The hole in your story: You seem to think people working for government are either 100% stupid or 100% too lazy to do their job; that will not be the case. You have inspectors, for one. Building inspectors, safety inspectors, accountants, bookkeepers and other bean counters. There are many, many safeguards in place, both legal and routine, in every major public budget.
There are only two types of multi-million dollar contracts: Corrupt ones, and legitimate ones. You sound like you are aiming for a legitimate one, something politicians want to point to as an accomplishment: Publicized contracts like that extend to hundreds of pages when millions are involved and will be monitored. You will have a schedule to keep, milestones to reach, and the people doing the inspection will not be glad-handing politicians but actual engineers, architects, electricians, plumbers, drainage experts, safety experts, fire marshals, etc.
You will not get a choice in the Insurance inspection, either. The fire marshal and arson investigators do their job no matter how innocent the fire may look; they are trained skeptics and will involve the insurance company and look into your financing to seek motives for setting the fire. And find it.
If you want a plausible story, do not depend on your opposition being a caricature of stupidity and laziness that is so easily fooled. If cities really were as incompetent as you portray them to be, they wouldn't exist.
You need a reason for professionals, with the authority to look into every nook and cranny of your developing jobs center every month, and a natural interest and pride in serving their city and preventing it from getting ripped off, to not hit the brakes: They need to believe you are putting your money where your mouth is; and some ramshackle warehouse decorated with some motivational posters is only going to convince them to look deeper.
If you want to save your story, ditch the city, and ditch the smirk. Make your criminal "The Music Man" (watch that old musical with Robert Preston); a con man of consummate skill that convinces non-government companies, charities, wealthy donors and more that what Detroit needs is a Jobs Center! (Robert Preston convinces the citizens of River City they need a Boys Band). Preston actually delivers the musical instruments; your guy actually delivers the Jobs Center, it just isn't going to work they way he said it would. The Music Man had a surprise happy ending with an innocent love story; but your story can end however you want. Inspectors will let you build something that just barely meets standards, it is not their job to ensure you keep your public promises, just that you meet the minimum allowable standards. They don't care if you collect \$100M in donations and are still begging for more on TV, even though they know you have only spent \$5M of it, and your "artistic renderings" of the Jobs Center cannot be realized with what you are doing -- the space isn't big enough, you are putting cheap flooring down, whatever. They aren't there to keep you moral, just to keep the building from falling down or killing people when it catches fire. This addendum is to answer the second part of your question; "is there a way to get around that?"
That answer is "I doubt it," but if you make it so the city itself has no contract on the line, and your villain is defrauding non-experts and they absolutely love him, he can raise 20 million, spend 5 million, and vanish with 15 million, leaving behind a grand entrance that says "Job Center" that opens on an empty, dusty warehouse with cobwebs in the exposed rafters.
Or the twist could be the "Stone Soup" fable; which is basically the plot of The Music Man: The con man generates so much excitement that the project becomes self-fulfilling: expectations were far lower than what he expected; enthusiastic volunteers make it all work out and nobody (but the IRS) ever looks at the money end -- and the IRS is not there to prosecute or expose any fraud.
Say your villain has been promising he can stop the violence and reform one of the gangs. A bloody gang war erupts; and all the psychopathic leaders of both gangs end up slaughtered, one side murdered and the other side blown up the next day. The rank and file all call a truce, they will reform themselves, and come in for job training -- and our villain's corporate partners step in with new vigor, with materials, equipment and volunteer employees to help these gang members get it, to end the gang wars once and for all. It's great publicity for them, the villain is just the revival tent preacher with fire in his eyes and thunder in his voice.
Then all your villain has to do is open the doors on that completely empty warehouse and he becomes a hero. Despite having the worst intentions, his Job Center succeeds and he is credited with turning around the lives of hundreds of Detroit youths. He even gets credit for stopping the gang war even though he had nothing to do with it. The city pins a medal on him, and MegaCorp: They may know many truckloads of money went missing, but it wasn't all theirs and it gave them a lot of free air time, so they don't mess with a good thing.