BANGOR, Maine — City economic development director Rod McKay began his tenure in the early 1980s, not long after Bangor’s unsuccessful urban renewal initiative and a surge in commercial development away from the downtown.

One of the first things McKay did when he took over economic development in Bangor was to dust off some old photographs of the city’s vast riverfront acreage. The Penobscot River is tied strongly to Bangor’s history as the Lumber Capital of the World, but logs had not floated down the waterway in years.

Still, McKay and others saw tremendous potential in that almost forgotten area.

Fast forward 25 years and Bangor’s riverfront is thriving, and even greater things are on the horizon. Thanks to annual events such as the American Folk Festival, there is renewed interest both in preserving and developing the riverfront as a destination within the city.

As the city prepares to embark on the next phase of its redevelopment, McKay reflected on how far things have come and also how much work remains.

“It started out as a much smaller project,” he said in a recent interview. “And then the city kept acquiring property along the water. For years, there was all this acquisition and demolition.”

The thought was to tear down and then build up stronger, he said. Tearing down was easy, but the building up has been a slow process. In fact, most of the improvements to the area that borders the Penobscot from the Veterans Bridge to the Joshua Chamberlain Bridge have been to the infrastructure and are not easily visible.

That will largely be the case with the latest phase, too, although there also will be some obvious changes.

The latest $1.8 million project — funded mostly with various grants — will include a boat launch off Dutton Street for canoes and kayaks, framework for an outdoor amphitheater and a new parking area off Railroad Street. It will include installing electric and water infrastructure to support public events such as the Folk Festival and will make improvements to storm-water management in the environmentally sensitive area.

Bangor city councilors voted unanimously earlier this week to award the project to S.H. Bridges, a local firm that will work closely with the Massachusetts-based design company Shadley Associates.

“There was high interest in the project,” said Pam Shadley of Shadley Associates. “It’s going to be fun to watch it progress.”

Work is expected to begin next month and wrap up sometime before the Folk Festival in late August.

In the last few years, the area has seen numerous changes, including adding a pedestrian walkway that runs from behind the Sea Dog Restaurant toward Hollywood Slots. There are sidewalks and lampposts and plenty of green grass to entice pedestrians. More and more small cruise ships have been coming up the Penobscot to dock in Bangor, something city leaders hope will continue.

Future plans envision expanding that pathway for bicycle use, as well as preserving additional green space. Some plans include a seasonal ice-skating rink, picnic tables and benches and an outdoor amphitheater for concerts and other events.

As plans have plodded along, one of the crucial elements of redeveloping the riverfront has always been private development. In fact, in 2006, the city created a downtown development tax increment financing, or TIF, district specifically to help harness some tax money from any development and use it for improvements specific to the area.

So far, the only businesses paying into the downtown TIF are Hollywood Slots and a few others, but the city remains hopeful.

“I think it will be quite a few years before we see benefits from that,” Councilor Richard Stone said recently. “But we’ll take it as it comes.”

Indeed, there are some real challenges to developing along the riverfront. Just ask Mo Fer or John Sites. Both men tried to move forward with plans for a condominium complex overlooking the water. Both plans fell through.

Other development projects, including a $4.3 million mixed-use commercial building by local developer Larry Springer, have failed to get off the ground, although McKay said Springer remains interested. Another local businessman, Chris Hutchins, pledged to donate $3 million to the city to construct the outdoor amphitheater but later withdrew that commitment.

“Those are some challenging sites there no doubt,” McKay said. “We’ve tried to provide as much incentive as possible.

“I think the city is waiting for high-quality development that fits in with the aesthetics of the area. As things progress, there will be renewed interest.”

Stone said he’s not concerned that private development won’t come back.

“In some ways, those developers look pretty sharp when you consider the economy now,” he said. “People had been so used to throwing money at things. They are probably happy they didn’t get financing.”

Certainly the addition of Hollywood Slots at the far end of the riverfront area will help attract business. If the city is successful in building a new auditorium at Bass Park within the next few years, that could provide an economic spark as well, McKay said. Finally, the recent improvements to the area’s infrastructure could give potential developers one more reason to take another look at the riverfront.

Asked whether the redevelopment has taken too long, McKay, who is well into his third decade of hashing out a master plan, smiled.

“It’s gone pretty much at a pace of money available,” he said. “We never wanted to do something that was going to burden the taxpayers.”