Corporate Show Time at the Apollo

It’s Amateur Night at the Apollo Theatre, and a parade of aspiring black stars is getting ready to face one of the toughest crowds in show business.

Apollo audiences have seen it all over the years: Jazz divas like Billie Holiday and Sarah Vaughan, a kid named Stevie Wonder, a mystery group called the Jackson 5. But tonight there’s something different on stage: a white teenager who leaps out of the crowd to join in a hip-hop dance contest.

As he shakes and rolls, a powerful, impromptu chant rocks the room: “White man in the house!” (chuka-boom) “White man in the house!” The boy gets a generous round of applause when he returns to his seat, flashing a victory sign. But outside, on the busy streets of Harlem, the mood is not always so welcoming.

For the first time in decades, there is white corporate money flowing into the community, fueling a development boom that marks the first major economic investment in Harlem since the riots of the late 1960s. More than $550 million in public and private funds are bankrolling the arrival of a Disney store, Cineplex Odeon Theatres, HMV record store, Old Navy, Starbucks and other retail giants on 125th Street, the neighborhood’s main artery. Slowly, a neighborhood that has been stifled by crime, drug use and persistent urban blight is beginning to share in the economic growth that has lifted more affluent urban areas across the rest of America.

City planners report signs of a similar economic resurgence, while not as intense, in the black neighborhoods of Atlanta, Kansas City, Dallas, Atlantic City, Oakland, Minneapolis and other communities. The change is driven by a dawning realization that, for all their problems, these communities could become retail gold mines for hungry corporate investors. It marks a significant turnaround for many American neighborhoods--and a prime example of the kind of investment that President Clinton has been touting all week on a tour of impoverished areas.

In Harlem, the signs of growth are everywhere: Pathmark, a national chain, recently opened the area’s first modern supermarket on 125th Street. The neighborhood’s first mall, the $65-million Harlem USA complex, will open in the fall, featuring prominent retail chains and a Magic Johnson Enterprises multiplex theater. Investors representing Ralph Lauren and Gymboree are scouting sites on the street, as is Jerry Speyer, the developer who controls Rockefeller Center and the Chrysler Building.

A Proud Identity at Stake

Yet these changes have stirred concerns that Harlem may lose its proud identity to corporate interlopers. While some celebrate the uptick in the area’s economic fortunes--including thousands of new jobs--others fear it will lead to cultural gentrification and an erosion of local political control.

As growth comes to the fabled black community, battles have flared over projects up and down 125th Street--but none more heatedly than at the Apollo, where a fight over control of the dilapidated theater has become a metaphor for the neighborhood’s economic and cultural growing pains.

“Harlem is the last big economic frontier in New York City and a bellwether for inner-city growth across America,” said Bernelle Grier, a Harlem native and senior vice president in charge of community development at Fleet Bank in New York. “It’s a whole new world.”

There are abundant reasons for this. Harlem and many other American inner cities are generally safer and cleaner than they were 20 years ago. Banks that once avoided making loans in low-income areas are now under a federal mandate to do so, and a profusion of new economic studies have shown that these highly populated zones are filled with consumers starved for retail services.

What makes Harlem special, however, is that a stream of black professionals has begun moving back into the neighborhood, snapping up rehabilitated brownstones and other attractive homes built around 1900. Located just north of Central Park, the community has excellent highway and rapid transit links. Indeed, the neighborhood once associated with the failed federal programs of the ‘60s is now seen as a retailer’s dream: 530,000 economically diverse people in a 7-square-mile community. Just the kind of “emerging” market that U.S. business is hungry to tap, here or abroad.

It helps that New York, for all its fratricidal politics, has enjoyed a high level of cooperation among federal, state and city officials in launching an “empowerment zone” for Upper Manhattan. These development zones, created in a 1994 law authored by longtime Harlem congressman Charles B. Rangel, call for partnerships between the public and private sectors. They earmark federal dollars as well as generous tax breaks for participating investors.

“We think we might be on the verge of another renaissance in Harlem,” said Rangel, referring to the neighborhood’s cultural preeminence in the 1920s, when Harlem nightspots, jazz clubs and literary salons were all the rage. “It’s going to surprise a lot of people.”

To be sure, Harlem’s social and economic woes endure. The area suffers from 19% unemployment and a 35% poverty rate. Only 6% of residents own homes here, compared with 66% nationwide, and there are rows of abandoned, deteriorating apartment buildings one block from 125th Street. Central Harlem remains an ethnic enclave: 87.6% black, 10.1% Latino and 1.5% white.

Less than 100 years ago, the neighborhood was an elite, largely white community of stately homes and elegant apartments. Only a handful of blacks lived in Harlem, but the numbers began growing in 1905 with the sudden collapse of a real estate speculation boom. Thousands of homes that had been built along the path of new subway lines went begging, and a wave of black residents began moving in. As whites fled, Harlem’s economic fortunes deteriorated; there was massive crowding in the housing stock, and health care was substandard, as were public schools.

In good times or bad, however, Harlem has had an enduring mystique. These days, tourist buses packed with German, French, Japanese and other visitors rumble through the neighborhood, taking in the Apollo and other sites. Meanwhile, new restaurants and clubs are springing up on once-deserted streets.

There’s plenty of start-up money to go around: Flush with city and state contributions, the Harlem empowerment zone has a $300-million investment pool, compared with $100 million for most other American cities, according to Rodney Lopez, associate director of the Upper Manhattan Zone. And that, coupled with energetic community leaders and local development groups, has brought a new vibrancy to the area.

