At least one of Wall Street’s leading powerbrokers is set to be in Detroit tonight for a secret dinner with Mayor Mike Duggan in advance of a major announcement committing $100 million to bring jobs and businesses
to the bankrupt city.
JPMorgan Chase Chairman Jamie Dimon is expected to join the mayor, the Thompson Foundation’s Bob Thompson, a representative of the governor’s office and perhaps billionaire investor Warren Buffett for a private dinner in the Madison Building on Grand Circus Park, three sources with knowledge of the situation confirmed to The Detroit News.
The plan, expected to be detailed Wednesday on NBC’s “Today Show,” would commit the capital to back firms that would pledge to invest in the city and provide tax-paying jobs in a Detroit preparing to exit its historic Chapter 9 bankruptcy later this year.
Gov. Rick Snyder will not attend the dinner, and the mayor’s office declined comment. But the move, which Dimon and Snyder discussed over lunch last month in New York, would be the latest signal of renewed interest by Wall Street in the legitimacy of Detroit’s comeback story and an eagerness to be part of it through investment.
Last November, Goldman Sachs — accompanied by Buffett — announced Detroit’s inclusion in its 10,000 Small Business program, a $20 million effort to provide financing, training and mentoring to small businesses across Metro Detroit.
“We teach skills,” Goldman Sachs Chairman Lloyd Blankfein told MSNBC’s “Morning Joe” in announcing that Detroit would be the 17th city added to the program. “We provide mentorship. We provide structure.”
In a city desperately needing billions in private investment, the latest effort represents a comparatively small financial commitment. But the symbolism — a Wall Street titan using a national morning show to signal business interest in Detroit — is a powerful assist to Duggan, Snyder and the city’s business and political leadership.
Similar to the Goldman commitment, the new initiative also would offer guidance and services, including consultants and subject-matter experts who could help businesses orient themselves in a city gutting through the largest municipal bankruptcy in American history.
All good, that, whatever the PR boost to Dimon and JP Morgan. The broader signal is what the action says about Detroit, its bankruptcy and the opportunity its represents to business people who measure success by investing at the right time and reaping rewards.
For as much as bondholders and bond insurers fiercely oppose Emergency Manager Kevyn Orr’s bankruptcy restructuring and say that it will dampen interest in lending to the city, the JP Morgan effort suggests Wall Street is starting to notice what locals like mortgage impresario Dan Gilbert already know:
Detroit offers opportunity. Its business community is active, and the hometown auto industry is leaner and more profitable. Real estate is comparatively cheap. Labor is available and trainable. The main airport in western Wayne County is world class. Political leadership, chiefly the administrations of Duggan and Snyder, are the most business-friendly of their respective offices in decades.
This is big deal stuff for a town that everyone, including Wall Street, turned its back on not too many years ago. The home of lumbering automakers was a Rust Belt, union-controlled enclave that projected mediocrity, no future and little appeal to investors hungry for the next new thing.
Investors should be fleeing, but they are not. Now some of the smartest money in the country is eyeing a city whose story projects a decidedly upward (and optimistic) arc, despite bankruptcy and a political collapse. That’s progress, made in Detroit.
