JPMorgan Chase to give another $15M to Detroit neighborhood fund

JPMorgan Chase, as part of its $150-million commitment to Detroit's revitalization, announced Thursday that it will invest $15 million in Mayor Mike Duggan's Strategic Neighborhood Fund.

The Strategic Neighborhood Fund targets 10 selected districts in the city for intensive investment, including residential and commercial development.

JPMorgan Chase, the nation's largest bank, said its latest investment will include a $10-million, long-term, low-cost loan and $5 million in philanthropy, with the money primarily targeting projects in commercial corridors across the 10 neighborhoods.

The Strategic Neighborhood Fund recently expanded to 10 neighborhoods in the city from an initial three. The neighborhoods have been chosen because they already show signs of economic recovery and therefore, with new investment, could draw more residents, business startups and new jobs.

The 10 neighborhoods and districts include Jefferson-Chalmers on the far lowest east side, Livernois/McNichols on the northwest side, West Vernor in southwest Detroit, the Islandview/Villages district on the east side, the East Warren/Cadieux area, the Gratiot/7 Mile area, as well as Northwest/Grand River, Banglatown, Russell Woods and Warrendale/Cody Rouge districts.

The announcement Thursday was made at the Detroit School of Digital Technology in southwest Detroit where Duggan was joined by senior JPMorgan Chase, community and government leaders.

Chase's support and the Strategic Neighborhood Fund itself are designed to finance crucial  neighborhood projects that lack access to traditional financing. Over time, the new investments are intended to attract additional capital and give residents more access to affordable housing and goods and services where they live and work.

On Thursday, Duggan said that with the help of partners like Chase, "we are taking the successful strategies that worked in our Downtown and Midtown areas and scaling it to bring physical improvements and development to neighborhoods across our city.

"We’ve got a lot more work to do and together," Duggan added. "We’ll expand the good work being done to ensure more Detroiters are participating in the comeback."

“There are so many clear signs of recovery across Detroit," said Peter Scher, head of Corporate Responsibility, JPMorgan Chase. "We want this growth to benefit all Detroiters, especially those who have lived here their whole lives. That’s why we continue to invest our long-term capital in more neighborhoods.”

The new investment announced Thursday is the latest move in JPMorgan Chase's commitment to its Detroit effort. In 2014, the bank helped launch two community development loan funds in Detroit — the Detroit Neighborhoods Fund and Chase Invest Detroit Fund — through two Community Development Financial Institutions (CDFIs) — Capital Impact Partners and Invest Detroit.

These funds, which included $40 million in low-cost loans from JPMorgan Chase, have helped finance the construction of mixed-use real estate development, affordable multifamily housing and other residential, commercial and retail developments, as well as provided flexible capital for small and medium-sized businesses throughout Detroit.

In all, the investments have helped created more than 1,000 new housing units, hundreds of new jobs and hundreds of thousands of square feet of commercial development.

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The JPMorgan Chase investment blends outright grants that don't need to be repaid, with low-cost loans made through nontraditional lenders like the Invest Detroit fund.

"When we started this almost five years ago, we did this combination of philanthropic grants and market rate capital, and we've never done this before," said Scher.   "It was kind of testing the market. Detroit needed to bring a market back. it couldn't rely just exclusively on government and philanthropic grants.

"It's been so enormously successful," he said. In dozens of loans made through the program there have been no defaults, Scher said. "It's an amazing sign. We've been so thrilled with the success so far it motivates us to continue on this path. Our experience in Detroit has completely changed our model of how we are investing in other cities."

Contact John Gallagher:313-222-5173 or gallagher@freepress.com.Follow him on Twitter@jgallagherfreep. Read more on business and sign up for our business newsletter.