WATERVILLE, Maine — Colby College is in an especially good place these days.

Applications to the liberal arts college are up 170 percent since 2014. An ambitious fund-raising campaign has pulled in more than $500 million over the past three years. And construction is underway on a massive campus athletic complex with an Olympic-size pool, an indoor competition center and an ice arena.

Unlike so many small colleges, “we’re doing exceptionally well,” said David A. Greene, Colby’s president.

But from its perch on a serene hilltop in Waterville, a blue-collar community of roughly 16,000 about an hour outside Portland, Colby is seeking to lift the city’s fortunes as well. Waterville, on a bank of the Kennebec River, has struggled to regain its footing since several mills shut down in the 1990s and early 2000s. Colby is aiming to supercharge an economic revival by remaking the hollowed-out downtown.

Colby is joining a number of smaller colleges that are taking a role in revitalizing flagging downtowns. If colleges are marketing distinctive academic programs and high-quality campus amenities to compete for increasingly discerning students, so, too, are they trying to leverage off-campus assets.