The hoopla in this city's historic Inner Harbor on Wednesday might lead an unsuspecting visitor to conclude that Baltimore is celebrating the Fourth of July, the discovery of America, the resurgence of the Colts and a visit from the pope -- all at once.

It will start with a 57-ship flotilla carrying city fathers, proceed with church bells, fireworks and concerts and finally conclude in five days after taking in July 4 and a Maritime Heritage Festival.

The center of the celebration is the opening of Harborplace, a $20 million marketplace along Baltimore's popular Inner Harbor, in the heart of retail-starved downtown.

For a city that spent most of the 20th century as a national symbol of decay, the two festive, green-roofed pavilions on the water's edge -- a glass-enclosed spread of shops, restaurants, cafes and food stalls developed by the Rouse Company of Columbia and modeled after Rouse's Faneuil Hall marketplace -- represent more than just a shopping center.

Boosters and officials of this port city insist that Harborplace is nothing short of the catalyst to Baltimore renaissance.

"This puts us over the top," said Martin Millspaugh, head of the quasipublic group that has managed Baltimore's downtown redevelopment for 15 years. "This is the missing ingredient that makes it all work as one. Instead of a series of attractions, we'll have one massive attraction: the shoreline."

In addition, Rouse's multimillion-dollar investment serves notice to doubters that a major, private developer -- not just the drumbeating believers in and around City Hall -- takes Baltimore's core city renaissance seriously.

This is important largely because there is so far still to go. Even though Baltimore often is portrayed as something of an urban Cinderella, its enduring levels of poverty, unemployment and housing problems place it among America's more "distressed" cities, according to a yardstick developed by the U.S. Department of Housing and Urban Development.

Against that backdrop, though, the degree to which the city has revived -- the swath of new downtown office towers, the restoration of several intown neighborhoods and the born-again harbor -- make Baltimore a significant case study at a time when federal policymakers are shifting their focus from the suburbs back to the inner cities.

Twenty years ago, Baltimore was a city in decline. From a vibrant birth in the 18th century as a shipping and commercial center, it has slipped into stagnation. Like much of urban America, the city lost most of its middleclass population to the suburbs. Its dingy row houses and faltering downtown became the butt of jokes that made Philadelphia sound desirable, and it contracted a chronic inferiority complex.

When Baltimore embarked on its urban renewal drive in the early 1960s, its leaders made a calculated decision that to draw people back downtown, they would have to lift the city's self-image along with its economy. They looked to the harbor on both counts -- for its development potential and also as a unifying symbol for city dwellers, who tended to identify more with their fiercely independent neighborhoods and ethnic communities than with the city at large.

In the early 1960s, the city came up with the game plan that has since guided all of its development. It called for heavy use of public funds as seed money for private investment and relied on an unusually centralized city government in which all neighborhood and economic development functions were merged into one department.

The first focal point was Charles Center, a 33-acre area of downtown where the city used $35 million in U.S. and local funds to acquire, clear and landscape depressed property. A group of business leaders then sought put developers, who have since built 14 major projects including office towners, the Mechanic Theater, parking garages, banks and a Hilton hotel.

The new buildings gleam like a transplanted silver of a Sunbelt city, weaving through Baltimore's old 19th Century skyline.

The next focus was the Inner Harbor, an eyesore lined by rotting warehouses and piers just a few blocks south of Charles Center. The harbor had been virtually abandoned after World War II because its narrow mouth could not accommodate the new, larger vessels.

With federal funds, the city cleared away the dilapidated structures and turned the U-shaped harbor into a grassy mall, eventually adding a wide, brick promenade-style walkway. Gradually, it began to catch on. There were harborside symphony concerts, ethnic festivals, kiteflying parties, sailboat rentals, the docking of the Tall Ships in 1976, attended by more and more Baltimoreans, including suburbanites.

"It became every Baltimorean's second neighborhood," said Betty Hyatt, of southeast Baltimore, president of one of the city's largest neighborhood organizations.

Because of its centralized housing and development department, then headed by Robert Embry, who went on to become asistant secretary of HUD, the city was able to shape the character of the inner harbor.

"We'd put in this tremendous infrastructure," Embry said, referring to the landscaping and new buildings. "But it was sort of a barren space with no ongoing magnet for people."

