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Shared Ownership and Sustainability
An Oregon restaurant has sold itself to a perpetual purpose trust dedicated to ocean sustainability
In Brief: In a move similar to Patagonia’s, an Oregon seafood restaurant has sold its operation to a perpetual purpose trust.
How It Works: Different from Patagonia founder Yvon Chouinard’s effective ‘donation’ of his company to a purpose trust, Local Ocean was purchased at a fair market price by a group of institutions dedicated to supporting a sustainable seafood industry. The institutions now operate as a separate legal entity, holding Local Ocean in a trust designed to serve the group’s mission.
Why A Trust: Before making the move to employee ownership the leadership of Local Ocean considered multiple avenues, including ESOPs and a worker co-operative. However, in many cases ESOPs function as a retirement fund for long tenured employees, and co-operatives are difficult to operate when the employees - and therefore the owners - are constantly changing. Due to the high rate of turnover at Local Ocean and within the restaurant industry more widely, ownership ultimately decided on a purpose trust.
Why It Matters: Steward ownership is currently one of the least common shared ownership structures. Aside from Patagonia - which enjoys few peers in size or scale - few employee-owned firms operate within the structure of a purpose trust. However, pioneers such as Local Ocean offer an example of how steward ownership works, and what a successful transition to a purpose trust looks like. In addition, Local Ocean shows how purpose trusts offer an alternative for businesses who are hesitant to switch to an employee- owned structure due to high rates of staff turnover.
Go Deeper: Check out the original article on Local Ocean here.