It’s been nine years since the onset of the great recession, and while the U.S. is generally in good shape, some areas haven’t seen the necessary growth to thrive. Detroit, for example, suffered such economic destruction and population loss over the years that a recovery seemed almost unthinkable.
But since exiting bankruptcy in 2014, things have been looking up. One bright spot in the turnaround came when JPMorgan Chase (JPM) said it would pledge $100 million over five years to revitalize Motor City. Yahoo Finance editor-in-chief Andy Serwer spoke to chairman and CEO Jamie Dimon to find out why helping Detroit was so important to him.
“Detroit's one of the only major American cities that didn't have a recovery,” Dimon says in the video above. “Pittsburgh, Philadelphia, Cleveland, Cincinnati—they all had some kind of recovery.”
With JPMorgan’s already large presence in the city, it made sense that the bank would partner with Detroit's government. “We're the biggest bank in Detroit already — consumer, small business, large corporations — so when we saw them [rebuilding the city], we said, ‘We're going to roll up our sleeves and go help them,’" Dimon explains. “We're helping them with work skills initiatives, we're helping them with affordable housing.”
And you don’t have to take his word for it. Serwer spoke to Detroit Mayor Mike Duggan about JPMorgan's partnership with the city. In Duggan’s view, the effects of the partnership have been huge.
Take for example housing. For one particular 200-unit housing development, JPMorgan invested $5 million, but Duggan notes that the money leveraged an additional $30 million from other parties who were putting in market rate loans. “Because [the investment] has been done so strategically, the impact has very been significant.”
While JPMorgan has been operating in the city for quite some time, Duggan says it had been years since the bank has shown this kind of commitment to the city, and he says it all comes down to Dimon.
“It’s really been Jamie Dimon’s interest personally,” Duggan explains. “He can you tell about the different neighborhoods in Detroit, what we’ve done to put the street lights on, and what the policing practices are – it’s a pretty remarkable commitment.”