He and city leaders looked to Rouse's Faneuil Hall as a model for filling the void, and began negotiating with the developer. Similarly, Embry recalled, he came up with an idea for an aquarium on the harborfront, took it to Mayor William Donald Schaefer.

"He said, 'Great,' and we went ahead," Embry said. A bond issue for the aquarium was approved in a city-wide election and it now is under construction near Harborplace.

Other new harborfront developments include the 28-story World Trade Center designed by architect I. M. Pei, a science center including a museum and planetarium, a 40-story home office of the United States Fidelity and Guaranty Company, and a 500-room Hyatt Regency Hotel, which is still under construction across the street from Harborplace.

City and Rouse Company officials are banking on the combined attractions of the harbor to draw tourists and conventioneers to the city. Other hotel interests apparently expect it to do so; Millspaugh said five chains have expressed interest in building Baltimore hotels since the Hyatt broke ground. Already, there is serious concern about where all the visitors will park.

Baltimore's development strategy, with Harborplace as its symbolic climax, has not met with uniform support.

There are many who glower at the fuss over Harborplace. The neighborhoods, the crab houses, the scattered ethnic restaurants, the blue collar personality of the city -- that, they say, is the "real Baltimore."

Opponents of Harborplace succeeded in getting the city to hold a referendum on the project in 1978, but the voters gave it the go-ahead. Nevertheless, many Baltimoreans still contend that the ballot was confusing and voters did not know what they were approving.

"Harborplace is a little out of the average worker's range," said Dave Kramer, housing director of Communities Organized to Improve Life, a coalition of low- and moderate-income neighborhood groups. "The people will go there, to the festivals. But it's not like a park, a neighborhood bar, the kinds of things people are used to."

There is also some opposition to the heavy use of federal funds -- particularly HUD's Urban Development Action Grants -- to aid large commercial developers in the Inner Harbor. Harborplace was financed totally with private funds, but the Hyatt Regency going up across the street was infused with a $10 million UDAG loan, secured by the city.

That loan amounted to a one-third of all the UDAG funds received by the city since the inception of that program, which is designed to catalyze private development in high-risk inner city areas that investors would otherwise avoid.

City and federal officials squarely defend such approaches. In Baltimore's case, Embry said, the city desperately needed another major downtown hotel; Rouse had vowed he would not build Harborplace unless the hotel came to pass.

"What alternative investments do the critics have in mind?" Embry asked. "The only firms capable of building a hotel are people with money. Hyatt Regency doesn't go into a risky proposition just because they're rich. That sort of criticism reflects a misunderstanding that people have about how the world works."

To the critics who speak of neighborhood neglect, city officials note that they have spent at least as much money on innovative neighborhood housing programs as they have on the glistening downtown developments.

The embodiment of Baltimore's newborn self-confidence is Mayor Schaefer himself, a bachelor who lives with his mother, loves to eat crabcakes and is said to have made the city his life.

He is the proponent of such phrases as "Baltimore is more than you think" and "Baltimore, treasure of the Chesapeake," and is prominently featured in an ad for a local TV station literally singing the city's virtues.

Schaefer is so proud of Harborplace that, according to Rouse Company officials, he had to wipe the tears from his eyes when he recently was shown a slide presentation of the project.

Schaefer is not alone. Almost all of Baltimore seems to have caught Harbor fever. It is symbolized by a sparkling poster of downtown and the inner harbor -- not as they are, but as they are envisioned if all the hoped-for commercial, retail and residential dreams come true. The poster is everywhere -- in real estate offices, in City Hall, in restaurants. The Maryland National Banccorp. used a scaled down version of it as the cover for its latest annual report.

One block east of the festive new harborfront stands a simple, pale green, corrugated metal structure reminiscent of the Baltimore harbor of old. It is Connolly's Seafood Restaurant, home of some of the most renowned crab cakes, oysters and seafood in the region, but slated to be torn down as part of the Inner Harbor redevelopment.

Sterling Connolly, son of the restaurant's founder, said he sees nothing tragic in that transistion. "We can't always live in the dark ages," he said, as he sipped coffee amid a crowd of lunchtime customers devouring his famous fare. "This is all in the vein of progress." He, too, has caught the fever.

On the wall behind where Connolly sat is a faded bas relief of the old Baltimore harbor, the way it looked when the restaurant first opened as a fish stand. Next to it hangs the ubiquitous poster with the message: "The Inner Harbor: New Magic for Old Baltimore."