There were hundreds of brightly colored houses clinging to a labyrinth of hills in Valparaíso, Chile. The cobblestone streets were a maze. The Andes were in the distance, and the azure Pacific Ocean glittered from beyond.
Taking in the dazzling views from a balcony at the Hotel Palacio Astoreca, my sister, Aditi, and I considered how we should spend our few days in the city, and the list of must-dos was long: several small museums, new art galleries, the historic center that is undergoing an impressive renovation, inviting restaurants and the lively port-side neighborhood.
There were a number of appealing choices during the visit, in early March, but it wasn't too long ago that the city, which is about 90 minutes northwest of Santiago and has a population of around 300,000, was a gritty metropolis with few of the attractions it offers today.
"At long last, Valparaíso is getting a second life," said Stephanie Carmody, 30, our guide for the day, who, like all locals, is called a Porteño. "What you see now is nothing like what it once was."
Valparaíso's face-lift was driven by an ambitious government initiative and private businesses. The result is a destination that encompasses history, art, culture and a vibrant dining scene, all under a canopy of sunshine with a backdrop of postcard-worthy views.
It was just a decade ago that Valpo, as the Porteños refer to their town, was dominated by crumbling, defaced buildings. Streets with loose stones and cracked pavement spread throughout the hills called Cerros and the flat area called El Plan. Cultural sights were either disintegrating or had been shut down, and the choices for decent accommodations and restaurants were meager.
It was a big decline for a place that used to be the main trading harbor in the Pacific during the 19th century and was once one of the wealthiest port towns in the world. The city began to languish when the trade route moved to the Panama Canal in the early 20th century, and it remained in a state of disrepair for more than a half-century.
Valparaíso's revival began in 2003 when Unesco declared the historic center, which is in El Plan and a portion of the Cerros, a world heritage site. The local government began to recognize the city's rich history and charm but didn't introduce a practical way to turn it around until nearly seven years later. A tourism development initiative called Plan Rumbo began in 2010 and is scheduled to be completed by 2015, although most of its goals already have been met, according to Milos Miskovic, the city's regional director of tourism.
The $75 million Valparaíso Recovery and Urban Development Program, which ran from 2006 to 2012, was also a significant factor in the turnaround. Established in partnership with Corfo, a Chilean government agency that supports economic growth, and the Inter-American Development Bank, one of the largest sources of development financing in Latin America, the urban development program's most aggressive step was to give Valparaíso the storybook look of its past, which visitors can experience as they meander through the city's winding streets. Roads and sidewalks have been repaved to make them more walkable, broken cobblestones have been repaired, and dozens of buildings, many concentrated in the historic area, have been restored. Homes have been repainted in vivid reds, yellows, blues and purples.
Reviving cultural sites was also part of the project. The Fine Arts Museum, for example, reopened last September after being closed for 15 years. Housed in an early-20th-century mansion, the two-level space has more than 200 paintings from Chilean and European artists including the French Impressionist Eugène-Louis Boudin. The building itself, which features carved pillars and marble fireplaces, was restored with more than $4 million of development bank financing.
New cultural attractions were another priority. A museum of musical instruments and a collection of art galleries have opened in the last few years, but most significant, a large cultural center opened last year at the former prison that housed many of the dissidents during the rule of Gen. Augusto Pinochet. The complex has a space for dance and theater performances, and contemporary art exhibitions are held in cellblocks that have their original bars intact.
Not everything new in Valparaíso is tied to the tourism and recovery programs, but they have led to other government- and privately financed projects. Mr. Miskovic estimated that more than 50 restaurants and 20 boutique hotels have opened since Plan Rumbo's inception, most of them in Cerro Alegre, translated as cheerful hill.
The Hotel Palacio Astoreca is a former mansion that opened in September as an upscale 23-room property after an elaborate restoration. Vincent Juillerat, 42, a Paris-based Swiss who owns the hotel with his Chilean wife, said that he first visited the city as a 20-year-old backpacker and that despite the dirtiness, he was fascinated by the history and small streets. On another visit three years ago, he discovered the dilapidated mansion. "I remembered my first trip and how even on such a tight budget, I couldn't find any place to stay," he said in a telephone interview from Paris. "I sensed an opportunity, and with the changes that were starting to take place in the city, the timing was ideal."
