The first time I stepped inside the building that now houses the University of Maryland's campus in Hagerstown, MD, I almost fell through a rotted floorboard to the story below. Our way illuminated only by flashlight, former Hagerstown Mayor Steve Sager and I stepped over fallen plaster, spongy timber and discarded wine bottles that had accumulated during the 20 years since the old Baldwin House last served as a downtown hotel.

Today, that once derelict building is a smart growth success story-one that could be replicated in any town or city with an old building and a new need.

What Sager saw in his flashlight beam, and what his successor as mayor, Robert E. Bruchey II, came to see, was not the shambles of the past, but the promise of the future. They saw the weathered but solid facade of the old hotel and that of an attached and equally abandoned department store as the anchor of Hagerstown's downtown historic district.

So, when Frostburg State University, a part of the University System of Maryland, began looking for a site for a satellite campus in 1997, Mayor Bruchey offered the Baldwin House complex. For free!

At that price, the decision would seem easy, but it was not. Two other sites, one on a farm that was to become a new industrial park and the other in a wooded tract near Hagerstown Community College, each had strong backers. Even University of Maryland officials opposed the downtown site, concerned about crime and a shortage of parking, and fearing that the rehabilitation costs would far outstrip the cost of building a facility on a "green field" site on the edge of town.

In the end, it took a directive from former Gov. Parris Glendening to the university's chancellor to place the new campus in the Baldwin House and ensure the university would abide by a smart growth executive order that required state agencies-including the university-to give preference to downtown locations for new facilities.

Last spring, Mayor Bruchey and a handful of city, university and former state officials who had played central roles in that decision a decade ago gathered in the splendidly renovated Baldwin House for a candid reassessment. Their unanimous verdict: The facility has been a smashing success for the university as well as Hagerstown.

As if to prove how much has changed, the reunion was part of this year's annual Preservation Maryland conference, which brought 400 visitors to the downtown campus and the building that just a decade ago was a dangerous place in which to walk.

As some opponents predicted, it did cost more to rehabilitate the Baldwin House ($15.3 million) than it would have cost to build on the farm pasture, ($11.5 million), but the square footage costs were almost equal: $199 for Baldwin House, $192 for the "green field" site. But the Baldwin House site has unquestionably produced benefits to the community that any site on the city's fringe would be hard-pressed to match.

This is not just a Maryland story; leaders in other states have similarly recycled older structures into new uses. A YMCA building in downtown Harrisburg, PA, for example, has been converted into SciTech High, bringing vibrant student life downtown.

Mayor Bruchey and his economic development director said the turnaround in the fortunes of downtown Hagerstown can be pegged unequivocally to the decision to put the campus there. Ever since a suburban mall was built in the 1970s, downtown Hagerstown had been emptying. But immediately after the campus site was announced in November 1999, investors began to buy downtown properties. Restaurants and coffee shops sprang up and empty storefronts were filled. A new police substation located on the campus building's storefront ground floor eased the fear of crime. Musical performances and weekend festivals drew crowds to a new pocket park built where two derelict buildings once stood next door.

The university center is also blossoming. Five colleges offer 11 undergraduate and six graduate programs in professions for which there is a workforce shortage in the region. Enrollment is 400. Many students attend night classes and use an adjacent parking garage that stood mostly empty at night before the campus opened.

Mark Beck, who oversaw the University System of Maryland's facilities' decisions, said the Hagerstown campus experience forever changed the way the university views the role of its facilities within communities. "We should have focused less on budget and more on community," he said.

The lesson here is that the right site for a university campus-or for other large institutions, such as hospitals, corporate headquarters or schools-can provide multiple community benefits that can far outweigh additional capital costs.