City of Tucson and Project Equity Launch Program to Preserve Legacy Businesses Worth $16 Billion in Revenues
Today the City of Tucson and Project Equity announced a business succession and recovery initiative aimed at preserving Tucson’s small business vitality. The program is a partnership of Project Equity, a nonprofit that helps business owners preserve their legacy through employee ownership, and the City of Tucson Office of Economic Initiatives.
As more business owners face retirement, the community becomes vulnerable to losing the local favorites that make up its culture and identity. Through this effort, we can keep these businesses in the community for future generations, preserving jobs and a strong local economy.
Funded by the federal American Rescue Plan Act of 2021 (“ARPA”), the initiative will provide training and support to demonstrate the efficacy of employee buyouts as a strategy to strengthen small businesses through increasing employee engagement, hiring and retention, and to preserve jobs, provide small business owners liquidity and reinvigorate the local economy.
According to a study by Project Equity, about half of the privately-held businesses in Tucson are owned by baby boomers nearing retirement. There are over 2,000 local businesses over 20 years old that account for nearly $16 billion in revenue and 60,000 local jobs. This represents an impending, massive ownership change of locally held businesses. This silver tsunami coupled with the lingering impacts of COVID-19, means these businesses urgently need solutions. This is a critical time for business owners to consider pathways to retirement, particularly how employee ownership can address current business needs.
“As more business owners face retirement or struggle to recover from the pandemic, the community becomes vulnerable to losing the local favorites that make up its culture and identity. Through this effort, we can keep these businesses in the community for future generations, preserving jobs and a strong local economy,” stated Evan Edwards, Chief Executive Officer at Project Equity.
Without an exit plan, many local businesses in Tucson are at risk. Additionally, the pandemic has made recruitment and retention of employees more challenging for business owners, thus slowing the recovery of their operations. Project Equity and the City of Tucson are raising awareness of employee ownership as a strategy to strengthen Tucson’s economic resilience, protect local jobs and revenue, and help business owners recruit and retain employees. Through this collaboration, Project Equity will provide hands-on support to companies that want to explore and execute employee ownership; and through its Employee Ownership Catalyst Fund also offer working capital and transaction financing.
Several local businesses are already reaping the rewards of employee ownership. J.B. Steel, Environmental Engineering Consultants (EEC), AGM Container Controls and Tucson Asphalt are just a few of the employee-owned businesses in Tucson.
“We are excited to bring this program to our local businesses,” said Barbra Coffee, Economic Initiatives Director for the City of Tucson. “This is a great way for businesses to explore employee ownership options for their business and to think about succession planning in a whole new way.”
City of Tucson Office of Economic Initiatives
The City of Tucson Office of Economic Initiatives coordinates the city’s economic development programs for the purpose of attracting jobs and investment to the City of Tucson. The Office of Economic Initiatives also offers local small business and entrepreneurial assistance and encourages workforce development to foster a long term sustainable and diverse local economy. For more information or to contact the Office of Economic Initiatives, visit http://www.ConnectTucson.com.