At the center of the city district, there is a clock tower. Every midnight it goes haywire and the moon turns the color of blood.
Within the Clockwork on the uppermost level of the clock tower, the reason for the curse lives. The formidable will of the local Baron, who cannot accept the loss of his Barony, whose force of will alone binds the two dimensions together, and who denies the spirits their eternal rest.
He has a lover - the Half Demon Redhead known as Branch Woman; a witch that lives eternally in the second story of a local townhouse. She is not a ghost, and she can only be with the Baron on a full moon, when he materializes. The rest of the time she spends in her apartment, trying to find a way to bring the Ghosts back from their undeath.
Oh, and during the Blood Moon the final hour of the City is replayed, and hostile ghost slayers come riding in, attacking everyone, including the PCs.