Tom Murphy is a dreamer. A big one. Always has been. Proud of it.

He came of age in the 1960s, when John and Robert Kennedy ushered in "Camelot'' and encouraged young people to think big, dream big. Don't just look at things as they are and ask why, they said, but look at things as they could be and ask why not.

The Peace Corps was created and young people focused on what they could do for their country. Murphy, the son of a South Side steelworker, bought into the idea, joining the Peace Corps and going to South America for several years to help downtrodden people.

When he got back to Pittsburgh in the early 1970s, he threw himself into trying to remake one of the toughest sections of the city, the North Side. After several years as a community leader, he got himself elected to the state Legislature, where he often bucked the power structure and created some powerful enemies.

Then in 1989 he ran a surprisingly strong race for mayor, coming in second out of five candidates in a primary, losing to then-Mayor Sophie Masloff.

It seemed liked nothing could stop the optimistic Murphy, who trounced then-City Council President Jack Wagner in the 1993 mayoral primary on his way to winning the first of three mayoral elections in November 1993.

When he became the city's chief executive in January 1994, big-thinker Murphy continued to exude optimism. He looked at the decaying Downtown area around Fifth and Forbes avenues and asked why it couldn't be turned around. He looked at other bedraggled sections -- the North Shore, the old South Side mill site where his father had worked, Herrs Island, East Liberty, the slag heap known as Nine Mile Run -- and said we have to do better.

Here is a wildly optimistic assessment on the city's Web site about Murphy's performance:

By 1994, "The city was desperate for a leader who would direct a physical and psychological turnaround. After two terms in office, the Pittsburgh that Tom Murphy inherited is a dim memory. Replacing it today is a high-energy, cosmopolitan city that glows with optimism about its future.''

Oh really?

The stunning news that Lazarus/Macy's will close its Downtown department store puts an indelible stain on one of Murphy's greatest triumphs of the late 1990s, when he demolished half a city block of old buildings to clear a site for a spanking new store in the Federated chain.

Word of the Lazarus shutdown also follows by a few months the announcement that the Downtown Lord & Taylor store will close. It also comes just three years after the collapse of Murphy's grand $500 million plan to totally remake the rundown Fifth and Forbes retail area by knocking down 40 older buildings and bringing in high-end national names such as Nordstrom of Seattle, Crate & Barrel and Planet Hollywood to put some zip in the Downtown retail corridor.

In the end, none of them came. And the failure of Lazarus -- which opened with high hopes and hoopla in October 1998 -- makes a wreck of Murphy's ballyhooed plans to "grow'' the city by giving out generous tax exemptions and sweetheart leases to well-heeled companies that would risk locating in an urban core. That direction was contrary to the flow of most stores in the last four decades, which had been flocking to greener pastures in suburban malls.

Lazarus didn't even have to start paying back the money it got from the city until the Downtown store's annual sales topped $40 million a year. In actuality, it never did more than half of that.

By giving generous tax breaks to incoming developers, Murphy hoped that over the long run, he could eventually increase the city's tax base. But it hasn't happened, and his optimism has proven to be sadly unrealistic.

The announced closure of Lord & Taylor -- just a block up Fifth Avenue from Lazarus -- was especially bitter for the city's historic preservationists. They're still angry after watching in horror four years ago as the beautiful, ornate interior of the former Mellon Bank building was gutted to make way for four floors of retail. Lord & Taylor didn't have to pay back city loans either.

Despite Murphy's big dreams, neither Lazarus nor Lord & Taylor caught on with local shoppers, who, used to their routines, went to more familiar places such as Kaufmann's or Saks.

The failed Fifth & Forbes project in 1998-2000, where Murphy tried to get a Chicago developer to do a $500 million makeover of three blocks between Smithfield Street and Market Square, was another testament to Murphy's overly optimistic nature.

Smaller retailers who had been Pittsburgh fixtures refused to fade away quietly, and put up a staunch fight, aided by the preservationists, who were alarmed about the loss of 100-year-old buildings bounded by Fifth, Forbes, Wood and Market Square, and by a conservative law firm in Washington, D.C. that volunteered to sue the city, for free, to contest its power to condemn and take over privately owned buildings.

After Murphy removed the Chicago firm, he turned to a Philadelphia redeveloper, Kravco Co., to come up with a more modest plan to reinvigorate Fifth and Forbes. But after nothing much happened for a year, Kravco merged into Simon Property Co., the nation's largest owner of suburban malls, and has pulled out of the development, forcing the mayor to start from scratch again.

Murphy does, of course, have some accomplishments, including completion last year of the new $375 million convention center. But even that has been tempered by his inability to get funding for an important auxiliary structure -- a new $110 million, 500-room hotel that would be attached to it.

He had tried, without success, to get the state Legislature to approve a new 3 percent tax on car rentals in Allegheny County to raise funds to build the hotel. Many convention groups won't consider Pittsburgh unless a 1,000-room "headquarters hotel'' is nearby. The new hotel could combine with the 615-room Westin to form such a hotel.

Murphy's unfriendly relations with many state legislators has been a major drag on progress for the city's economic development. Ever optimistic, Murphy maintains his standing with the Legislature isn't really a hindrance, but many lawmakers, of both parties, see it differently.

Murphy's control over city finances also faces serious doubts. For 10 years, he kept the city budget balanced by using one-time revenues, such as selling the water department in 1996 or refinancing bond issues so payments would be smaller in the near term but larger in decades to come.

But the wolf finally arrived last year, when he failed to get state legislators to approve a higher occupation tax, a new tax on businesses or a new tax on poured drinks. So he finally had to ask the state to declare the city "financially distressed.''

A consultant hired by the state found the city has, in actuality, been running budget deficits for the last five years. Murphy couldn't reduce expenses by merging firefighters with paramedics because he'd made a no-layoff deal with firefighters in May 2001 in order to win the Democratic mayoral primary over challenger Bob O'Connor.

Murphy has some successes to brag about. Expensive new housing is popping up on the old slag heap between Squirrel Hill and Swisshelm Park. The old mill on the South Side, where his father toiled for more than 50 years, is now the site of a UPMC sports medicine complex, a Steelers practice field, an electrical workers headquarters and other office buildings, new housing and stores.

Murphy kept the Pirates in town by building them the $260 million PNC Park, where run-down buildings used to be on the North Side. But only $48 million for the project came from the Pirates, who get virtually every revenue stream from the building. His generous public financing plan was labeled as a give-away by many critics.

Not that the Steelers were about to leave or fold, but Murphy also put together a plan for their new stadium that was heavily dependent on public funds. The Steelers chipped in $123 million of the $280 million pricetag.

Many critics continue to complain that was too much public funding for a successful, profitable franchise like the Steelers. Some people wondered why the old Three Rivers Stadium wasn't just given to the Steelers and then they could have made renovations.

There's nothing wrong with being a dreamer. But foolish optimism can sometimes turn ugly -- just like the empty storefronts along Fifth and Forbes in the heart of the city.