The Unfulfilled Promises of Andrew Young’s Enterprise Zones

During the Andrew Young years in Atlanta, the “number of jobs created or retained” became the barometer by which the success and utility of the city’s numerous public-private projects were measured. Mayor Young’s project updates were interspersed with calculations of the number of positions each project produced; how many of those positions were temporary and how many were permanent; how many were entry level; how many were filled by people “from the community.” More often, Young speculated about the anticipated total number of jobs created once a project was complete. These ambitious projections made the projects appear successful from the moment the ground was broken and made the financial risk often taken on by the city, backed by the citizens’ tax dollars, seem worth it.

The Atlanta Economic Development Corporation (AEDC) was the city’s primary broker of public purpose capitalism. Established in 1977 by Maynard Jackson and Dan Sweat of Central Atlanta Progress (CAP), the nonprofit organization was created to broker public-private partnerships, functioning as a “financially independent, quick-reacting, skillful developer and facilitator of the City’s job-oriented economic development policies.”¹ In its early years, the AEDC spent much of its time and resources helping small businesses apply for improvement loans and grants for things like facade repair. However, its initial purpose was “to develop projects that provide high-density blue-collar jobs in locations of high unemployment.”²

One of the AEDC’s first major projects dedicated to that end was the Atlanta Industrial Park (AIP). Located on 250 acres on Bankhead Highway at the western edge of Atlanta, the park was originally the site of the Chattahoochee Brick Company. The Fulton County Development Authority used federal grants along with private funds to purchase the plot for $2.25 million in 1983 and then leased the land to the AEDC for the park. According to its early plans, the purpose of the park was “to attract and retain within the city industrial companies which need new facilities, to create needed employment opportunities for the unemployed and underemployed, unskilled or semi-skilled jobs; to generate tax revenues by increasing the property tax base; and to bolster the general economy of the city through increased demands for goods and services.”³ Its planners in the AEDC estimated that the park would generate 1,200 permanent industrial jobs and bring in more than $900,000 in annual tax revenue. By the time the mayor’s office announced the project, the AEDC’s president, Joseph Martin, projected more than $2 million in tax revenue.

However, Martin’s revenue estimates were superseded when the Georgia Assembly designated the AIP as the state’s first enterprise zone, with the backing of the mayor’s office, the AEDC, and the Atlanta City Council. The city offered tenants of the park exemptions from property and inventory taxes for twenty-five years, with a 100 percent tax exemption for the first five years and 20 percent declines in successive five-year increments. Ronald Reagan had proposed enterprise zone legislation in 1982, describing it as a way to “[utilize] the market to solve urban problems, relying primarily on private sector institutions.” The goal of the zones, Reagan explained when introducing the legislation, was to “create a productive, free market environment in economically-depressed areas by reducing taxes, regulations and other government burdens on economic activity.”⁴ The bill was quite controversial; many Democrats, including Georgia’s Fifth Congressional District representative Wyche Fowler, opposed it, and subsequently, it struggled to pass through Congress. However, Georgia was one of twenty-five states that adopted enterprise zone legislation. Fulton County voters approved the zones with two constitutional amendments, and the Atlanta City Council soon after passed enterprise zone legislation.⁵ The city would lose hundreds of thousands of dollars for each tenant in annual tax revenue for several years. Yet, for enterprise zone defenders, those losses were a small price to pay for potentially thousands of job opportunities and other local development prospects. It was with these ambitions that the AEDC started leasing space in March 1983.

The AIP initially appeared to be a success. In its first year, seven companies had committed to lease space in the park.⁶ One of the most lauded was the Purolator Courier Corporation, the nation’s second-largest overnight shipping company, which planned to hire at least 300 employees, though they did not specify the types of jobs.⁷ By 1986, there were fifteen tenants, including Toys “R” Us, Circuit City, and Suzuki. Suzuki, for example, used the park as a distribution center for motorcycle and engine parts as well as a training site for regional dealers. U.S. director of operations Hideaki Tanaka estimated they would hire “some 40 employees, and we hope to grow.”⁸ The largest tenant, Toys “R” Us, estimated they would produce over 350 jobs when they began operating. By 1987, 1,113 people were employed at the AIP, 44 percent of whom were city residents. It was projected to employ more than 2,000 when the entire space was leased out, which its boosters promised would happen sooner rather than later. Local and national leaders were soon celebrating the AIP’s success. The AEDC used it as an example of its achievements as the city’s “public entrepreneur,” while Andrew Young extolled it in his reelection campaign speeches.⁹ The AIP also garnered the praise of the federal Department of Housing and Development (HUD), which recognized the project with an award of merit and apparently “used it as a model for HUD speech-making throughout the country.”¹⁰ To its supporters, the AIP was a shining example of the benefits of public-private partnerships and helped Atlanta reinforce its reputation as a business-friendly city.

