In the 1990s, the Chester Housing Authority laid claim to a national reputation: one of the worst public housing agencies - if not the worst - in the country.

After decades of struggle, that image is getting rehabilitated, as reflected in the demolition of two dilapidated 15-story towers that for years stood at the entrance to the city's center.

The end of the Chester Towers - whose slow but steady destruction is visible to thousands of motorists who travel north every day on I-95 - marks the completion of CHA's overhaul. The remaining shells are scheduled to come down by next month.

That milestone would keep the agency on track to return to local control in late 2009 for the first time in 18 years, said Dennis Bellingtier, a regional director of HUD's Office of Public Housing.

The authority, and beleaguered Chester itself, are "on the verge of getting there," according to Keith Reeves, an associate professor of political science and public policy at Swarthmore College. He grew up in Chester and serves as a HUD evaluator for the project. "There is no question it has had enormous success over the last 10 to 12 years."

At the same time, "we have a bit more work to do," Reeves said, noting that residents who move into the new units need social-support services to sustain the progress.

The ambitious $80 million Chester Towers Revitalization Project, which includes 125 new apartments and a community arts center off Avenue of the States across from Deshong Park, is the final phase in the nearly $200 million makeover of the city's five large complexes.

In 1994, the agency was designated "severely distressed" based on its rating of 35 out of a possible 100 points - the lowest assessment in the nation, one official said.

Since then, it has rehabbed or rebuilt 429 rental units. It also won three of the highly competitive federal Hope VI revitalization grants to help fix an additional 615 units - nearly one-sixth of those designated for home ownership "to wean people off [public housing] forever," as Maria Zissimos, CHA general counsel, put it.

The 1970s-era, 300-unit Chester Towers for seniors and those on disability was never the city's worst property. Despite asbestos and major plumbing and heating deficiencies, they were almost fully occupied until recently.

Rehab of the towers, though, was judged to be too expensive.

Besides, the structures - the tallest in the city - "stuck out like a sore thumb," Zissimos said. "That's not how people are living anymore."

Rather than densely packed high-rises with tiny apartments, public housing across the country has moved to low-rise buildings that create pleasant streetscapes.

The CHA changes have cut the number of rental units nearly in half, to 944 - a point of contention among housing advocates.

Steven Fischer, CHA's executive director, said he endorses quality over quantity. "In a city with an overwhelming need for affordable housing, . . . some might argue that wasn't a good trade-off. But I think most people are happy with the quality of housing stock compared to before."

Community activist Barbara Gooby-Muhammad was one of the original plaintiffs behind a lawsuit that led to the 1991 decision to place the authority under federal receivership.

She said relocations required as the units were renovated had its kinks, and some residents still think CHA - and the private developers who manage some properties - don't pay attention to their concerns.

"I don't want to make this sound like it's a cakewalk," she said of the transformation under way. "It was not."

Still, residents are "getting happier," she said, as tenant councils form, for example.

The agency also has created its own police force and provided job training and other support services to foster self-sufficiency. And it is moving closer to signing a supermarket - a coup in a city with none - for its proposed shopping center on Highland Avenue, according to officials.

"We're coming out of the tunnel," said Robert C. Rosenberg, who as federal receiver handled daily operations from 1994 until 2005.

"Horrendous," he said of earlier conditions. "An awful lot of [the properties] were boarded up. You had rats running around. You had sewage seeping into the units. You had no heat, no hot water. . . . It was a disgrace."

How did it get that way? "Direct consequence of incompetence and corruption," Rosenberg said.

After U.S. District Court Judge Norma L. Shapiro's intervention, CHA made enough strides that it scored a 96 percent in 2003, and Rosenberg's post was later terminated. He has been retained as judicial administrator for development to ensure the completion of projects.

Now, the authority has a new board of commissioners - another step toward ending receivership. Occupancy is 100 percent with closed waiting lists, Fischer said. "That's your indication that the transformation has taken place," he said.

CHA's support of home ownership, retail and community centers, many argue, is helping to turn around beleaguered Chester itself.

"I believe we've been a real catalyst for change," Rosenberg said. "Before, we were like an anchor dragging down the city."

This last phase, said Mayor Wendell Butler, "fits in with the total city revitalization. It's going to look nice."

On a recent day, cranes chipped away at piles of rubble on the site.

"The tearing down of the towers is an end of an era," said Jonathan Whittington, vice president of the Residents Council for Matopos Hills, a CHA development. "Maybe it's a new life for everybody and everything."

He lived at Chester Towers from 2001 to 2004, enjoying spectacular sunrises from the eighth floor. "A lot of good memories there, don't forget," he said of friendships made in the lobby, a favorite gathering spot. "But I realize in order to have a new you must get rid of the old."

Besides the four-story residential buildings and arts center, the 3.3-acre complex will house office space for the authority and retail shops. In addition, the project includes the 82-unit Matopos Hills Senior Apartments, near the Commodore Barry Bridge and completed last summer; the 48 rental townhouses of Chatham Estates, and Logan Terrace, 24 townhouses across from Chatham that are selling for a subsidized price of about $105,000.

Recently, Flora Turner, 90, and her niece, Claudine Clark, 61, who both relocated to Matopos Hills Senior Apartments, agreed the towers had to go.

Clark, though, said she missed the easy access to public transportation and sense of community. When she passes the stark remnants, it saddens her. "I think, 'Look, that's my home.' "

Contact staff writer Lini S. Kadaba at 610-627-0352 or lkadaba@phillynews.com.