Harlem residents hotly debate who should lead them into a prosperous future: Billie Holiday and Duke Ellington, or Mickey Mouse and Starbucks

On the very spot where Billie Holiday once carved up hearts with her jagged voice, a quartet of black musicians in dapper suits eases through the ballad "For Heaven's Sake" before a midnight crowd at Harlem's Lenox Lounge. Ensconced in an upholstered booth and surrounded by zebra-patterned walls and silver-fin lighting fixtures, a visitor could be forgiven for expecting Lady Day to walk through the double doors of the Zebra Room, trailed by the scent of white gardenias. "That was her reserved booth over there," says owner Alvin Reed, pointing to a corner table in this club, which opened in 1942. "After she had a gig downtown, she would come up here to relax and sing a few."

Tall and slender, his beard starting to gray, Reed at age 61 remembers the days before Harlem became a global symbol of urban decay, when its artistic traditions bloomed and the sound of jazz bursting from corner bars was a balm for its chronic poverty. "When I bought this club, in 1988," he says, "I saw a Harlem that could come back."

More than a decade later, the Lenox Lounge has become a glorious example of what some are calling the Second Harlem Renaissance. Assisted by low-interest government loans, Reed, a local entrepreneur, already has spent $900,000 refurbishing one of the few original art-deco club interiors left in New York City. By doing so he hopes not only to make a profit but also to revive an idea that gained currency during the first renaissance of the 1920s and 1930s: that Harlem is to African American culture what Paris is to the French, and deserves to be treated accordingly.

Harlem's most recent rebirth was spurred by an infusion of government money that began in 1996. But even at this early stage of the economic-development boom, some residents and local entrepreneurs are complaining that there has been too much emphasis on corporate projects -- developments like the new Harlem USA mall that now dominates the main commercial strip of West 125th Street -- and not enough on small, homegrown businesses like the Lenox Lounge. They worry that a Faustian bargain is being struck without their consent: that development is happening so fast and is so dominated by outsiders, that the price could be Harlem's soul.

In many ways it's a familiar story: a historic district tries to balance development with preservation of its unique character. But more is at stake here than the fate of a single neighborhood. After decades of being decimated by poverty and neglect, the epicenter of African American culture for most of the past century could finally be crushed, ironically, by uncontrolled growth.

With its complex character and history, Harlem has always been more than an African American enclave. Settled in 1658 by the Dutch, it was a prosperous suburb during the 19th century and home to many waves of European immigrants, especially the Irish, Italians, and Jews, some of whose descendants remain. Broadly defined, the neighborhood stretches from 155th Street to 110th Street on the West Side, and to 96th Street on the East Side. Government planners often lump Harlem together with all of Upper Manhattan, a predominantly Hispanic area that includes Spanish Harlem, Washington Heights, and Inwood.

For much of the 20th century, Harlem stood as the embodiment of the African American dream of freedom and prosperity. Thousands of working-class blacks migrated to the area from the South before and after World War I. During the first Harlem renaissance -- one of the most creative periods in American history -- the neighborhood was a mecca for black intellectuals, musicians, writers, and artists such as Duke Ellington and Langston Hughes. Harlem gave birth to bebop in the 1940s, and during the civil-rights era it became a political nexus as leaders like the Reverend Adam Clayton Powell Jr. and Malcolm X rose to prominence. "Harlem is the recognized Negro capital," wrote author and civil-rights activist James Weldon Johnson.

But middle-class flight in the 1960s and 1970s left Harlem in the grip of crime, drugs, and joblessness. In the decades that followed, several attempts at revitalization failed for reasons that, depending on whom you ask, include the misappropriation of government funds, redlining by banks, dangerous streets, negative stereotypes perpetuated by the media, corporate myopia, and out-and-out racism.

Today, thanks to a booming national economy and a massive influx of government money, Harlem finally seems to be undergoing a true economic transformation. Developers running out of real estate in lower Manhattan are venturing into the area. Meanwhile, federal empowerment-zone legislation introduced by local representative Charles Rangel is kicking into gear after a slow start. During the next four years nearly a billion dollars in public and private investment capital is slated to find its way into Upper Manhattan.

