Benton Harbor, Michigan — April 19, 2011 at 10:26 pm

The connection between Michigan’s EFM power grab, Rep. Fred Upton and Big Oil/Gas


Based on some tips from folks who have contacted me about my blogging the Big Government TakeoverTM of Benton Harbor by Rick Snyder’s Emergency Financial Manager, Joseph Harris, I’ve been doing some digging into the development known as Harbor Shores. I have found an amazingly tangled web that involves a number of very powerful, very wealthy men.

In the process of developing the Harbor Shores Golf Course/McMansion residential complex which opened last summer, part of a park in Benton Harbor called the Jean Klock park was leased to the developers. The process by which that happened appears to have been very shady.

[I]n 2003 the entire park was threatened by a luxury housing development called Grand Boulevard Renaissance. Once again nearby residents banded together to prevent the city from actually selling part of the park. Six people filed a lawsuit claiming that such a sale would violate the terms of the Klock deed. The resultant settlement agreement was memorialized in a Consent Judgment stipulating that:

“The Court permanently enjoins the City from using any portion of the property depicted as Jean Klock Park in Exhibit to this Consent Judgment for any purpose other than bathing beach, park purposes or other public purposes related to bathing beach or park use except for recreational vehicle park campsites provided however that the City shall for all time be authorized and empowered to operate its water treatment facility located at the south end of the park including but not limited to capital improvements and expansion. The restrictions in this paragraph shall run with the land and shall be binding upon the City and its successors.”

Unbeknownst to the plaintiff group at the time, the city of Benton Harbor was represented by an attorney who simultaneously was representing a constituent member of the Harbor Shores development consortium, then named Edgewater-River Run. This is significant because the city and the Harbor Shores developer entered into the subsequent contract, executed in 2006 and again in 2008, allowing the Harbor Shores developer to lease Jean Klock Park acreage for 35 years with 2 automatic renewals, or allowing the developer quiet enjoyment of the land for up to 105 years.

There are currently two lawsuits still pending.

There are some folks who really benefited personally from the development of Harbor Shores. One of them is Congressman Fred Upton, grandson of Whirlpool founder Frederick Upton.

Supporters of the Harbor Shores luxury housing development say the $500 million project will create jobs and spark the renewal of the city of Benton Harbor, now the poorest city in Michigan.

But for two prominent backers of project, Republican Congressman Fred Upton and Whirlpool CEO Jeff Fettig, the benefits of the project hit closer to home: the proposed development will put a private golf course with spectacular views of Lake Michigan just a short drive from their family residences.

According to county property records, Upton and Fettig, both residents of Benton Harbor’s more affluent neighboring municipality, St. Joseph, live on Ridgeway Avenue, a residential street that dead-ends in the south end of Jean Klock Park. The park is a public recreation area owned by the city of Benton Harbor that would lose 22 acres of beachfront terrain to the Harbor Shores development. If the project is approved, dunes in the park would become three holes of a private Jack Nicklaus Signature golf course, open only to those who could afford a daily fee expected to be in the range of $200.

Both men have taken action to promote the project.

There are others who have benefited, too, of course. There is one family in particular, the McClendons, who own four lots along Ridgeway Avenue. And there’s a very close connection between the Uptons and the McClendon’s: Fred Upton’s cousin Katie is married to one of them, a man named Aubrey McClendon. Who is Aubrey McClendon? He is the owner of Chesapeake Energy, one of the largest natural gas companies in the U.S. and, in 2008, was the highest-paid CEO at all S&P 500 companies. His company is involved in hydraulic fracturing or “fracking” for natural gas. McClendon is also a developer. While he himself does not live on Ridgeway Avenue, his family does. And those that live on Ridgeway Avenue benefited mightily from the Harbor Shores development.

“Ridgeway has been the gold coast of the Midwest for a long time,” said Loren Gerber of Core Real Estate in nearby Stevensville. ”I expect Harbor Shores to cause property values to rise along Ridgeway and everywhere around the course.”

Although he doesn’t live here, McClendon has other ties to Michigan as well. He’s been deeply embroiled in a legal fights with Saugatuck Township, about 45 miles to the north of Benton Harbor. After McClendon purchased a large tract of duneland there, the Township rezoned the area making it impossible for him to develop it into a condo/recreation mecca similar to Harbor Shores. He tried to gain some goodwill by selling some of his land to local land conservancy. However, he still ended up suing the Township last year, accusing them of spot zoning. The suit is ongoing.

A recent request to dismiss McClendon’s case was dismissed by Federal District Judge Paul Maloney. Who is Paul Maloney? He’s a Bush-appointed judge recommended by none other than Congressman Fred Upton who celebrated his appointment. Maloney not only refused to dismiss the case, he went so far recently as to force the Saugatuck Township Board members to have a court recorder present to record everything they say anytime they have a quorum and discuss the case.

So, we have now come full circle. In Saugatuck, Congressman Fred Upton helps get a judge appointed who then rules quite favorably for one of Upton’s relatives, Aubrey McClendon, in a shoreline development dispute. Meanwhile, in Benton Harbor, both the Upton and McClendon families benefit financially from another shoreline development at the expense of the local residents — a project that Upton himself helped to push.

But there’s actually more to this. The guy who wrote the bill that gave Harris his massively expanded powers, Al Pscholka, is a former Upton staffer and is the state representative from that area. AND he was on the Board of the development group for Harbor Shores.

And more: Aubrey McClendon is the CEO of Chesapeake Energy. His relative and golf buddy, Congressman Fred Upton, is the Chair of the House Energy and Commerce Committee. And Fred Upton is trying to stop the Environmental Protection Agency from regulating greenhouse gases. Natural gas obtained using hydraulic fracturing, as McClendon’s company does, has recently been found to emit more greenhouse gases than coal. More on the close ties between McClendon and Upton at the Blind Eye’s great blog Who is Fred Upton (R MI-6)?

Finally, there’s this: Saugatuck Township, home of the stunning Saugatuck Dunes, is beginning to worry about bankruptcy due to the lawsuits from Aubrey McClendon. In fact, they held a vote last May to raise taxes to pay for the legal fees. It passed by two votes but there was a snafu that prevented a recount and is forcing the Township to spend even MORE money defending itself from yet another questionable lawsuit. They are actually fearing bankruptcy and, if they go into bankruptcy, they become vulnerable to — yep — an Emergency Financial Manager.

If that happens, what’s going on in Benton Harbor to ease the process of handing over prime real estate to wealthy and powerful developers for their own economic enrichment could happen in the beautiful Saugatuck Dunes, as well.

I’m just sayin’…