In a 6-3 vote with one member not voting, the New Jersey Assembly Commerce and Economic Development Committee on Thursday approved a bill that would create an urban enterprise zone in Atlantic City; an effort to incentivize businesses with tax credits to spur economic development in the ailing resort city.
The committee signed off on A3920, authorizing the creation of an urban enterprise zone in Atlantic City for a one-time term of 10 years to provide the city with a shot in the arm to create jobs, spark economic development and provide vital property tax relief.
The UEZ designation would allow qualifying businesses in Atlantic City to collect a sales and use tax that’s half of what it would normally have to collect and to receive up to a $1,500 tax credit for every new permanent full-time employee they hire.
The bill would also allocate a significant portion of the sales and use tax collected during the 10-year period to go directly back to the city for property tax relief.
The measure is an attempt to stem the bleeding in Atlantic City, which has been hit with a brutal downturn in gaming tax revenues amid heavy competition from rival gaming destinations that has prompted the shutdown of four casinos — Atlantic Club, Revel, Showboat and Trump Plaza — and the loss of 8,000 jobs in 2014 alone.
However, some committee members expressed concern as to whether UEZs have been proven to spur economic development in the cities and regions where they’ve been established. New Jersey’s UEZ program, which was launched in 1983, currently has 32 designated UEZs.
The woes in Atlantic City have been mounting. Gov. Chris Christie last month installed an emergency management team to oversee the city’s finances after a brutal downturn in gaming tax revenues. In addition to the more recent shutdowns in September of the Revel, Showboat and Trump Plaza, another Atlantic City casino, Trump Taj Mahal, is also at risk of closing as a bitter feud between its owners and workers’ unions threatens to derail a potential Chapter 11 reorganization for Trump Entertainment Resorts Inc.