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The city has had a very close relationship with what is now County Donegal for centuries. The person traditionally seen as the "founder" of the original Derry is St. Columba (also known as Colm Cille or St. Columb), a holy man and royal prince from Tír Chonaill, the old name for almost all of modern County Donegal (of which the west bank of the Foyle was a part before 1600). Derry and the nearby city-town of Letterkenny form the major economic core of northwest Ireland.

Derry is characterised by its distinctively hilly topography. The River Foyle forms a deep valley as it flows through the city, making Derry a place of very steep streets and sudden, startling views. The original walled city of Londonderry lies on a hill on the west bank of the River Foyle. In the past, the river branched and enclosed this wooded hill as an island; over the centuries, however, the western branch of the river dried up and became a low-lying and boggy district that is now called the Bogside.

Today, modern Derry extends considerably north and west of the city walls and east of the river. The half of the city, west of the Foyle is known as the Cityside and the area east is called the Waterside. The Cityside and Waterside are connected by the Craigavon Bridge and Foyle Bridge. The district also extends into rural areas to the southeast of the city.

This much larger city, however, remains characterised by the often extremely steep hills that form much of its terrain on both sides of the river. A notable exception to this lies on the north-eastern edge of the city, on the shores of Lough Foyle, where large expanses of sea and mudflats were reclaimed in the middle of the nineteenth century. Today, these slob lands are protected from the sea by miles of sea walls and dikes. The area is an internationally important bird sanctuary.

In the last 15 years there has been a drive to increase inward investment in the city, more recently concentrating on digital industries. Currently the three largest private-sector employers are American firms. Economic successes have included call centres and a large investment by Seagate, which has operated a factory in the Springtown Industrial Estate since 1993. Seagate currently employs over 1,000 people in the Springtown premises, which produce more than half of the company's total requirement for hard drive read-write heads.

Significant multinational employers in the region include Firstsource of India, DuPont, INVISTA, Stream International, Seagate Technology, Perfecseal, NTL, Raytheon and Northbrook Technology of the United States, Arntz Belting and Invision Software of Germany, and Homeloan Management of the UK. Major local business employers include Desmonds, Northern Ireland's largest privately-owned company, manufacturing and sourcing garments, E&I Engineering, St. Brendan's Irish Cream Liqueur and McCambridge Duffy, one of the largest insolvency practices in the UK.

The city is the north west's major shopping district, housing two large shopping centres along with numerous shop packed streets serving much of the greater county, as well as Tyrone and Donegal. Retail developments in Letterkenny have, however, lessened cross-border traffic from north County Donegal.

The city centre has two main shopping centres; the Foyleside Shopping Centre which has 45 stores and 1430 parking spaces, and the Richmond Centre, which has 39 retail units. The Quayside Shopping Centre also serves the city-side and there is also Lisnagelvin Shopping Centre in the Waterside. These centres, as well as local-run businesses, feature numerous national and international stores. A retail park was recently built called Crescent Link Retail Park located in the Waterside and has many international chain stores, including Homebase, Curries, Carpet Right, PC World, Argos Extra, Toys R Us, Halfords, JJB, Pets at Home, MFI, Tesco Express, M&S Simply food and Land of Leather. In the short space that this site has been built, it has quickly grown to the second largest retail park in Northern Ireland (second only to Sprucefield in Lisburn). It changed hands for more than £92m in October 2007.

It is also home to the world's oldest independent department store; Austins. Established in 1830, Austins predates Jenners of Edinburgh by 5 years, Harrods of London by 15 years and Macys of New York by 25 years. The store's five-story Edwardian building is located in the city centre's Diamond.

There are many museums and sites of interest in and around the city, including the Foyle Valley Railway Centre, the Amelia Earhart Centre And Wildlife Sanctuary, the Apprentice Boys Memorial Hall, Ballyoan Cemetery, The Bogside, numerous murals by the Bogside Artists, Derry Craft Village, Free Derry Corner, O'Doherty Tower (now home to part of the Tower Museum), the Guildhall, the Harbour Museum, the Museum of Free Derry, Chapter House Museum, the Workhouse Museum, the Nerve Centre, St. Columb's Park and Leisure Centre, St Eugene's Cathedral, Creggan Country Park, The Millennium Forum and the Foyle and Craigavon bridges. Future projects include the Walled City Signature Project, which intends to ensure that the city's walls become a world class tourist experience.

The city has seen a large boost to its economy in the form of tourism over the last few years. Cheap flights offered by budget airlines have enticed many people to visit the city. Tourism mainly focuses around the pubs, mainly those of Waterloo Street. Other attractions include museums, a vibrant shopping centre and trips to the Giant's Causeway, which is approximately 50 miles (80 km) away.

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