I'm not sure about the impact of drug legalization on the local economies of these areas. Right now, the drug trade is actually one of the few sources of remunerative work available for unskilled people in these cities. You mention police arresting people for "possession" but the fact is that they have little time for that around here. There's enough dealers and traffickers to keep them busy. You think all those guys are going to go straight when drugs are legalized? I think legalization would help, don't get me wrong, but I think the positive impact would be a lot less than many opponents of the drug war would like to believe.
These areas are already very cheap to build in. Delaware, Pennsylvania, and New Jersey practically give away abandoned industrial sites hoping to find companies to take them over. Getting rid of regulations can be iffy. After all, the outputs of polluting activities in Camden flow down the Delaware River to a whole bunch of other people.
Fixing education in these communities is intractable. You can't teach kids in a community where gang leaders have more authority than parents. You have to fix the community before you can make a dent in the education problem.