Restaurante Alegre, which is one of the most buzzed-about restaurants in town, is attached to the hotel. Sergio Barroso, 28, is the executive chef and worked at high-profile restaurants throughout Europe, including El Bulli in Spain and, most recently, the Monte-Carlo Beach Club in Monaco, before moving to Chile. He was attracted to Valparaíso, he said, because of the city's potential. "There were a lot of traditional restaurants in town, but I wanted to offer something more inventive that you might see in a big city but would be surprised to find here," he said.
As we discovered over dinner one evening, his renditions of Chilean food showcase his creativity. Our meal began with a black sesame seed rice cracker with a side of peanut butter infused with merkén, a local blend of chiles and spices. Salmon marinated in smoked oil and served in an almond milk bath was followed by grouper accompanied by tiny nuggets of squid, which looked deceptively like corn kernels.
The city's turnaround seems to be drawing crowds: Mr. Miskovic said that the number of tourists last year had doubled to 120,000 in only two years, from 60,000 in 2010.
With the exception of scaffolding in a few spots, the city's reinvention looks complete, but Porteños say there is more to come. Carlos Lastarria, the director of the Fine Arts Museum, showed us the grounds outside the mansion that are being turned into a 6,500-square-foot garden replete with roses. Sidhartha Corvalán, who runs the cultural center, said that a restaurant, a cafe and a string of shops are scheduled to open on the grounds later this year. Mr. Miskovic said that a sea walk will soon be built along the coastline.
On our last day in Valparaíso, Ms. Carmody, our tour guide, took us to the sparsely populated and decrepit Cerro Polanco neighborhood. The local municipality had financed a graffiti street art event late last year to help give the barrio a makeover. More than three dozen South American artists were invited to create eye-catching murals on the crumbling houses.
As we walked through Polanco's streets, we were the only people taking in the show. It was difficult to understand why such a captivating place was empty. "People are still sometimes afraid to come here because they remember the past history of it being unsafe," Ms. Carmody said. "But with the way Valpo has become a place to see, this neighborhood, like the rest of the city, is not going to stay quiet for much longer."
WHERE TO STAY
Hotel Palacio Astoreca, in Cerro Alegre, is an upscale 23-room boutique hotel built in an early-20th-century mansion. Art by European and Chilean artists hangs throughout. Rooms start at $230 nightly, including breakfast. (56-32) 327-7700; hotelpalacioastoreca.com.
Hotel Manoir Atkinson, a more affordable option in the heart of Cerro Alegre, is a seven-room hotel with cozy and bright rooms, affable service and stunning views. Rates start at a $100 nightly, including breakfast. (56-32) 327-5425; hotelatkinson.cl
WHERE TO DINE
Restaurante Alegre, in the Hotel Palacio Astoreca, is a chic spot where the Spanish chef Sergio Barroso reinterprets classic Chilean cuisine. An 11-course tasting dinner costs about 37,000 pesos, or $76 at 185 pesos to the dollar, without wine. (56-32) 327-7700; hotelpalacioastoreca.com.
El Rincón de Pancho, in the central market in El Plan, is a seafood spot with hearty portions of traditional dishes like fried whole reineta, a fish, and crab ceviche. A meal for two is about 9,700 pesos. (56-32) 222-8531.
Espiritu Santo serves Chilean cuisine like duck with lentils and roasted vegetables, which is the highlight of the menu at this lively spot. A meal for two with a glass of Chilean wine is about $50. (56-32) 327-0443; hosteriaespiritusanto.cl
WHAT TO DO
To arrange art, history and other cultural walking and driving tours in the city, contact the Santiago-based Santiago Adventures, (802) 904-6798; santiagoadventures.com.travel
This article originally appeared in The New York Times.