On the shores of Lake Michigan, a private golf course and housing development, seen here in 2009, sit on public land once protected under the Land and Water Conservation Fund Act. (Robert McClure/InvestigateWest)

BENTON HARBOR, Mich. — In this predominantly black town with the lowest per-capita income anywhere in this hard-hit Rust Belt state, municipal leaders allowed a development group to take over the heart of a city park that fronts onto Lake Michigan — land originally bequeathed to the people of Benton Harbor forever.

Opponents claim the land deal violates the Land and Water Conservation Fund Act. In 1977, Benton Harbor accepted money from the fund for park development under the condition that it remain forever open to public or, if closed, be replaced with land of equal fair market value and reasonably equivalent recreational use.

Harbor Shores Community Redevelopment, Inc., a consortium of Whirlpool Foundation and two other non-profit groups, used the city land in the center of Jean Klock Park to build three holes of a “Jack Nicklaus Signature” golf course. The course anchors a $500 million development billed on the developer’s website as combining “the charm of a small town with the year-round amenities of a world-class destination, ideally located just 90 minutes from downtown Chicago.”

Annual memberships at the golf course start at $3,750. This in a town where the median income is $17,301, according to the Census Bureau’s American Community Survey, and where the 2010 U.S. Census found 48 percent of residents live below the poverty line.

The Benton Harbor case illustrates how local governments, looking for economic development, are turning over federally protected parks in exchange for the promise of cash, jobs, or both. The outcome can be park replacements of unequal value, one of multiple failures InvestigateWest has identified in the administration of the Land and Water Conservation Fund.

Proponents of these exchanges say the infusions of cash that come with them can result in better facilities in newer parks as well as jobs.

But in Benton Harbor, critics argue that the public came out a loser.

In the conversion, approved by the National Park Service in 2008, the people of Benton Harbor gave up use of 22 acres of grasses and trees at the center of Jean Klock Park on the back side of towering dunes overlooking Lake Michigan. The quiet swath of parkland sheltered three rare plants. Biologists working for the city had previously written that because of the proximity of the forested dunes to the nearby wetlands, “Their importance as a resource cannot be overestimated.” Residents enjoyed bird watching, hiking and walking their dogs.

In return, the people of Benton Harbor got seven scattered parcels of real estate in an area that was “historically filled with foundry sand and other waste materials” and where testing revealed the presence of more than 20 chemicals, some at levels above standards intended to protect people in residential settings, according to a report by the consulting firm Gannett Fleming and commissioned by Harbor Shores. The chemicals detected include lead,1,3,5- trimethylbenzene, anthracene, pyrene and polycyclic aromatic hydrocarbons,, according to the report. One piece of land where chemicals were detected also served as an illegal trash dump, according to a 2010 city report. An InvestigateWest reporter visited the dump site in 2009.

Harbor Shores did take action to minimize chances that residents would come into contact with industrial chemicals that remain in the soil beneath several of the replacement parcels. Two areas of the tainted soil were dug up, according to a Harbor Shores spokesman, and in one area soil was removed and 12 inches of sand put down to prevent direct contact with chemicals.

Harbor Shores is required under state law to “exercise due care … in a manner that protects the public health and safety,” the Gannett Fleming report states. For three of the replacement park parcels, the “exposure barrier” to protect people from the chemicals is to be the walking path through the parcel, according to the report.

That worries Nicole Moon, a Benton Harbor resident, longtime opponent of the golf course conversion and cancer survivor.

“There’s no way in hell I’d feel comfortable walking there,” Moon said. “Knowing what I know, I would not be hanging around those trails.”

Leaving aside the chemicals on the replacement parcels, Moon and other critics say the acreage in the old industrial area just doesn’t make up for the green swath taken away behind the dunes on Lake Michigan.

Harbor Shores is connecting the seven parcels with walking trails and sidewalks.

“None of the scattered parcels are viable parks,” Moon said. “There is no park.”

The deal upset many of Benton Harbor’s residents.

More than 1,500 people living in and around this town of about 12,000 residents signed a petition opposing the deal. Critics viewed the deal as a land grab that produced a top-flight golf course enjoyed primarily by wealthy Chicagoans and residents of the adjacent, mostly white city of St. Joseph. Arguing it wasn’t a fair trade, the opponents tried to stop it in federal and state courts, but lost.

