It took me a little while to find this old mill site in Gay City State Park, but after walking along a number of trails, and consulting a couple of maps, I was able to find all that's left of the mill built here in the late 1700's to early 1800's. The religious sect who settled this area built a mill drawing power from the Blackledge River. During the war of 1812 the woolen mill fell on economic hard times due to numerous blockades. After the mill was revived, it burned to the ground in 1830, further leading to the decline of what little prosperity there was in Gay City.
A paper mill built here helped to revive the small community somewhat up until the time of the Civil War. Gay City lost a number of their younger men in the war, and shortly there after, that mill also burned which ultimately lead to the demise of Gay City. People left here for jobs in the nearby big cities and the homes here were abandoned and left to the elements.
In 1943, one of the last descendants of the people who lived here sold the land to the state of Connecticut with the stipulation that it be called "Gay City". It became a a state park one year later.
Sources: http://www.damnedct.com/gay-city-hebron/
http://en.wikipedia.org/wiki/Gay_City_State_Park
http://www.ct.gov/deep/cwp/view.asp?a=2716&q=325202