PORTLAND, Me.—Kris Horton is the most prominent cheese seller in this newly vigorous New England coastal city, and not just because her store’s coolers are so full of specialty cheeses. It is also because her shop is located in the new Public Market House, which she organized and helped open in September.

The seven-month-old market, a product of civic idealism, entrepreneurial opportunity, and economic desperation, occupies the basement and first floor of a partially renovated, four-story, 136-year-old building at 28 Monument Square, which until last summer was an eyesore. Ms. Horton led a vocal and active public campaign to establish the new market after the Libra Foundation sold the larger Portland Public Market, two blocks away, where Ms. Horton and other food and farm product vendors had worked since 1998.

The experience of being forced out of the larger market was one of the most bruising of Ms. Horton’s life, she said. But she discovered new comfort and resilience in the steady flow of customers that now buy from K. Horton Specialty Foods and three other small food and farm product retailers—A Country Bouquet, Maine Beer and Beverage, and Big Sky Bread Company—that, as a partnership, now manage their new home at Portland’s center.

The Public Market House is just the latest example of how fresh local food and downtown markets can enhance economic and real estate activity in American cities, big and small. This week in Traverse City, Mich., for example, the Kellogg Foundation’s Food and Society program gathered 600 people from around the country to celebrate the same values and principles that produced Portland’s new market—and hundreds of other entrepreneurial businesses providing safe and nutritious food and a launch pad for related economic development projects.

The three-day annual conference is one of the premier events in a blossoming national movement that is producing the fastest-growing sector of the food industry in the United States, according to the U.S. Department of Agriculture. The movement is also producing farm practices that protect health and the environment, and add economic and social value to communities.

New Life Downtown
That is certainly the case here in Maine’s largest city. In just the last year, according to Portland officials, more than 80 new downtown condominiums have been built within three blocks of the new Public Market House, which developers view as an asset in advertising their projects. Several more housing developments are planned.

"Markets bring life to a city; this one is already a destination," said Nelle Hanig, the business development specialist in Portland’s Economic Development Division who helped accelerate the permitting process to get the market built. "The location of the Public Market House is important to its success. It’s right in the middle of town. It’s becoming a focus of activity and that’s always good in a city."

Although the Public Market House will not rival the size and sales of the older market it replaced, it is generating so much new business activity that a new economic study proposes to promote the new indoor market as the centerpiece of a "market district."

The study, completed this month for the Portland Downtown District, an economic development agency, said the new market is attracting enough shoppers to generate $1.2 million annually in sales. The market district, said the study, might add another covered outdoor market with 25 vendors on nearby Lancaster Lane, as well as producers selling goods on "day tables" in Monument Square. All together, the report’s authors concluded, the outdoor markets could generate $1 million more annually in sales and attract over 1,000 customers a week.

Reaping a Whirlwind
The story of how the Public Market House was established is distinctive and stirring. Last summer, Ms. Horton and her three partners in Market Vendors LLC worked with the building’s owner, contractor, banker, tradesmen, and city permitting officials to renovate a derelict building with remarkable speed. The collaboration, the urban equivalent of an Amish barn raising, took just six weeks and cost the building’s owner, Alan Mooney, only $250,000. The market opened as scheduled on September 1.

"I believe in the spirit of a public market being a community," said Ms. Horton, while tending to a stream of afternoon customers. "We found out that a lot of other people in Portland feel the same way. People just showed up to help. The Public Market House was born out of a whirlwind."

Several people linked arms at that storm’s center. Mr. Mooney, a prominent engineer, paid $725,000 to buy 28 Monument Square after learning that Ms. Horton and her partners, all of whom he knew, were intent on establishing a new market.

"If I didn’t have a tenant ready to get into the building immediately, I wouldn’t have taken it on," he recalled. "I needed the income to make it work. I knew Kris, knew her business, and I was ready to make a commitment."

Mr. Mooney then turned to two men he’d worked with for years to help advance the project. One was Sam Ladd, the president and chief executive officer of Maine Bank and Trust, who knew many of the vendors involved and quickly authorized a $150,000 loan for demolition and renovation.

The other was Bob Gaudreau, the president of Hardypond Construction, a respected Portland contracting firm that specializes in historic renovations. He and Mr. Mooney met and agreed to a scope of work; the following Monday workers began pulling tons of debris out of the old building. Six weeks later, Ms. Horton and other vendors were back in business in the newly restored building.

"Usually you have more time and you plan and pre-order and prepare," said Mr. Gaudreau. "In this one, you start running and see if you can keep up. We had a lot of interest, a lot of self-interest in making it work. I want Portland to succeed. A lot of that was in the pulse of this work effort."

The Public Market House is located in the same square that has held a weekly outdoor farmers market for decades. Now, the presence of an indoor and outdoor market adds vitality to both. Mr. Mooney said he is planning to spend $300,000 more this spring to renovate the market’s second floor to make room for new vendors, prepare the third and fourth floors for professional offices, and restore the 12,000-square-foot building’s historic façade.

"I knew that there was a lot of energy in Portland to make this happen," said Mr. Mooney, who collects $6,000 in monthly rent from his Public Market House tenants.

Foundation Harnesses Free Enterprise
The catalyst that released all of that energy was the announcement by the Libra Foundation in February 2006 that it was selling the last of its real estate holdings in downtown Portland, including the old Portland Public Market., which the foundation built and opened to national fanfare in 1998.

The $9.4 million, L-shaped expanse of glass and soaring timber beams earned more than $6 million in sales in its first year. The original market was a centerpiece of the Libra Foundation’s novel strategy of using its considerable assets—$220 million—to buy and renovate downtown office buildings to jumpstart Portland’s reeling economy. The foundation—started here in 1989 by Elizabeth Noyce, the former wife of Intel founder Robert N. Noyce—also founded a downtown bank, purchased and renovated seven office buildings, and bought three large parking decks.

When the foundation started its acquisition program in the early 1990s, office vacancy rates hovered around 60 percent and Portland’s economy and reputation were stagnant. This city of 64,000 residents now has stable housing values and rising personal incomes. The historic neighborhoods overlooking Casco Bay and the Atlantic are so popular that office and housing vacancy rates are less than 3 percent. The city is attracting young people, urban professionals, and retirees from Boston and New York.

Four years ago, according to Owen Wells, the foundation’s president, Libra changed course to take advantage of the economic conditions it helped to foster. "We wanted to capitalize on strong real estate markets in Portland," he said.

So, in 2003, Libra sold three buildings and a parking deck for $31 million. Three years later the foundation sold the rest of its downtown real estate—four office buildings, two parking decks, and the Portland Public Market—and turned a $20 million profit.

It’s been almost a year since the old Portland Public Market closed its doors. The windows are streaked and grimy. Inside the bas-relief panel above the mantel of the central granite fireplace is still visible with its sculpted border of food from local fields. Two blocks away, on a bright afternoon, the new Public Market House swarms with customers.

Keith Schneider is the editor and director of program development at the Michigan Land Use Institute. A version of this article was published in the April 11, 2007 edition of The New York Times. Reach Keith at keith@mlui.org; read his blog at http://www.modeshift.org/.