backpage editorial

Opportunity Costs

Trickle-down urban development and crony capitalism in Jacksonville


Opportunity Zones (OZs) represent the latest initiative to address the socioeconomic challenges facing low income neighborhoods. The Trump administration’s 2017 Tax Cuts and Jobs Act makes significant tax breaks and incentives available to businesses that invest in designated zones that meet the low-income-community criteria. Several of these targeted zones are in Jacksonville’s Urban Core. However, there is little evidence that such strategies work for the communities or their residents.

The first problem is the underlying supply-side premise. That is, the notion that using incentives to lure investors to low-income neighborhoods will somehow benefit the folks already living in those communities. This is nothing more than warmed-over trickle-down economics applied to urban economic development. It is worth reminding ourselves that here in the United States, we have been pursuing various forms of trickle-down economics for at least 30 years—and all we have to show is stagnant wages alongside record income and wealth inequality. In short, the benefits don’t trickle down; they inevitably trickle up.

The Opportunity Zone approach is just a variant of prior programs with equally misleading but seductive names such as “enterprise” or “empowerment” zones. The record is clear that these programs do little to improve the economic health of the communities in which they have been implemented.

Yet, in spite of the massive and accumulated evidence refuting the claims of supply-side development, politicians continue to promote these policies. Their attachment to these tired and empirically discredited policies is an act of faith. In that sense, it can be described as “faith-based” policy-making.

But there is an even more important reason why politicians keep pushing policies that consistently fail to meet their publicly proclaimed objectives: They are successful in their latent purpose of further enriching already economically privileged private investors. Whenever an unsuccessful policy remains in place despite repeated and demonstrated failure, we should always ask, “Who really benefits from it?” If it is the corporate elite, there will be no effort to find alternatives. In short, the trickle-down claim is nothing more than ideological window dressing designed to justify an inherently class-biased economic policy.

Here in Jacksonville, the OZ program is an example of “crony capitalism.” The Curry administration lobbied to have the area around the football stadium designated as an Opportunity Zone in order to enhance the profitability of Shad Khan’s already planned investment in the entertainment district—at the expense of more deserving communities.

This pattern is well-established in Jacksonville. Three of the most significant subsidized development projects—Lot J, The Shipyards and The District—just happen to be led by two well-connected local elites, Peter Rummel and Shad Khan. While these patterns of public subsidy are common in all major U.S. cities, they are shamelessly transparent in Jacksonville, where there is weak and disorganized opposition to blatant cronyism.

OZs are also being used for political purposes. The Trump administration hopes these so-called Opportunity Zones will mobilize black voters to support the president’s reelection. The effort is being aided locally by the Urban Revitalization Coalition (URC), whose co-founder, Pastor Darrell Scott, is the Chairman of the National Diversity Coalition for Trump and has publicly proclaimed that Trump is “the most pro-black president I’ve seen in my lifetime.” It is hard to avoid the conclusion that these Opportunity Zones represent little more than a cynical strategy aimed at exploiting the desperation of underserved communities for short-term political gain and long-term private profit. I hope I am wrong.

If the socioeconomic needs of OZ communities were an actual priority, every project would be accompanied by a Community Benefits Agreement (CBA) forged through the democratic participation of community members and stakeholders. The CBA would formally stipulate conditions of accountability, ensuring that the interests and needs of community residents have been considered and are met. This could entail provisions for reinvestment, living-wage employment, affordable housing and public-transportation infrastructure. At one time, city governments saw their primary responsibility as directly providing quality social, economic and cultural services to the urban population. Today, under neoliberal urbanism, no policy can be implemented without the private sector benefiting and profiting. This is often referred as a “Public-Private Partnership” (PPP), which is just a euphemism for the public sector assuming costs and risks, while the private sector reaps the material benefits.

It is unfortunate that urban economic development policy for low-income communities has been reduced to luring private investment from the outside, rather than providing the resources directly to the community and existing businesses, so that wealth can be built and stay within these communities. This latter approach was explored by Mayor Alvin Brown’s administration as part of the Community Wealth Building Initiative. Sadly, but not surprisingly, it was abandoned by the Curry administration.


Jaffee is a professor of sociology at the University of North Florida.

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