Designed by prestigious architects using the best materials, the Buffalo State Asylum was, when it opened in 1880, a mark of the city’s commercial stature and progressive attitudes. But times changed and the sandstone colossus was abandoned in the 1970s. Now an ambitious plan will restore and transform the site, renamed the Richardson Olmsted Complex after the lead architects, into an 88-room hotel, the Buffalo Architecture Centre and a conference space.

When it opens in 2016, the complex will again be a symbol of progress. Executive director Monica Pellegrino Faix says: “Our reuse weaves together the past and the present: just as with Buffalo’s renewal, we are redeveloping incrementally and sensitively.”

The Richardson Olmsted Complex, in a former asylum and one of Buffalo’s iconic buildings. Photograph: Joseph M. Cascio

Buffalo, on the Canadian border in the north of New York state, was the US’s eighth-largest city in 1900, but became a rust-belt wreck as industry declined. Billions are now being invested in hi-tech industries and waterfront parks. College grads and artists are drawn by cheap housing and a burgeoning cultural scene, and developers are respectfully repurposing the city’s rich architectural heritage.

Buffalo’s late-19th- and early-20th-century buildings are a masterclass in architectural history. The architecture of celebrated Frank Lloyd Wright lives on in several of the city’s buildings, including the restored Martin House Complex. And at the Pierce-Arrow Museum, an unrealised design by Wright for a whimsical petrol station was built last summer.

The Hotel@The Lafayette

In downtown Buffalo, the Hotel@The Lafayette kickstarted the boutique trend in 2012 by revamping a 1904 hotel designed by America’s first female architect, Louise Blanchard Bethune. Nearby, the 67-room Curtiss Hotel will open this summer in a historic terracotta office block.

Restaurateurs are also taking advantage of the historic buildings. Oshun is a seafood and oyster bar in the art deco former Waldorf Astoria. And in the Horsefeathers Building, a former furniture warehouse, Martin Cooks has built a loyal following for its brunch and tasting menus. Buffalo Proper, which has been a big hit since it opened in a beautiful old building last August, serves tweaked comfort food and cocktails.

Buffalo Proper for cocktails and comfort food.

Sharing a former engine factory, Resurgence Brewing and the Body of Trade & Commerce Gallery have enlivened an industrial stretch of Niagara Street. Gallery director Anna Kaplan says: “Gorgeous living and studio spaces, paired with affordable living costs, have led to a truly vibrant, creative community.”

On 18 July, the City of Night art festival will see industrial grain silos hosting exhibitions, performances and an art fair. But the arts scene buzzes all year round: Helium Comedy Club and Buffalo Ironworks in the Cobblestone district attract rising comedians and bands, and the Babeville music and arts complex, created by local musician Ani DiFranco, is a former Methodist church now home to a record label, an intimate basement club and a music venue that has hosted such luminaries as St Vincent and Modest Mouse. In Buffalo, the future’s never far from the past.