August 15, 2014; Washington Post
The planned revival of bankrupt Detroit has taken a twist that contrasts with the history of previous municipal turnarounds in the United States. There is plenty to debate about what constitutes a municipal turnaround and how deep some of the major touted turnarounds of U.S. cities have been, but many people point to places like Providence, Portland (Oregon), Atlanta, Pittsburgh, and others as cities that have made significant advances out of their longstanding socio-economic doldrums. The mix may be different in each, but they all had elements of governmental and civic leadership charting the cities’ pathways up and out of some of their problems.
Although Detroit has had a well-publicized commitment from the region’s philanthropic community focused on the nexus between the valuable collection of the Detroit Institute of Arts and the city’s billions in debt to public employee’s pensions, the distinctive story about Detroit’s future has been focused on corporate saviors, notably Dan Gilbert of Quicken Loans and Jamie Dimon of JPMorgan Chase. It’s not just that Detroit is welcoming private investment. City leaders seem to be leaning on these corporate leaders to guide the city through the post-bankruptcy thicket back toward prosperity.
With all but no expectations of federal intervention and limited resources available from the state, Detroit is counting on the private plans of Gilbert and Dimon for the future, with little or no local government constraint, much less direction.
One of the nation’s most prominent scofflaw banks, having recently paid a $13 billion federal fine for selling seriously flawed mortgage-backed securities plus $1.7 billion for its role in the Bernie Madoff scandal, JPMorgan Chase has now committed all of $100 million toward blight removal, redevelopment, home loans, and job retraining in Det