NIAGARA FALLS – Santa Claus arrived on Old Falls Street riding fire engine No. 4, and a hundred or so people awaited the flip of the switch that would illuminate the holiday lights strung on trees lining the street.

Mayor Paul A. Dyster told the crowd that improvements were underway to re-create the atmosphere on Old Falls that existed when he was young.

But less than three minutes after the lights came on, the crowd was back inside Conference & Event Center Niagara Falls, leaving the public space empty again.

Old Falls Street stretches from the front door of Niagara Falls State Park – where 8 million people from around the world visit every year – to the Seneca Niagara Casino & Hotel some three blocks away.

But after $12 million was spent on a recent makeover, Old Falls Street too often looks and feels like a ghost town.

A $25 million hotel and apartment project by the Hamister Group is set to start construction next year, raising hope that someone other than the public sector is ready to make something happen there.

But for now, long sections of Old Falls Street sit vacant – even during peak tourist season.

City and state officials explain they’re still unscrambling the mess left from the 1970s “urban renewal” period. As of the late 1990s, no one had yet planned for a tourism-based economy here, Dyster said.

“You realize when you start talking about doing this, all the stuff you want to have downtown you just bulldozed ... and the stuff that you built is largely useless,” Dyster said. “And that is a real bad place from which to start because now you have these huge costs in front of you even to get back to a level playing field with other competing locations that are trying to do the same thing.”

Add to that the fact that vehicular traffic had been excluded from the street, making any chance of survival bleak.

Thomas J. DeSantis, the city’s senior planner, describes the area in the mid-’90s as “desolation row.”

“Some of them worked for a while, even the (Rainbow Centre) mall worked for a while,” DeSantis said. “Eventually nothing else working around it meant that it was all doomed.”

While there are a few hubs of activity, there are few encouraging signs.

A stretch of retail frontage across from Niagara Falls State Park has been mostly vacant for several years. A one-story building looking straight into the park houses a wax museum, some nondescript souvenir shops and a pizza place.

Then there’s the enclosed glass walkway near the other end of the street that the city planned to demolish but that today remains empty.

Removing ‘Berlin Wall’

To start rebuilding, $12 million was spent on new infrastructure, with cobblestones, streetlights and the return of vehicular traffic. It included the demolition of the Wintergarden. That glass building, along with others stretching from Niagara Street to Rainbow Boulevard and including the former Rainbow Centre mall, had created a “Berlin Wall effect,” cutting off the heavily trafficked park area from the rest of downtown, officials said.

The idea of the new streetscape – a “green” street that collects and filters rainwater and reuses it to water native plants – was to spruce up the area to make it more attractive to private investment.

Work was completed on the eastern section in 2007, with the western portion unveiled in May 2010.

Since then, Old Falls Street has regained a pulse.

Niagara County Community College’s $26 million Niagara Falls Culinary Institute opened in the fall of 2012.

The Hamister Group is moving ahead with plans for a $25.3 million five-story, mixed-use project at Old Falls Street and Rainbow Boulevard.

Mark E. Hamister, the group’s chairman and CEO, said he likes what’s been done to enhance Old Falls Street. But he said more private investment is needed to create the pedestrian traffic that will allow the area to flourish.

“It’s a good start, but it’s far from finished, and it’s far from what we need,” he said.

Those who take pride in the city’s economic development agree the street’s not where they want it to be, and the mayor acknowledges that it’s reasonable to ask why there isn’t more on Old Falls Street.

“You have some large, kind of institutional-looking spaces, too many of which are currently dark,” Dyster said.

Knowing the street lacks enough restaurants, shops or other attractions to keep people coming on a regular basis, officials have pursued an events-based strategy to lure people, like the tree-lighting earlier this month.

So where are there spots for opportunity?

There’s a row of mostly vacant space attached to the Comfort Inn-The Pointe, at the western end of the street.

The hotel and storefronts are owned by a subsidiary of the Maid of the Mist Corp., which bought the property in December 2008. In the last couple of years, the Maid of the Mist has been concentrating on making sure its primary business – boat tours below the falls – remained in operation on the U.S. side.

Through a spokesman, the company said a $4 million renovation project at the hotel – set to run through 2016 – does not include any work on the vacant storefronts.

“Old Falls Street has come a long way, and we remain optimistic about its future. It remains a work in progress,” spokesman Kevin A. Keenan said in an email. “We are evaluating some opportunities, but there is nothing we can discuss publicly at this time.”

On the other side of the street, Doug Brown’s family has operated several businesses in a building across from the park for more than three decades. Brown, who took over running the wax museum and two souvenir shops eight years ago, said that while streetscape work has helped the area, the improvements have not prompted him to invest much in his business.

The changes “allowed us to stay in business,” said Brown, who has been critical of street closings for some weekend events, which he said draw people to the area at times like holidays when they already would come, but not when the local businesses need help.

Toward the east end of Old Falls, there’s the unused glass walkway in the city’s right-of-way that abuts the former Falls Street Station building.

The building – across Old Falls from the $19 million Conference & Event Center Niagara Falls that opened in 2004 – went into foreclosure, and Joseph M. “Smokin’ Joe” Anderson purchased it and opened it earlier this year as an entertainment and retail attraction with native art and dancing called Smokin’ Joes Native Center.

Anderson, who owns other properties downtown, including the Quality Hotel & Suites at Rainbow and Old Falls, is constructing a new entrance to the Native Center at First Street and Rainbow. Neither Anderson nor a company representative responded to a message left requesting comment.

‘A work in progress’

Global Spectrum, the firm the city and state hired to run the conference center and create programs for Old Falls Street, has held about 300 events a year on Old Falls Street over the last three or four years, said Christopher J. Schoepflin, president of USA Niagara Development Corp., the state’s economic development arm in the Falls.

While people have come to the downtown space, the street “continues to be a work in progress,” Schoepflin said.

“But as a starting point, if three, four, five years ago, I would propose to spend $12 million and inside of a 36-month period of time convert that to $160 million in total investment that starts to activate the street, I think that’s a hugely successful first step,” he said, referring to the total value of recent and planned investments.

What started with the conference center continued with the first street-level retail on Old Falls in a generation – a Starbucks and TGI Friday’s restaurant, Schoepflin said.

While the majority of what’s there has come from public investment, there’s still more do to.

So what’s in the future for Old Falls Street?

Two development teams have been asked to make proposals for projects in the remaining two-thirds of the former Rainbow Centre mall.

Then there’s the Downtown Niagara Falls Development Challenge, a program that will offer $40 million in state and city incentives over the next five years for the best ideas for developing downtown. The idea is to leverage $240 million in private investment, part of Gov. Andrew M. Cuomo’s plans for the Falls. Schoepflin said that depends on what happens with this three-block street.

“Everything comes back to Old Falls Street,” Schoepflin said.