Successful Downtown Project programs go through three distinct organizational
1. Catalyst phase: During this phase, in which the revitalization
program is created, the organization builds collaborative partnerships;
develops basic revitalization skills; and establishes a credible presence
in the community.
2. Growth phase: Most of the major reinvestment needed in the historic
commercial district takes place during this period.
3. Management phase: In this stage, the organization constantly monitors
the marketplace and helps the district make necessary economic adjustments;
ensures that the district is well maintained; and continues to stimulate
physical improvements and economic innovations.
The catalyst phase typically lasts from 2 to 4 years; the growth phase,
about 8 to 12 years; and the management phase is ongoing. Downtown Projects
sometimes cycle back and repeat certain aspects of earlier organizational
phases as they mature, as the marketplace changes, and as the program's
staff and leadership change over time.
Sometimes, however, Downtown Project revitalization programs repeat aspects
of earlier cycles because they aren't aware that the organization needs
to change or because they find the symptoms of change disorienting or disturbing.
Understanding the three phases of organizational development is critical
to helping a Downtown Project program mature and tackle progressively more
complex revitalization activities-and can be one of the toughest challenges
for a Downtown Project program manager or volunteer leader.
Characterized by enthusiasm, high hopes, and some skepticism, this phase
is frequently marked by misconceptions about the commercial district's true
problems and opportunities. Since the new organization has no track record
yet, its initial revenues have probably been raised through pledges, and
the district's constituents will watch carefully to see if the new organization
lives up to their expectations. These are the years during which program
leaders must lay the organizational groundwork for the reinvestment that
While the catalyst phase presents some daunting challenges-many things about
the revitalization process will seem new, with many things to learn-the
specific tasks that need to be accomplished during these years, are, in
a technical sense, relatively easy.
The primary tasks during the catalyst phase include:
· learning the basic revitalization skills that program participants
will need in order to rebuild or reshape the district's economy and attract
· building collaborative partnerships and a strong volunteer base;
· achieving some highly visible "victories" during the program's
early days as a way to signal that changes are taking place, while working
diligently to discover economic opportunities for the district and make
decisions about the best path to pursue.
During the catalyst phase, work plans are usually basic, focusing on the
immediate crises that led the community to adopt The Downtown Project approach
and launch a revitalization program. The planning process becomes truly
strategic only when the organization approaches or enters the growth phase
and has a good understanding and a realistic assessment of its economic
Because the organization is new and untried, fund raising during the catalyst
phase is usually short-term, based on initial pledges from local government,
property and business owners, financial institutions, corporations, and
private individuals. In essence, the program's leaders must convince people
to take a chance and provide the initial funding support for the new program,
enabling it to develop. Fund raising based on an established track record
and a perception that the organization is worthy of ongoing financial support
generally does not occur until the growth phase.
When is an organization on the verge of its first major transition? The
major indicators that a Downtown Project program is ready to move from the
catalyst to the growth phase include:
· Design management system. The organization should have an established
system for guiding design changes in the commercial district. The form this
design management system takes is less important than making sure that it
works effectively for the community. The system might be regulatory in nature
or it might be voluntary, driven by incentives, depending on the community
preferences and chosen methods of management.
· Strategic thinking. The program's participants, particularly its
leadership, should have begun to think and act strategically. Rather than
focusing on the immediate problems that gave rise to The Downtown Project
program, the organization must begin looking at ways to shape the commercial
district's development over the course of the next decade or longer.
· Organizational credibility. The Downtown Project program should have
attained a reputation within the community as a credible, effective, and
· Good understanding of the district's economic role. The organization
should have developed-and be able to articulate a sound understanding of
the district's economy: its strengths and weaknesses; the strengths and
weaknesses of other commercial areas within the region; and market opportunities
within the community and the region.
The transition from the catalyst to the growth phase is one of the most
crucial, and often turbulent, periods in a Downtown Project program's life.
About 82 percent of all communities that launch full-fledged Downtown Project
revitalization programs remain active and enjoy continued success. The remaining
18 percent fail; and, of that 18 percent, 90 percent fail at this
transition point. These failures invariably result from on of the following
· failure to work comprehensively in all areas of the Downtown Project
· failure to forge a true public/private partnership;
· failure to grasp the interdisciplinary nature of the Downtown Project
approach, thus duplicating activities already taking place in the community
instead of serving as a conduit to focus existing resources on a cooperatively
developed revitalization agenda;
· tendency to focus activity exclusively on the commercial district
rather than examining the effect that all the economic, political, and cultural
factors throughout the community have on the district;
· failure to hire full-time staff; and/or
· failure to make a long-term commitment to the revitalization process.
