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Kai Ryssdal: Allenton, Missouri sits quite literally at a bend in the road on Route 66, about 30 miles west of St. Louis. For most of its existence, it was little more than a stop on the Union Pacific Railroad. Now, it's an object lesson in good intentions gone bad, of developers going bankrupt and people who lived in town having to just go.

From St. Louis Public Radio, Adam Allington reports.

Adam Allington: What used to be the town of Allenton is tucked between Interstate 44 and the creeping Ozark foothills. At its peak, the town boasted about 70 homes, a small canning factory, a barber shop and a bank.

These days all that remains of the village are a few cracked streets, overgrown lots and piles of broken concrete.

Spencer Emht: Right now, we're just looking at the remains of what used to be my home here. It's big rubble and concrete and a deep hole.

Spencer Emht grew up in Allenton. In 1971, a Six Flags Amusement Park went up directly across the interstate. Two years later, the county declared Allenton blighted. Emht claims it was a blatant attempt to pressure folks into selling to a succession of would-be developers. And over time, many residents did sell, which took a toll on the remainder of the community.

Emht: At first, people kept their homes up, kept their yards up. I mean, Bud Brown lived right down there below me and he had one of the finest homes in town. He always kept it nice. And now there at the end, even his home was getting run down. You know, why are you going to invest money in something that may not be here tomorrow?

Allenton was annexed by nearby Eureka in 1985. Later, Eureka approached a consortium of investors to redevelop Allenton into a mix of housing and big-box stores. In 2005, city officials told the few remaining residents to sell or risk eviction under the city's eminent domain authority. However, just two years later, one of the primary partners filed for bankruptcy and the deal fell apart.

Scott Bullock is an attorney with the Institute for Justice, which tries property rights cases. He says eminent domain disasters like Allenton's are extremely common.

Scott Bullock: These redevelopment projects involve massive taxpayer subsidies, benefits given to private parties. And they're, quite frankly, not market-driven projects. So oftentimes they fail even in the best of times.

But people involved in the Allenton development say the town's fate was sealed long before its residents were forced to sell out.

Kevin Coffey: It met every definition of blight that exists.

Kevin Coffey is the mayor of Eureka.

Coffey: It had homes with insulation hanging out, there was trash and debris, it had raw sewage in the streets.

Coffey says Eureka couldn't pay for the new bridge, sewer and water needed to keep Allenton viable.

Coffey: What do you do when you can't afford to salvage a neighborhood? When you can't afford to put adequate roads? When you're a small community that can't afford to spend millions of dollars to enhance people's property?

Coffey says former residents were fairly compensated. He says no one could have predicted the unprecedented collapse of the housing market that ultimately killed the development. But staring into the hole that used to be his home, Spencer Emht says that news was small consolation on the day he was forced to move his mother out of the only home she'd ever known.

Emht: I tried to explain to her what was going on, and she just looked at me and said, "I'm just going to let you know right now," she goes. "I was born in this town and I'm going to die in this town." And the day I had to move her, I had to almost actually physically move her, because she did not want to go.

Mayor Coffey says Eureka still hopes realize its vision for Allenton one day. The bank that owns the property is in discussions with several retail chains; Coffey says he's been assured that it's just a matter of time before one of them bites.

In St. Louis, I'm Adam Allington for Marketplace.