GRAND RAPIDS DOWNTOWN ALLIANCE

FINAL DRAFT MAY 10, 2012 ORGANIZATIONAL PLAN for DOWNTOWN GRAND RAPIDS INC. PREPARED FOR THE GRAND RAPIDS DOWNTOWN DEVELOPMENT AUTHORITY AND GRAND RAPIDS DOWNTOWN ALLIANCE PREPARED BY PROGRESSIVE URBAN MANAGEMENT ASSOCIATES

DOWNTOWN GRAND RAPIDS, INC. Organizational Structure Business Plan Outline FINAL DRAFT (5/10/12) Introduction: In the latter half of 2010, the Grand Rapids Downtown Development Authority (DDA) commissioned a participatory community visioning and priority setting process to develop a Framework Plan for downtown. The Framework Plan presents an updated market-based vision for downtown, and, perhaps more importantly, provides a new construct for guiding DDA investments, decision-making and organizational structure. One of the immediate recommendations of the Framework Plan for the DDA was to set up a Partnership model. The Partnership would be created to develop a stronger structural operating relationship between the DDA, Downtown Alliance (DA), Downtown Improvement District (DID) and the City. Similar downtown partnerships are found in many cities and are considered a best practice in the downtown management field. In Grand Rapids, we suggested that a Partnership arrangement could benefit existing organizations by leveraging resources, eliminating redundancies, improving productivity, creating cohesive marketing messages and strengthening the influence of downtown stakeholders. In late 2011, the DDA, DA and DID convened a series of meetings of a Partnership Committee to explore greater collaboration. P.U.M.A was retained to develop organizational alternatives that would also include the Partnership model. To meet this objective, we began a three-step process that included the following: Step 1: Identify Outcomes, Constraints and Opportunities Step 2: Develop and Review Alternatives Step 3: Create a Business Plan and Facilitate a Leadership Retreat In the beginning of February 2012, P.U.M.A began Step 1. During this initial site visit, we met with the Partnership Committee to affirm preferred outcomes from a more collaborative downtown development and management approach. We also met with legal counsel to determine limitations and implications arising from the use of DDA, DID and any other quasi-public funding. Additionally, we reviewed organizational budgets, work programs, by-laws, job descriptions, annual reports and other documents that provided insight on the current day-to-day operations of the DDA, DA and DID. From those first meetings, the organizational leaders were receptive to exploring improved collaboration, but want to better understand operating details and implications before moving forward. We began Step 2 by exploring a variety of structure alternatives, ranging from an informal coordinating Assoc. 5 Page

group to a formal incorporated Partnership. Any organizational model that is chosen will address key issues that all of the parties identified, including: Role Clarification o Define the role of the City in any new Partnership structure and ensure that existing synergies and working relationships are maintained. o Define the roles of Downtown Development Authority, Downtown Alliance and Downtown Improvement District. o Eliminate Redundancies o Preserve the existing strengths of the various organizations in a new structure. o Improve Experience Program Relationships & Structure (specifically under marketing, special events and business recruitment & retention) Accountability of the Boards and Staffs o Demonstrate accountability at all levels, particularly in utilizing specific funding sources. o Improved Quality and Performance Improved Communications -- Internal & External o o A unified message and brand Improved Visibility & Accessibility of Organizations Return on investment o Metrics for both hard & soft stuff -(i.e. measurements on the success of development projects and the cost benefit to downtown, city and greater Grand Rapids, measurements of the cost benefit of events and marketing) Efficient Use of Resources Leverage Maintain the strengths of the organizations Four Business Operating Structures From the initial meetings held with leadership from the Downtown Development Authority, Downtown Alliance and Downtown Improvement District, three alternatives emerged that meet the above outcomes. The first option, Existing Structure, is to keep the organizations virtually the same but clarify some of the roles and responsibilities of each organization. The second option, Hybrid, is to combine the organizations in some kind of formal merger. The third option is to create a new Partnership. And, when we brought the three above options back to the group, in early March 2012, a new fourth option emerged. We are calling the fourth option, Downtown Grand Rapids, Inc. Assoc. 5 Page

