Last July families at a Highlands Ranch child care center received startling news: The center was temporarily closing after a visit from the county health department.

The center’s owners failed to submit required construction plans to the Douglas County health department and get construction permits from the county’s building division.

A state child care licensing inspector also found several safety violations related to the construction: emergency exits were blocked by tools and debris, and paint and construction materials were accessible to children.

The renovation was the result of an ownership change: In early July, a national chain called The Nest Schools purchased the center from a small local company.

The chain has six child care centers in Colorado — all of which opened after Detroit-based private equity firm Rockbridge Growth Equity invested in the company in 2022.

Some early-childhood experts recently have sounded the alarm about the growing footprint of private equity in child care. They worry that such investment firms are primarily motivated by outsize profits, not providing quality experiences for young children. But others say private-equity-backed child care is providing many desperately needed seats and that its deep pockets can help a fragile industry during a challenging time.

Gerry Pastor, co-CEO of The Nest Schools, said in an email that private-equity investment helped sustain and grow The Nest, including by making much-needed upgrades costing more than $1 million at the Highlands Ranch center.

He said that although the center tried to keep child care operations separate from construction, “a few unintended issues arose” that were corrected immediately. He said children, workers and families did not use the exterior grounds during construction there. He also said some of the allegations that Chalkbeat inquired about “never happened,” but he didn’t specify which ones.

A Rockbridge spokesperson had no comment.

Colorado lawmakers are taking notice of private equity’s push into child care.

In January, they introduced legislation that would put new limits on private-equity-backed centers to temper practices that critics say are harmful, including cutting staff members and raising tuition.

“We just want to make sure that as more investors come to the state that they understand they’re coming to the state to invest in high quality (child) care and not simply just to turn a profit,” said state Rep. Lorena Garcia, a Democrat who is sponsoring the bill.

Experts say private-equity firms often make swift changes when they invest in child care centers. At The Nest Schools of Highlands Ranch, those changes had consequences beyond construction disruption. The director and assistant director quit within a month, according to letters The Nest sent to parents, and parents said about 10 more staff members also left.