Predictably, many of these problems are connected. For instance, an organization
that does not address the commercial district's need in a comprehensive
manner also usually fails, either intentionally or inadvertently, to tackle
the broader issues that guide regional development. And a community that
is unwilling or unable to make a long-term commitment to the revitalization
process will be frustrated in its efforts for the simple reason that the
Downtown Project process is incremental. Towns that expect to see significant
new investment during the first few years of program activity will inevitable
be disappointed; the largest economic gains occur in the growth, not the
During this stage of the revitalization process, leaders of the Downtown
Project program use the basic skills they learned and the partnerships they
developed during the catalyst phase to begin tacking tougher problems.
These are the years in which major reinvestment usually takes place: facade
improvements grow into more substantial rehabilitation projects; unused
(or underused) upper floors become apartments, offices, or other small businesses;
new building rise on vacant lots; surface parking lots turn into parking
garages. Along with the visionary risk takers who started the program, The
Downtown Project organization now needs seasoned volunteer leadership-individuals
who possess the technical skills and expertise to provide the development
financing, political access, and marketing direction necessary to stimulate
major reinvestment in the commercial district.
The major challenges of the growth phase are:
· to develop and implement a comprehensive economic development strategy
for the comprehensive economic development strategy for the commercial district
a strategy based on a firm understanding of the region's market opportunities
· to raise the capital required to complete major building rehabilitation
and, if necessary, public improvement projects; and
· to identify and take steps to overcome the regulatory, financial,
and perception barriers that prevent or deter full utilization of the commercial
Unlike the transition from the catalyst to the growth phase, which is marked
largely by the skills the members of the organization have learned and by
the way the program is perceived by the public, the shift from the growth
to the management phase is marked by tangible benchmarks:
· At least 70 percent of the buildings, both public and privately owned,
that needed major physical renovations at the beginning of the revitalization
effort have bee renovated.
· The ground-floor vacancy rate ranges between 5 and 8 percent.
· The upper-floor vacancy rate is less that 20 percent.
· Public awareness of the commercial district's importance of the community
and its quality of life is high.
The organization has made some appreciable headway in overcoming the regulatory,
financial, and perception barriers that have impeded full utilization of
the district's . commercial buildings.
Many Downtown Project revitalization programs also experience a sort of
"identity crisis" as they approach this transition. The organization
has usually made significant headway toward correcting the problems that
initially led to its decision to start a Downtown Project program, and program
leaders may no longer be sure what the group's mission should be or, even,
whether it should continue. When this happens, it is important to remember
that the revitalization and management of a traditional commercial district
is an ongoing process. Just as sound management of any business remains
imperative after its startup, so to is ongoing management of a commercial
district essential to its economic stability and continuing growth.
During the management stage, the Downtown Project program's role changes.
In many ways functions like a shopping mall management office, ensuring
that businesses adapt to changes in the marketplace; that the district's
physical infrastructure, both buildings and public spaces, is in good condition;
that the district is as safe as possible; that the district's marketing
strategy is on target and effective; and potential threats to the district's
economic vitality are kept in check.
Among typical characteristics of the management phase are the following:
· The program sometimes serves as a contractor to the municipality,
delivering or augmenting specific services such as maintenance, parking
management, and security.
· The program's staff often grows during this phase, with staff members
assuming greater responsibility for management of the organization.
· Program leaders sometimes redefine or better articulate the organization's
mission to reflect the progress that has been made and the shift from revitalization
to ongoing management of the district.
· The commercial district is no longer perceived by the general public
as a being in economic distress or danger.
· The district supports a broader range of uses than it did at the
beginning of the revitalization process.
Staff and Volunteer Needs
Each stage of program evolution requires different management and leadership
skills. During the catalyst phase, the organization needs leaders with vision,
creativity, connections, and political clout and professional staff who
can communicate effectively, with enthusiasm and credibility.
In the growth phase, the program needs leaders who are experienced practitioners
in their respective fields, professionals who can contribute the specialized
skills and legwork to put to put together the projects developed during
the catalyst stage and ensure that they are properly marketed and administered.
Staff should be focused, well organized, and experienced in the management
of mature programs or businesses, not just in the startup nuts-and-bolts
of Downtown revitalization.
Once the management phase begins, program leaders must be capable of directing
a mature organization and recognizing and responding to new trends, opportunities,
and challenges. Staff should be seasoned management professionals thoroughly
versed in the techniques of commercial district revitalization and management.
