"I’m a local boy,” says Carsten Cox, gesturing at what he calls “my own backyard”—the enviable panoramic view from the terrace of his Norman Foster–designed penthouse, with its wide sweep of water and landmarks both industrial age and modern. But Carsten is no Londoner, and Foster’s NF1 apartment complex is not in the English capital, where he has arguably made the biggest architectural mark since Sir Christopher Wren, but in the obscure German town of Duisburg, about 36 miles from Düsseldorf.

Duisburg isn’t that well known, even in Europe. For those who have heard of it, it’s synonymous with the Ruhrgebiet—the former industrial heartland of Germany, now mainly remembered for the hard times of the 1980s, when it seemed to be sinking under the weight of ecological degradation, economic crisis, and soaring unemployment.

“In the late 1980s, the young and well-educated were leaving Duisburg in droves,” explains Rolf Fehr, the managing director of the Duisburg Inner Harbor Development Company, which is responsible for Cox’s penthouse and for the entire 89-hectare Inner Harbor redevelopment site. “The point of building apartment buildings like NF1, creating public space and revitalizing the neighborhood, is to persuade them to stay—and new businesses to come. We are using architecture to encourage the kind of economic restructuring that will keep Duisburg alive.”

Cox is living proof that this plan may be working. Although he was raised in the Ruhr, he spent most of his adult life in Stuttgart and Frankfurt before returning to his roots to live in the Inner Harbor—despite the fact that his job, as a structural engineer, is a two-hour drive away. (He does have a pied-à-terre in Stuttgart to lessen the toll of the commute.) “I saw this flat, and I just wanted to live in it,” he explains. “It’s not only the superb quality of my apartment, which would be unaffordable in other German cities. It’s the whole Inner Harbor thing. The atmosphere as well as the architecture is fantastic; it’s a real community. We have a local market, events, socials where everyone aged 3 to 83 turns up, and the 13th restaurant in the neighborhood has just opened.”

All this new life was a distant dream back in 1989, when the Inner Harbor—once the world’s biggest inland harbor—was decaying rapidly, along with the rest of the Ruhrgebiet. “There were 200 jobs left in the [harbor] area,” recalls Fehr. “Whereas today, there are 4,000. And back then, only a handful of people lived here. In fact, the situation in the entire region seemed so hopeless that the Land of Westphalia decided to take radical action to encourage the restructuring of the old industrial cities.”

Using architecture and planning as its starting point, the Land of Westphalia (the equivalent of a state in the U.S.) set up the regionwide International Building Exhibition (known in Germany as the IBA), a cross-disciplinary think tank. It united regional and local governments, planners, and architects, created new administrative structures with a decade-long life span, and organized seminars, forums, and international competitions to generate ideas.

The IBA devised an ambitious urban and ecological regeneration program that became Europe’s biggest such project, stretching across several cities to encompass the entire Ruhrgebiet. A major environmental cleanup was undertaken, and plans were drawn up for the conversion of industrial wastelands into mixed-use community and cultural resources, including offices, housing, museums, and performance areas.

These postindustrial urban centers were not viewed in isolation, but were planned as parts of a coherent whole: Today, they are linked together by an impressive regional park system, which includes thematic tourist routes for cyclists and hikers, such as the Route of Industrial Culture. “The IBA focused on preserving the identity of the Ruhr Valley, not on tearing everything down,” recalls Marie Mense of THS (TreuHandStelle GmbH), the development company that funded NF1 and many other residential developments in Duisburg and the surrounding area. “If you destroy your history, you have no memory—and no identity.” Mense believes preserving the past is vital to local morale. Moreover, she points out that widespread demolition is not an option in the dense urban conglomerations of the Ruhrgebiet, where the cost of decontamination pushes the price of site clearances sky-high.

Accordingly, Duisburg Inner Harbor has retained between 30 and 40 percent of its old warehouses and mills, refurbished into offices, museums, and restaurants along the lines of Foster and Partners’ master plan, which was chosen in an international competition held under the auspices of the IBA in 1991. Their plan, which remodels a two-kilometer stretch of the harbor channel and its surrounding area, was chosen for its elegant solution to maximizing the waterfront, and for its intrinsic mixed-use approach. Foster himself calls Duisburg “a new, 21st-century paradigm of mixed use in the inner city.”

“The whole idea was to bring the water back into Duisburg,” explains Fehr. “To give it a new role in the life of the city. So three new canals were cut, which literally carry the water further into town, and a variety of public space was created on the waterfront.” Lining the harbor are walkways, bike paths, lush green spaces, sculptures, a skateboard park, and café terraces. But the new paths are a mosaic of salvaged bricks and tiles, and while many old buildings were demolished to create these well-used public spaces, the Garden of Memories, for example, designed by Israeli sculptor Dani Karavan, poignantly preserves certain segments of them.

Set back from the water, energy-efficient office buildings like the nautical “Five Boats” adhere to a strict five-story limit, ensuring a human scale and the preservation of the waterfront view for the residential buildings behind them. Currently there are 420 apartments in the Inner Harbor; when the project is completed, there will be 700. (Siting apartments directly on the main waterfront was determined to be too expensive: “No one in Duisburg is going to pay a million euros for a waterfront loft conversion,” says Fehr.)

The most striking feature of the development is the many-sided reclamation of water for public use. The beautifully spare Movable Footbridge—an engineering first that recalls the traditional skills of the Ruhr—invites walkers to cross it; boats can moor at Foster’s breathtakingly ingenious Steiger Schwanentor jetty, which rises and falls with the water level; and a new dam has provided a more scenic stretch of water as the backdrop for the restaurant terraces, as well as a place to swim. The jewel in the crown of Duisburg Inner Harbor will be its landmark Eurogate building—a terraced five-story office and public services building (not yet built), sheltered under a photovoltaic canopy, symbolizing the new sustainability of the Ruhrgebiet.

“New infrastructure and public amenities were put in place first to establish the harbor as an attractive place in which to live and work,” explains Foster. It has been a wise move. Fehr notes that the public investment in the infrastructure, made possible by European Union grants, was some 65 million euros. “We spent this on the public spaces,” says Fehr. “And that investment has attracted some 400 million euros of private investment so far. By the time we’ve finished the project, we will have raised 10 euros of private money for every single euro of public money we’ve spent.”

Fehr attributes the success of Duisburg Inner Harbor to the excellence of Foster’s master plan—and the development company’s faithfulness in following it: “Lord Foster is extremely proud of us in Duisburg for never deviating from his master plan, not once in ten years,” says Fehr with a wry smile. With a 2010 slot as European Capital of Culture looking almost certain, the Ruhrgebiet as a whole seems well on the way to a truly extraordinary urban transformation.

“When I first moved here,” says Carsten Cox, basking in the sun on his terrace, “my friends all thought I was mad. Now, people say, ‘Oh, of course, the Inner Harbor!’ Duisburg has always had a lot going for it—the mentality is different from the rest of Germany, people are more open, friendlier, always ready to try new things. The Inner Harbor project is allowing that to blossom.”