JPMorgan Chase to invest $100 million in Detroit

Amid a constant drumbeat of stories of economic decline, controversial labor negotiations and general chaos, Detroit could use some good news.

On Tuesday it appeared to get some, with an announcement that financial behemoth JPMorgan Chase & Co. would invest $100 million in the bankrupt city in an effort to revitalize it.

The deal, which was announced exclusively to local paper Detroit Free Press, comes after months of negative news not only for Detroit, but for JPMorgan, which recently agreed to the largest settlement agreement in U.S. history over its mortgage lending practices. Critics say the predatory lending practices of institutions including JPMorgan contributed to the housing woes and ultimate financial downfall of cities such as Detroit.

The bank made no mention of those practices in its $100 million investment plan (PDF). The exclusive interview JPMorgan CEO Jamie Dimon gave the Detroit Free Press also seemed to focus on the positive.

“Obviously Detroit was having issues,” Dimon told the paper. “I got together some of our senior people and said, 'What can we do that’s really neat, that could be really creative?' When you’re in a town, you try to be a great citizen there and we happen to be big player in Detroit.”

The bank’s investment will be split evenly between loans and grants to the city and various organizations. The biggest chunk of money — $50 million — will go to Capital Impact Partners and Invest Detroit, private investment firms that have been big backers of development in the city. The Detroit Land Bank Authority and several other organizations will get $25 million to help with blight removal throughout the city.

Other investments include a fund for workforce development, and money to help promote small businesses, as well as a plan for a Detroit streetcar system.

Detroit declared bankruptcy last year and is negotiating with unions and creditors over money the city owes but cannot afford to pay.

JPMorgan spokesman Stephen O'Halloran declined a request for comment from Al Jazeera. He said the bank would make an official announcement on Wednesday.

Michigan Gov. Rick Snyder told the Free Press that JP Morgan Chase’s decision could be a catalyst for others to invest in the city.

“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.”

JPMorgan Chase’s Executive Vice President of Corporate Responsibility Peter Scher told the Free Press that the company had an interest in reinvigorating economies where it had a big presence, and he hinted that it could make similar investments in other economies.

“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,” Scher said.