Many residents embrace this evolving landscape. Crowds jam the sidewalk outside Harlem USA, which is owned by a consortium of three developers, one of them from the neighborhood and two from outside it. The mall brims with the kind of chains and superstores previously unknown here: a Disney Store, HMV records, a nine-screen Magic Johnson Theatres complex, the New York Sports Club, and other businesses that will ultimately create 500 much-needed permanent jobs. (Despite new investment, Upper Manhattan remains the most economically depressed section of the island. Its unemployment rate of 18% is more than four times the national average.)

"Look at this -- only $10," says a kid outside an Old Navy store, unfurling a pair of chinos as he lines up for the grand opening of Modell's Sporting Goods and the chance to score free Yankees tickets and meet New York Knicks legend Earl "the Pearl" Monroe. His friend, sucking on a Frappuccino from the Starbucks down the street, nods approvingly.

"They are just setting up a megastore in front of my place and saying, 'Survive it."

--Sikhulu Shange, referring to the HMV that is opening across the street from his Record Shack

Not everyone is equally sanguine, however. Wrapped in the colorful, flowing dress of his native South Africa, Sikhulu Shange sits in the back of the Record Shack, a long, narrow store on West 125th Street. With his deep voice and crisply enunciated English, Shange projects indomitability, a quality that has served him well in 30 years of doing business in Harlem. It was local merchants like himself, Shange says, who held the neighborhood together "when Harlem was hemorrhaging, when everybody was running away."

The Record Shack is a local institution, born in the ferment of the Pan-African movement of the late 1960s. That movement's roots stretch all the way back to the early part of the century, when Marcus Garvey urged blacks to control their own destinies by owning their own companies. In 1921, African Americans owned about 80% of the businesses near 135th Street and Seventh Avenue, where Garvey's Universal Negro Improvement Organization was based. Tycoons like Madam C.J. Walker, who became so rich selling hair-care products that she had a mansion built in the white suburb of Irvington-on-Hudson in 1918, became role models showing what black entrepreneurs might accomplish.

In Harlem, all that is ancient history. Today only 35% to 40% of the 250 or so retail businesses on 125th Street are minority owned, according to Barbara Askins, president of the 125th Street Business Improvement District. (The percentage is higher for service businesses.) "And now there is this 'revitalization' under the banner of the so-called empowerment zone," says Shange, nearly spitting out the words. The arrival of the chain stores is just the final stage of a gentrification process that has been going on for years, he explains, as he ticks off the names of African American-owned restaurants and clothing stores forced out of business by rising rents. "The process of installing that kind of machinery is gradual," says Shange. "In the end it just grinds everything up."

It's hard to imagine how Shange, with his small selection of African, Caribbean, and other CDs locked inside glass cases, will compete with the giant HMV opening across the street in Harlem USA. Officials of the Upper Manhattan Empowerment Zone (UMEZ), the joint federal-state-city nonprofit development corporation created by Congressman Rangel's legislation, defend their decision to lend more than $11 million -- or 17% of the total financing -- to the developers of the mall by saying there will always be a market for locally owned niche stores like the Record Shack.

Such comments make Shange livid. "That's somebody talking off the top of their head, somebody who's never even run a fish-and-chips joint, so what is it that they know about what makes me tick?" he says. "These big stores have so many square feet of space loaded down with the same kind of merchandise I'm selling. They are just setting up a megastore in front of my place and saying, 'Survive it.' "

Outsider-owned businesses are not new to Harlem, of course. Nor are the impassioned reactions they arouse. There have been violent episodes, such as the 1995 rampage by a black nationalist named Abugunde Mulocko, who burst into Freddy's Fashion Mart, a Jewish-owned clothing store, and set a fire that killed seven people before turning a gun on himself. Other situations have been resolved peacefully: the "Buy Where You Can Work" campaign in 1934 pressured Blumstein's department store to hire black clerks and pioneered the modern economic boycott.

The arrival of the chains is more complex -- and less charged with issues of race. At least one, Magic Johnson Theatres, is a partnership between the basketball superstar's development corporation and Loews Cineplex Entertainment. And Richard D. Parsons, the chairman of UMEZ's board of directors, and Terry C. Lane, the organization's CEO and president, are African Americans. The superstores present a difficult target for community activists because residents enjoy shopping there. Even the stores' harshest critics concede that they provide employment, albeit in primarily low-level service jobs.

