Detroit Recovery Gets $100 Million Boost
May 21, 2014 Zach Halper
Detroit’s post-bankruptcy economic recovery has received a big boost in the form of a $100 million, five-year commitment from JPMorgan Chase & Co.
The New York City-based financial firm announced at a luncheon with community leaders in Detroit that the company’s existing 80-year service in the city will be expanded by investing $100 million there during the next five years. This long-term investment is the firm’s largest commitment to a city and among the largest corporate commitments to Detroit. The city received $40 million from the Kellogg Foundation in January.
Detroit has also received financial assistance for its troubled art museum. As previously reported by The NonProfit Times, nine foundations contributed $330 million to help Detroit protect the assets of the Detroit Institute of the Arts’ (DIA) collection and help preserve its two pension systems.
Detroit filed for bankruptcy on July 18, 2013, making it the largest municipal bankruptcy case in U.S. history. The city was declared bankrupt in December after a judge said that the city’s $18.5 billion debt would make it nearly impossible for negotiations with creditors to proceed.
“We believe in Detroit’s future, and we want to see the city recover its economic strength,” said JPMorgan Chase Chairman & CEO Jamie Dimon. “With this investment, we are putting our resources and expertise to work to help Detroit chart a course back to economic prosperity. We have been in Detroit for a very long time, and we’re here for the long term.”
The $100 million investment by JPMorgan will be broken down into five categories:
- Investing in Community Development: $50 million
- Tackling Blight: $25 million
- Strengthening Workforce Readiness: $12.5 million
- Growing Small Businesses: $7 million
- Seeding Future Economic Growth: $5.5 million
Of the $50 million for Community Development, $40 million will be in the form of flexible, long-term debt capital; $10 million will be in the form of grants to help two leading Detroit institutions – Invest Detroit and Capital Impact Partners – strengthen their organizational capacity.
“The City of Detroit is at a critical juncture and the moment of opportunity is now,” said Dave Blaszkiewicz, president of Invest Detroit. “The investment capital provided by JPMorgan Chase will serve as a vital resource for renewal by strengthening the platform for development of residential, commercial and mixed-use projects. We greatly appreciate their trust and support.”
Terry Simonette, president and CEO of Capital Impact Partners, said that his organization’s partnership with JPMorgan “is another step toward helping to redensify and revitalize Detroit.”
In addition to the financial assistance the city will be receiving, JPMorgan will also be utilizing its Detroit Service Corps to help Detroit’s nonprofits strengthen their capacity to solve the community’s toughest problems. The Corps, made up of a team of volunteers, will provide capacity building and technical assistance to help local organizations find solutions to challenges they have identified.
“Investing in Detroit isn’t just the right thing to do, it’s the smart thing to do for Detroit and other cities that can learn from their experiences,” said Peter Scher, Executive Vice President and Head of Corporate Responsibility at JPMorgan Chase.
More information on JPMorgan’s $100 million investment can be found at www.jpmorganchase.com/Detroit