Successful Downtown Project programs go through three distinct organizational phases:

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.

Catalyst Phase

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 will follow.

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 new investment;

· building collaborative partnerships and a strong volunteer base; and

· 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 options.

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 successful organization.

· 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 mistakes:

· failure to work comprehensively in all areas of the Downtown Project four-point approach;

· 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 catalyst phase.

Growth Phase

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 and limitations;

· 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 district's buildings.

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.

Management Phase

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 suffering from:

· 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 status quo.

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 cohesiveness;

· 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 organization.

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 beginning.

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.