Residents flock to Harlem USA to buy name brands at cheap, grand-opening prices; the neighborhood has a serious case of pent-up demand. Like many inner-city areas, Harlem is a drastically underserved market, lacking the businesses that provide basic goods and services that other places take for granted. Imagine an area that has a population larger than Seattle's but has no full-service supermarkets, no hotels, hardly any dry cleaners, and only four movie screens. That described Upper Manhattan until the current redevelopment added a Pathmark supermarket, a string of Kleener King dry cleaners (set to open soon), and the Magic Johnson Theatres complex. Harlem still doesn't have a single hotel, although a 300-room Doubletree is in the works for Washington Heights. All told, government planners estimate that Upper Manhattan loses $1 billion in retail sales to other neighborhoods.

Residents also grant the chains a warm reception because they equate the stores with status. "Everybody thinks if the superstores come in, somehow it's a mark of progress, and that's true whether it's an inner-city black neighborhood or an upscale white suburb," says Roberta Brandes Gratz, who has studied hundreds of American cities during 30 years of writing about urban issues. (Her most recent book, Cities Back from the Edge: New Life for Downtown, was published in 1998.) "This is a sad commentary on who we are as a country, but it is a reality."

The notion that the presence of superstores somehow validates Harlem gives some community leaders fits. "We don't need them for us to value ourselves!" proclaimed William E. Davis Jr., an architect and former commissioner of the New York City Landmarks Preservation Commission, as he rose to his feet at a recent seminar on historic preservation in Harlem. The crowd burst into applause.

Nor are the chains necessarily a great bargain. Some residents say that the prices at the new Pathmark on East 125th Street seem to be climbing and are higher than the prices offered in Pathmark stores in more affluent neighborhoods. (Pathmark denies those claims. "That's not the reality," says Rich Savner, a spokesman for the chain. "Harlem's prices are the same as the rest of New York City.") Still, the mere idea is galling, especially to some residents of Central Harlem, where the median household income is $20,000, a third less than the citywide figure. Facing the rising cost of owning and renting real estate in Harlem, those people fear being priced out of their own neighborhoods.

"It makes me crazy when I see chain stores being promoted as giving people quality goods at decent prices," says Gratz. "That's one of the great myths. They come in and start cheap, but the price goes up, and suddenly you're paying more. You might be getting something you didn't have before, but it's a myth that you're getting something cheap or necessarily better."

"Nobody's gonna ruin Harlem. Anybody who spends money is green as far as the cash register is concerned."

--Horace Balmer, co-owner of Showman's jazz club

UMEZ sees stores like Disney and Old Navy as magnets for new investment. The agency is charged with distributing $300 million in loans and grants using federal, state, and city funds and $250 million in federal tax credits over a 10-year period. With so much money at its disposal, UMEZ has become a flash point for critics who accuse it of favoring big corporate developments over local businesses. Some Harlem entrepreneurs complain that UMEZ has rejected their applications for much the same reason given by big banks -- that their projects are too risky -- and that that defeats the whole purpose of such an agency. Others say that they were approved for loans but that the interest rates were too high. UMEZ, for its part, says that some local businesspeople come in asking for huge loans with no documentation.

"I know that no economic strategy is sustainable without mom-and-pop businesses whose owners live and work in the community," says UMEZ's Lane. But of the $115 million in loans that UMEZ approved between 1996 and 1999, $42 million falls under the heading of "Business Recruitment and Retention" -- meaning that the funds go mostly to big projects like Harlem USA and the Vibe Store, an urban entertainment superstore. "Small-Business Development," which includes projects like the Lenox Lounge and a local credit union, accounts for only $18 million, or 16%.

UMEZ has doled out another $38 million on tourism initiatives, the next big item on its agenda. Harlem is considered a vast untapped market for that industry, which in 1997 pumped nearly $14 billion into the New York City economy. "Harlem is a trademarkable, marketable concept," says Lane. "It's one of the most famous communities in the world. We need to capitalize on that."

