City, Ranked Least Desirable, Sees Light Above Cellar : Urban Renewal: Benton Harbor, Mich., fell to last in a ranking of places to live. But all is not lost; local boosters are beginning to engineer a comeback.

After two years of being listed 298th out of 300 in a national magazine’s annual ranking of desirable places to live, town boosters here decided that enough was enough. They would take positive action.

They invited the officials from Money magazine who did the ranking to come out to southwestern Michigan and see for themselves the progress Benton Harbor had made to restore itself to its former glory as a jewel of Lake Michigan. The officials accepted the invitation. The optimistic boosters waited.

When Money published its current list in September, Benton Harbor’s position had moved, all right. To No. 300. Dead last.

“If three years ago someone had rated Benton Harbor last on a list of the best places to live, no one would have argued,” said Michael Lawson. “But today, folks are riled.”

Signs of Recovery

Lawson is executive vice president of the city’s newly formed Community Economic Development Corporation. He says that even though the city is still largely regarded as an urban pocket of crime and poverty surrounded by affluent suburbs, there are signs of recovery from an economic slide that began more than 20 years ago.

For the first time, he said, there are signs of life in what just a year ago was a virtual ghost-town business district of boarded-up buildings taken over by drug users and bums.

He said that many of those abandoned buildings are being bought, renovated and leased to new businesses. Manufacturing plants are expanding and industrial parks are going up. A women’s clothing shop has opened under a new green awning, the first retailer to come to Main Street in 10 years.

According to Lawson, city services are being restored and residents are repainting and fixing up dilapidated homes as streets are repaved and trees planted.

Waterfront condominiums overlooking a new marina are nearing completion. There are plans to restore the turning basin of the city’s ship canal, which was filled in 30 years ago to build a parking lot in a then-bustling downtown.

Still, with an unemployment rate of more than 30%, and more than 70% of the city’s 14,700 residents on welfare, even the most optimistic realize that Benton Harbor has a long way to go.

“Some people are still skeptical because there have been so many broken promises in the past,” said Mayor William Wolf. “But this is the first time so many people have come together with the same goals.”

Benton Harbor was once a thriving manufacturing and lakefront resort town on the industrial corridor north of the Indiana border. It fell on hard times in the 1960s when racial tensions drove out most of the city’s white residents and middle-class blacks. Many moved south across the St. Joseph River to the affluent town of St. Joseph. At one time Benton Harbor and St. Joseph billed themselves as twin cities.

Some twins. Today St. Joseph is almost all white; Benton Harbor almost all black.

When businesses fled, Benton Harbor’s economy and tax base collapsed. Charges of mismanagement stained frequently changing administrations. The town still has a mountain of debt, much of it in missing funds.

“Because of the walls built up around the city, part of them for racial reasons, no one was holding the politicians here to any standards of performance,” Wolf, the city’s first white mayor in 16 years, said.

Wolf, who owns a marina supply business, took office last year. Shortly after his election, Steve Manning, a Harvard-educated black, was hired as city manager. Working together, the two seem to have won the support of the surrounding communities as well as their own.

“People knew it was time,” said Merle Hanson, a local businessman who is chairman of the Community Economic Development Corporation. The CEDC is a nonprofit organization. It was formed last year after executives of Whirlpool Corp., the area’s biggest employer, met with business and civic leaders and told them that unless Benton Harbor were saved its economic disease could spread to neighboring communities.

“There is a cancer here that started out small, but every year over the last 20 it’s gotten bigger,” said Hanson. “For too long, we would say, ‘Well, that’s Benton Harbor,’ and we would turn away.”

So Whirlpool pledged $1 million a year for five years if the CEDC could match it. In less than a year, they are about $800,000 short of their five-year, $5-million goal. Per capita, according to the CEDC, it is one of the largest private-sector funds in America.

With federal and state grants and loans, CEDC expects the money to translate into $30-million worth of infrastructure projects in housing, recreation and waterfront and industrial park development. A 1986 designation as Michigan’s only enterprise zone provides tax incentives for businesses that locate there. This was a key to the city’s developments.

Budget Balanced

Twenty new businesses have taken advantage of the tax benefits, resulting in about $6 million in new construction, $8 million in equipment, 140 new jobs and about $2 million in annual payroll. The activity has lured 18 doctors to the area in the last year.

After years of red ink, the city balanced its budget when the fiscal year ended in June.

Despite the magazine ranking, Benton Harbor’s bold moves have not gone unnoticed. One who noticed was Ross Hadley, a wealthy developer who left the city 20 years ago to expand his businesses. He returned 10 months ago, bought up 16 dilapidated downtown buildings and began renovating. So far he’s leased out space to seven new businesses.

“Twenty-seven years ago Benton Harbor was the place to be,” said Hadley. “I really believe Benton Harbor will come back, and very soon.”

While still an area of “haves” and “have-nots,” Benton Harbor’s neighboring communities have started to take an interest in the beleaguered city where once they turned away.

“The wall around Benton Harbor is slowly coming down,” said Mayor Wolf. “Pretty soon it won’t be there at all.”