Wearing work boots and carrying flashlights on a spring day last year, a band of architects and developers picked their way through the dim interior of the American Brewery. They looked like archaeologists combing through an ancient ruin, which, in some ways, is exactly what the brewery is.

Built in the 1800s, the American Brewery has stood empty these past 33 years, a ghostly reminder of a distant past when the city's manufacturing muscle was on display in working-class neighborhoods such as this one in East Baltimore.

Rain drips from a hole in the roof and puddles on the floor. Ankle-deep piles of pigeon droppings and feathers soil the concrete floors. Holes and graffiti deface walls. Rust has corroded most metal surfaces.

The deterioration doesn't end at the doors of the old factory, which stands at an isolated, impoverished corner of the city near the point where East North Avenue dead-ends at the Baltimore Cemetery. The view from the brewery's vacant arched windows is equally desolate.

In a roughly 20-square-block area around the brewery, about half the properties are empty buildings or barren lots. Rowhouses and stores stand empty. A building that was once a schoolhouse and then an apartment house has been abandoned. So has a one-time post office that was reincarnated as an auto parts store, before it, too, failed.

The area has been in decline for more than three decades, most precipitously during the 1990s. City Hall has alternately ignored or unsuccessfully tried to stem the deterioration. Either way, the consequence has been the same, the unending disintegration of a neighborhood, with all the social ills and misery that go with it.

"It's depressing," said Leslie Funderburk, one mother who lives in the neighborhood. "How can you expect someone to have a positive outlook on life, when all they see is destruction?"

The dissolution evident around the brewery is not confined to that area of Baltimore. Even as many city neighborhoods are in the midst of a housing boom unprecedented in recent times, and other communities are being readied for rebirth, 18 percent of residential areas are categorized by the city as distressed, based on such factors as sales prices and vacancy rates.

Portions of Baltimore, such as Park Heights in Northwest, the neighborhoods abutting Carroll Park in Southwest and large swaths of East and West Baltimore have decayed badly, with acres of abandoned houses and buildings in deplorable condition. Not surprisingly, those areas are rife with drug dealing and crime, poverty and despair. They provide compelling evidence that the revitalization so apparent in some sections of the city has left many other parts untouched -- a reminder of the continuing gulf between prosperous and poor Baltimore.

To understand the dynamics of a degraded neighborhood and its chances for rebirth, it is useful to explore the cycle of cause-and-effect in one such area, such as the one that surrounds the American Brewery.

While the shuttered plant symbolizes the wider abandonment of the area, it has also been a cause of the neighborhood's stagnation. Failed attempts to redevelop the brewery have created a developmental Catch-22: With the future of so commanding a building in doubt, investors have been deterred from putting money into the surrounding area. And because those blocks have declined, developers have been reluctant to invest in the brewery property.

Other grim economic logic contributes to the downward spiral of this section of Baltimore. Landlords don't want to make investments in properties that they do not expect to recoup in rents, and tenants don't want to, or can't, pay more rent for buildings that are in poor condition. Retail businesses don't move into neighborhoods without a critical mass of customers to support them, but no one willingly moves into neighborhoods with no amenities. One negative reinforces another. The only change is further deterioration.

On some residential streets around the brewery, only a handful of houses have people living in them. On many blocks, the boards covering window openings have been ripped out, giving those buildings the eerie look of Formstone jack-o-lanterns.

To be sure, a couple of blocks boast well-maintained homes with polished marble steps and planters filled with flowers, houses that would not be out of place in Canton or Federal Hill. They hint at what the neighborhood once was, and some hope might become again. But they are exceptions.

Walk the streets on any given day, and you're apt to find city police making an arrest, often for drugs; last year, the police averaged about 70 arrests a month in the area.

Walk the alleys, and it won't be long before you come upon drug addicts stumbling down the stairs from the second floor of an abandoned building. A local methadone clinic treats 600 patients; one describes the blocks around the brewery as part of a larger "all-night [drug] shop."

Many streets and alleys are strewn with refuse, which provide the food for rats, just as the abandoned buildings offer them shelter. The city responds to dozens of complaints each year, but litter and discarded furniture remain problems -- the result of the willingness of illegal dumpers, transients and even some residents to sully an already degraded neighborhood.

On blocks once dotted with shops, there's no bank or full-scale grocery or sit-down restaurant. The only chain drug store closed five years ago. One of the few -- and most popular retailers -- is an unlicensed "house store" run by a retiree on the first floor of his rowhouse on a block that is otherwise blighted. He sells cans of soda for 50 cents and Mary Jane candies for a nickel.

What's left, for the most part, are a few churches, barber shops, corner stores and carryouts. Near the end of East North Avenue is a small commercial cluster that includes an auto supply store, a gas station and an oil delivery company