Some community leaders see tourism as Harlem's savior, providing the neighborhood with the wherewithal to restore its historic and cultural treasures. And so far the projects funded by UMEZ sound promising. They include local groups like Boys Harbor, which is building an archive of Latin music, and the Studio Museum of Harlem, which wants to expand its store selling African American and other artwork. Other recipients are such organizations as the National Museum of Jazz, a New York City nonprofit that has proposed building a multipurpose facility to be developed in conjunction with the Smithsonian Institution. A downtown developer plans to revive the now-defunct Minton's Playhouse, the hallowed birthplace of bebop, by renovating the original building and creating a music venue, a bar, and a restaurant.

But Harlem's history with tourism has left some residents skeptical. Many resent those visitors -- often from Asia and Europe -- who are trucked in on tour buses to attend a gospel church service, enjoy a soul-food brunch, and maybe visit the Apollo Theatre, and are then carted away before nightfall. "Sometimes tourism here is handled like it's a jungle safari," says Lloyd Williams, president and CEO of the Greater Harlem Chamber of Commerce. "Like they're in the wild kingdom looking at the animals running around." Visitors don't venture far from their buses because they view Harlem as dangerous, despite the fact that the homicide rate has fallen 77% in five years, a decrease greater than even the city's well-publicized drop.

Some local entrepreneurs think Harlem USA and similar developments can help soften the area's image by blending the comfort of the familiar with more "authentic" offerings, such as the African boutiques on West 125th Street and the new nightclubs and restaurants. "Nobody's gonna ruin Harlem," says Horace Balmer as he stands on a recent Saturday night outside Showman's, the jazz club he co-owns on West 125th Street. "That mall is fantastic. Business is business. Anybody who spends money is green as far as the cash register is concerned."

Balmer, senior vice-president for security at the National Basketball Association, is a former New York City police detective who has lived in the neighborhood for 25 years. Showman's has an even longer history here: it was originally located next to the Apollo Theatre and frequented by the likes of Duke Ellington, Eartha Kitt, and Pearl Bailey. After being destroyed by fire, the club reopened on Frederick Douglass Boulevard and later moved to its current location to make way for Harlem USA.

The unabashedly capitalistic fervor exhibited by people like Balmer frightens some residents, who say it encourages reckless development. Michael Henry Adams, a historical preservationist who lives in the neighborhood, believes the key to preserving Harlem's character is protecting its historic buildings with landmark designations. Such designations not only satisfy preservationists and historians but also foster tourism, according to Adams. "Buildings have the ability to transport people back in time," he says, "so they can experience Harlem the way Langston Hughes or Zora Neale Hurston saw it."

The New York City Landmarks Preservation Commission has come under heavy criticism for declaring few Harlem buildings fit for historical landmarking, while large swaths of wealthier areas like Greenwich Village, SoHo, and TriBeCa are protected. Whatever the explanation -- politics, bureaucratic ineptitude, and racism are among the suggested culprits -- the result is that many important buildings have already been destroyed, including the Audubon Ballroom (where, among other historic events, Malcolm X was assassinated), the Cotton Club, and the Harlem Opera House. Others are threatened by deterioration or by cost-conscious developers.

"Most of the development plans seem to lack any kind of vision or appreciation for how special Harlem is," says Adams. "The whole notion of Harlem is this large collection of broken-down old buildings that ought to be swept away and replaced with something you might find in Paramus, N.J. That's like taking Paris and just knocking it down."

What Adams wants to save are places like Small's Paradise. Architecturally, there's not much to it: a three-story brick building now boarded up and covered with graffiti. But Small's was once the most prestigious black-owned nightclub of the renaissance, featuring expensive drinks, dancing waiters, and performers like Cab Calloway and pianist Charlie Johnson. Most notably, it was frequented by both blacks and whites at a time when many Harlem clubs were whites-only establishments.

"We're supposed to get the ground-floor corner," says Dr. Reginald Manning, an African American orthopedic surgeon from Brooklyn, as he stands outside Small's. Manning and a small group of investors are planning to bring the building back to life. But the crowds that Manning expects won't be flocking to a museum, a concert hall, or a jazz club. Rather, they'll be gobbling down flapjacks at a new International House of Pancakes.

