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Downtown Development Authorities as a Catalyst to Development: A Case Study of Ferndale, Michigan

Kirk Sanderson



Local economic development in many communities has focused on either creating or revitalizing the city’s downtown district.  Attracting businesses, shoppers, and residents to the downtown has become an important part of many cities’ strategy.  To aid in these efforts, many cities have established a Downtown Development Authority (DDA) to help attract and promote business in the downtown.  This paper looks at the city of Ferndale, MI as an example of an effective DDA that has played an integral part in the revitalization of once-struggling downtown.

Ferndale Background

Ferndale is an inner-ring suburb or Detroit with a population of just over 21,000.  Located on the historic Woodward Avenue Corridor, Detroit’s automobile heritage still plays a big role in defining the city’s image.  But Ferndale also shares some of Detroit’s challenges.  They have had a steady population decline over the last twenty years as suburban employment centers and residents move farther away from the central city and its surrounding communities.

Ferndale’s downtown shopping district centers around the intersection of Woodward and Nine Mile Road.  As the city’s population slowly eroded, so did the once bustling storefronts along Nine Mile.  The vacancy rate reached 30% in 2000.  The city of Ferndale established a DDA to counteract these developments.  In 2001 they hired Cristina Sheppard-Decius as executive director, and charged her with reversing these trends.

DDA Leads Downtown Revitalization

The goal of any DDA is to increase the business activity of the city.  One way to do this is to bring in well-known national chains as a means of spurring growth.  However, these chains often have specific criteria that must be matched in order for them to open a new store.  These criteria can involve demographic requirements such as population density or income levels, as well as physical requirements like building size or number of parking spaces.

Because of these requirements many of Sheppard-Decius’ early attempts were unsuccessful.  For example, Starbucks and Borders both declined the opportunity to open in Ferndale, citing a lack of the proper market.

Sheppard-Decius decided to tap into the local business networks to increase downtown business activity.  The DDA played an important role in helping many local business owners through the process of starting their own business.  The success of these small, independent stores varied, but as time passed, certain niches began to emerge.  Unique clothing and shoe stores, independent record stores, and restaurants and cafes were succeeding, and the downtown slowly came back to life.  The vacancy rate dropped from 30% to around 3%.

The revitalization of Ferndale’s downtown needs to be understood in the context of its surrounding communities.  Just north of Ferndale are two larger communities that are well-known for their downtowns.  Royal Oak and Birmingham could be seen as being in competition with Ferndale.  Not so, according to Sheppard-Decius.  While many people frequent all three cities, each has a slightly different atmosphere that appeals to different people.  There are certain kinds of stores that would not do well in Ferndale that would succeed in the more up-scale Birmingham, and vice versa.

According to Sheppard-Decius, it is important to be aware of those differences when targeting potential businesses.  A city would not want to bring in a store that is not likely to do well, and likewise a store owner wants to open in a location where it is most likely to succeed. 

Building on the success of its downtown, Sheppard-Decius initiated events to highlight local businesses.  The DDA took over control of the annual Dream Cruise in Ferndale, an event that draws tens of thousands of people.  The DDA’s involvement gives it another way to promote local business.  She also started a monthly “Thursdays on the Nine” in the summer where businesses stay open later and offer specials.  The DDA has also actively sought new downtown residential construction.  As many as three new projects are currently planned to draw residents into the DDA area.

Lessons Learned

Sheppard-Decius’ experiences illustrate two important aspects to creating an effective DDA.  The first is to accept the situation a city finds itself in, and determine the best way to build off of that.  An example is Ferndale was the shifting of focus from national chains to local business networks to stimulate growth.

It is also important to recognize the importance of knowing “who you are” as a city and using marketing as a way to make it grow.  As the downtown took shape, Sheppard-Decius identified certain groups that frequented downtown Ferndale and began to shape advertising and promotions towards those groups.  The young, hip, independent-minded crowds in local art galleries, coffee shops, and clothing stores earned the city the nickname, “Fashionable Ferndale”.

Limitations on a Development Authority’s Effectiveness

It is often noted that determining the effectiveness of economic development programs can be difficult.  In this case, it is difficult to gauge how much of a business’s or shopper’s decision is based on the actions of the DDA and what their decisions would be in the absence of any policy.

There are also variable outside the control of the city or DDA that can have a large influence on the vitality of the local business.  Fluctuations in the national and regional economy play an important role.  For example, the automobile industry’s troubles will have an impact throughout southeast Michigan and the state as a whole.  Population trends and demographics also may limit a city’s attempt to attract residents.

Sheppard-Decius faces other difficulties as well.  The first is the size of the downtown district.  As mentioned earlier, the primary business district is located along Woodward Ave north and south of Nine Mile Road, and on Nine Mile west of Woodward.  This not only limits resources, but there is only so much that can be done in an area that size.

Another challenge is the buildings themselves.  Many of the buildings are older compared to buildings in other communities.  While this may allow for lower rents, business owners may prefer to locate somewhere else.


Ferndale’s Downtown Development Authority is an example of a DDA that has had a significant impact on their community’s revitalization efforts.  Effective DDA’s, like Ferndale, accurately assess the needs of the city and enact initiatives and policies that will allow the city to meet those needs.  In this case, Sheppard-Decius targeted local business networks to create business activity downtown.  As a critical mass of businesses developed, niches emerged that could be capitalized on by targeted advertising.  Due in large part to the DDA, Ferndale has become one of the most vibrant downtowns in Metro Detroit.