On Harlem’s main thoroughfare, success isn’t always defined by brand-new business or from-the-ground-up commercial development. On 125th Street, roadside entrepreneurs sell items filling many a household need, women sometimes braid hair on the sidewalk, and just hours after Michael Jackson’s death, you could purchase a memorial t-shirt, CD or poster within steps of the Apollo Theater.

But with more than a year under the bridge since the 125th Street Rezoning was approved in order to guide an anticipated building boom, those who once packed community meetings on the plan are left wondering whatever happened to the expected onslaught of development. Uptown prepared for a parade of bulldozers and cranes with the new zoning regulations – setting forth height restrictions, square footage requirements and incentives to include affordable housing and cultural spaces in new projects – and related economic programs. Although these provisions are not exactly getting a workout – and the list of major developments along 125th Street that have either been stopped completely or stalled indefinitely has certainly been noted – the months since the rezoning approval have seen Harlem’s Main Street trying to stay afloat and even growing, if in unexpected ways.

The major factor, of course, was the collapse of the financial markets that came months after the rezoning approval, deflating New York City’s real estate bubble. Harlem was not spared. According to the Greater Harlem Chamber of Commerce, approximately one-third of businesses in Harlem closed in the last year, between July 1, 2008 and June 30, 2009.

City Councilwoman Inez Dickens, who represents central Harlem, took the lead when it came time for negotiations with the Department of City Planning, and her office helped to engineer economic programs to complement the rezoning actions. These days, Dickens takes the long view on the future of Harlem’s Main Street, most of which is in her district. “When the rest of the world is bleeding, communities of color will hemorrhage. That is the way it has always been,” she said. “But people also have to understand that even when the economy is good, it often takes three to four years from approval to when doors are opened on a new development.”

To those who opposed the city’s move for rezoning all along, the lack of new development is not a bad thing. The gentrification that’s been underway in Harlem for years threatens the community’s character and African-American essence, they say, and the rezoning only promised the continuation of those trends.

“For so many low-income and even moderate-income Harlem residents, this is good news in that there is the expectation that it will ease some of the displacement pressures,” said Harlem Tenants Council director Nettie Hester Bailey. “The economic meltdown and the collapse of the real estate industry have stopped the overdevelopment of Harlem in its tracks.”

“They’re just holding this land, and the rezoning approval, in abeyance until the economy turns around,” said Bailey, whose group is party in an ongoing legal action challenging the rezoning.
While the height restrictions and other regulations provided for in the new zoning rules have not yet been tested, the economic incentive programs that were created in conjunction with the rezoning have received at least some use. One of those programs is the 125th Street Pilot Retail Incentive Program, created in conjunction with the Upper Manhattan Empowerment Zone (UMEZ). The program offers forgivable loans, with a matching grant by AREA Property Partners for up to $50,000, to small businesses that wish to expand or relocate along 125th Street and some intersecting avenues. The loan is structured as a two-year, zero percent interest forgivable loan, meaning that no repayments are required as long as the business stays in operation, pays taxes and keeps certain documentation. Basically, the loan becomes a grant if the business remains in good standing for two years. Three businesses have received the forgivable loans, but they were already located on 125th Street. So far, there have been no applications to relocate to the storied thoroughfare from elsewhere in the city.

“There are projects that are still alive and slowly working through the process. Once the economy heats back up, things will move at a faster pace. People come to 125th Street for the variety of retail that is mostly from small businesses. I don’t think that will change anytime soon, even after the economy rebounds,” said Kenneth Knuckles, vice chairman of the City Planning Commission and CEO of UMEZ. “We wanted to have something to help local businesses. Rent escalations and redevelopment are an issue,” Knuckles said.

Community Board 10 Chairman W. Franc Perry III believes that once new projects begin to appear, the rules established by the 125th Street Rezoning will shape appropriate development. “We worked very hard to make sure that there would be affordable housing, height restrictions and that 125th Street would remain a commercial corridor. Before the zoning, there really weren’t any restrictions. Now we will be able to create a situation that is beneficial to everyone.”

In fact, some indicators show reflect a situation that’s already trending positive. According to Prudential Douglas Elliman Real Estate, 125th Street has a retail vacancy rate of 3 percent that is well below that of the Financial District, the Meatpacking District and even Madison Avenue (though every empty storefront is not necessarily counted as vacant; buildings that are not advertising their space are not counted in the vacancy rate). The area in and around the footprint of the rezoning has seen some growth: Starbucks opened its second 125th Street store in 2008, Applebee’s will make its Harlem debut soon, an ALoft hotel is under construction on 124th Street, and another hotel has a permit for a 14-story building on 125th Street near Fifth Avenue. The city’s Economic Development Corporation has plans to turn Mart 125, the defunct vendor marketplace of the 1980s and 90s, into a mixed-use development featuring 40,000 square feet of affordable housing along with two cultural spaces, a caf