BACK IN 1997, THE MEMBERS of the Canadian­Hemphill County Economic Development Council (EDC) took a look at the numbers and cringed. The Panhandle town of Canadian had not known prosperity since the oil-and-gas boom of 1975­1985. There were no jobs, and like most small towns in the area, Canadian was shrinking. There had been about 4,500 people living there in 1985, but the EDC estimated that half of them had left. “So I started searching frantically for something that would attract more people to Canadian,” recalls Remelle Farrar, who was then an insurance agent and EDC volunteer, “and as I looked around to see what had worked in the past and in other places, I kept running across this term, ‘ecotourism.'” So Farrar proposed a two-pronged program that would not only draw visitors to enjoy the abundant plant and animal life in the Canadian River Valley but also rebuild a largely boarded-up downtown to give tourists someplace to eat, sleep, and shop.

Canadian may be the first small Texas town to decide to base its economy on ecotourism, and in the seven years since it did, the population decline has stopped and the count has stabilized at its historical postwar norm of around 2,300 people, according to Farrar, 48, now the director of the EDC and the Canadian­Hemphill County Community Development Partnership. Downtown, fourteen historic buildings have been restored, some of them housing the eleven new businesses and 180 new jobs that have been created. Retail-sales-tax revenues have jumped more than 25 percent, and in the past year alone, hotel-motel-tax revenues—considered the strongest measure of tourism income—have doubled. And the locals, from small shopkeepers to big ranchers, are talking up the lesser prairie chickens that mate out along the Canadian River breaks in March and April and the delicious scampi at Our Fillin’ Station.

Originally a railroad settlement called Hogtown that was located five miles to the east and was known as a “desperado city,” Canadian was platted and named the county seat when Hemphill County was organized, in 1887. The railroad quickly made it the commercial center for the surrounding ranches. Then, in 1953, the Santa Fe Railroad relocated 150 families from Canadian to Amarillo. After the Amarillo Daily News crowed that Canadian was about to become a ghost town, its mayor, Malouf “Oofie” Abraham, a realtor from one of the town’s oldest families and later a state representative, raised funds to install 61 mercury-vapor lamps downtown. “If we’re going to be a ghost town, we’ll be the best damn lit ghost town in the United States,” he reportedly huffed. That project, along with his other civic improvements, allowed the town to hold its own despite the loss of the railroad families and the droughts that nearly crippled the farming and cattle businesses. During the decade of the oil-and-gas boom, the population doubled and bank deposits tripled. By the early eighties, just before the boom went bust, Hemphill County was one of the largest producers of natural gas in the nation and one of the state’s wealthiest counties per capita.

So the subsequent collapse was particularly bitter, but the city-county government still had assets and traditions to build on. The boom had created neighborhoods of modern housing and financed a YMCA, a hospital, and a top-flight school system. The Fourth of July Rodeo, launched in 1888, had grown into the centerpiece of a four-day civic extravaganza. The Canadian Record remained an award-winning small-town weekly, and the arts community continued to grow. And, especially by Panhandle standards, Canadian was still a pretty town of wide, hilly streets and brick or stone prairie-style houses with tile roofs, built shortly after the turn of the century as townhomes for ranchers, many of whose descendants live in them today.

And then there was the surrounding countryside. Located below the Llano Estacado Caprock, the Canadian River Valley’s rolling plains are less snowy and icy in the winter, and less dry in the summer, than the High Plains seven miles south. Nature is varied and colorful. Out Formby Road, which leads northeast of town to the Gene Howe Wildlife Management Area and the Black Kettle National Grassland, the river bottoms nurture cottonwood, persimmon, hackberry, western soapberry, mulberry, and marshmallow, as well as eye-popping fields of sunflowers and wildflowers. It’s one of the few places in the state where colors change dramatically in the autumn, and the two-day Fall Foliage Festival, established in 1954, draws 10,000 visitors every October.