The valuation of the land received in trade is a central part of the dispute. In this case, the financial value of the woodsy park was equal to industrial wasteland because of an earlier legal settlement that prohibited development in the park.

Those in favor of the Harbor Shores conversion say it was a fair deal – and particularly necessary given Benton Harbor’s poverty.

“The Harbor Shores development was part of a multi-faceted strategy … to help attract new jobs, new investments and new tax base for the area,” said Jeff Noel, who serves as public affairs vice president for Whirlpool Corp. as well as president of Whirlpool Foundation. He is also on the board of trustees for Harbor Shores.

The National Park Service at first objected to this trade, saying in an October 2007 letter that the scattered parcels were “insufficient in magnitude, capacity and viability” to make up for the big chunk of green space plucked from the middle of Jean Klock Park. But with Democratic governor Jennifer Granholm pushing hard for the development to go through, two U.S. senators in favor, and local Republican congressman Fred Upton urging the agency to change its mind, the Park Service relented.

Bob Anderson, who heads the Park Service’s office that oversees park conversions in the Midwest, said the agency changed its mind because Harbor Shores and the city made improvements to the proposal.

The 2007 letter says the city “refers to the replacement land being linked together,” but, “we see no connectivity to other park units.”

Anderson said a second proposal contained more specific details about linking the scattered parcels with a trail system, and that’s why the agency changed its mind.

One of the seven parcels of land set aside as an eventual replacement for the acreage at Jean Klock Park, seen here in 2009. (Robert McClure/InvestigateWest)

A gift to the city

Jean Klock Park was donated to the city in 1917 by publisher-industrialist John Nellis Klock and his wife Carrie in memory of their late daughter Jean, who died in infancy. At the dedication ceremony, John Klock said, “It is not so much a gift from my wife and myself, it’s a gift from a little child. See to it that the park is the children’s.” The deed to the city specifies it must “forever be used by the said City of Benton Harbor for bathing beach, park purposes, or other public purposes; and at all times shall be open for the use and benefit of the public.”

In principle, that alone should have ensured the park remained available to the public.

But in 1977, the city also received a three-year, $50,000 matching grant from the Land and Water Conservation Fund to build a bathhouse in the park. Accepting public money from the Land and Water Conservation Fund requires that the entire park remain open and available to the public in perpetuity unless a land swap of reasonably equivalent usefulness and equal fair market value receives prior approval from the National Park Service.

John Klock couldn’t have foreseen the hard times to come for Benton Harbor. In the 1960s, the one-two punch of urban renewal and construction of an interstate highway that bypassed the town helped send the its economy on a decades-long slide. The town’s faltering finances help explain why city officials twice before sold off parts of the park, no matter John Klock’s words at the long-ago dedication ceremony.

In 1998, the city sold the northernmost acre-and-a-half of the park, with a magnificent view of Lake Michigan, for a small waterfront subdivision, records show. The deal, which netted the city $375,000, appears to be a classic case of a park converted to private use that got past the Park Service. When parks activists looking at land records discovered the earlier sale, they sent a detailed eight-page letter, accompanied by 36 documents, asking the federal agency to hold the city to account. That happened in March 2008.

Anderson, of the Park Service, said his agency notified the Michigan Department of Natural Resources (now the Michigan Department of Natural Resources and Environment), which was supposed to investigate.

“I can’t tell you what they’re doing because they haven’t told me what they’re doing,” Anderson said recently.

The second conversion of Jean Klock Park to private use happened in 2003 when the city agreed to sell 3.4 acres adjacent to the first subdivision. Park opponents challenged this in court. To settle the case, the cash-strapped city agreed to be legally bound to protecting the rest of the park from further development.

Ironically, though, this 2004 win by parks activists backfired when land appraisers looked at the golf course deal. Because of that victory, the parkland was reclassified as undevelopable and therefore appraised as equivalent to the scattered parcels of replacement parkland.

Golf as an economic driver

The park deal does have backers who say it’s been a boon for the community.

The land exchange netted the financially pinched city a promise from Harbor Shores to pay the city $30,000 a year in rent. The developer also took over the long-neglected maintenance of what remains of Jean Klock Park, where the firm estimates it will spend $125,000 a year. The city had been spending just $20,000 a year there.

In addition, Harbor Shores made improvements to the waterfront part of the park – its most popular feature – which remains public.

