ATLANTIC CITY - Generous federal tax incentives are attracting investors and developers to the city with visions of creating a cybersecurity complex that would help move the local economy away from an over-reliance on tourism and casino gaming.
During the second annual Opportunity Zone Black Capitalism Fund Summit at the Showboat Hotel Atlantic City on Wednesday, interested investors, community leaders and entrepreneurs discussed how the city's oceanfront location and federal Opportunity Zone program could be the catalysts for a new economic engine focused on cybersecurity, education and workforce development.
"This event can teach investors the kinds of opportunities we have here," said James Whitehead, an Atlantic City resident and co-founder of the summit. "I believe that the type of investors that are here can help us drive about $3 billion of investment into Atlantic City to create America's first cyber-triangle."
Whitehead said the concept would include a national headquarters, a multi-use complex and residential housing for "cybersecurity warriors."
Atlantic City's proximity to several major metropolitan areas and the ocean make it a unique location for technology and aviation industries, Whitehead said.
"Right now, the Opportunity Zones in Atlantic City are in the Tourism District, which is where the ocean is," he said. "If you're the president of McDonnell Douglas or Lockheed Martin, would you like to wake up and look at the Atlantic Ocean or wake up and look at the concrete Pentagon?"
Atlantic City is one of 75 municipalities with designated Opportunity Zones in New Jersey under the federal government's Tax Cuts and Jobs Act of 2017. The federal program was designed to drive long-term capital investments into low-income urban and rural communities through attractive tax incentives.
The program has been scrutinized in some instances - such as the Rybovich marina project in West Palm Beach, Florida - for allowing well-connected and already wealthy individuals and corporations to capitalize from tax breaks while the poor communities that were supposed to prosper receive little, if any, benefit. New Jersey's tax credit program has been subject to similar criticism.
But there are success stories. Washington, D.C., is one area where low-income neighborhoods are being developed through the Opportunity Zone program. Redbrick LMD, a D.C.-based development and real estate company, has been among those organizations taking advantage of the federal program, and its managing partner believes Atlantic City's potential is similar to that of the nation's capital.
"This city seems to be one of those places that could really benefit from the federal legislation," said Louis Dubin, of Redbrick. "I think it's just really important for those of us that are executing on these Opportunity Zone investments to get out and educate and tell people what's going on."
Atlantic City has four eligible Opportunity Zones - Chelsea, Ducktown/Boardwalk, Uptown and Downtown/Boardwalk, and South Inlet - based on the poverty rate and median family income of those areas.
Kaleem Shabazz, 3rd Ward councilman and president of the Atlantic City NAACP, said events like Wednesday's summit are important to "let people know Atlantic City is open for business." Shabazz also said an economic summit geared toward minority investors was important to demonstrate that communities such as Atlantic City, where blacks and Hispanics make up nearly 64% of the population, are not being marginalized when it comes to development opportunities.
"Diversity is always good. I'm glad that there are people of color here who want to invest, and we want to ensure them that Atlantic City is a place that they are welcome, that they can get a fair shake, a place that has a government that is going to be sensitive to their needs," Shabazz said.
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