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Investing in Community Development

Community development is at the core of our investment in Detroit. Building on JPMorgan Chase's deep expertise in community development banking and track record of lending and investing in Detroit, we committed $40 million in flexible, long-term debt capital and $10 million in grant capital to two leading nonprofit community development financial institutions.

Through the Detroit Neighborhoods Fund, managed by Capital Impact Partners, we are providing financing for the rehabilitation and construction of mixed-use and multifamily housing. Through the Chase Invest Detroit Fund, managed by Invest Detroit, we are financing residential, commercial and retail developments and are providing capital to help small and medium-sized enterprises grow.

Our investments are aimed at providing capital for projects that have the potential to transform Detroit’s urban core and neighborhoods but struggle to access traditional sources of financing. Two years in, we are seeing these projects come to life – bringing jobs and other benefits to the city.

Turning the Tide in Her Hometown

Few of us welcome traffic delays, but Melinda Clemons, Senior Loan Officer at Capital Impact Partners in Detroit, has a different perspective. "Getting stuck in traffic on Woodward Avenue is great," she says. "There's construction all over the place, everywhere you look there’s a crane and it’s down to one lane."

While it may take a bit longer to get where she's going, Clemons – a Detroit native – sees it as a happy indication that the tide has turned in her hometown. "I went to high school downtown so I'm very familiar with this area," says Clemons. "Back then, it was riddled with crime and drugs. So seeing what's going on now brings a totally different feeling of pride."

And Clemons can take pride in knowing she's played a role in making it happen.

One of the construction projects under way is The Scott at Brush Park, a $61 million development for which Capital Impact – as well as Invest Detroit – provided financing. The Scott is being built from the ground up on formerly vacant land and, when completed in December 2016, will have 199 rental units plus retail space. It is located in the historic Brush Park area that links Midtown to Downtown, a key area targeted by the city for development because it will promote increased density and economic activity along the Woodward Corridor.

With a rooftop pool, spa and other amenities, The Scott is geared toward young professionals – though 11 units will be preserved as affordable – and the apartments already are being snapped up. "Even five years ago, if you had told anyone there would be a high-rise, market-rate project coming on the market for $2 a square foot in Midtown, you would have been laughed out of the city," notes Clemons. "But it’s happening."

According to Clemons, being able to develop market-rate units in that location – where a large portion of the census track is below the poverty line – is significant. Capital Impact’s approach is aimed at creating mixed-income communities, where the diversified population drives a greater range of retail and other services and higher-income residents increase the tax base. An added benefit of The Scott project: Building on long-vacant land means bringing in new residents without the risk of displacing any existing ones.

"At least a few times a week, I get calls from out-of-state investors who want to know how they can be a part of what's going on in Detroit. You can feel the pull and the excitement. It's a vibe you get. Things have turned around, and this is the next hot place to be."

Melinda Clemons, Senior Loan Officer, Capital Impact Partners

Like most complex community development projects, the deal to build The Scott was a long time in the making – and it nearly fell apart at the last minute. Capital Impact, through the Detroit Neighborhoods Fund, provided critical capital at the 11th hour that put it over the finish line. Clemons points to JPMorgan Chase’s quick decision making and openness to finding a solution as the factors that saved the deal. "I love the Detroit Neighborhoods Fund because it is one of the most flexible financing programs we have," says Clemons. "Chase gets it."

Another project in the works, thanks also to financing from the Detroit Neighborhoods Fund, is the renovation of the iconic Hammer and Nail building in Midtown. Previously slated for demolition, the rehabilitated building, to be renamed The Plaza, will instead include 72 apartments plus retail space.

"I cannot stress enough how transformational The Scott and The Plaza projects are for the Midtown area," says Clemons.

While Capital Impact is making a mark in Midtown, its focus and horizons extend beyond the urban core – and its project portfolio includes not only large-scale developments like The Scott and The Plaza but also smaller-scale ones. Through the Detroit Neighborhoods Fund, the nonprofit has multifamily and mixed-use projects under way in neighborhoods such as West Village and Woodbridge – with more in the pipeline. In all its work, Capital Impact encourages equitable participation by the community, as well as support for local developers.

"At least a few times a week, I get calls from out-of-state investors who want to know how they can be a part of what’s going on in Detroit," notes Clemons.

"You can feel the pull and the excitement. It’s a vibe you get. Things have turned around, and this is the next hot place to be."

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