All of this gave the community enough to work with, and Farrar’s group set out to get local, state, and federal funding for their plan. Since there was much more private land than public land, they would have to win over ranchers whose experiences with environmentalists had left them suspicious of terms like “ecotourism.”

“We don’t even call it that here,” says Jim Bill Anderson, laughing. “We call it ‘nature tourism.'” The 53-year-old rancher had already been contemplating nature tourism as a way to help make ends meet when Farrar began promoting the idea. Today his wife, Deborah, leads kayakers down the river through their land, and he takes out groups—serious birders, like nature photographers and Audubon clubbers from Houston, who pay $50 each—to view lesser prairie chickens in the spring and rough-legged hawks in the winter. And because the hunting and birding seasons barely overlap, he can still sell hunting leases, with bobwhite quail lately surpassing deer as the most popular quarry.

If Anderson was a natural for Farrar’s approach, Mike Arrington, whose ranch southwest of town has been in the family for more than a century, was a tougher sell. Running a cow-calf operation, he was worried about how he and his wife, Debbie, would be able to hold on to the property long enough to turn it over to their three sons. But he was incredulous when ecotourism advocates urged him to start protecting prairie dogs, that underground-tunnel-dwelling scourge of ranchers, so city folk could view them on weekends. “You show me someone who will pay me to look at prairie dogs,” he snorted at an early meeting organized by Farrar, “and I’ll stop shootin’ ’em.” She did and he did; the 46-year-old Arrington now protects three prairie dog towns and hopes his forefathers aren’t rolling in their graves too much. He was the first local rancher to welcome paying guests, taking out a bank loan in 2000 to convert the ranch’s 1918 main house into a bed-and-breakfast. He has mowed about six miles of hiking trails down near the Washita River, and visitors can also enjoy swimming, birding, and animal-watching (from deer to the occasional bobcat).

All told, close to half the area ranchers have embraced this brand of tourism. Meanwhile, local Texas Parks and Wildlife technician Bob Rogers, 46, has created similar diversions on state land, raising money mostly through private donors. The Gene Howe Wildlife Management Area marshlands had been overrun by nonnative Russian olive trees that Parks and Wildlife ill-advisedly planted in the fifties, and much of the other vegetation and wildlife were disappearing. After clearing the trees, Rogers’s crews created interpretive nature trails for birders and hikers and—to encourage the return of mammals, waterfowl, and migratory birds—fishing ponds that support native brush and trees. In the most unorthodox move of all, Rogers created a new prairie dog town in the sand hills of the wildlife management area’s North Pasture. The rattlesnakes and head-bobbing burrowing owls that traditionally share holes with the “dogs” have also moved in, along with ground squirrels and jackrabbits, and the pasture has become a favorite destination for hikers.

But it’s the lesser prairie chickens that mate nearby—and are found only in parts of the Texas Panhandle and parts of Oklahoma, Kansas, New Mexico, and Colorado—that are Canadian’s main attraction. They’re almost impossible to spot most of the year, but in early spring the males gather at the open breeding ground (called a lek) and compete for female attention by jumping up and down, puffing out their chests, and making a warbling, cawing sound. The reddish-orange air sacs on each side of their necks puff up as they display, and the hopping grows more frantic—Rogers likens the scene to watching popcorn pop—until the females pick mates.

While the great outdoors was being prepped, downtown Canadian was getting a major face-lift. The Main Street program to renovate buildings and promote new businesses was launched in 1998 with $10,000. Since then, the EDC has spent about $200,000 of public funds, an investment that has in turn attracted $11.5 million in private monies and state and federal grants. The town’s first major redo was financed and executed by Salem Abraham, the 38-year-old grandson of former mayor Oofie, who earned a degree in finance from Notre Dame in 1987. Unlike most young people who leave small towns today, he immediately returned home to work for his grandfather’s oil-and-gas company in the three-story Moody Building on Main Street, the tallest building in town. But the bust had convinced him that that industry would never provide security, so he began trading commodities futures in Chicago and New York on the side, a pursuit made possible by the rise of the Internet. Because it’s never easy to find qualified employees willing to move to a small town in the middle of nowhere, he decided that, among other things, Canadian needed more entertainment.