All of the options include the following: Communications and collaboration improves between staff and boards. A scope of services and agreed upon responsibilities is adopted by each organization. Environment, Experience and Economy Activity Centers: o The DDA manages the majority of the Environment Activity Center scope; the Downtown Alliance manages cleaning and beautification. The Downtown Alliance manages the Experience Activity Center and becomes the Experience Committee. Economy Activity Center is shared between the Downtown Alliance and the DDA. DDA retains its focus on development and infrastructure. Downtown Alliance assumes more responsibility for retail recruitment and retention. Events: o o The DDA relies on the Downtown Alliance to manage events. The Downtown Alliance works with the DDA to develop a strategy for funding and implements the program. Marketing: o There is one downtown brand used by all of the downtown organizations to have a common message, and managed by the Downtown Alliance. All marketing goes through the Downtown Alliance. o There is one downtown website: www.downtowngr.org. Maintenance and Beautification: o The Downtown Alliance provides maintenance and beautification services. Advocacy: o The Downtown Alliance advocates and speaks on behalf of the downtown stakeholders. After further discussion, the Partnership Committee asked us to provide more depth to two Options: Option 1 Existing Structure and Option 4 Downtown Grand Rapids, Inc. Once given more knowledge on the two options, the Partnership Committee endorsed Option 4 at its meeting on April 24, 2012. The other three options, with Option 1 being the next favorable, are included in an appendix of this document. The following pages explore the Partnership Committee s endorsed Option 4 Downtown Grand Rapids, Inc. Appendixes include the other three options, a staffing and salary package plan for Downtown Grand Rapids, Inc. and sample resolutions for each organization. Assoc. 5 Page

Option 4 Downtown Grand Rapids, Inc. (DGRI) Downtown Grand Rapids Inc. (DGRI) combines the resources and energies of the Downtown Development Authority (DDA), Downtown Alliance (DA) and Downtown Improvement District (DID). DGRI is responsible for keeping the vision and adopting and managing a parallel budget. DGRI coordinates the programs and activities of the DDA, DA and DID by providing staffing and management. Each agency has a specific and essential role to play: DDA manages the planning, expenditures, investment and administration of TIF funds, including all project development, incentive and public realm improvement functions; DA is the advocate and experience manager of downtown, including all marketing and business retention and recruitment functions; DID is the funding source for maintenance and beautification functions. DGRI provides staff and management services for each entity. Boards of the participating agencies are linked through shared board members, and the DGRI board serves as a coordinating committee of the whole. Downtown Grand Rapids Inc. Board (DGRI) City of Grand Rapids 501 (c ) 4 or 6 Economy Program Area Review Incentive applications Incubator Districts Venture Fund New Development Downtown Development Authority Board (DDA) Downtown Improvement District Board (DID) Environment Program Area Bike, Pedestrian, Transit Initiatives Traffic Circulation Parking Study Public Realm & Infrastructure Downtown Alliance Board (DA) 501 (c ) 4 Experience Program Area Events & Permitting Marketing Retail Recruitment BID Activities Clean Beautification Advocacy DA Foundation 501 (c ) 3 Assoc. 5 Page

Governance - Downtown Grand Rapids, Inc. (DGRI) is the umbrella entity that connects the various organizational parts of the new downtown management organization. Each organization has members from its board on the DGRI board. DGRI is governed by a board that consists of board members from each of the component parts, in effect serving as the coordinating committee and providing the overall vision for moving downtown Grand Rapids forward. There are three (3) board members from the DDA, three (3) from the DA, one (1) from the DID as well as the City Manager (or City Manager s designee) and the Mayor (or his or her designee). Board members are self-selected by each individual board. Term limits should be considered. Board members should be downtown stakeholders. Over time, the Downtown Improvement District board may transform into the Downtown Development Authority board. It is recommended that this does not happen in the first three years of the new organization. The City of Grand Rapids has voting seats on the DGRI board. The DGRI board could also consider adding additional affiliate non-voting members to its board. Affiliate members should be from un-represented entities, if there are any, (i.e. arts council, tourism, chamber, marketing professional, property owner, business owner, etc.). The boards share members. The Downtown Alliance has up to three board members that sit on the DDA board. In order to do this, the DDA would expand its board from 9 members to 12 members, which it can do if the City Commission changes the DDA ordinance. The Downtown Alliance will submit at least 5 potential DDA board member names to the Mayor for consideration. The DDA board is currently represented on the Downtown Alliance board and will continue to be so. The Downtown Grand Rapids Inc. (DGRI) employs all staff and administrative support Staff is all housed within the DGRI. Staff is not eligible for city benefits. DGRI offices are located outside of City Hall. Only DGRI has staff. The Chief Executive Officer (CEO) is selected and approved by the DDA board, approved by the City Commission and serves at the will of the DDA Board. The first Chief Operating Officer (COO) is the current Executive Director of the Downtown Alliance. Any future COO will be selected by the Chief Executive Officer (CEO) and a Search Committee of the Downtown Alliance. That will then be approved by the Downtown Alliance board. The Downtown Grand Rapids Inc. board accepts the two organizations choices. The CEO is the staff for the DDA. The COO is the staff for the Downtown Alliance and DID. The COO reports to the CEO and is the primary staff liaison to the DA board. Assoc. 5 Page