The industrial park was also celebrated by members of the Reagan administration as a successful example of the enterprise zone concept. “[The AIP] is proof positive the concept is viable and its time has come,” explained deputy assistant HUD secretary Stuart Sloame. “Atlanta has been practicing what we in the federal government have been preaching.”¹¹ Ironically, then, a city led by a black Democrat became a poster child of Reagan’s key urban development initiative. The enterprise zone was where conservative free market principles intersected with black liberals’ pragmatic politics of economic growth and their promise of opportunity.

Enterprise zones were a striking example of Andrew Young’s concept of public purpose capitalism in action. The AIP’s initial success supported Young’s contention that private industry was the best job generator and tax revenue producer. Though they received property tax abatements, the eighteen tenants did pay real and personal property taxes, which amounted to $154,000 in 1986. And they contributed to the local community with new bank deposits, improved retail sales, and the general diversification of the local economy.¹² “Intangible benefits,” the AEDC also explained, “include the overall improved quality of life for residents of the community.”¹³ More importantly, the tenants would provide much-needed jobs for Atlantans, most notably the poor black residents of neighboring public housing, including Bankhead Courts and nearby Perry Homes, Hollywood Homes, and Bowen Homes.      

Before the AIP companies could fulfill their community development mission, however, suitable workers needed to be found to take advantage of the new employment opportunities. To that end, potential applicants needed to demonstrate their capacity for work and potential for excellence before even getting an opportunity to interview. To help qualified residents get these jobs, the AEDC enlisted the assistance of a program called the Support to Employment Program (STEP).¹⁴ Administered from Perry Homes, the program was “a catalyst for AEDC in recruiting and interviewing Ninth District residents for employment in the AIP.”¹⁵ STEP agents provided “job readiness” training and helped identify “motivated, responsible employees for available jobs.” In its annual review, the AEDC highlighted its success stories, including those of Bankhead Courts resident Ulysses Hall. Hall was employed at Dynatron-Bondo, a resin production company. He was promoted to production supervisor and “has broken company records.” Hall was quoted as saying, “I feel good about my job. When Dynatron-Bondo succeeds, we succeed.”¹⁶ Hall exemplified the positive worker attitude and commitment to excellence that STEP sought to inculcate.

Marsha Walker, another Bankhead Courts resident, was promoted to assistant supervisor in the computer department at Circuit City. She claimed, “I am proud of my job, and as I continue to grow with Circuit City, I will always recommend the STEP program so others can have the same opportunity.”¹⁷ For the AEDC, Hall and Walker represented the hidden potential among residents in housing projects who just needed to be identified and cultivated from among the unmotivated and the unreliable. They illustrated to the AEDC’s supporters the healing power of labor, suggesting that the work provided not just wages but a sense of personal fulfillment and instilled a desire to continue to improve. Furthermore, the success stories served as models of excellence that showed how people could make something of themselves if they were given an opportunity and worked hard to take advantage of it.

Yet the reality beyond such stories challenged the narrative of the project’s achievements. The purpose of the AIP and enterprise zone concept was to provide job opportunities for disadvantaged locals. The legislation required localities to establish zones in areas of high unemployment for this reason. These were areas where the locals had difficulty accessing the industrial parks, hotels, and other sites of employment emerging rapidly in the suburbs on the city’s north side. In selling the AIP and the enterprise zone concept, city officials promised the residents of Council District 9—which had the highest unemployment rate in the city—that they would receive 80 percent of the potential thousands of jobs created at the complex. Furthermore, the majority of these jobs were supposed to be entry level, suitable for people with little or no skills.

