(Disclaimer: Contents my be edited, expanded, or redacted without notice. This is largely the brainstorming phase right now.)
A Rough Sequence of Events
Thresh originally was part of the old East Bloc, a city that had been fought over by various ethnic groups for centuries. None had a real claim on it.
After the Bloc fell to the cultural and economic might of the Capitalist ethos, the city sprung up as a crossroads between the newly-liberated eastern republics.
Heavy industrialization of the city followed, with the old apartment blocks, factories, and farms being buried under new development.
The Great Collapse occurred as the planet ran out of the resources required for the global economic engine: Conflict over oil and the resulting nuclear wars resulted in mass collapse of civilization around the globe. Due to its location, Thresh was one of the few industrialized places left standing.
In the post-petroleum world Thresh becomes perhaps the last great metropolis, not least because of SureCorp's innovations in generating power from nuclear waste.
Divide between rich and poor grew to dire levels due to the general shortage of resources and influx of survivors from the rest of the devastated world, The poor masses are increasingly consigned to quarters of the city barely fit for human habitation.
Final straw comes with city's plan to demolish the old quarter of the city, 'Sector Zero', and replace it with gilded high rises completely out of reach of the quarter's poor inhabitants. A resistance group that would come to be known as The Red Hand arises to stop the demolition and assert the people's rights.
The moneyed interests in government bulldozed over the fledgling rebels without mercy, and the movement morphs into outright rebellion against the government. What comes later to be known as the Red Hand Uprising quickly escalates, leading to a bitter yearlong struggle that leaves no corner of Thresh untouched.
President Mikhail Borodin is assassinated by rebel leader Aleksandr Nazarenko. SureCorp head Leonid Volkov assumes control of the city.
Shortly thereafter came the disaster which ended the uprising for good. A nuclear explosion in the heart of Sector Zero levels the areas held by the Red Hands, and makes the remainder of the district uninhabitable.
A giant containment sarcophagus is erected over the district, entombing 'Ground Zero' forever. There are still tunnels going under the barrier, however, where the greedy and desperate can try making a living in the bones of the old city.