Whew, where to start. I wish I had a couple hours to write this in more detail, but here goes. A lot of this is Scranton-centric, and heavily dependent on political progress. And, I know very little about the state of politics, budgets, etc. here, so not sure how realistic any of this is.
Also, note that I'm borrowing lots of ideas heard here and elsewhere. While I don't follow Jane Jacobs to a tee-- there's definitely a lot of her approach that I like.
So, two general areas this area should look at: the economy and urban planning, and of course they have a lot of overlap.
Economy:
1) Taxes, lower them as much as possible without hurting 2 and 3 and 4. Without knowing the state of the budget, and knowing it's probably tight after years of economic decline, I'm sure it's still doable given just how high taxes are now in Scranton. But, I'm sure it'd take hard choices about what has to give.
2) Keep public schools good. This is a great long-term investment, and it helps to attract new residents, often well-educated middle class folks who research this sort of thing.
3) Keep crime low. We've got a really low crime rate for a city this size.
4a) Transportation beyond the region. Easier access to NYC and Philly will help us. I don't think we'll become a bastion for commuters-- we're just too far. But, easier access for business people, visitors, and yes even some tourists will help commerce. I'd love to see a train, but better bus service may make more sense for the buck.
Urban planning-ish stuff:
People may not think of this area as "urban", but urban planning makes sense for small cities too. If we want this city to turn around, it needs to grow. Smarter growth will help keep and improve the character of the town, give us areas to be proud of, and give outsiders some reason to come here.
4b) Local transportation: Better mobility
Few roads go through from one area to another, and the few that do are in slow going. Sidewalks are in shambles. A lot can be done cheaply with timing of lights, ticketing of property owners with impassable sidewalks, and making 476 more open and accessible to inhabited parts of our towns.
Can't speak to COLTS, as I haven't taken it anywhere yet. But, I'm sure--as in most small city systems--it's inadequate, and also more expensive than seems justifiable. So, not sure what to do with it.
5) Develop the cores: pick a few key areas to focus on as pedestrian-friendly, open-late cores, probably Downtown, around the river, Main Ave., and maybe Cedar or Pittston Ave in Southside.
Work them in various concerted ways:
* mixed use zoning: maybe most people in this city of houses *won't* want to live in apartments right near shops, but some sure will. (students and recent grads often don't want to maintain a lawn, but do want easy access to shops, restaurants, bars.) And, retail in a bubble without nearby residents is more likely to fail.
* open up the mall to the Lackawanna Ave
* connect the cores: zoning W Lackawanna Ave up to West Side, making stretch to southside more walkable/pleasant (right now these are both big barriers in a Jacobs-ian sense.) Don't do things like putting in an office park on Linden Street-- that's also a barrier.
* preserve the streetscape (more zoning to prevent strip-mall-ification), see Old Forge to see how car-oriented design can kill a town
* tie other things into the core: move farmers' market to somewhere downtown but still with plenty of parking. (that big parking lot next to the mall) same with other festivals, etc.
* get the baseball stadium downtown. i'm usually opposed to municipalities blowing vast sums of money on new stadiums. but, seems like a modest expenditure here might go a long way.
6) Avoid mega-projects. Better to change zoning and taxes in order to let things spring up organically over time. Huge multi-block projects are usually more disruptful to a neighborhood than helpful, and 20 years on you end up with another costly mega-project to undo it. And they're costly and suck up so much of government's time, often for the pure vanity of leaving one person's "mark" on a city.
7) Rehabilitating old houses. There are so many amazing ~100 year old houses here with amazing architectural detail. Designate historic zones, try to get state preservationist funding (if any exists), give tax breaks, or at least help foster pride in some of these neighborhoods with these gems.
Apologies, it's broad and not so detailed, but at least gives an outline for what one new resident thinks may help. (And it'd probably be very similar stuff for most small American cities.)
And, I actually think this town is making decent progress on some of these fronts.
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I still don't understand how a town so convenient to I-81, I-476, the now-dubbed "315 Strip", Wilkes-Barre, Scranton, and Susquehanna River (not to mention all of the hot Italian guys, but I digress! LOL!) can have so little going for it. 
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