Few neighborhood residents could get hired at the AIP, however. “A lot of the people who live in the area have gone down there to apply for work, and some of them couldn’t even get in the gate,” local neighborhood planning unit president Odessa Wheeler said. “They said those people in the community would be given priority, but most of the companies brought their own people with them.”¹⁸ About 56 percent of AIP employees lived outside the city limits, and the majority of those who lived in Atlanta were from other parts of the city.¹⁹ City representatives argued that there was no hiring quota for the companies that rented in the AIP, claiming, “We can’t sit down and force these folks to hire somebody, but we can let them know that it is important to us that they adhere to the provision.”²⁰ Their promises notwithstanding, in its first year of operation, only 43 employees lived in the area—about 8 percent of the total number of workers. By 1987, there were over a thousand employees and only 138 lived in Council District 9. In the enterprise zone that many promised would revitalize the district, only 12 percent of its employees were from the neighborhood. “The significance of that project was to attract employers to locate in the area to provide job opportunities,” argued city development commissioner Joseph Martin. “There are no guarantees.”²¹ Rather, there were only opportunities for those who were not only able to demonstrate “job readiness” but also just plain lucky.

Both those considered deserving and undeserving of job opportunities were disciplined—that is, compelled to comport in ways deemed productive by city elites or risk economic marginalization—by the Young administration’s job policies. The “job ready” were disciplined by the carrot of potential steady income, a promise made elusive by the competitive structure of job opportunities. The unworthy and uncompetitive got the stick: exclusion from job opportunities and further marginalization. Ultimately, unemployed Atlantans who were prepared but unlucky in the job market found themselves in the very same marginalized position as those who failed to demonstrate “job readiness” or who were otherwise deemed undeserving of opportunity. In the 1980s, many of those made surplus in the postindustrial economy were punished not just by the market but also by the carceral state.

The AIP was not the only public-private project that failed to deliver on its promises to residents. More than many other cities, Atlanta used its Community Development Block Grants (CDBGs), federal grants distributed by the Department of Housing and Urban Development to “serve principally the needs of low- and moderate-income people,” for economic development projects whose benefit to poor communities was not always apparent.²² While 13 percent of all block grant funds nationally were spent on economic development (much more was spent on housing), Atlanta spent 39 percent on development projects. Atlanta Journal-Constitution reporter Nathan McCall detailed several mishaps in an exposé of the city’s use of community development funds. The city used over $1 million in federal funds to persuade its most successful black developer, Herman Russell, to open a plastering business and a beverage distribution factory in Mechanicsville, a largely low-income neighborhood near downtown. City officials promised residents that the companies would create about 180 new jobs and preserve 150 more. Yet, the plastering business never opened, and the distribution center employed fewer than ten people.²³

These projects illustrated the limitations of relying on the private sector to create employment opportunities. While companies could pledge to hire unemployed residents, there was no way to enforce their initial promises. Unlike the public sector, where public officials could be checked by elections, there were few mechanisms to ensure accountability to the people who were being promised jobs and economic development in exchange for tax breaks. Public officials could only hope that the corporations would hold up their end of the deal. But just the promise of jobs, even if they were limited and necessarily competitive, was seemingly enough to justify the city’s investment in these projects.

Even more so than his predecessors, Young was committed to expanding the role of the private sector in helping to meet the needs of city residents. On the one hand, the structure of federal urban policy encouraged such a commitment. The Nixon administration intended CDBGs to spark or intensify private investment in underresourced urban communities. Further still, the Carter administration’s Urban Development Action Grants (UDAGs) required the “firm commitment of private funds be made before an application can be approved.”²⁴ So in this sense, the Young administration was merely governing in accordance with federal objectives of decentralization and privatization.²⁵

On the other hand, Young’s embrace of public-private partnerships was not simply a reluctant acquiescence to the mandate of devolution. Since his days negotiating with business owners in Birmingham, Young had believed in the power of an enlightened private sector to help foster opportunities that would enable black advancement and security when the public sector was unwilling (in the case of Jim Crow Birmingham) or unable (in the case of resource-strapped Atlanta) to do so on its own. As the involvement of corporations in addressing the “crisis” of the black family likewise demonstrated, Young wasn’t the only black liberal political or civic leader who held this faith in private sector–funded action. Like the return to privatism reflected in the black family reunions, Andrew Young’s public purpose capitalism can be situated within the black liberal tradition. By necessity black liberals had long “creatively financed” the improvement of black life, employing a mix of public and private resources to sustain black communities. By the post–civil rights era, these resourceful habits dovetailed with emergent neoliberal modes of governance.