In this model, the DDA and Downtown Alliance have agreed on each other s plans and pledge to work on them together. The Framework Plan is approved and accepted by the City Commission, through and amendment to the DDA s Development and Tax Increment Financing Plan. Funding and Budget - There is a Downtown Grand Rapids, Inc. (DGRI) adopted parallel budget which accounts for discrete funding sources and uses from each participating agency. Downtown Grand Rapids, Inc. coordinates the key DDA development tool of tax increment revenue with the primary Downtown Alliance management tool of the business improvement district funds. Each board still has control over the development and expenditure of its budget. Each of the organizations has a contract with DGRI that pays for the staff and the program implementation and coordination. Each organization will maintain its accounting system as required by its applicable statute, is individually audited and will stand alone for auditing purposes. DDA revenues continue to fund downtown development and incentives as well as most of the initiatives described in the Economy and Environment Activity Centers of the Framework Plan. Programming and Operations The Experience Activity Center, including marketing, merchandising, and retail support is overseen by the Downtown Alliance Board with DGRI staff implementing the programs. The Economy Activity Center is shared between the DDA and the Downtown Alliance. Based on best practices in other cities, it works best when the marketing and the retail recruitment efforts work together. Therefore, we recommend that the Downtown Alliance be the marketing and retail recruitment and retention arm of the downtown. The Downtown Alliance and Downtown Development Authority are located in the Downtown Grand Rapids, Inc. office. Downtown Alliance, DDA, and DID all have contracts with DGRI for staff and program management. The Special Events & Permitting staff of the City of Grand Rapids is located within the DGRI offices. Co-ordinated work programs and budgets are developed by the DGRI staff and the boards of the Downtown Development Authority, Downtown Improvement District and Downtown Alliance. Once approved by each individual board (and DID assessment and DDA budget is approved by the Assoc. 5 Page

City Commission), the work plans and budgets are sent to the DGRI board for adoption and implementation. Implementation and Sequencing - The following implementation and sequencing assumes that the Chief Executive Officer for the Downtown Development Authority has already been hired and approved by the City Commission. It also assumes that the existing Downtown Alliance Executive Director becomes the Chief Operating Officer. The Downtown Partnership Committee and the CEO and COO will steer the implementation and transition plan. Steps Description Responsibility DDA, DA and DID and City will pass resolutions endorsing the proposed new structure. Endorsing this new structure will be key to its implementation and acceptance by the various parties. Board driven The DDA and DA approve of each other s plans (DA Strategic Plan and DDA Framework Plan). The DDA Framework Plan should be referenced in the DDA Development Plan. The City Commission adopts the DDA Framework as part of the Development and Tax Increment Financing Plan The DID s 3 year assessment is approved by the City Commission Establish bylaws and incorporate DGRI The approval of each other s plans will coordinate and strengthen the goodwill and collaboration between the DDA and DA The DDA Framework plan is approved by the City Commission which fortifies the future plans that are captured within it. The approval allows the BID to continue for 3 years Incorporation papers and bylaws need to be established by the newly formed DGRI. An initial board will need to be determined (this should be the existing Partnership Committee) Board driven Board driven Board & Staff driven CEO and COO driven Assoc. 5 Page

Choose board members for DGRI and add DA board members to the DDA. Create contracts between the DGRI and the DA, DDA and DID Develop Staff descriptions, salary and benefit packages Hire staff Determine an office location Special events & permitting moves to this location Based on the guidelines above, the DA and DDA will each pick three members to be on the board of the DGRI. The DID will choose one member. The DDA board will need to agree to expand its board to include up to 3 DA members on its board. Those members must be approved by the City Commission. The DA will submit at least 5 names to the Mayor for his consideration to the DDA board. As DGRI will provide all staff and program management, it is important to develop separate contracts for each agency with DGRI. This implementation plan assumes the CEO and COO are hired. We recommend that the CEO and COO and a committee of the DGRI board create job descriptions for this new organizational structure. The jobs should fit the needs of the DGRI and not existing personalities. DGRI will need to also develop salary and benefit packages. Once the job descriptions, salary and benefit packages are approved the CEO and COO will hire the program managers and other staff for each Activity Center. DGRI will be located in downtown Grand Rapids. The appropriate office, in a central location, should be determined. The City s special events & permitting staff will locate in the DGRI offices once the DGRI staff is hired and location chosen. They will remain City staff. They will be able to coordinate better with the DGRI staff and the downtown events. Board driven CEO and COO driven CEO and COO driven, with Board approval CEO & COO driven CEO & COO driven City, CEO & COO driven Assoc. 5 Page

