Using regulator capacitor bank for a motor
You can probably find contactors that would be ok with that duty. You will need to consider the make and break current in addition to the duty cycle. You should be able to get detailed application data from the contactor manufacturer. You may also need to consider stress caused to the capacitors and transients created on the power distribution system.

It is difficult to envision how this scheme can provide any benefit.

You probably need to gather data for the entire building load and the largest individual loads over a period of time. Record watts, reactive volt-amperes and harmonic volt-amperes. Determine how the energy charge is calculated. Then decide what sort of effect various reactive VA compensation schemes will have on the operating cost.