The Fall Of Niagara Falls.

Decades of decay, corruption, and failed get-rich-quick schemes have made the city one of the most intractable disasters in the U.S.

a musty dive in Niagara Falls, the decrepit city in western New York State that sits atop one of the natural wonders of the world. The editor, Mike Hudson, slapped down some cash and ordered a round of Labatt’s for the house, which consisted of five people, including the proprietor. Hudson, the founder of the weekly tabloid Niagara Falls Reporter, freely refers to his town as “a godforsaken place,” and it was hard to argue with the assessment in the neighborhood surrounding the bar. The area is the worst the city has to offer, a place of drugs and crime and boarded-up brick houses.

Hudson knocked back a shot of Sambuca and rummaged around for his cigarettes, shouting epithets and contributing jokes to a running discussion on local politics. “It’s been all downhill in this town since 1969,” said one of the other patrons, a ruddy-faced man who had his first name, Fred, sewn onto his windbreaker. “Ever since they knocked down the whole goddam downtown,” muttered the bartender, Frankie G. (short for Giaquinto).

“That’s what everyone will tell you about the place,” Hudson said later that night, over plates of spaghetti at a local Italian joint, which was bedecked with photos of hometown mobsters and dead celebrities.

Niagara Falls’ descent into blight—in spite of its proximity to an attraction that draws at least 8 million tourists each year—is a tale that Hudson’s little newspaper has been telling for years. It encompasses just about every mistake a city could make, including the one Frankie G. cited: a 1960s mayor’s decision to bulldoze his quaint downtown and replace it with a bunch of modernist follies. There was a massive hangar-like convention center designed by Philip Johnson; Cesar Pelli’s glassy indoor arboretum, the Wintergarden, which was finally torn down because it cost a fortune to heat through the Lake Erie winter; a shiny office building known locally as the “Flashcube,” formerly the headquarters of a chemical company and now home to a trinket market. Once a hydropowered center of industry, Niagara Falls is now one of America’s most infamous victims of urban decay, hollowed out by four decades of job loss, mafia infiltration, political corruption, and failed get-fixed-quick schemes. Ginger Strand, author of Inventing Niagara: Beauty, Power, and Lies, called the place “a history in miniature of wrongheaded ideas about urban renewal.”

Niagara Falls has something that sets it apart from other terminally depressed Rust Belt towns, something that makes its economic failure all the more remarkable: those falls, the 176-foot-tall cascade of thunder that is no less breathtaking for being your grandparents’ honeymoon destination. For many years the city’s route to a better future seemed straightforward, and it led to the water’s edge, where you could look across the border to Canada and see a brightly lit skyline of new high-rise hotels. “It’s a booming tourist mecca over there,” Hudson said. “Over here, it’s a slum.”While the Canadians were building theme restaurants and luxury suites, the American side spiraled downward. Niagara’s median household income is now just $30,000, 40 percent below the national average, and one-fifth of its 50,000 residents (down from 100,000 in the 1960s) live below the poverty line. As of November, unemployment was 7.5 percent, lower than the national average; so many have been out of work for so long that they no longer register as part of the workforce.

There’s a litany of explanations for this, but for the last decade, through a boom and a bust, several mayors, and nonstop recriminations, a single constant has loomed over the city: the Manhattan real estate billionaire Howard Milstein. In the late 1990s, the municipal government designated a private group backed by Milstein as the “master redeveloper” of 140 acres of downtown real estate. Milstein appeared, at first glance, to be just the man to help the city finally capitalize on its natural potential. He had a hotel and other development interests in Times Square—a fabulously successful example of commercial reclamation—and he proposed to revive Niagara Falls along similar lines, as a casino-centered playground. It never happened. Today, Milstein is still sitting on an enormous swath of land, a ghost town of abandoned homes, shuttered storefronts, and vacant lots in the shadow of a closed-down factory where Nabisco used to make Shredded Wheat.