Treasury Secretary to Visit Hard-Hit Detroit

Treasury Secretary Jacob Lew will travel to Detroit later this week for talks with civic, business and nonprofit foundation leaders about how to help revitalize the bankrupt city.

The e-mail announcing Lew's visit said he plans to meet with foundation leaders to “highlight the Obama administration's continued commitment to the city's revitalization and explore ways to promote job creation and economic growth.”

The visit — scheduled for this Thursday and Friday — comes after word last week that state and local officials were interested in getting President Barack Obama's administration to free up as much as $100 million in anti-blight money for Detroit. But there were no immediate indications that Lew's visit had anything to do with those reports last week.

If that money from the state's allotment of nearly $500 million from the federal Hardest Hit Fund were allocated to Detroit, however, it could free up a like amount in city funds which could then be used to offset a settlement with city retirees. That could help pave the way toward the city's exit from the largest municipal bankruptcy in U.S. history.

Last week, the Free Press reported that discussions were underway to determine if that $100 million could be made available. But there was no confirmation from Treasury or the White House regarding discussions, other than a statement from an administration official that they were continuing to work with local and state officials “on a range of topics” including blight but no bailout was on the way.

Officials in Michigan's Gov. Rick Snyder's office, as well as the state's housing department, also provided no confirmation of such a deal.

Today's e-mail announcing Lew's visit made no mention of any discussions regarding the funding, which is under state authority already, but because of strict rules regarding the use of Hardest Hit Funds, could require federal signoff if Detroit were to get $100 million for blight eradication.

The Hardest Hit Fund was created to fund mortgage stabilization and principal reduction programs in the wake of the housing crisis of 2008-09. Much of the funding across the U.S. has gone unspent and would revert to Treasury in 2017.

Lew's visit was framed as part of an ongoing effort to help Detroit leverage already available federal resources. Already, Treasury has sent a high-ranking official, Don Graves, to be the president's point man in Detroit. Last fall, the adminsitration unveiled a $300-million aid package to the city, from public, private and nonprofit sources — though much of the federal funds included had already been committed to Detroit — and technical help in making sure funds were spent efficiently.

On Thursday, Lew is set to meet with foundation leaders to “discuss ways the nonprofit sector can help spur Detroit's revitalization by developing and investing in programs that support economic development, promote education and workforce skills training, and increase access to capital.”

On Friday, Lew is set to tour New Center Stamping, a metal stamping business in Detroit which received $3.7 million from Treasury's State Small Business Credit Initiative.

Also on Friday, Lew is expected to meet with area business and community leaders to discuss the condition of Detroit's economy.

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