Option 4: Downtown Grand Rapids Inc. Staff Structure Chief Executive Officer (CEO) Administration & Accounting Chief Operating Officer (COO) Economy Program Manager Experience Program Manager Environment Program Manager Review Incentive Applications Incubator Districts Venture Fund New Development Events & Permitting Marketing Retail Recruitment Merchandising Plan BID Activities Maintenance & Beautification Advocacy River Bike, Pedestrian, Transit Initiatives Transit, Circulation, Parking Studies Public Realm & Infrastructure City Special Events & Permitting Staff Progressive Urban Management Assoc. 5/2012 Page 9

APPENDIX Organizational Structures DOWNTOWN GRAND RAPIDS ORGANIZATIONAL STRUCTURE OPTIONS APPENDIX Four Business Operating Structure Options From the initial meetings held with leadership from the Downtown Development Authority, Downtown Alliance and Downtown Improvement District, four alternatives emerged that met the desired outcomes. The first option, Existing Structure, is to keep the organizations virtually the same but clarify some of the roles and responsibilities of each organization. The second option, Hybrid, is to combine the organizations in some kind of formal merger. The third option is to create a new Partnership. And, when we brought the three above options back to the group, in early March 2012, a new fourth and preferred option emerged. We are calling the fourth option, Downtown Grand Rapids, Inc. (see full description of this option in main document). Option 1 Existing Structure: The Downtown Development Authority and Downtown Alliance remain two separate organizations with a few changes to better clarify roles and responsibilities. This option may be a first step toward developing Option 4. Each agency has a specific and essential role to play: DDA manages the planning, investment and administration of TIF funds, including all project development, incentive and public realm improvement functions; DA is the advocate and experience manager of downtown, including all marketing and business retention and recruitment functions; DID is the funding source for maintenance and beautification functions. DDA DA DA Foundation Environment Economy Experience DID Functions

APPENDIX Organizational Structures This proposed organizational structure includes the following components: Governance Roles are clarified. The Downtown Development Authority and the Downtown Alliance have agreed upon each other s plans and pledge to work on them together The DDA Framework Plan is approved by the City Commission It is strongly recommended that each organization has a designated board seat representing the other organization. There is no co-location in this option because there is no unified chain of command or communication. There are still two staffs, two boards. The Downtown Development Authority can choose to employ its employees or keep them as city employees. Possibility to move the administration of the Downtown Improvement District to the Downtown Alliance from the Downtown Development Authority. This option allows the different cultures of each organization to remain intact. Option 1 may or may not encourage a new entrepreneurial spirit for the Downtown Development Authority. There may be a continued disconnect between marketing/events and business recruitment functions. Funding and Budget The Downtown Development Authority continues to contract with the Downtown Alliance to provide marketing and in return, the Downtown Alliance is charged with creating an annual marketing and special events program. Downtown Alliance s programs are also supplemented and funded by the Downtown Improvement District s assessment Experience Activity Center programs, including marketing and special events, are funded by both organizations. If the Downtown Development Authority makes any streetscape improvements, consideration will be given to the impact on the Downtown Alliance s budget to maintain those improvements. Programming and Operations Downtown Alliance is the management and marketing arm of the downtown, providing services that are financed by downtown s assessment districts. These services include clean and beautification teams, advocacy, marketing and special events.

APPENDIX Organizational Structures The Experience Activity Center, including marketing and special events, is overseen by the Downtown Alliance with funding from both organizations. The Downtown Alliance Board serves as the Experience Activity Center Committee. Based on best practices in other cities, it works best when the marketing and retail recruitment efforts work together. Therefore, we recommend that the Downtown Alliance be the marketing and retail recruitment and retention arm of the downtown.