If the golf course makes money for Harbor Shores, the city will get 20 percent of the profits. The other 80 percent of any golf course profits will go to support education, recreation, literacy training and other activities in Benton Harbor, according to the lease that grants Harbor Shores the right to keep using the parkland for a golf course for up to 105 years. Already, Whirlpool and Harbor Shores are promoting a “First Tee” program that allows area youths to golf for free. And local residents who can’t afford the steep annual fees can pay a daily greens fee of $40.

Whirlpool also donated valuable riverfront land to the project, and views the entire effort as a way to revitalize Benton Harbor, said Whirlpool’s Noel. He portrayed the development and golf course as part of a noble effort to help rescue Benton Harbor after the loss of about 5,000 manufacturing jobs, some at Whirlpool.

“We’ve got enough evidence that the impoverishment of Benton Harbor has restricted the city’s ability to maintain Jean Klock Park in any kind of satisfactory way,” Noel said. “The bathhouse was in disarray. The maintenance was not very good at all.”

The result of the development is worth whatever utility Benton Harbor residents found in the former parkland, said Noel. “This to me is a great opportunity for the community. To me, it’s the right strategy.”

Deep ties

Whirlpool and the community of Benton Harbor have had deep ties for decades.

In fact, the appliance giant has envisioned a big waterfront development moving into some of its former industrial land at least since 1986, when a company official touted the idea as a way to make up for the company’s decision to lay off more than 1,000 workers, according to an Associated Press story.

The ties are both financial and political.

The state attorney general who filed an amicus brief to the Michigan Supreme Court in support of Harbor Shores’ bid to build the golf course in January 2011 has received $35,000 in campaign donations from the City of Benton Harbor’s law firm since 2010, according to the National Institute for Money in State Politics. The firm is his fifth-biggest donor.

And Rep. Upton — the congressman who intervened on behalf of the conversion — is grandson of a Whirlpool founder. Whirlpool has ranked among his top five campaign contributors since 1989, OpenSecrets.org also shows.

In addition, the attorney who initially represented the city on the deal, Geoff Fields, soon was working for the developers, a fact that the National Park Service questioned, a government document shows. In a Nov. 11, 2007, teleconference, the Park Service’s Bob Anderson asked if Fields “was working for the city of Benton Harbor when he wrote the lease or if he was working for Harbor Shores as he is now,” according to Park Service notes about the conversation. “The concern was over the fact that he could represent both sides in the lease, and whether he had the city’s best interest in mind if he was then working for Harbor Shores. The question was not answered.”

Mayor Wilce Cook – who later saw virtually all of his power and that of the city council usurped by a state-installed emergency financial manager, thanked Anderson at the time “for being so candid” on the subject, the Park Service notes say.

In a 2009 interview, Cook had high hopes for the golf-course development: “It’s a good thing because the spin-off from the golf course should be astronomical,” Cook said. “We are hard pressed here. We need jobs, we need more money to run the city.”

“Harbor Shores will be able to provide some jobs for our community,” he said. “Hopefully it will spawn new entrepreneurial jobs for some of our residents. You know we need people to cut lawns or do the laundry or be caddies – any number of things.”

Cook said a trip to see casinos in Mississippi helped convince him that Harbor Shores would be a plus for his town. But he acknowledged that the jobs would be largely seasonal, because few people want to play golf as icy winds sweep off Lake Michigan in the winter.

Cook said he was unsure whether the deal meets the requirements of the Land and Water Conservation Fund, and that an attorney would have to answer that question.

But, the mayor said, even if he and the council had tried to stop the deal, he’s unsure if they would have been successful.

“This is something the governor wants,” Cook said. “We know that the largest small-appliance manufacturer in the world wants it. That’s Whirlpool. We also know two United States senators want it. And we know that our congressman from this area wants it.

“I think: ‘How are you going to beat that?’ You can’t probably defeat that but at least we can work with them and … ensure that our citizens get their fair share of anything that comes down the pike, which has not always happened for the city of Benton Harbor.”

Last month, Harbor Shores was in the national spotlight as golfers tromped across what used to be public forest land. They were in town for the Senior PGA Championship — or, to be exactly correct about the name, the Senior PGA Championship presented by KitchenAid. KitchenAid is a brand name of Whirlpool.

Jason Alcorn contributed to this report, which was edited by Carol Smith. InvestigateWest is a donor-supported investigative newsroom in Seattle. Support its original, independent journalism for $5 a month or $60 a year.