Benton Harbor, Joe Harris — May 10, 2011

Benton Harbor condemns low-income hotel directly across from new Whirlpool headquarters

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NOTE: This entry was lost in the Blogger crash on 5/12/2011. I am restoring it now (on 6/17/2011).

In October of 2010, the city of Benton Harbor granted the Whirlpool Corporation a nearly $3.9 million tax abatement. Why did they do this? Because, without it, Whirlpool would have taken their marbles to some other state.

Monday’s approval was the last hurdle for Whirlpool to build its $68 million headquarters in the city. Berrien County, Benton Township and St. Joseph already approved the incentives.

Here’s a video posted on the Pure Michigan website last August which talks about the tax breaks that Whirlpool was receiving from the state and the city.

This benefit today will guarantee that at least 2,300-2,400 jobs are maintained by Whirlpool Corporation for the long term. Had we not had this kind of support from the state and local community, there’s really a good chance that we would not have been able to make the investment that we made.

Note that there is no claim that they will be creating new jobs when this multi-million dollar facility on the shore of the St. Joseph River is completed. Only that it will maintain 2,300-2,400 jobs. In other words, without these tax breaks, Whirlpool would simply have gone to some other community willing to pay for it.

In the article from last October, it mentions that Whirlpool was pledging an offsetting “corporate donation” to Benton Harbor.

Also at the meeting, City Manager Ron Carter said Whirlpool has committed a corporate donation to Benton Harbor totaling $3.8 million.

The donation means Whirlpool will only save about $71,000 through the abatements.

Why then, if they are only netting $71,000 in savings, was the entire project, costing tens of millions of dollars, contingent upon the tax break? Perhaps this goes some way toward explaining it.

Despite holding an open meeting to garner public input on how to use the $200,000 donation, Whirlpool officials will hold off on awarding it until Benton Harbor city leaders and Emergency Financial Manager Joseph Harris are able to agree on how to use it.

First of all, it’s only a $200,000 donation (perhaps an installment.) But, also, it now has strings attached. Benton Harbor city officials must agree with the Emergency Financial Manager, Joseph Harris. It appears that more questions are raised regarding this offsetting “corporate donation” than have been answered.

Across the street from the new corporate headquarters that are under construction is a run-down low-rent hotel called St. Joseph’s Riverwatch Inn. The Whirlpool construction is on the left, the Riverwatch Inn is on the right.

Crappy iPhone image by Eclectablog

As you can see from the photos below, taken at last Saturday’s parade by Anne C. Savage, it’s not a particularly nice place, hardly the kind of thing Whirlpool executives would want to gaze at as they peer out their office windows toward Lake Michigan.


Image by Anne C. Savage. Please do not use without permission.


Image by Anne C. Savage. Please do not use without permission.

Today the city of Benton Harbor condemned it.

Directly across the street from where construction on Whirlpool Corp.’s $68 million headquarters complex noisily progresses sits the crumbling Riverwatch Inn.

The signs have changed many times at the Benton Harbor business since it opened as the Imperial 400 motel in 1964. For a while it even served as the Southwestern Michigan Community Correction Center.

The latest sign at 711 West Main St. was posted Friday by Benton Harbor’s building inspectors: “condemned.”

City inspectors have declared the building “dangerous and uninhabitable.” Tenants have 30 days to move out, and the owner, Narmada Inc., headed by Jay Kansara of Chicago, has 90 days to fix it or tear it down, according to Ted Hanson, a building official with Benton Harbor.

Ted Hanson, a former Allegan County inspector, reports directly to EFM Joseph Harris.

It’s not particularly surprising that Benton Harbor officials would want to make sure that its buildings are all up to code. However, it’s difficult to argue about why they are taking these actions NOW rather than years ago. Whirlpool has clout in Benton Harbor because they hold so many of the financial strings. With the construction of the headquarters fully underway, this unsightly hotel clearly was not part of their long-term plans. One can’t help but wonder what leverage was used, what words were uttered into which ears, to instigate this now.

Here’s something to keep in mind about Whirlpool: despite all the claims that they are essential to Benton Harbor’s tax base, they have paid no federal taxes for three years and they are being excused from paying an enormous amount of their city taxes because they have, for all intents and purposes, blackmailed the city. Benton Harbor government officials were offered two choices: small crumbs and handouts that serve mainly to make Whirlpool look like a good, upstanding corporate citizen or to get absolutely nothing when the company pulls what remains of its Benton Harbor operation out of the area.

Maybe there is corruption in the Benton Harbor government. Maybe there is malfeasance and mismanagement. But, at the end of the day, one group holds all the best cards and the city of Benton Harbor must do whatever they can with shitty hand they have been dealt.

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