Eight years ago, then-Assemblyman Vince Mazzeo of Atlantic County introduced a bill to add Atlantic City — which was reeling in the wake of the closure of four casinos that year — to the list of “Urban Enterprise Zones” in the state.
“This is a common sense step to create economic growth that will help revitalize Atlantic City by encouraging businesses to develop and create private sector jobs through public and private investment,” Mazzeo said at the time. “We need jobs. We need investment. We need economic development. And we need property tax relief for hard-working families. This brings all four to Atlantic City, and will be another vital step toward bringing a new day to the city built around economic prosperity for everyone.”
The bill never made it to the full Assembly or state Senate for a vote.
But in early February, state Sen. James Beach introduced a bill reviving the same concept.
The UEZ Program, which first launched in 1983, offers participating businesses incentives designed to encourage growth and stimulate local economies. Nearly 7,000 certified UEZ businesses have benefited from the advantages of the program statewide in 33 municipalities.
How businesses benefit from UEZ
Businesses participating in the UEZ program can charge half the standard sales tax rate on certain purchases; receive tax exemptions on certain purchases, including capital equipment acquired and investments made to build a new facility or expand or upgrade an existing facility; and receive a $1,500 tax credit for each full-time employee that is hired.
Employers also benefit from subsidized unemployment insurance costs for certain employees who earn less than $4,500 per quarter.
The bill would authorize the creation of a UEZ in the city of Atlantic City for a term of 10 years. A business operating as a casino would not be eligible, but a business operating on casino property not owned by a casino business may be eligible.
During the first five years, all of the sales and use tax revenue collected is to be appropriated for use by Atlantic City, and during the final five years, 66.5% of the revenue collected is to be appropriated for use by Atlantic City.
The statement contained in Beach’s bill points out, “This bill is meant to address the negative economic conditions experienced by Atlantic City over the past several years as the city transitions from a casino gaming destination to a general-interest tourist destination.”
The bill has been referred to the Senate Economic Growth Committee.
UEZ revival in New Jersey
The program floundered a decade ago under Gov. Chris Christie, who did not deem it effective.
But last year, Gov. Phil Murphy revived interest in the concept.
A state report in 2019 analyzing the value of the zones included several recommendations, such as improving the way the state tracks outcomes. Participating cities see a benefit, according to the report.
“However, it is unrealistic to believe that any single economic development program can lift a municipality with entrenched problems of distress and poverty to health and sustainability,” the report stated.
“The UEZ Program is only one tool in the state’s economic toolbox, but it appears to be a valuable tool. Therefore, there is no recommendation to replace or sunset the UEZ Program.”
The opening of the first casinos in Atlantic City in the late 1970s was supposed to boost the local economy. But poverty and crime have persisted even in the shadow of the billion-dollar properties, as no elected officials have found a way to significantly remedy the systemic problems that have plagued the city.
Photo: Shutterstock