay Ash.
 
Mark is particularly keen on possibly housing it within the University of Massachusetts system. There'd be access to other economists and students who can intern and take on projects with the office. And there is the obvious opportunity to include a workforce development piece into the program.
 
"I like the idea of a college because I like that there is a lot of personnel on hand to offer expertise in both directions," Mark said.
 
In the future, Mark hopes there will be a way to create self-sustaining income, either through loan programs or through a membership base. He added that the office can help build a larger network of employee-owned businesses to help each other out.
 
"As a state, this is a good statement to make, we support this kind of business. We are interested in small business, of course, and I'd rather spend money on something like this, on a business that is going to stay local rather than give a big tax write off for GE who might leave again," Mark said. 
 
Mackin operated the office on $127,000, which was a small amount to cover the entire state. But, as a contractor, he wasn't in the position to advocate for more funding. He says there is the opportunity to grow the office's operation.
 
"You can get something started with this but you have to grow it," Mackin said. 
 
The money to start it back up is now sitting on Gov. Charlie Baker's desk awaiting a signature. There is a chance it is vetoed, but Mark said he believes there is enough support in the Legislature to override that veto should it come to that. 

Tags: economic development,   paul mark,   small business,   

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Crosby/Conte Statement of Interest Gets OK From Council

By Brittany PolitoiBerkshires Staff

Architect Carl Franceschi and Superintendent Joseph Curtis address the City Council on Tuesday.

PITTSFIELD, Mass. — With the approval of all necessary bodies, the school district will submit a statement of interest for a combined build on the site of Crosby Elementary School.

The City Council on Tuesday unanimously gave Superintendent Joseph Curtis the green light for the SOI to the Massachusetts School Building Authority by April 12.

"The statement I would make is we should have learned by our mistakes in the past," Mayor Peter Marchetti said.

"Twenty years ago, we could have built a wastewater treatment plant a lot cheaper than we could a couple of years ago and we can wait 10 years and get in line to build a new school or we can start now and, hopefully, when we get into that process and be able to do it cheaper then we can do a decade from now."

The proposal rebuilds Conte Community School and Crosby on the West Street site with shared facilities, as both have outdated campuses, insufficient layouts, and need significant repair. A rough timeline shows a feasibility study in 2026 with design and construction ranging from 2027 to 2028.

Following the SOI, the next step would be a feasibility study to determine the specific needs and parameters of the project, costing about $1.5 million and partially covered by the state. There is a potential for 80 percent reimbursement through the MSBA, who will decide on the project by the end of the year.

Earlier this month, city officials took a tour of both schools — some were shocked at the conditions students are learning in.

Silvio O. Conte Community School, built in 1974, is a 69,500 square foot open-concept facility that was popular in the 1960s and 1970s but the quad classroom layout poses educational and security risks.  John C. Crosby Elementary School, built in 1962, is about 69,800 square feet and was built as a junior high school so several aspects had to be adapted for elementary use.

Ward 6 Councilor Dina Lampiasi said the walkthrough was "striking" at points, particularly at Conte, and had her thinking there was no way she would want her child educated there. She recognized that not everyone has the ability to choose where their child goes to school and "we need to do better."

"The two facilities that we are looking at I think are a great place to start," she said.

"As the Ward 6 councilor, this is where my residents and my students are going to school so selfishly yes, I want to see this project happen but looking at how we are educating Pittsfield students, this is going to give us a big bang for our buck and it's going to help improve the educational experience of a vast group of students in our city."

During the tour, Ward 5 Councilor Patrick Kavey, saw where it could be difficult to pay attention in an open classroom with so much going on and imagined the struggle for students.

Councilor at Large Alisa Costa said, "we cannot afford not to do this" because the city needs schools that people want their children to attend.

"I know that every financial decision we make is tough but we have to figure this out. If the roof on your house were crumbling in, you'd have to figure it out and that's where we're at and we can't afford to wait any longer," she said.

"We can't afford for the sake of the children going to our schools, for the sake of our city that we want to see grow so we have to build a city where people want to go."

Councilor at Large Kathy Amuso, who served on the School Building Needs Commission for about 18 years, pointed out that the panel identified a need to address Conte in 2008.

Curtis addressed questions about the fate of Conte if the build were to happen, explaining that it could be kept as an active space for community use, house the Eagle Academy or the Adult Learning Center, or house the central offices.

School attendance zones are a point of discussion for the entire school district and for this project.

"At one time I think we had 36 school buildings and now we have essentially 12 and then it would go down again but in a thoughtful way," Curtis said.

Currently, eight attendance zones designate where a student will go to elementary school. Part of the vision is to collapse those zones into three with hopes of building a plan that incorporates partner schools in each attendance zone.

"I think that going from eight schools to three would be easier to maintain and I think it would make more sense but in order to get there we will have to build these buildings and we will have to spend money," Kavey said, hoping that the city would receive the 80 percent reimbursement it is vying for.

This plan for West Street, which is subject to change, has the potential to house grades pre-kindergarten to first grade in one school and Grades 2 to 4 in another with both having their own identities and administrations. 

The districtwide vision for middle school students is to divide all students into a grade five and six school and a grade seven and eight school to ensure equity.

"The vagueness of what that looks like is worrisome to some folks that I have talked to," Lampiasi said.

Curtis emphasized that these changes would have to be voted on by the School Committee and include public input.

"We've talked about it conceptually just to illustrate a possible grade span allocation," he said. "No decisions have been made at all by the School Committee, even the grade-span proposals."

School Committee Chair William Cameron said it is civic duty of the committee and council to move forward with the SOI.
 
He explained that when seven of the city's schools were renovated in the late 1990s, the community schools were only 25 years old and Crosby was 35 years old.  The commonwealth did not deem them to be sorely in need of renovation or replacement.
 
"Now 25 years later, Crosby is physically decrepit and an eyesore. It houses students ages three to 11 in a facility meant for use by teenagers,"
 
"Conte and Morningside opened in the mid-1970s. They were built as then state-of-the-art schools featuring large elongated rectangles of open instructional space. Over almost half a century, these physical arrangements have proven to be inadequate for teaching core academic skills effectively to students, many of whom need extra services and a distraction-free environment if they are to realize their full academic potential."
 
He said  the proposal addresses a serious problem in the "economically poorest, most ethnically, culturally, and linguistically diverse area" of the city.
 
Cameron added that these facilities have been deemed unsatisfactory and need to be replaced as part of the project to reimagine how the city can best meet the educational needs of its students.  He said it is the local government's job to move this project forward to ensure that children learn in an environment that is conducive to their thriving academically.
 
"The process of meeting this responsibility needs to begin here tonight," he said.
 
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