The building that IHOP will soon occupy is currently managed by the Abyssinian Development Corp. (ADC), a nonprofit group affiliated with the Abyssinian Baptist Church, which is headed by the prominent minister, Reverend Calvin O. Butts III. The ADC, which has been spearheading much of the development in Harlem -- from the Pathmark supermarket to a Sterling Optical outlet -- says it tried to bring Small's back as a nightclub, but nobody would finance it. The decision to let in the IHOP was made after several years in which the space stood empty. "We made a real effort, but in Harlem it's three times more difficult to do a deal like that," says Karen Phillips, president and CEO of the ADC. Phillips points out that because there's little capital in Harlem, outside money is often required. "At some point, to save the building, we had no choice," she says.

At press time the IHOP deal was being finalized and had received little publicity in the community. But Adams says he doesn't expect a huge outcry. "If this were Rome and things like this were happening, people would be up in arms," he says. "But because this is a largely black urban area, people have been preoccupied by survival and basic things like health care for so long, they're fatalistic. They're just resigned to being ignored and neglected."

Ultimately, it is the community's responsibility to fight to preserve its history and culture, development experts say. But like many neighborhoods, Harlem is not sufficiently organized to yoke development to its own terms.

Comments author Gratz: "You need strong, committed, knowledgeable local organizations that can fight not just the chains but also local brokers, who don't even want to hear about how to negotiate with a local business, and property owners, who think that renting to a chain is more lucrative than renting to a local business and in many cases get burned. And banks who don't know how to finance local people. You've got a whole litany of hurdles that have to be attacked at the same time. So far in Harlem I don't see the kind of community-based institution that can or, more importantly, that wants, to make that happen."

"We're under cultural siege," says Barbara Ann Teer, founder of the National Black Theatre. "Tourism and culture are trillion-dollar businesses around the world. But if you go to Hawaii, you can't find anything authentic anywhere. We need to build monuments, institutions that perpetuate who we were and who we are. If we don't codify our own culture, our own infrastructure, we will cease to exist on this planet."

Harlem's fate, in the end, may depend on how many entrepreneurs like Alvin Reed are out there. When Reed's family moved to Harlem in 1945 from Richmond, Va., the Lenox Lounge was for white customers only -- with exceptions made for celebrities like Billie Holiday, who would sing with the all-black band. Reed is the classic self-made businessman, a bootstrapper who got his start selling newspapers, shining shoes and, while in the army, lending fellow servicemen money, much of which, he assumes, went for hookers.

Reed also worked for the post office and the police department; his retirement income and the money from a second mortgage on his home purchased the Lenox Lounge. It was a daring venture, made riskier by his decision to hire major jazz players at a time when Harlem wasn't luring many outsiders interested in such music. He recently upped the ante with a $450,000 empowerment-zone loan (later increased to $575,000) used to restore the club to its former pristine condition.

Reed is determined to stick it out for as long as it takes to pay back those loans, an imposing debt for any small-club owner. It's going to take a while, even at the average 7% interest rate he got from UMEZ; even with his great location at West 125th and Lenox; and even with his new cover-charge policy ($20 buys admission to the Zebra Room and two free drinks, although Reed plans to raise the price when the addition of a restaurant allows him to offer food as well). Still, Reed is optimistic. His son, Alvin Reed Jr., recently quit a job at Xerox to work at the Lenox. And Reed hopes grandson Alvin Reed III, age 3, will go into the family business someday, too.

"I think people my age got to retirement and realized what we had left behind," the club owner says. "A lot of middle-class blacks left because of drugs and the neighborhood going down, but now a lot of them want to come back, for their conscience. They're starting new businesses, joining the YMCA, donating to black organizations, and rehabbing these old buildings and renting them out."

Reed knows that to survive he'll have to attract outsiders willing to pay the cover charge and order dinner from the new kitchen. But he doesn't want the place to become a tourist trap and hopes his regular customers, who still hang out in the no-cover front bar, will always consider the Lenox Lounge their local watering hole. Because in the long run, whether you're a lifelong resident or a tourist, everyone wants Harlem to feel like Harlem. "It won't be easy," Reed says, as he watches his club fill with customers on a Saturday night. "But we're trying to show people this can work."

Paul Keegan is a freelance journalist based in New York City.

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