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Niagara Falls proposes a dramatic new idea to attract young people downtown.

Beginning this year, the city will offer to pay the student loan debt of recent college graduates for two years if they relocate to a specific neighborhood just blocks from the falls.

"They have a need: to pay their loans. We have a need: We don't have enough of them. So we said, 'How can we combine the two?' " Community Development Director Seth A. Piccirillo said. "We want to do something that isn't being done somewhere else."

The plan is meant to help the city transition from its diminished industrial base to a more knowledge-based economy by creating a sort of Elmwood Village of Niagara Falls.

Attracting young professionals with discretionary income would in turn attract retailers downtown and help stop the city's population loss before it dips below 50,000 -- when it would lose its status in some federal programs after the next U.S. census, city leaders say.

"If we cannot fix that, then we do not have a future," Mayor Paul A. Dyster said. "Trying to revitalize a downtown without young people is like trying to get bread to rise without yeast."

Attracting the young people would also help the city fast-track the revitalization of key downtown areas and cut down on blight by making it eligible for new federal and state grants, leaders said.

Graduates who have received two-year or four-year degrees within the past two years, or those in graduate school, would be eligible, and the city promises to cover up to $3,500 per year of student loan payments for two years.

The graduates would need to rent a market-rate apartment -- or buy a home -- within a targeted area minutes from the cataracts. If they meet all of their loan and rent or mortgage commitments after the first year, they would be reimbursed the cost of their student loans for that year. The same thing would happen after the second year, Piccirillo said.

"We want to show the area and the rest of the country how serious we are about attracting young professionals," Piccirillo said. "We know they have the potential to change a neighborhood."

>20 applicants wanted

The city is targeting graduates of Niagara University and Niagara County Community College, as well as others who work in Buffalo. But city leaders think they might also draw young people from other parts of the country who have never heard of such a program.

"We're always saying, 'What can we do to keep our young people here?' " Piccirillo said. "We need to be asking, 'What can we do to get other people's young people here?' "

If city lawmakers approve the plan, the city would seek 20 applicants for the first round of the program. Those applicants would be paid with $200,000 from a city Urban Renewal Agency account.

The young people would be encouraged to find apartments in the Third Street area, near the Seneca Niagara Casino, or homes for rent or sale in the Cedar Avenue, Fourth Street or Park Place areas.

Many of those streets are a combination of historic and well-kept homes mixed with blighted properties. Moving young people to the well-kept homes as part of a coordinated strategy could make the city eligible for grants to demolish the blighted areas, leaders said.

The city also would use the little money it has for demolitions in those areas, something that could rapidly change the face of the neighborhoods.

"I think that would be a major game-changer," Dyster said, "to prove it's not just affordable and cool but also safe to live downtown."

An influx of young people can only help attract businesses the city has been losing for decades, development officials say.

"Retail follows rooftops, so as you start to create a neighborhood, the services will follow," said Christopher J. Schoepflin, president of the state's USA Niagara Development Corp. "That could hopefully create a sense of vibrancy and urbanity that is really exciting. That sense of vibrancy is something that's been lacking in downtown for a very long time, if we've ever truly had it."

Young people have had other reasons of late to come to downtown Niagara Falls, and city leaders say downtown housing is a largely untapped market.

When the NCCC culinary arts institute opens Sept. 1 in the former Rainbow Centre mall, about 500 students will hone their skills in a cooking laboratory and walk-up restaurant. Many of those students say they want to live downtown.

>Hospitality, casino jobs

Leaders also point to the three hotels in the downtown tourism district that are being rehabbed and could provide hospitality jobs for the young people, as well as a series of "green industrial" jobs, such as the Greenpac paper mill.

Others say workers at the Seneca Niagara Casino and Niagara Falls Memorial Medical Center would benefit from the type of downtown housing the city lacked when the casino was built.

Niagara Falls leaders think they have some key points for drawing young people downtown.

They point to the emerging hospitality industry -- Niagara University is looking to expand downtown -- as well as a cultural scene for "young creatives" who live west of Main Street and find entertainment at the Niagara Arts and Cultural Center.

Young people also want to live in a walkable community, said Piccirillo, a recently hired 29-year-old who city leaders say has the youthful perspective and energy they have long needed to attract young people to their city.

"We want you to be part of our city," Piccirillo said. "Tell us what you're looking for, and we'll find a way to provide it to you."

>Live close to nature

If young people are looking to be active, he said, they should realize the targeted neighborhood is just blocks from the Niagara Gorge and less than a mile from Niagara Falls State Park and the famous waterfalls.

"That's green space you can't find in any other area of the country," Piccirillo said.

Leaders believe the plan will ultimately help make the city more attractive for summer tourists while building neighborhoods for those who live there year-round.

"We need to do something that's responsive to our most critical problems," Dyster said. "I think a lot of people, if they looked at Niagara Falls, would find a lot of things they like."

email: cspecht@buffnews.com