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Yosef Pincus, 80, of Haifa, was sitting Friday in the new square in front of his veteran restaurant, Ha'ogen, in Haifa's lower city, reminiscing about his days as a sailor, when when the port's main Palmer Gate was open to tourists. "Forty years ago the lower city was jumping," he said. "All the government offices were here. Thousands of people went out on their breaks and bought at the kiosks."

But instead of maintaining the area, Pincus says, it was allowed to sink into ruin, its buildings empty, housing the homeless, criminals and pigeons.

But Haifa's lower city is now undergoing a facelift thanks to the Port Campus, an ambitious project that will include branches of the Technion and colleges along with shops, galleries and studios.

Although Haifa has more college students than any other city in Israel, 35,000, Mayor Yona Yahav says, its academic institutions were built out of town and the students' presence is not felt. The goal is to "give young people a place they can identify with, so they will see Haifa as home even after they finish their studies," Yahav, who decided on the project three years ago, says.

Tiltan College of Design, an extension of the University of Haifa, is refurbishing property at the cost of NIS 10 million; the Carmel Academic Center's law and business colleges' student dorms are also to be located in the Port Campus.

Project director Arieh Greenbaum says his job involves matching the institutions with developers as well as encouraging the police to take action against undesirables in the area. "I have to make it worth [the entrepreneurs'] while to come," he says.

"We wanted a place that would speak of the change we want to make," architect Merav Eitan, who owns a gallery that is being renovated, says in explaining her choice to do business in the area. "We saw the potential; something happening from the ground up," she added.

Not all voices are optimistic, however. The longtime merchants feel they are being squeezed out "quietly," bringing in students who "don't have money," according to stall owner Gadi Pe'er. "We don't get anything out of this," he says.