Two years in, JPMorgan Chase’s $100 million commitment continues to help fuel Detroit’s comeback
Wednesday, May 25, 2016
Posted by: Matt Hillier
Firm’s new initiatives include $4 million for preserving affordable housing in neighborhoods, $1.5 million to strengthen job training and summer youth employment and other efforts to support small business growth
Financing has already supported $240 million in local community development projects, allowed hundreds of Detroiters to receive job training and provided $1.3 million in loans to minority-owned small businesses
JPMorgan Chase & Co. today announced a series of new investments from the firm’s $100 million, five-year commitment to Detroit’s economic recovery. The firm is also marking the second anniversary of its Detroit investment by sponsoring the first-ever Detroit Startup Week, a week of free activities to support area entrepreneurs.
Working closely with civic, business and nonprofit leaders to address the city’s most pressing challenges, JPMorgan Chase is making a series of new investments in small business growth, commercial development, workforce training, summer youth employment, and other efforts to spur economic opportunity and homeownership in Detroit’s neighborhoods.
“Detroit is Exhibit A of what can be accomplished when individuals and organizations put ideological differences aside and work together to reimagine a city, revitalize a community and open doors to opportunity,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase. “JPMorgan Chase is incredibly proud to be working side-by-side with community and city leaders to help this great city continue its comeback. We hope that other cities and national leaders will take note of Detroit’s collaborative approach to fixing problems and learn from it.”
Two Years of Progress: Notable Statements of Support
“JPMorgan Chase’s commitment goes above and beyond just writing a check,” said Detroit Mayor Mike Duggan. “From new loan programs for minority-owned small businesses, to research on how we can strengthen job training to help more Detroiters find good-paying jobs, the work JPMorgan Chase is doing to help us tackle our challenges is incredibly appreciated.”
“This commitment is welcome news that will help support the great work already happening across Detroit,” said Senator Debbie Stabenow. “This investment will go a long way to helping small and minority-owned businesses access much-needed capital, training workers for good-paying jobs, and increasing the availability of affordable housing.”
“It is inspiring to see the tremendous progress that the City of Detroit is making through this public-private partnership and these efforts to develop new opportunities for small businesses to create jobs and grow our economy,” said Senator Gary Peters. “JPMorgan Chase is continuing to support Detroit’s economic revitalization by providing critical job training and financial support that will help residents find good-paying jobs and build stronger, safer neighborhoods so Detroit can thrive.”
“In an age of constricted municipal budgets and political polarization, JPMorgan Chase has demonstrated that public-private cooperation is both essential and effective in addressing our most pressing urban problems,” said Rip Rapson, President & CEO, The Kresge Foundation. “In just two short years, the catalytic effect of their investment in this city cannot be overstated. The firm has set an example to the nation and to the world that investing in the stabilization of Detroit neighborhoods – and the residents and small business owners that call them home – is an investment destined for strong social and capital returns.”
Growing Detroit’s Small Businesses
Detroit’s small businesses are a big driver of consumer spending, according to recent data from the JPMorgan Chase Institute. An analysis of anonymized Chase credit and debit card spending in Detroit found that 58 percent of consumer spending took place at small businesses in the city, which is 20 percentage points higher than the average small business spend across 14 other major U.S. cities. Further, U.S. Census data shows that the approximately 50,000 small businesses owned by people of color in the city make Detroit the fourth largest U.S. city for the number of minority-owned businesses. Yet many of these businesses lack access to traditional forms of credit and capital.
In 2015, JPMorgan Chase and W.K. Kellogg Foundation helped the Detroit Development Fund create the $6.5 million Entrepreneurs of Color Fund, providing Detroit minority-owned small businesses with access to financing and technical assistance. In six months, the Entrepreneurs of Color Fund has provided $1.3 million in financing to 15 Detroit businesses, that are owned by minorities or primarily employ minorities, and these businesses in turn have retained or created 135 jobs.
“We are grateful for JPMorgan Chase’s investment in the Entrepreneurs of Color Fund, which in less than a year has already had a meaningful impact on minority-owned businesses from the neighborhoods to downtown,” said Ray Waters, President, Detroit Development Fund. “The businesses financed by the fund are not only benefiting the entrepreneurs, but also providing valuable products and services – and jobs – in neighborhoods throughout Detroit.”
The second year of the Detroit commitment also included inaugural awards from the Innovation Fund at Macomb Community College, a $2.7 million effort supported by JPMorgan Chase to boost Detroit-area entrepreneurship. Three Detroit-based companies have been awarded a total of $225,000 from this fund, including Banza, a company that produces pasta from chickpeas; Kollecto, a business that matches buyers with affordable artwork; and Pro:Up, an online marketplace that connects students with extracurricular opportunities related to their career objectives. The next round of awards will be announced this fall.
