Warren Buffett says Detroit ripe for investors, including himself

By Ricardo Lopez – LA Times

The Oracle of Omaha said Wednesday he’d be willing to invest in Detroit if he found a suitable company.

Warren Buffett was on hand at a Goldman Sachs Group Inc. event to announce a program that will provide up to $15 million in loans to small business to spur economic development. An additional $5 million will go toward providing education and training to entrepreneurs, Goldman Sachs said in a statement.

“The resources are here to have a great, great city,” Buffett told the news conference, the Detroit Free Press reported.

Detroit, which declared bankruptcy in July, is reeling from the loss of tax revenue as the city’s population has shrunk over several decades. The city’s population is 701,000, down from its peak of 1.8 million in 1950.

City services have been slashed, vacant lots and abandoned buildings proliferate throughout the city. The average police response time to emergency calls is almost an hour.

The unemployment rate in Detroit’s metro area was 9.5% in October, according to the Bureau of Labor Statistics. That’s more than two percentage points higher than the U.S. jobless rate, which was 7.3% last month.

Nonetheless, Buffett and Goldman Sachs believe there are many investment opportunities in the city.

“Small business owners are a critical part of Detroit’s comeback,” said Detroit Mayor Dave Bing in a statement. “This new initiative will provide significant financial and technical assistance for these businesses.”

Goldman Sach’s “10,000 Small Businessess” initiative has been implemented since 2010 in other cities that include Los Angeles, New York, New Orleans and Miami. It will begin in Detroit in March of next year.

Source for Article – LA Times – Link

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