Original Story: Freep.com
When the head of the world’s largest bank called the local billionaire bent on Detroit’s revival, good things happened.
JP Morgan Chase CEO Jamie Dimon plans to be in Detroit today to announce a $100-million investment in the city that began several months ago with a phone call to billionaire Dan Gilbert, the Quicken Loans founder who owns or controls more than 40 downtown buildings.
“Obviously, Detroit was having issues,” Dimon told the Free Press this week in an exclusive interview. “I got together some of our senior people and said, ‘What can we do that’s really neat, that could be really creative?’ ”
Two of the most powerful men in American business and finance developed a relationship in recent years as their interests intertwined. So when Detroit slid into Chapter 9 bankruptcy last year, Dimon wanted to act and sought Gilbert’s advice.
“We pointed him and his people to various relationships or others that we knew about here in Detroit,” Gilbert told the Free Press this week. “They called back and said, ‘Here’s what we’re doing, and we’re pretty excited about it.’ ”
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Over the coming five years, the $100 million will speed up the city’s blight-removal efforts, strengthen workforce development, pump money into urban redevelopment projects, train entrepreneurs and provide rehab loans to homeowners. The money will flow to groups already active in the city, including the M-1 Rail streetcar project, Eastern Market, Focus: HOPE and a variety of workforce training and entrepreneurship programs.
“No one’s forcing them to do this by any means,” Gilbert said. “I think they’re doing it because they think Detroit’s not only in need of help in a lot of areas, but they believe in the long-term growth and they want to be involved in the ground level. So I think it’s very, very important and very exciting.”
The bank is hoping to make money off the deal from loan interest, but mainly by helping revitalize one of its major markets, where it has 1 million regional customers, 2,500 employees and a lot of history as the successor company to the old National Bank of Detroit. The positive public relations of helping Detroit, with its auto industry nearly felled by the Great Recession, is also a benefit for the major financial player.
“When you’re in a town, you try to be a great citizen there,” Dimon said, “and we happen to be a big player in Detroit.”
That first phone call led to secret discussions involving Gov. Rick Snyder, Mayor Mike Duggan, and many others. Today, Dimon will attend a celebratory lunch with Duggan and Snyder to announce Chase’s commitment.
Snyder hailed the commitment this week, calling it “very exciting.”
“I think it really helps and it sends a great message that people see significant value in investing in Detroit and that there’s a lot of upsides,” he said. “As a result of the bankruptcy, Detroit hopefully will be viewed as one of the great value places to invest, a place that has a future in terms of living and working there.”
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Snyder added that Chase’s commitment this week might help nudge Lansing lawmakers to vote on the rescue plan for Detroit. That plan would see the state commit the equivalent of $350 million over 20 years toward a grand bargain to shore up Detroit pensions and protect artwork at the Detroit Institute for Arts from sale. It is currently being debated in the Legislature.
“I view it as a very positive statement to make,” Snyder said of the Chase pledge, “that private organizations are seeing value in Detroit and really want also to help this equation. So hopefully that will be further encouragement for legislators to vote to support the package.”
Key to revitalization
Dave Blaszkiewicz, president of the civic group Downtown Detroit Partnership and head of the Invest Detroit fund for local development projects, said the Chase investments will be key in advancing Detroit’s revitalization efforts.
“You couldn’t ask for a better time to bring these dollars in,” he said.
For Chase itself, the benefit comes from fostering the economic climate in one of their key markets, said Peter Scher, Chase’s executive vice president of corporate responsibility.
“We feel like we have been and will be a part of the community of Detroit for the long term,” he said. “The thing that drives this for us is both a sense of responsibility and also a sense that we want to be in Detroit for the long term and so we have an interest in seeing Detroit succeed.”
“We essentially spent the last six months trying to determine where there are areas where we would be uniquely positioned to make a difference, to help accelerate some of the efforts that are already going on,” Scher said. “What’s in it for Chase is the long-term success of Detroit. If it’s good for the economy, it’s good for our business.
Chase also is concerned with finding solutions for all the other cities around the world where it does business in some 60 nations.
“So to the extent that we can begin to find solutions in a place like Detroit, our hope is that those solutions will be applicable in other places around the country and frankly around the world.”
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