According to the Boston-based Institute for a Competitive Inner City, urban shoppers generally pack more buying power into 1 square mile than suburban consumers; they are more fashion-oriented and less price-driven, showing greater brand loyalty than people in more upscale areas. Another study showed that Harlem residents spend 60% of their discretionary shopping money outside the neighborhood.

“The future of retailing isn’t in white suburbs,” said Ann Habiby, research director at the institute. “Those places are tapped out by now. Most new growth will be taking place with African American, Hispanic and Asian consumers. So what we’re seeing in Harlem is a glimpse into the future.”

Many residents like what they see so far, especially those who no longer have to travel outside their neighborhood to buy quality food and other goods. As she browsed in the poultry section of the new Pathmark, Tressie Strachen, a 40-year Harlem native, couldn’t say enough about the growth changing 125th Street.

“It makes such a difference, because this is what we’ve needed for so long,” she said. “This market provides local jobs and it gives you a much better feeling about your neighborhood. All of these things are so long overdue.”

Yet not everyone is celebrating on 125th Street. More than 73% of the small shops on the heavily traveled, two-mile boulevard are owned or managed by blacks and Latinos, and many are worried about being displaced as property values rise. Still others are angered on a deeper level, suggesting that outsiders fail to understand Harlem’s special heritage.

When co-developer Magic Johnson opened the area’s first Starbucks two months ago, white jazz artist Kenny G performed at the opening. Bill Saxton, a local black saxophonist, was offended: “To think they selected Kenny G when there are hundreds of world-class musicians in this community is an insult,” he wrote the Chamber of Commerce.

Small Merchants Feel Endangered

For Dorothy Pitman-Hughes, the empowerment zone has been a betrayal. She operated a popular stationery store on 125th Street for 18 years but said she was forced to move because of a rent increase on her site, which is owned by the city. The hidden goal of all this change, she suggested, is to move small merchants out of Harlem and to bring in corporate customers.

Moreover, Hughes argued that many of the new jobs in the area will pay barely more than the minimum wage, hardly the kind of bedrock on which to build a more affluent Harlem. “To me, it’s a form of economic cleansing on the street. The people pulling the strings never told us the real agenda, and there is anger building in the community.”

At the Apollo, it has erupted into a full-blown political war. Once the crown jewel of black entertainment and now home to a successful television show, “Showtime at the Apollo,” the house is dark on most nights and its marquee is rusting.

The theater’s sorry physical state shocks old-timers who remember the Apollo’s grand opening in 1935. One of the few bright lights in a community that was hit hard by the Depression, it boasted top-line black entertainers and a smattering of white artists as well. The Apollo quickly became one of America’s premier halls, but changes in the music industry--especially the end of segregation, which allowed black stars to play bigger venues--eventually spelled doom for the 1,500-seat house. Owners declared bankruptcy in 1980, and the venerable theater was just one more abandoned building on 125th Street.

But it got a new lease on life from former Manhattan Borough President Percy Sutton, who took over the facility in 1982 and tried to restore it. He had only middling success, and in 1992 the state took over the site; a nonprofit foundation was created to run the theater, and it gave Sutton’s company the rights to film TV shows there.

The troubles deepened last year when Dennis Vacco, then the state’s Republican attorney general, accused Sutton’s firm of withholding $4 million in revenue that should have been paid to the Apollo foundation, which is headed by Rangel.

Sutton and Rangel, who are close allies, angrily denied the charges, and the battle sparked months of headlines. Harlem’s old political guard was particularly incensed by a Pulitzer Prize-winning editorial crusade in the Daily News against the Apollo directors. To Sutton, it was an attempt by outsiders to wrest control of a black landmark away from the community.

“My reputation has been injured,” he said in an interview. “And what’s tragic is, all of this has been a partisan political attack from people who don’t care about Harlem.”

Subsequently, Democratic Atty. Gen. Elliot Spitzer, who ousted Vacco in the 1998 election, continued his own probe of Apollo finances. He said Sutton’s firm owes the theater “well over $1 million,” a charge Sutton denied.

Amid the wrangling, both sides are desperate for a white knight, hoping that Time Warner will ride to the rescue and financially “adopt” the beleaguered Apollo. The corporation, which has long expressed an interest in reviving the theater, is studying the matter, officials said, and Rangel is confident a deal can be worked out.

If it does, the Apollo reclamation could become a model of a pragmatic approach that typifies a new generation of black activists and financial entrepreneurs in Harlem. Slowly, they are changing the way business gets done. The new emphasis is on economic partnerships and coalitions with local groups, rather than old-time political patronage.

“People like myself who moved away from Harlem would really like to come home now,” said Fleet Bank’s Grier, who remembers lining up as a teenager to hear the Temptations at the Apollo. “With all the new economic tools at our disposal, we can make this a community that is not entirely low income.”

As for the Apollo, the theater could become a mecca, “the Carnegie Hall of Upper Manhattan,” according to Randy Daniels, a deputy commissioner for the state agency that owns the theater. “But we need outside resources to do this. People need to understand that.”

The issue of outside investment, though, is fraught with emotions. Before the Pathmark could open, its sponsors fought a four-year battle against community groups and local merchants determined to block the new market, fearing it would displace small businesses. The Rev. Calvin Butts, a politically powerful minister of the Abyssinian Baptist Church, helped sponsor the project, through a church-owned development corporation.

“We’ve learned that by building these big projects in Harlem, you don’t sell out,” he said. “You work with corporations and banks, but you don’t have to turn the area over to them. This way, on 125th Street, everybody wins.”