The Blue Ox bar sits amidst the South Bronx’s vacant manufacturing buildings and public housing high rises–an area Tom Wolfe characterized as a “war zone” in his novel The Bonfire of the Vanities. But stepping into the bar is like entering a different world. Inside, white candles glow on the tables and copper-top bar. Paintings by local artists hang on the brick walls and an acoustic guitar sits in one of the paned-glass windows.

“There is no place like this south of 161st Street,” says Aronne Baietti, the owner. “People call it a beacon of hope in the neighborhood.”

That hope is gathering force: In February, Bronx Borough President Adolfo Carrión, Jr., announced that his office and the Department of City Planning are considering rezoning a large section of Port Morris, the southeast Bronx neighborhood bordered by the East River. Once home to piano, garment and ironworks manufacturers, many of the old factories have been abandoned since the 1970s, when most of the port activity moved to New Jersey and service jobs began to dominate New York’s economy. Carrión, an urban planner by trade, thinks these properties are ideal as live-work spaces for artists and small businesses. He has put his borough’s planners to the task of studying his idea, and it could go into effect as soon as next year.

Market forces are the impetus: Soaring rents in industrial-turned-trendy areas like Soho, Dumbo and Williamsburg have artists looking for more affordable loft space. With empty warehouses offering the high ceilings and natural light artists desire, as well as proximity to public transportation and major roadways, Port Morris has become the next frontier.

“What’s happening is just organic,” says Carrión. “Artists who are always pushing the envelope, because they need space and affordability, have started coming here.”

He is confident that the change could help the entire neighborhood. Port Morris’ 26,900 households earn an average of just $16,000 a year, in a borough where unemployment is about 11 percent, significantly more than the citywide average. Carrión has some convincing to do, however. Many local residents fear they will be left out as jobs for which they are unqualified pop up around them.

“The rezoning is good if it is giving people jobs and opportunities to learn,” says Isabelle Johnson, president of the tenant association at the nearby Mitchel Houses. “It is not so good if it is looking to bring people in.”

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Port Morris of 2003 is not unlike Soho of the 1970s. Once teeming with trucks and businesses that made everything from zippers to leather, the latter area slowly cleared out as manufacturers sought larger, more modern facilities west of the city, and as succeeding generations declined to work in family-owned factories. Artists discovered large, cheap studio space in the blocks south of Houston Street and began moving in by the thousands. While the city resisted having them there at first, the artists ultimately won zoning changes that created the community of lofts and galleries.

Over the years, the area boomed with high-end shops and restaurants and rising rents, pushing out some longtime tenants and ultimately the very artists who made the place.

Whether Port Morris will face the same fate is unclear. But a pilot program started six years ago to revitalize a strip of old factories and row houses along Bruckner Boulevard may offer a hint of what’s to come.

In 1997, the city redesignated three blocks of row houses from manufacturing space to mixed residential and commercial properties. Since then, the buildings have filled up with antique shops, art studios and galleries, creating the Art and Antique District.

“We’ve taken on a physical blight and turned it into a unique area,” says Neil Pariser, vice president of the South Bronx Overall Economic Development Corporation, which has invested about $1 million to spruce up the area with new sidewalks, trees and decorative lighting. “The street has its own cachet and own style.”

The group’s initiatives also include the Bronx Venture Center, a “smart” office building on East 137th Street that is wired for internet access and leased at low cost, thanks to reduced-interest loans and a grant from the Bronx Overall Economic Development Corporation.

And the artists are moving in. The Clock Tower Building, once home to the Estey Piano factory, was renovated last year and has started renting out live-and-work space.

With all these changes, rents have already started rising. “About four years ago I rented my store for around $800. Now I am paying $1,500,” says Reies Aguare, manager of David’s Antiques. And that’s on the low side, according to SOBRO, which estimates average commercial rents are up to $2,500 a month.

Already, the first wave of new shops may be on their way out. The downturn in the economy and the lack of foot traffic in the area have hurt business. If things don’t improve, shop owners say they will close down in the next few months.

“I used to make $2,000 to $3,000 a month in profit,” says Alberto Penafiel, owner of Jenny’s Antiques. “Now I take money from my other store”–F & J Furniture, on Tiffany Street–“in order to cover the expenses.” His rent is slated to go up by more than 80 percent, to $1,500, in September.

“We need to have a lot more people coming by,” says Aguare. “I might be closing pretty soon after eight years of trying my best.”

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Part of the reason for this business trouble, say some longtime Port Morris residents, is the awkward marriage between the needs and interests of local residents and the artists and art dealers who are moving in. “People in the neighborhood don’t know about Antique Road,” says Rafael Bueno, executive director of the Cherry Tree Association, a community organization. “The development is coming from the outside. Artists are moving in from somewhere else.”

A better strategy for the area, he says, would be to create mixed-income housing and jobs that pay a living wage. “We need training for people to get jobs with a living wage and a working waterfront to provide those jobs,” he says. “Right now, it seems people will come in their cars, do their business there and then leave their trash behind.”

Luis Cerezo, a long-time resident of Mitchel Houses and president of Cherry Tree, agrees. “We need to have a big company come in, a factory of some sort, that will hire a lot of people from the community.”

Carrión says he recognizes these issues, and plans to do what he can to mitigate them. Rezoning the area from the Major Deegan Expressway south to the Harlem Rail Yards, and between the Third Avenue and Triborough bridges, he says, would help. Artists will help draw more restaurants, retail shops and other stores to the area, which will provide jobs and boost business for stores that are already there. “The support services for a neighborhood aren’t there yet, but they’ll come as the population increases,” says Paula Caplan, Carri”n’s deputy director for planning and development.

Carrión also says he hopes the Harlem Rail Yards can be redeveloped to create 2 million square feet of either retail or distribution space as another job-creating venture.

In the meantime, Pariser says they plan to work to preserve existing industrial operations like the New York Post, S & J Sheet Metal Supply Inc., and City Waste Management, which he says together provide between 15,000 and 20,000 jobs in the South Bronx.

“The choice for us is do we go the route of creating manual labor jobs with some technical skill, or do we go with the retail sector and service jobs? Either way, there’s going to be several thousand jobs,” Carrión says.

As for displacement and gentrification, the borough president argues that these aren’t issues in Port Morris because the population is so small. “We’re not going to box people out,” he says, “because they’re not there.”

Some of the newcomers agree. “There is not going to be the overflow. There is a lot to be filled up all along the waterfront. You are not moving out the small Spanish restaurant for a trendy one,” says David Graham, who opened Storage Art Space, a nonprofit gallery, in 2000.

To keep artists in Port Morris, Graham suggests mimicking moves made in Peekskill, where buildings received government subsidies for renovations and were designated strictly for artists. Carrión says a similar formula for Port Morris is still being hammered out.

In the meantime, the businesses that are there now are hoping to profit from busier roads.

William “Willie” Williams stumbled upon the Blue Ox Bar while trying to beat traffic one day. “I turned off the highway, saw this place and thought I’d better check it out.” Nestled in the corner of 139th Street and Third Avenue, the bar draws a regular crowd of artists and local entrepreneurs, as well as people like Williams, who lives in the north Bronx but comes for the relaxed atmosphere.

“All the people you never knew who were here in the neighborhood are here at this bar,” says Baietti, who bought the empty bodega in 2001 and transformed it into a bar. He’s also renovated the upstairs apartment, and has settled in.