JPMorgan Chase’s support of Eastern Market and TechTown Detroit continues to provide valuable licensing, training and technical assistance to small business owners. In 2015, TechTown’s efforts in the University District resulted in 13 Retail Boot Camp graduates, the creation of six permanent jobs, two brick-and-mortar storefronts and one pop-up storefront. Additionally, JPMorgan Chase funded the completion of Eastern Market’s Shed 5 and community kitchen projects and helped Eastern Market create 25 jobs, license 17 businesses and attract nearly $19 million in additional investment.
Finally, JPMorgan Chase is sponsoring the first Detroit Startup Week, a five-day celebration of the Detroit’s entrepreneurial community, which will provide resources to small businesses owners looking to strengthen their concepts or businesses. Beginning May 23, the week of free activities is expected to draw over 2,000 participants and feature over 100 events focusing on an array of topics ranging from technology to neighborhood collaboration.
Investing in Community Development
Half of JPMorgan Chase’s $100 million commitment is financing to develop commercial, retail and mixed-use, mixed-income multi-family housing in Detroit. To date, the firm’s long-term financing of two Community Development Financial Institutions (CDFIs) – Capital Impact Partners and Invest Detroit – has led to investments of $38.4 million in projects that have the potential to transform Detroit’s urban core and neighborhoods. The firm’s financing has led to additional investment, such as a $2 million guarantee from the Kresge Foundation to Capital Impact Partners’ Detroit Neighborhoods Fund in 2015. Over the past two years, the firm’s funding has supported $240 million in financing across 11 projects that are either completed or underway. These projects have created or preserved nearly 450 units of housing – including more than 90 units of affordable housing – produced over 550 jobs and created nearly 67,000 square feet of commercial space. The projects include, Global Titanium Inc., Granada Apartments, Hope of Detroit Academy Charter School, Rainer Court Apartments, Sakthi Automotive facility, Shoppes at Woodward, The Plaza, The Scott at Brush Park, The Whitney, the West Village Project and Willy’s Overland Lofts.
“Sakthi’s ability to grow its business in Detroit would not have been possible without the help of Invest Detroit and the Chase Invest Detroit Fund,” said Lalit Verma, CEO, Sakthi Automotive Group. “The subordinated debt funding package allowed us to get another $41 million in senior financing and create an additional 350 jobs.”
“The JPMorgan Chase $100 million investment in Detroit is accelerating momentum for economic growth, creating jobs and attracting additional investment,” said David Blaszkiewicz, President and CEO, Invest Detroit. “The JPMorgan Chase Invest Detroit Fund greatly enhanced our capacity to promote business growth and the development of mixed-use, mixed-income housing. These are key elements supporting the creation of density and long-term sustainability for Detroit; and its emergence as a vibrant, walkable community for people to live, work and play.”
“Together with JPMorgan Chase we have created one of the most flexible financing programs we have to offer,” said Melinda Clemons, Senior Loan Officer, Capital Impact Partners. “Through our projects we are developing mixed-income communities, where the diversified population promotes a wide range of businesses, increases the tax base and supports the type of population density that is needed for Detroit’s recovery.”
This week, JPMorgan Chase is announcing the commitment of $4 million over four years to help seed Develop Detroit, the first citywide neighborhood-focused nonprofit housing development firm. As home prices increase and investors purchase properties in high-growth areas, Develop Detroit will work to preserve existing affordable residential homes and build new, inclusive mixed-use housing projects in targeted neighborhoods, including initial investments in over 400 housing units in Marygrove, North New Center, Eastside Detroit and West Midtown.
“JPMorgan Chase has been a crucial partner to Develop Detroit and to Detroit's housing landscape more broadly,” said Sonya Mays, CEO, Develop Detroit. “Their monetary investment was essential in our start-up trajectory – but as important, JPMorgan Chase has layered our investment into an entire ecosystem of support that spans not just housing stabilization, but small business incubation and workforce development. It is this type of multi-faceted, yet targeted approach that we believe will be truly catalytic for Detroit neighborhoods.”
Develop Detroit will complement the firm’s other investments in neighborhoods, including the Home Restoration Program, which JPMorgan Chase created by providing Liberty Bank with a $5 million grant. The Home Restoration Program extends affordable rehabilitation loans to qualified homebuyers in Detroit’s neighborhoods. To further support Detroit’s housing market, JPMorgan Chase is providing financial support for a new marketing campaign in Jefferson Chalmers, Northend, Grandmont Rosedale, Morningside, East English Village and Cornerstone to raise awareness of the Home Restoration Program. The Home Restoration Program is also expanding its down payment assistance program for low-and moderate-income participants, up to $15,000 per household.
