Manchester, N.H., (pop. 107,000) has seen its share of hard times, but it's booming now and has lessons to teach anyone willing to visit. The downtown is dominated by a series of red-brick buildings running along the Merrimack River, the remnants of a textile industry that thrived from the 1830s to the 1930s. Between 1930 and 1970, some of these buildings were torn down, until people realized they were in fact one of the city's core assets. This change of viewpoint was the mind shift that led to the city's rebirth.

Today most of the old factories have been renovated and are occupied by businesses of all descriptions. Some house the regional offices of national firms such as Fidelity Investments and Autodesk Inc., and there are many small businesses and the service firms they attract—the Vertical Dreams rock-climbing gym, for example.

In one building, an extensive museum documents the city's history. Founded as a company town built around the huge textile mill, it depended on technology that was leading edge in its day, including the water-powered belt drives that ran hundreds of looms. Across the parking lot lies a smaller brick building adorned with a windsock. This is the office of Dean Kamen, the inventor of a host of medical devices and the famous Segway Human Transporter, who comes and goes via helicopter from the roof.

Mayor Robert Baines told me the recent history of the town as we sat in the boardroom of the Van Otis Chocolates company on Elm Street, snacking on the firm's famous Swiss Fudge. In 1991 struggling local banks were shut down by federal regulators, throwing the fragile economy into a tailspin for the second time. Since then, the city has made long-range plans based on an inventory of its assets, such as the old factories, the airport, the city's proximity to the major centre of Boston, and its natural beauty, including the river, which has undergone a major cleanup.

An aggressive plan to develop the airport, which offers a convenient alternative to Boston's Logan International, has provided a major boost. The Verizon Wireless Arena, which seats 10,000 people, offers a venue for major artists and has become the second most profitable arena of its size in the world. Last April a new ballpark opened, called Fisher Cats Stadium; it's home to the Blue Jays' AA team, the New Hampshire Fisher Cats. The red-brick-and-green steel girders match the design of the old factory buildings, and all of the seats give a good view of the action. Just beyond the ballpark, a landfill is being redeveloped

for other uses, including upscale condominiums.

At Fisher Cats Stadium I watched a game from a suite leased by the Roedel brothers, David and Fred III, hotel developers who are building a new Hilton property just beyond the outfield. (Incidentally, pitcher Vince Perkins, signed out of high school in British Columbia, won 4-1. Armed with a mid-90s fastball, he's a good bet to make it into a Jays uniform.)

The Roedel brothers grew up in the hotel business; they watched their father develop a large chain and then sell it later in life. They started building and managing properties along the east coast and clearly are proud to have a new operation under construction in their own backyard.

The state has no sales or income tax. Most taxation is in the form of property taxes. This works, according to the mayor, “because the best government is local.”

A former school principal, he argues that a strong educational system is the foundation for economic growth. “We fixed the schools,” he told me. “When companies are thinking of locating in Manchester, the first thing they do is tour the local schools to see if this is a good place to bring up their kids.”

Today, he says, instead of moving away, young people are staying and even moving to town. While a vibrant economy is one reason, the other is that there are now lots of affordable amenities for young people and their families. There are ethnic restaurants and an arts scene, and tickets to a ball game start at $4.

For a while my guide was Dick Charpentier, a retired accountant who as a volunteer “Granite State ambassador” seemed to know pretty much everything about the city, including the best shortcuts. A descendant of immigrants from Quebec who moved here in the 1800s to work in the mills, he also speaks French.

There is still a large francophone population, and we dropped in on the Franco-American Centre in a building that also houses ACA Assurance, founded as a fraternal benefit for the working francophones. Manchester is the birthplace of the credit union movement in the United States, says Charpentier. The first credit union in the country was founded here by the Desjardins family of Montreal; the city's early banks were only for the mill's owners and managers. This innovation in financial services is another mind shift.