Name: Insights: Inside J.P. Morgan Chase's Detroit Revitalization
Uploaded: 2020-01-14
Duration: 5 min 57 s
Description: The bank has invested millions into the town. (September 2017)

[MUSIC PLAYING] Home of the US motor industry and the Motown music phenomenon. Waving the white flag, the city filing for bankruptcy. The economy was so bad, it prevented people from opening and starting new businesses. And I don't think that the banks could get involved because the market just wasn't there for it. It took two decades of decay to bring down the one-time industrial giant. I think for a long time, people thought that through the Housing and Urban Development and other federal programs, they would come in and solve the problems. And the fact is, the federal government has less resources. It's just a fact. What the smarter cities and leaders are recognizing is they have to turn to businesses and other entities. We are particularly pleased to be here today to be announcing the $100 million investment in Detroit. So we provided both capital and capacity to community development and finance institutions. So we're creating jobs, helping businesses grow. We're investing in infrastructure, building CDFIs, small business. I wanted to open up a restaurant or business in Detroit. A lot of the banks that I was approaching were just too intimidated, I think, and nervous. A, it being a restaurant and the failure rate of restaurants is really high. And B, it being a location in a neighborhood that hasn't really developed quite yet. So I think the challenge has been that most small companies just are not bankable companies. The credit score isn't very high. They don't have enough collateral. Perhaps they've lost money in the last year, and perhaps the balance sheet is not as strong as a bank would like. I had some money to start the project. But I needed a substantial amount to finish. And that's where I'd gotten the money through Detroit Development Fund. When we first announced our investment in Detroit in 2014, our small business focus which were great for downtown, but we realized we weren't having the impact we wanted. And we shifted to much more focus on minority entrepreneurs who needed capital, needed counseling, who needed advice. We tried to go where we think there's some stability in the neighborhood and where we can find empty retail space. Along the way, we're trying to make sure that when we do residential rehab, that a good portion of that is affordable rental or affordable sale units, so that we don't get to a point where we're creating a hub in a neighborhood. And the home values go up so much for the rentals that the people who now live there can't live there anymore. And we'll make our way over to the studio, which is the coolest affordable unit you will ever see. So we are developing a $4 million mixed use project, eight townhomes, four apartments, 1,200 square feet of retail. This is really the first effort in years to do ground up development in the neighborhoods in Detroit. And so it always takes somebody to take the first chance. So when we started the project, we had some neighbors who, frankly, were less excited. But the reason that we're able to have a transformative impact on the neighborhood is because there were people who were here before us who held on, right? And who put money into their houses. I came here in 197-- well, we came to Detroit in '69. Our first houses we paid $1,000 for. $1,000 now. The young kids are doing great things. I'm not finding fault with any of them. I'm glad they're here. I'm glad that they are taking on these projects. They seem to be able to get money to fix them up, which we couldn't. We fixed them up as best we could. And now they're mad because they can't get it from me for $20,000. They thought that I would be willing to sell it for cheap. Two family flats in West Village sold for 200 to 300. Well, what's the business case for the big companies investing in Detroit? First of all, they need to attract talent. And the other part, frankly, is that a lot of companies got caught up in the meltdown, the mortgage mess. And they had to take a hard look in the mirror at their own practices. I think what you're seeing is a renewed sense of social responsibility. And certainly, when it comes to JP Morgan Chase, Detroit has been a huge beneficiary of that. But where a lot of the job growth I think will come in the future are smaller enterprises that might be 25 employees or less. If those companies can grow, the net result of having a lot of employers adding small numbers of jobs can equate with what the big employers used to be. Even the most optimistic people in Detroit would tell you the work is far from done. Gentrification where it is thrown around and is talked about, and there's ways of doing things tastefully and being inclusive. And there's ways of not. And so it was an opportunity to show the kids, though, for them to see, to be very frank, a 40-year-old black man whose business partner is a 43-year-old black man, who are really two kids just from the inner city, who believe in development, and wanted to change people's lives through real estate development was exciting for us. One of the hopes that we have was-- what Chase has is that if we do well, it can be duplicated in Baltimore, in New Orleans, and other cities. And that's kind of the test that they're looking for. If we can do it here, why can't we move it to other cities that need the same kind of assistance for their population? 