“It has been a pleasure to partner with JPMorgan Chase on the Home Restoration Program for the past two years,” said Alden McDonald, President and CEO, Liberty Bank. “We hope our program will continue to be a catalyst for rebuilding and lending in Detroit’s neighborhoods and we are optimistic that our work will continue to allow more dreams of homeownership to become reality.”
Since 2014, JPMorgan Chase has provided nearly $1 million in grants to three local housing counseling agencies – Central Detroit Christian Community Development Corporation, Southwest Economic Solutions and U-SNAP-BAC Community Development Corporation – to provide support and education to potential homebuyers. As part of the $1 million investment, this year the firm is renewing its commitment to Detroit homebuyers with over $230,000 in funding to these organizations.
Strengthening Detroit’s Workforce
Earlier this year, JPMorgan Chase and the Corporation for a Skilled Workforce released two reports that examined the state of the Detroit workforce development system and provided recommendations to help align resources to support job growth in the city. The reports are enabling the city’s leaders, like the Mayor’s Detroit Workforce Development Board, to make data-driven investments in training programs, better prepare Detroiters for available jobs and create a roadmap to address the city’s workforce challenges.
“JPMorgan Chase continues to provide us with critical information and financial support to better understand and tackle Detroit’s workforce challenges,” said Jeff Donofrio, Director of Workforce Development, City of Detroit. “With enhanced data and more resources, the city is making progress aligning workforce systems with the needs of business and helping Detroiters gain the skills they need to succeed.”
JPMorgan Chase continues to invest in workforce training solutions across Detroit. This summer, JPMorgan Chase is providing another $500,000 to support the Mayor’s Grow Detroit Young Talent summer jobs program, which provides paid work experiences for young adults between the ages of 14 and 24. By the end of this summer, JPMorgan Chase will have supported nearly 700 young people through this program and provided $1 million to support summer youth employment in Detroit over the last two years. A recent JPMorgan Chase report found that compared to 14 other U.S. cities, Detroit had the largest increase in private sector worksites offering summer youth employment, adding more than 100 partnerships in 2015.
To help all Detroit residents develop the skills, credentials and experience they need to establish stable career pathways, JPMorgan Chase is supporting workforce training programs at Focus: HOPE, Detroit Employment Solutions Corporation and The Greening of Detroit. Over 250 people will be able to participate in Focus: HOPE’s manufacturing and information technology certification program, which has a job placement rate of more than 85 percent, over the next four years. With the firm’s support, Detroit Employment Solutions Corporation will be able to train 175 individuals for careers in high-growth sectors such as healthcare and information technology. And Greening of Detroit, which provides workforce training for jobs in forestry and landscaping, will be able to provide 250 jobs for high school students.
Additionally, JPMorgan Chase is committing a total of $2.5 million to three organizations – Goodwill, Greening of Detroit and Ecoworks – to support job training programs in the city. Projects include a $1 million investment to relocate Goodwill’s Flip the Script and Center for Working Families programs to a newly-rehabilitated building in the North End and a $500,000 grant to support Ecoworks’ Reclaim Detroit deconstruction and construction job training programs. This week, JPMorgan Chase is also announcing a new $1 million grant to expand Greening of Detroit’s adult training and youth employment programs.
Putting the Skills of JPMorgan Chase Employees to Work
In 2014, JPMorgan Chase launched the Detroit Service Corps, a three-week, full-time program that aligns the skills and expertise of the firm’s top-performing employees with the needs of nonprofit partners in Detroit. Since then, 36 employees from eight countries have traveled to Detroit to volunteer with 11 nonprofit organizations in the city. Detroit Service Corps members have collectively contributed over 5,400 hours to projects ranging from the creation of strategic plans, to the development of business plans and financial models for earned revenue projects.
“The Detroit Service Corps was an extremely talented group of people,” said Craig Varterian, Executive Director, Reclaim Detroit. “They focused on Reclaim’s project need and worked hard to understand our long term strategy and deliver valuable tools to push our mission impact to another level.”
This year, an additional 32 top managers from seven countries will be traveling to Detroit in June and October, respectively. The nonprofits the teams will be assisting will be announced later this year. To further support the city’s nonprofit community, today the firm is announcing that Detroit is one of three cities selected by Cities of Service – a national nonprofit organization – to receive support to establish a Chief Service Officer. The firm’s grant to Cities of Service will support the Chief Service Officer program, which will connect residents with impactful projects that address key challenges facing the city.
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available atwww.jpmorganchase.com.