Waterfell

Waterfell was once a shining metropolis, a symbol of the power of architecture. Now, it is nothing but an underwater grave. Yet before Director Kanth unleashed a tide of death upon the city, it was already in decline. 
When Waterfell was first built by Director Kanth, he made several important mistakes. First, he left maintenance shafts in the design that could (and did) have terrifying destructive power if broken. Second, he did not give the city the infrastructure for a stable food source, making it rely on imports from the other metropolises. Finally, he did not give the city enough power to account for future growth, constructing only a small system of waterwheels to provide energy to the whole metropolis. 
At first, people flocked to Waterfell. The novelty of living in an underground city was marvelous, and the views from behind the waterfall were stunning. However, people realized all too soon that Waterfell was not a nice place to live. Water vapor from the waterfall blew through the carved-out rooms regularly, soaking everything. The lower levels were remarkably claustrophobic, feeling like tunnels under the ground, but the upper levels were bitterly cold. 
While its tourism industry thrived, all the residents of Waterfell who had the means to do so quietly moved away in the next few years. Waterfell became a slum of sorts, populated by people who had nowhere left to go. 
As Director Kanth grew apathetic, Waterfell's condition worsened. Maintenance was all but halted by the order of the Director, and trash built up on all the levels. Rich tourists stopped coming, cutting the main flow of cash. Waterfell began to starve. 
Then, the Director opened Maintenance Shaft 1 and destroyed the city, along with most who lived in it. The lower caverns became a flooded and narrow maze inhabited by the dead, described as a nightmare by anyone who explored them after the calamity. There were some meager efforts to reconstruct the city and recover the bodies, but nobody really wanted to risk their lives and their sanity exploring the lower levels. 
Nowadays, Waterfell has become a place of terror. Occasional explorers report swimming skeletons and floating lights. Rumors of dark magic have spread. No one knows exactly what is happening in Waterfell, and no one wants to find out.