Insights: Inside J.P. Morgan Chase's Detroit Revitalization

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The bank has invested millions into the town.

 Inside J.P. Morgan Chase's Detroit Revitalization

The bank has invested millions into the town. (September 2017)

home of the U. S. Motor industry and the Motown Music channel, leaving the white flag the city filing for bankruptcy. Theo economy was so bad it prevented people from opening and starting new businesses. And I don't think that the banks could get involved because the market just wasn't there for decades of decay to bring down the one time industrial giant. I think for a long time people thought that through the housing, Irving development and other federal programs, they would come in and solve the problems. And the fact is, the federal government has less. Resource is it's just the fact what the smarter cities and leaders are recognizing, that they have to turn to businesses. Another, you know, and we are particularly pleased to be here today to be announced $100 million. It's $100 million Detroit. So we provided both capital and capacity to community development finance institutions for creating jobs, helping businesses grow. We're investing in infrastructure building, CDF eyes, small business. I wanted to open up a restaurant or business in Detroit. A lot of the banks that I was approaching were just too intimidated, I think nervous a being a restaurant and the failure rate of restaurants really high and be being a location in a neighborhood that hasn't really developed quite yet. So I think the challenge has been that most small companies just are not bankable company. The credit score isn't very high. They don't have enough collapse. Perhaps they've lost money in the last year, and perhaps a balance sheet is a strong is a banquet life. I had the money to start the project, but I needed a substantial amount to finish. And that's where I got money through Detroit Development Fund when we first announced our investment in Detroit in 2014 are small business focuses, which is great for downtown. But we realized we weren't having. In fact, we wanted, and we shifted to much more focused on minority entrepreneurs. Need capital mean counseling? I needed advice. We try to go where we think there's some stability in the neighborhood and where we can find empty retail space along the way. We're trying to make sure that when we do residential rehab that a good portion of that is affordable, rental or affordable sale, you know, so that we don't get to a point where we're creating hub in the neighborhood and the whole values golf. So much for the rentals that the people who now live their lives and we'll make our way over to the studio, which is the coolest, affordable unit you will ever see. So we are developing a $4 million mixture project. Um eight townhome for apartment, 1200 square feet of retail. This is really the first effort in years to do ground up development in the neighborhood in Detroit, and so, you know, it always takes somebody to take the first chance. So when we started, the project had some neighbors who, frankly, were less excited with. The reason that were able to have a transformative impact on the neighborhood is because there were people who were here before us, who held on right and who put money into their houses. I came here in 19 seventies what we came to Detroit in 69 our first houses. We paid $1000 for $1000. Now the young kids are doing great things. I'm not finding fault with any of them. I'm glad they're here. I'm glad that they are taking on these projects they seem to be able to get money to fix him up. What we couldn't wait. Now they're mad because I can't get it for me. For $20,000 they thought that I would be willing to sell it for James Family Flats in West Village. War 203 100. Well, what's the business case for the big companies investing in Detroit? First of all, they need to attract Taylor. And the other part, frankly, is that a lot of companies got caught up in the meltdown, the mortgage mess, and they had to take a hard look in the mirror at their own practices. I think what you're seeing is a a renewed sense of social responsibility, and certainly when it comes to J. P. Morgan Chase, Detroit has been a huge beneficiary of that. But where a lot of the job growth I think will come in the future are smaller enterprises that might be 25 employees of those companies. Congrats. The net result of having a lot of employers adding small numbers of jobs can equate with what the big employers used to be. Even the most optimistic people would tell you the work is done. Gentrification Word is thrown around, um, and talked about. And there's raises doing things tastefully and being inclusive. And there's ways, you know I'm not. And so it was an opportunity to show the kids go for them to see, to be very Frank, a 40 year old black man who's been a partner of 43 year old black man who were really kids from the inner city who believe in development and one of the chance to live the real estate development was excited for one of the hopes that way have with Chase, as is that if we do well, it could be duplicated involved in New Orleans and other cities, and that's kind of the test that they're looking for. We do it here. Why can't we move it to other cities that need the same kind of assistance for their population?