Global financial giant JPMorgan Chase is bringing Wall Street money to the Motor City.
JPMorgan CEO Jamie Dimon formally unveiled his company’s plans to put $100 million into a range of targeted initiatives at a Detroit luncheon Wednesday.
Dimon called the effort a “long term investment” in a rebounding city.
“We believe in Detroit’s future, and we want to see the city recover its economic strength,” said Dimon.
Gov. Snyder and Detroit Mayor Mike Duggan were there to welcome Dimon. Both touted JPMorgan’s commitment as proof that major investors are looking past the city’s current bankruptcy to a promising future.
Snyder said that while Detroit resolves its massive debts in federal bankruptcy court, investors like JPMorgan are starting to see the city as “one of the great value opportunities.”
“They’re a global investor,” Snyder said. “And they looked around the world and said, ‘Detroit’s a good place to invest.’ That’s a big message.”
Apparently, the idea grew out of a phone conversation Dimon had with Quicken Loans CEO Dan Gilbert, who has become downtown Detroit's biggest property owner and civic booster.
Duggan said things got rolling when bank officials came to town a few months ago. They asked Detroit leaders how the bank could help the city, and incorporated what they heard into the final initiative.
“The pieces all fit together,” Duggan said. “It’s just transformational for the city.”
The biggest piece of the package is $50 million to invest in community development projects that will “leverage new and existing dollars to help finance vital projects that struggle to access traditional forms of capital,” according to the plan outline.
JPMorgan is partnering with two community development financial institutions to disburse the funds to various commercial and residential development projects in Detroit neighborhoods.
The second-biggest piece, $25 million, will go to a range of blight eradication projects. The specifics are tightly coordinated with Duggan’s aggressive and centralized plans on that front—which include demolishing some of Detroit’s vacant homes, while drawing new buyers for others through an online auction.
The rest of the money will be split among job training programs; small business incubators and loan programs; and a handful of other “strategic initiatives,” including support for the planned M-1 streetcar line along Woodward Avenue.
Both Snyder and Duggan said the combined efforts will benefit all Detroiters. They dismissed questions about whether JPMorgan had a particular obligation to help city neighborhoods devastated by mass home foreclosures.
JPMorgan was a big player in the national foreclosure crisis. In the past two years, the bank has paid out billions to settle a number of cases that alleged financial fraud and wrongdoing during that time. They include an $8.5 billion multi-bank settlement related to illegal foreclosures and evictions.
But on Wednesday, the focus was on the future “upside” of this investment with elements of philanthropy.
Duggan predicted that similar initiatives will be announced soon. In fact, he suggested that another “major national bank” has already expressed interest.
“I do think you’re going to see other banks follow suit in the near future,” Duggan said. “Because JP Morgan’s a winner, and people tend to follow winners.”