The gatehouse is owned by the Stratford-based McCallum Enterprises, who also owns the dam, canal and hydroelectric facilities. Under their federal license, McCallum was required to maintain the gatehouse, which was probably a hassle. But McCallum's engineers and the DEP fisheries unit decided the gatehouse was just the place for the fish ladder, so maintenance requirement has been waived. Sheltonites were given no opportunity to comment on this idea and it appears the people designing the fish ladder were not even aware that people around here think it's important. So, there goes our landmark.
McCallum also has plans to fill in the canal and replace it with high-density housing, and has recently installed an obnoxious fence (see photo below) to close 1000 feet of riverfront that had been public under their federal license to operate the hydroelectric facility. Local residents and officials had no idea these actions were proposed and missed the comment periods because the legal public notices were made in the Waterbury Republican, Fairfield Citizen News, and New Haven Advocate, the first two of which are not local and the latter is a left-wing freebie for college students that many older people find offensive.
The property is regulated by the 5-member Federal Energy Regulatory Commission (FERC), which supercedes all local regulations. The City of Shelton and local residents were given no opportunity to provide input before FERC decided to allow the collapse of the gatehouse, the filling of the canal, and the closure of the canal to the public. However, the US Corps of Army Engineers has not approved a required wetlands permit so far, so the canal might yet be saved (the application was temporarily withdrawn).
Here's a video (be sure to click "watch in high quality" to the lower right of the video) of the Canal Street Riverfront Development zone and the canal and locks, along with the fence that was erected, and here's a page with more information about the canal. I put the video together since many residents are not familiar with that area and aren't quite sure where the locks are.
Update 11/20/2008: FERC responded to DEP and the City of Shelton by a strong reversal of their original approval to close the canal to the public. The Mayor had asked for US Representative Rosa DeLauro for assistance, and that seems to have paid off. Yay!