Detroit, MI, November 10, 2015 (CDFI Connect)—This week Opportunity Finance Network (OFN) hosts the annual OFN Conference in Detroit, MI. With more than 1,200 CDFI practitioners, funders, investors, and policy makers in attendance, a high-quality, practitioner-driven curriculum, strategic dialogues, and incredible networking opportunities, the 2015 OFN Conference is the largest and most influential gathering in the industry.
This year’s theme is Opportunity. Made in America. Detroit, as the host city, is the perfect place to talk about creating opportunity. JPMorgan Chase has made a multi-million dollar commitment to Detroit, working with local partners and CDFIs to create opportunity here.
CDFI Connect sat down with Mel Martinez, chairman of the Southeast U.S. and Latin America for JPMorgan Chase & Co. to learn more about their work in Detroit.
JPMorgan Chase & Co. has made a huge commitment to Detroit with $100MM in capital deployed last year– why Detroit? And how do you see your work growing in Detroit?
JPMorgan Chase has a long history in Detroit. We’ve been doing business there for more than 80 years. We have thousands of employees in the Southeast Michigan, many small and large business clients and millions of consumers who bank with us and are counting on Detroit to comeback. Our firm’s future is linked to the success of Detroit’s economic recovery.
Our $100 million, five-year commitment to Detroit leverages the firm’s global resources and expertise to help tackle some of the cities biggest economy challenges: workforce development, small business growth, commercial development and the revitalization of Detroit’s neighborhoods. We’re going to continue focusing on these areas and looking for innovative ways to help spur the city’s continued recovery. We’re optimistic about Detroit’s future and are continually seeing progress.
Why are CDFIs so crucial to your work in Detroit?
One of the biggest barriers to economic opportunity in Detroit and in cities around the country is access to capital. Too often, small businesses and commercial projects—like housing and retail—cannot qualify for traditional capital. CDFIs are critical to giving families, entrepreneurs, developers and others access to the financial resources they need to help low-to-moderate income communities and revitalize neighborhoods.
Investing in CDFI’s is the centerpiece of our Detroit program. More than half of our $100 investment is allowing our CDFI partners like Invest Detroit, Capital Impact Partners and the Detroit Development Fund to attract additional investment and kick start projects that might never have gotten off the ground. As a result, more workforce housing is being created in Midtown and Downtown Detroit and minority-owned small businesses in Detroit’s neighborhoods will be able to grow and expand.
How does JPMorgan Chase & Co. define success, particularly around your community & economic development work? What have been your biggest successes in Detroit to date?
Progress is being made in Detroit’s comeback, but we know there’s still a long way to go. The city has exited bankruptcy, state and city leaders are working together, the street lights are being repaired, emergency response times have improved, people are moving to Midtown and Downtown, and blight is being tracked and removed in the neighborhoods.
However, one of the most encouraging signs of progress is the amount of commercial activity in the city. In making our investments in the CDFIs, our goal has been to not only invest in the future of Detroit, but also to challenge others to do the same. That appears to be taking place and we welcome the support of other private sector partners to help spur the city’s recovery. Because of this, CDFIs are able to leverage new and existing resources to help finance vital projects that struggle to access traditional sources of capital. This means more housing, grocery stores and retail centers being created or expanded across the city.
How do you feel that these investments will monetize and strengthen Detroit’s economy? And what are the challenges still ahead?
With each investment we’ve made in Detroit, there’s an opportunity to create more skilled workers to compete for good-paying jobs. There’s an opportunity to create more housing for people who want to fill these jobs. There’s also support for small businesses throughout Detroit’s neighborhoods that previously could not get access to capital and get their businesses off the ground. And there’s less blight and hopefully there will continue to be more home rehabs throughout the neighborhoods. While many challenges lie ahead, we’re hopeful other cities can learn from the innovative solutions being put in place in Detroit and use them to tackle big challenges in their cities.
In December 2014, JPMorgan Chase & Co. announced the creation of a CDFI collaborative program intended to forge partnerships among CDFIs to help them build capacity; improve access to capital and create economic growth in distressed and underserved communities. The program awarded $33 million to seven collaborations comprising 27 CDFIs working in 21 states. Why was this investment in the CDFI industry important to JPMorgan Chase & Co.?
JPMorgan Chase is committed to helping cities develop innovative and sustainable solutions through creative partnerships that allow them to tailor their responses to specific challenges. We see CDFIs as critical partners to develop these solutions. To do this, CDFI collaboratives created a new model for CDFIs to grow and expand. By collaborating and leveraging each other’s greatest assets—access to capital, talent and technology—they’re developing inclusive growth strategies that connect families, entrepreneurs, and distressed communities to greater economic activity. Specifically, the CDFIs we’re supporting are leveraging our $33 million commitment to secure $150 million in additional support. This means they’re able to tackle some of the biggest issues facing our cities: lending to minority-owned small businesses, creating more affordable housing and providing access to affordable financial products in distressed neighborhoods.
Later this month, we will announce a second round of grants for CDFI’s that share our commitment to economic problem solving through collaboration. JPMorgan Chase’s new awards will go to programs across the country that creates tailored solutions to the unique needs facing our communities.
What’s your favorite Motown classic and why?
I have several favorite Motown classics. If I had to choose, Stop in the Name of Love by the Supremes is number one. My Girl by the Temptations is a close second and I love Aretha Franklin's Respect.