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Detroit revival spurs JPMorgan to make fresh $50 million pledge
May 10, 2017 / 4:20 AM / 5 months ago

Detroit revival spurs JPMorgan to make fresh $50 million pledge

A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files

NEW YORK/WASHINGTON (Reuters) - JPMorgan Chase & Co (JPM.N) is investing another $50 million in Detroit amid what city officials and bank executives describe as encouraging signs for urban renewal through public-private partnerships.

JPMorgan’s latest investment, which it plans to announce on Wednesday, comes on top of a $100 million, five-year commitment the largest U.S. bank made to Detroit in 2014.

At the time, the city was bankrupt due to the near-collapse of the U.S. auto industry and six decades of economic decline and population exodus.

The bank has put up $107 million so far, funding blight removal, commercial and residential redevelopment, job skills training and loans to small businesses. Now it plans to reinvest $13 million from early loan repayments, and commit an additional $30 million, Peter Scher, the bank’s head of corporate responsibility, said in an interview.

“There’s been a much more vibrant comeback in the small business sector in Detroit than anyone expected,” he said.

The $150 million commitment is tiny compared with the bank’s $2.5 trillion balance sheet, but JPMorgan is the biggest bank in Detroit, aligning its interests with the city‘s. Chief Executive Jamie Dimon has made it a personal mission to improve Detroit, visiting at least six times to check on the initiative.

Dimon has met with contractors who needed working capital to repair homes and with food entrepreneurs who needed shared commercial kitchens for bread baking and sausage-making.

The bank has worked with Detroit Mayor Mike Duggan to focus its efforts on neighborhoods with the most promise and city support.

”Detroit’s resurgence is a model for what can be accomplished when leaders work together to create economic growth and opportunity,” Dimon said in a statement provided to Reuters.

JPMorgan has followed other private investors. Billionaire Dan Gilbert, founder of Quicken Loans Inc, and his companies control more than 90 properties downtown in a redevelopment push.

Detroit was once the fifth largest U.S. city with 1.85 million people. It now ranks below the top 20 and has its smallest population since 1850. But in July 2015, by the most recent Census Bureau estimate, Detroit’s 677,116 residents were just 0.5 percent fewer than the year before, the smallest drop in decades.

The bureau will release 2016 figures later this month. Local officials hope to see gains.

“It will validate all the work that is going on here,” said Carmine Palombo, deputy executive director of the Southeast Michigan Council of Governments.

Still, the city’s unemployment rate was 10.9 percent in 2016, the highest among the 50 largest U.S. cities. Nearly 40 percent of residents live in poverty and Detroit had the second-highest violent crime rate in 2016 among major U.S. cities.

Reporting by David Henry in New York and David Shepardson in Washington; editing by Lauren Tara LaCapra

Our Standards:The Thomson Reuters Trust Principles.
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