Actually, it was the idea of Abraham’s wife, Ruth Ann, to buy the ramshackle 1909 Palace Theatre, where they had dated, so Canadians wouldn’t have to drive nearly an hour to Pampa to see a movie. Abraham bought it from Rob Talley in 1997 and began renovations. When it reopened the next year, he’d spent a million bucks to recreate a forties movie house that is THX certified and has Dolby Digital Surround Sound. Leased back to Talley, the Palace shows first-run movies and draws more than half its business from out of town.

The theater’s splash is still causing ripples. The downtown vacancy rate, which was 60 percent when it reopened, is now below 10 percent. Abraham has bought six buildings on the south side of the two busiest blocks of Main Street. Most with facades that have been scraped down from seventies-era stucco to the original wood, brick, or stone, they range from the old-timey City Drug Soda Fountain, with its marble countertop, to the Store, an upscale emporium selling jewelry and Mexican imports. With financial help from the EDC, other local merchants have filled out the street with offices, gift shops, and art galleries.

Main Street is also where you’ll find Kim’s Cottage, a most unusual bed-and-breakfast. One of thirteen new B&B’s that have joined the twelve-year-old Emerald House since 2000, it consists of three wood-frame cottages—with tin roofs, antique furniture, and whirlpool baths—inside a single storefront. And there are other attractive lodging options. In 1995 local banker John W. Baker and contractor Steve Johnson purchased the abandoned Major Courts motel downtown, upgraded its ten courtyard rooms, and renamed it the Canadian Courts; six years later, as part of the tourism drive, they began fixing up the adjacent two-story Vic Mon Hotel. They merged the two, and the expanded Canadian Courts now features 49 rooms and a banquet room; a restaurant is scheduled to open in September, and a private club is planned.

In 2001 Abraham redid the ground floor of the Moody Building with twelve-foot-tall windows and turned it over to Milton Cooke and his wife, Julie, who opened the Cattle Exchange, the first classy (but casual) restaurant in town. Cooking with mesquite, they specialize in grilled steaks sold by thickness, as well as barbecue plates. A couple of months later, with help from the EDC, Tamra and Stuart Scroggins opened Our Fillin’ Station in an old gas station­car dealership that had been vacant for eleven years. They’re just the kind of people Farrar has been trying to lure to Canadian. Stuart graduated from high school there in 1978 and left for college, vowing never to return. He kept his promise until 2000, when he brought Tamra and their two kids back from California for the annual Fourth of July blowout and they couldn’t find a place to eat. The couple had been hoping to open an eatery of their own somewhere, so Canadian suddenly looked good. Their restaurant helps meet the local demand for meat and potatoes, but Tamra has also introduced the town to the likes of feta cheese, snow peas, and fish wraps.

By next year, the reinvention of Canadian will be largely complete. The visitors center will have opened and Main Street will have been returned to its original brick, the sidewalks widened and the power lines buried. The town’s goals are modest: Farrar hopes to attract enough newcomers to boost the population to about 3,500 “while retaining our Mayberry R.F.D. feel.” But questions remain. Much of last year’s jump in hotel-motel-tax revenues came from Santa Fe Railroad crews who filled rooms while working on tracks throughout the region, and nearby towns with no ambitious tourism programs reported windfalls similar to Canadian’s. Will hotel-motel-tax revenues drop now that those crews have started to leave? And will the birders return, once they’ve checked the lesser prairie chicken off their life list?

Whether the ecotourism gambit works in the long run or not, Canadian is a much different town today than it was just a few years ago. “This community has a boom-and-bust culture and has been threatened with extinction over and over again,” says Farrar. And now, for the first time in a couple of decades, optimism reigns once more.