Combine cherries and sugar in a small sauce pan and heat to a simmer over medium heat. Stir water and cornstarch together in a small bowl and add to cherries, stirring constantly until combine and mixture returns to a full simmer. Remove from heat and allow to cool to slightly warm or room temperature. Continue with recipe as cherries cool.
Preheat oven to 350℉ and prepare a 9"x5"x3"loaf pan by spraying with non stick spray or lightly greasing with butter and lining with parchment that overhangs the long edges.
In a small bowl whisk together flour, baking powder and salt until combined.
Beat together butter, cream cheese and sugar until smooth, scraping the bowl once or twice. Add eggs one at a time, scraping bowl and beating after each until incorporated. Add vanilla and mix to combine. Pour in half the milk and half the flour and beat until just combined. Repeat with remaining milk and flour. Scrape the bowl and add chocolate chips and mix to combine.
Pour half the batter into prepared pan and spread smooth. Top with half the cherry sauce, remaining batter and cherry sauce again on the top. Using a table knife, swirl batter in a figure eight pattern two or three times to create nice swirls of cherry sauce. No need to over swirl.
Bake in preheated oven for 55-65 minutes or until a toothpick inserted in the centre comes out clean. Remove from oven and allow to cool completely in pan prior to lifting out and slicing.