Can Camden's bus depot and subway stops be transformed from gritty way stations to gleaming magnets for new development?

The Delaware River Port Authority is betting $12 million that the answer is yes.

The DRPA is paying for a $3 million makeover of the Walter Rand Transportation Center in downtown Camden, which is the hub for NJ Transit's bus service in the region. That construction, which also will provide better links to the adjacent PATCO Broadway subway station and River Line light-rail stop, is to start late this year or early in 2011.

And $9 million - the last of New Jersey's share of the DRPA's controversial economic-development money - has been set aside for unspecified development in urban-transit hubs around the Broadway and City Hall subway stations.

The goal is to attract businesses to create two things now lacking in impoverished Camden - jobs and tax revenue, said Jeffrey Nash, the Camden County freeholder who is vice chairman of the DRPA and leader of the authority's New Jersey delegation.

The plan is to disburse the $9 million through the county's economic-development agency, the Camden County Improvement Authority. Freeholders created the agency in 1992 to provide tax-exempt financing for redevelopment projects, nonprofit organizations, and public facilities.

The improvement authority would establish a process by which developers could apply for funding, Nash said.

"This gives Camden a very significant step up to becoming again the vital municipality it once was and can again become," said John Matheussen, chief executive officer of the DRPA. "And transit is key to these kinds of developments."

No specific projects have been proposed, but they likely would be mixed-use developments - with retail, commercial, and residential spaces - and developments tied to Camden's biggest institutions, Cooper University Hospital and Rutgers University.

The developments around the Walter Rand Transportation Center and the Broadway and City Hall PATCO stations could be big enough "to fundamentally change what the area feels like," said David Foster, president of the Greater Camden Partnership. "They could change the experience of what it means to use those trains."

Commuters could disembark into a bustling new office building instead of an urban wasteland. That would allow PATCO to attract more riders and businesses to draw new customers, Foster said.

He said development could be in place around the City Hall station within two years and around the Broadway station in five years or less.

Under state legislation passed in 2007, developers get a large tax credit for making at least $75 million in new capital investments in an urban-transit hub and employing at least 250 full-time workers.

Urban-transit hubs are defined as areas within a half-mile of an NJ Transit, a PATCO, or a PATH commuter-rail station in any of nine cities, including Camden.

"When you think about the assets that Camden has, mass transit should be at the top of the list," Foster said, citing the bus, subway, and light-rail routes and the proposed light-rail extension to Gloucester County. "These are tremendous assets that aren't being fully leveraged . . . and we need to find ways to focus redevelopment subsidies in those areas."

The first visible results from the DRPA's new spending are likely to be the changes at the Walter Rand Transportation Center, at Martin Luther King Boulevard and Broadway. Those improvements are designed to reduce bus, pedestrian, and auto congestion and make passengers more comfortable as they wait for buses.

NJ Transit will build a new bus-loading area with canopies, lighting, closed-circuit cameras, a public-address system, and signs. The project also includes repaving and streetscape improvements on Broadway and in the adjacent plaza areas.

"Aesthetically, it will look better," NJ Transit chief engineer Les Eckrich said. He said the canopies would mimic the River Line's arched canopies. The project will include digital signs to tell passengers when buses are to arrive, and new signs and colored concrete walkways will direct passengers to the adjacent PATCO and River Line stations, he said.

Design work will be completed by summer, and construction will start late this year or early in 2011, Eckrich said. The $3 million project is scheduled for completion by mid-2012, he said.

About 10,000 passengers a day use the center, NJ Transit spokeswoman Penny Bassett Hackett said.

The DRPA is paying for the project from its capital budget, in reimbursement for earlier work at PATCO's Broadway station funded by NJ Transit, Matheussen said.

The $9 million for the urban-transit hub development is coming from the DRPA's economic-development money and represents the last of that controversial pot of money, Nash said.

The DRPA, which gets 87 percent of its money from tolls on the agency's four Delaware River bridges, has been criticized by commuters for spending about $386 million on economic-development projects such as Lincoln Financial Field, the Kimmel Center, the National Constitution Center, the Camden Riversharks' baseball stadium, a soccer stadium complex on the Chester waterfront, the National Museum of American Jewish History, and the President's House memorial near Independence Hall.

When the deeply indebted DRPA increased auto tolls by $1 on its bridges in 2008, its top executives promised angry motorists they would use the new revenue only for transportation-related expenses. But they noted that about $35 million remaining from previous borrowing could be used for development spending.

The $9 million is being drawn from that money.

Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.