"Festival marketplaces," those lively waterfront developments revitalizing several previously forsaken American downtowns, are like many other contemporary phenomena -- updated versions of ancient and enduring urban traditions.

Historically, many cities came into being because of a natural human inclination to engage in trade at a single, animated, identifiable place. The Greek "agora," the north African "souk," or the Middle Eastern bazaar exemplify traditional marketplace environments where diverse commerce could occur in an atmosphere of competition, free choice and festivity.

Prior to our automotive century, such marketplaces were located naturally at the hearts of cities, readily accessible by road or water. Open and inviting to the public, they had to be conducive to the display of wares and, on occasion, allow for the gathering of large groups of citizens.

Today, even more than before, these characteristics remain essential to the success of the festival marketplace concept.

But they are not all that's needed. Even the hottest idea in the hottest location may require special kinds of design and merchandising, along with economic and civic support not easily obtainable. And once a development is designed, financed and built, there is still the market test -- will people come to visit and spend enough money to make it all worthwhile?

To appreciate what can happen when seemingly obvious criteria are not satisfied, one only has to consider well-known contemporary failures, attempts to create centers of attaction that never attracted. Detroit's population-repelling, fortress-like Renaissance Center (complete with metaphoric moat) and Washington's misconceived, badly located, ill-fated Visitors Center (at Union Station) come to mind.

James Rouse and his Enterprise Development Co., creators of latter-day festival marketplaces, seem to have arrived at the right formula. In the 10 years since Rouse's first project was completed at Boston's Quincy Market -- which reportedly entices 10 million visitors yearly, as many as Disneyland -- a family of festival marketplaces has started growing.

Baltimore's Harborplace, the famous centerpiece of the city's Inner Harbor redevelopment, has far exceeded expectations. Conceived in controversy, endorsed by a voter referendum and finally constructed at the end of the 1970s, it has become the festival marketplace architectural prototype, despite opening several years after Quincy Market.

Harborplace couldn't lose. Occupying one of the city's prime downtown sites only a few dozen yards from the water, it attracts Baltimoreans as well as tourists from out of town. The bustling, intimate harbor, its northwest corner framed by Harborplace's twin, green-roofed marketplace pavilions, is filled with scores of boats at anchor, in marina slips, or in transit.

As backdrop for the boats, pavilions and plazas, and within easy walking distance, are the mirror-finished Hyatt Hotel, parking garages, towering office buildings, the science museum, the national aquarium, the reenergized former power plant, parks and playgrounds and a variety of high-density housing.

In addition to the normal festivities generated daily by the confluence of all these facilities and activities, summertime and weekends attract ethnic festivals to the Inner Harbor. For Harborplace's merchants and food sellers, this translates into even more customers and receipts.

Harborplace has achieved annual sales in excess of $ 400 per square foot, three times the revenue generated by many retail shopping centers. Of course, rents are double or triple those at conventional centers, a reflection of the higher development costs associated with the numerous architectural amenities and nonrentable public spaces designed into the buildings and landscape.

In 1983, Norfolk's 80,000-square-foot festival marketplace, Waterside, was completed on the edge of the Elizabeth River. Rouse once described the site as a "ratty waterfront and not much of a downtown."

It, too, was an instant success. A few months after Waterside opened, Norfolk's mayor credited it with dramatically increasing tourism, convention business and new development in the surrounding area. Real estate assessments and tax revenue shot up, and people began to think again about living downtown.

Soon plans were being made for a World Trade Center, several office buildings, new condominium apartments, renvoated hotels, a hotel-marina-housing complex and the Cousteau Ocean Center, as well as for future expansion of Waterside. It's claimed that more than $ 100 million worth of new construction has been catalyzed by the $ 14 million spent for Waterside. Norfolk's Elizabeth River frontage and downtown are being transformed in the process.

Waterside was created through public-private collaboration. City officials and business interests were aware of the risks but convinced of the potential, as was Rouse. Therefore, to make it happen, Norfolk provided all of the financing (at 11 1/2 percent interest). It also invested an additional $ 27 million in surrounding park and infrastructure improvements. But it gets half of Waterside's profits, which, when added to tax revenue from related development, will more than return Norfolk's investment.

Portside is a 60,000-square-foot, $ 15 million marketplace in Toledo. Like Waterside and Harborplace, it also sits on a waterfront, the banks of the Maumee River, in a city whose downtown had been compared with Dresden in 1945.

Two years ago, Business Week magazine stated that "Portside is expected to draw 5 million visitors, generate $ 18 million in sales, and create 700 jobs" during its first years. Indeed, Norfolk's Waterside had drawn 6 million visitors and had sales exceeding $ 300 per square foot in its first year.

Also like Norfolk, Toledo's civic oficials and business leaders led the effort for revitalization. Owens-Illinois Inc. and the Toledo Trust Co. first built two new office buildings on the waterfront, flanking Portside. As Portside was built, another office tower and a 250-room luxury hotel went up. Today, Toledo has a convention and performing arts center nearby, along with more new hotels, housing and offices.

To finance Toledo's waterfront development, including Portside, $ 81 million was raised from a variety of sources; $ 19 million through revenue bonds; $ 14 million from UDAG grants; a $ 13.5 million first mortgage from the local building trades pension fund; $ 9 million in loans from Toledo Trust; a $ 1 million gift from a church, and investments from other local companies and private citizens.

Again, the city of Toledo, which spent $ 7 million on public improvements, will receive 50 percent of Portside's profits. Over the long run, however, the biggest payoffs are expected to be a revived downtown and renewed civic pride.

More festival places will appear, adding to the list. Others, like Manhattan's South Street Seaport, are already part of the thriving collection. And some downtown festival centers are not on waterfront sites at all, such as Sixth Street marketplace in Richmond, the Pavilion at Washington's Old Post Office or Philadelphia's Gallery at Market East.

No matter where they are or what incidental problems they may precipitate, all of these projects demonstrate that fruitful urban development is not just a matter for the private sector alone, or for government alone. It requires shared vision and mutual efforts. It also takes heaps of planning and patience, not to mention money. Too often, only short-term, short-sighted actions and thinking prevail.

Modern festival marketplaces may not endure in their present form, and their architectural imagery may become repetitive and jaded. Nevertheless, the collaborative process by which they are developed always will serve as a laudable model for building new city pieces out of old ones.

NEXT: Adversarial urban development.

Roger K. Lewis is a practicing architect and a professor of architecture at the University of Maryland.