Budgeting and Fund-Raising
As The Downtown Project organization matures and moves through these development
cycles, its funding needs and opportunities for attracting financial support
change as well. When a community launches a new Downtown Project revitalization
effort, there is no local track record with which to convince potential
funders to contribute to the program. In essence, the leaders of the new
organization must raise funds on good faith, persuading individuals, organizations,
businesses, agencies, and government to provide initial funding based on
the dream of a revitalized commercial district.
As the program approaches the transition to the growth phase and its initial
funding runs out, it must develop a fund-raising strategy based on its track
record and on a clear plan for the future. Rather than just raising money
to cover administrative costs, the organization should develop a budget
that includes all program expenses-loan funds, financial incentives, lease
options, infrastructure improvements, bond financing, etc.-and allocates
administrative costs-salaries, benefits, overhead expenses, professional
development, etc.-to specific goals based on estimates of staff time committed
to each goal. Too many revitalization programs sell themselves short by
budgeting only for administrative, costs, rather than looking at the total
amount of capital needed for a comprehensive effort.
Threats to Organizational Development
No Downtown Project organization, nor any other nonprofit group for that
matter, operates perfectly. A program can be deflected from its course in
any number of ways. The following are some the typical threats to an effective,
successful revitalization organization:
Lack of strong leadership. This problem is most threatening when
it occurs at the start of the program. Precisely because a downtown revitalization
effort's start-up phase has a "let's all pitch in and make this thing
happen" quality, launching a program without an identifiable leader
is relatively easy. However, an organization that does not have dynamic
leaders, particularly a strong board chairperson, may quickly find itself
· rapidly diminishing political and financial support;
· staff burnout; and
· an inability to recruit volunteers.
The stranglehold, or "good ole boys revisited." Conversely,
trouble also develops when the revitalization organization is governed with
an iron fist or ruled by what appears to be a clique of board members. Among
the many problems an organization with narrow leadership might suffer are:
· limited sources of funds and support, usually confined to the funds
the leaders themselves can generate;
· loss of interest among volunteers who then leave; and
· resistance to organizational change as leaders try to maintain the
Committee-run organization. Programs without strong leadership
often have committees that spin off in their own directions, taking on projects
that may not fit the organization's work plan or mission. Threats to the
program's stability can include:
· projects that don't reflect the mission and thus dilute the organization's
· funding requests that are haphazard, overlapping, and poorly coordinated;
· confusion about the organization's mission; and/or
· staff inefficiency.
Too much bureaucracy. Revitalization programs that place too much
emphasis on record-keeping, at the expense of actual achievement, create
a different sort of imbalance, which can result in:
· wasted staff time and talent;
· digression from the organization's mission;
· ineffective work plans; and
· volunteer frustration.
Unwillingness to raise funds. If the Downtown Project organization's
volunteer leaders refuse to raise money for its projects, or do so reluctantly,
the program suffers not just financially but psychologically as well. Such
boards typically shift fund-raising responsibility to the staff person or
expect committees to find money for their own projects.
Failure to "recycle" the program's board of directors. Even
boards with strong individuals at the helm sometimes forget the need for
new talent. Organizations that don't recruit new people can become stale,
lose touch with current issues, and send signals to volunteers that there
is little room for advancement.
Loss of staff. Staff turnover is a fact of organizational life. A
healthy program can weather the loss of staff and even continue its work
during the transitional months. In fact, such programs often become stronger
as they search for a new manager and board and committee members take on
some of the day-to-day responsibilities of running the Downtown Project
Change of political climate. Downtown Project management programs
that survive changes in local government do so because they have maintained
an apolitical posture. Weak organizations that have attached themselves
to particular political parties, administrations, or personalities will
suffer severely when city council, the mayor, or other major supporters
lose political clout. And political fortunes always shift.
Organizations that fail make many excuses: downturns in the local
economy, other projects that receive greater political favor, too much to
do and too little time to do it are all common excuses. But economic conditions
and political shifts rarely harm effective revitalization programs. Commercial
district revitalization and management can take place even in the most depressed
economic conditions if the organization is well balanced, well directed
and committed to a program of work that is realistic, aggressive, and inspiring.
Organizations must pass through stages of growth and development in order
to thrive. Similarly, they must expect to deal with crisis, probably on
a regular basis. The phases of growth are not of equal length or magnitude;
moreover, crises can push an organization back into the preliminary stages.
A group that does not do its homework often "skips" to an organizational
phase it cannot sustain; it then either fails or starts over . . . at the
But an organization that takes the time to clearly articulate its mission,
spell out roles and tasks, assume financial responsibility for coordinating
commercial district revitalization and management and persevere through
the inevitable transitions can-and will-succeed.