Part III of an Exploratory Study to Establish a Special Improvement
District on Springfield and South Orange Avenues, Newark, NJ

Report to the Corinthian Housing Development Corporation and New Community Corporation

May 11, 1998

Phase II: Formalizing the Coalition of Merchants & Developing A Plan

Phase II of the revitalization process should begin with local merchants assuming control of the effort from the merchant organizer and community-based organizations or other lead agencies that have organized, sponsored, and supported the effort to this point. The loose coalition of merchants that participated in Phase I activities, such as publishing a merchant newsletter and limited joint advertising, must be willing to make a stronger commitment to the neighborhood's commercial corridors if the revitalization effort is going to significantly impact the business climate in West Side Park. Though the effort may benefit in the short-term from the continuing presence of a staff person, the revitalization of West Side Park will not move beyond the limited accomplishments of Phase I by continuing to depend on a merchant organizer.

The experience of other revitalization efforts in low-income communities indicates that before merchants can take control of the revitalization effort, several things must happen. First, there must be leaders identified among the business community. Second, the loose coalition of businesses established in Phase I must develop into a more formal structure. Finally, there must be a widespread belief in the framework for sustaining a successful revitalization effort in West Side Park. Once these three steps are accomplished, the merchant-led effort will be ready to guide existing programs, define short- and long-term goals both for their businesses and for Springfield and South Orange Avenues, and implement new programs. In sum, the most critical element of the revitalization effort's second phase is the development of merchant leadership to interact directly with foundations, government agencies and commercial lending institutions.

As indicated in Volume II of this report, the commercial revitalization effort on Grand Street in Brooklyn has received continuous support from the St. Nicholas Neighborhood Preservation Corporation. St. Nicholas initiated Grand Street's revitalization effort by building a coalition of businesses, organizing strategy sessions and funding the effort's first programs. The Business Improvement District that grew out of that revitalization effort continues to utilize the support of St. Nicholas in the form of office space, secretarial services, computers and software, office supplies and a revolving loan fund.

Although the role of community-based organizations and/or other lead agencies should decrease following the establishment of a more formal organization of businesses, the community-based organizations should continue to act as partners to the commercial revitalization effort. Neighborhood merchants should continue to utilize the services and supplies of their community-based partners.

Organize a Merchants' Association

One option for formalizing the coalition of merchants organized during Phase I of the revitalization effort is the (re)establishment of a merchants' association. As Part II of this report indicates, West Side Park businesses have organized merchants' associations in the past, but they have not been able to sustain themselves and they have now disbanded. The difference here is that the merchants' association will emerge as a result of the accomplishments achieved during Phase I. The prospects for success should be greater now than in the past, and a strong base should exist as a result of the earlier work of the merchant organizer, community-based organizations, and outside funders.

What Can a Merchants' Association Do?

A merchants' association, with both a name and a logo to formalize the identity of West Side Park merchants, is a formal organization for interacting with foundations, lenders, and government agencies, and provides a vehicle for sustaining a merchant-led revitalization effort. A formal structure is crucial to building partnerships with neighborhood-based institutions, such as the University of Medicine and Dentistry of New Jersey (UMDNJ), and expanding the scope of community-oriented funding programs.

The experiences of the commercial revitalization efforts in Midtown-Elizabeth, Roxbury, Massachusetts and East Williamsburg, Brooklyn indicate that a merchants' association that has the active support of merchants in the form of a time commitment will be able to assume the leadership and motivation responsibilities previously held by the merchant organizer. The merchants' association will also have the capacity to not only re-examine and redefine the short- and long-term vision of the CRP, if necessary, but also take on responsibility for maintaining existing programs and establishing new ones.

Build Partnerships with Community Institutions

The establishment of a merchants' organization should allow West Side Park merchants to begin developing partnerships with private foundations, lending institutions, government agencies, and existing neighborhood-based institutions with a stake in the future of Springfield and South Orange Avenues. As Part II explained, potential partners are often interested in supporting neighborhood revitalization efforts, but they prefer to work with organizations rather than individual merchants. Furthermore, the partnerships can serve several purposes, including funding activities, expanding the market for neighborhood businesses and services, and providing technical and political support to the merchants' association. Existing neighborhood institutions, such as the UMDNJ and neighborhood bank branches, can support programs by funding an expansion of the community policing effort, participating in joint advertising, and purchasing supplies for a neighborhood clean-up event. Eventually, these potential neighborhood partners may also participate in the formation of a West Side Park SID. Part II describes some of the publicly and privately sponsored programs with which the merchants' association may be able to partner to expand the scope of the revitalization effort.

Connect to Capital: Expand the Community Loan Pool

Merchants and local community-based organizations should explore new options for funding, since access to capital will continue to be a concern for merchants during Phase II. As mentioned in Part II, the community loan pool is one funding mechanism. In West Side Park, financial institutions, foundations, businesses, and community groups could participate in a loan pool that provides funds to merchants for building rehabilitation, start-up costs, expansion, or other activities. The community loan pool, which can be administered by a community-based organization that draws upon another source of funding, should offer reduced rate loans for businesses that have failed to qualify for loans from traditional sources.

The structure of the community loan pool should reflect the increased capacity of merchants and therefore, differs from the loan or grant program described as a component of Phase I. As described in Part II, community loan pools require initiative, cooperation and organization within the business community, which could be demonstrated by the formation of a merchants' association. The community loan pool should also loan larger amounts of money and have either higher interest rates or stricter repayment schedules than a revolving loan fund.

Institutionalize and Expand Phase I Programs

Implementation of programs such as a merchant newsletter, joint advertising, and neighborhood crime watches will, most likely, be done with the assistance of a merchant organizer, community-based organizations, and outside funding during the first phase of the revitalization effort. In Phase II, the merchants' association should perform these activities on a routine basis, with the support of volunteers from the business community. For example, if publication of the merchant newsletter during Phase I was sporadic, the merchants' association should publish it on a more regular schedule or expand it in Phase II. Merchants could also build a partnership with the Newark Police Department to expand the community policing effort in the neighborhood. Again, the critical difference between Phase I and Phase II is the leadership provided by neighborhood merchants, as opposed to either a merchant organizer or an existing institution.

Building on the Accomplishments of Phase I

Several of the programs proposed as part of Phase I, such as the creation of both joint advertising and merchant newsletter, are designed to create a neighborhood identity among merchants neighborhood residents. The formalization of the coalition of neighborhood businesses through a merchants' association will enable an expansion of these programs to target both neighborhood residents and people who work in the community. Examples of low-cost programs that the West Side Park merchants' association could sponsor include:

Moving Beyond Phase II

Moving to a third phase of the revitalization effort, which may include establishing a Special Improvement District, will depend on the interest and capacity of West Side Park's merchants to do the following:

Project Community Contents Next Prev