APPENDIX Organizational Structures Option 2 - Hybrid: The Downtown Development Authority moves outside of City Hall and becomes the umbrella organization encompassing all four groups the DDA, DA, DA Foundation and DID. The Downtown Alliance board serves as the Experience Task Force, as well as remaining an independent board with committees. This proposed organizational structure would include the following components: DDA employs all of the staff. This option might have employees utilizing city benefits, but they do not have to be subject to civil service. The DA Board becomes the Experience Task Force of the DDA and sets policy and direction for the DDA staff on the Experience portion of the Framework. DDA and DA co-locate because the changes to staff, chain of command and improved communication warrant this change. The DDA Executive Director will be the lead staff person, and the DA Executive Director will become the DDA Deputy Director. DDA expands its board to include at least 3 positions for the DA. The DDA, Downtown Alliance and Downtown Alliance Foundation retain their separate boards. There is the option to have the DID board become the DDA board if it adds DID and DA members. The DA remains a 501 c(4) so that it can advocate on behalf of downtown issues and is not subject to the open meetings act. The Downtown Alliance Foundation remains a 501 c(3). DDA moves out of city hall and into a visible downtown location. City Special Events Department moves out of the City and into DDA; reporting to Experience, Deputy Director/DA. DDA would create new staff job descriptions for all positions. DID administration would fall under the Experience/DA. Based on best practices in other cities, it works best when the marketing and the retail recruitment efforts work together. Therefore, we recommend that the Downtown Alliance be the marketing and retail recruitment and retention arm of the downtown. Advantages Achieves cost efficiencies by combining staffing and administration within one organizational umbrella. DID money can be used entirely for programs and services.

APPENDIX Organizational Structures Cross-fertilization is maximized in this scenario. DA is part of discussions of each part of the Framework of the DDA, including Economy and Environment. Stakeholders from both organizations are folded into each other and working as one. Eliminates the confusion and perceived duplication of multiple downtown agencies. Creates a more entrepreneurial culture and approach to downtown development, marketing and management. Coordinates and leverages the key DDA development tool of tax increment financing with the primary DA management tool of the business improvement district funds. Downtown Development Authority Director Deputy Director (current DA director) Administration & Accounting Economy Program Manager Experience Program Manager Environment Program Manager Review Incentive Applications Incubator Districts Venture Fund New Development Merchandising Plan Events & Permitting Marketing Retail Recruitment BID Activities Clean Beautification Advocacy River Bike, Pedestrian, Transit Initiatives Transit, Circulation, Parking Study Public Realm & Infrastructure

APPENDIX Organizational Structures Option 3 - Partnership Create a Partnership model that acts as an umbrella organization. The Partnership would combine the resources and energies of the DDA and the DA. This option has the following attributes: DDA revenues will continue to fund downtown development and incentives as well as most of the initiatives described in the Economy and Environment sections of the Framework Plan. The Experience section, including marketing, merchandising, and retail support will be overseen by the Downtown Alliance with funding from both organizations. The Economy activities will be shared between the DDA and the Downtown Alliance. Based on best practices in other cities, it works best when the marketing and the retail recruitment efforts work together. Therefore, we recommend that the Downtown Alliance be the marketing and retail recruitment and retention arm of the downtown. The Downtown Alliance will be the management and marketing arm of the organization, providing services that are financed by downtown s assessment districts. These services include clean teams, advocacy, communications, marketing and special events. Downtown Grand Rapids Partnership is the holding company that connects the various organizational parts of the new downtown management organization. The Partnership provides all staff and administrative support Same staffing chart as in the hybrid options, but staff is all housed within the Partnership. Staff is not eligible for city benefits. It is governed by a board that consists of the officers from each of the component parts, in effect serving as the executive committee and providing the overall vision for moving downtown Grand Rapids forward. Advantages: Coordinate and leverage the key DDA development tool of tax increment financing with the primary DA management tool of the business improvement district funds. Create a more entrepreneurial culture and approach to downtown development, marketing and management Achieve cost efficiencies by combining staffing and administration within one organizational umbrella Eliminate the confusion and perceived duplication of multiple downtown agencies

APPENDIX Organizational Structures Develop a unified and more influential public/private partnership to steer downtown planning and development. DOWNTOWN GRAND RAPIDS PARTNERSHIP STAFF-VISION- ADMINISTRATION ENVIRONMENT DDA$ ECONOMY DDA/DA $ EXPERIENCE DA (DID and DDA) $ DDA Downtown Alliance Downtown Alliance Foundation