Lower East Side Is Under a Groove

FOR decades, there was a discount men's suit shop at 183 Orchard Street.

The Cake Shop.

Then, in 1995, came Kush, a stuccoed Moroccan-themed bar.

Then the bulldozers.

And now, the 18-story Thompson Lower East Side hotel is rising on the site, with rooms to start at 5.

That four-part history of one address - from shmattes to hipsters to bulldozers to tourists - is a summary of much of the recent evolution of the Lower East Side. On a Tuesday last month, Sion Misrahi, a real-estate dealmaker who has played a central and often contentious role in that history, stood in front of the hotel construction site and reflected on the moment, a dozen years ago, when he saw the future of the neighborhood.

To that point, Mr. Misrahi, who started his working life as a 14-year-old pants salesman at his father's men's wear shop on Orchard Street, had been hoping to resuscitate the bargain-shopping culture originated by Jewish immigrants by creating a historic district, a sort of old-time theme park with pushcarts.

Instead, he changed course, advertising to fill some 18 vacant storefronts on a one-block stretch of Orchard Street by promoting them to night-life businesses.

"We decided to rent to bars and restaurants who would bring in the hipsters and change the neighborhood," Mr. Misrahi, 57, said.

Since that "aha moment," when the bar Kush became his first night-life tenant, Mr. Misrahi has had a hand in scores of deals that have transformed the area, including the latest wave of hotels, condominium towers and boutiques. He is, in large part, responsible for the hipification (some may say the crassification) of the neighborhood, a district east of SoHo and south of the East Village.

As some of the early bohemian hangouts are being overwhelmed by a decidedly high-heeled and cologned crowd, and others give way to hotels and luxury rentals like the Ludlow, a 23-story brick-and-glass giant that looms over Katz's Delicatessen, Mr. Misrahi finds himself vilified by some longtime Lower East Side watchers (even though the Ludlow, the most visible symbol of gentrification, is one of the few projects he had nothing to do with).

"What Sion and those people should realize is they've let greed run rampant," said David McWater, the chairman of Community Board 3, which is advocating zoning changes to limit building heights and retain the area's historical charm. "There have been no compromises. They let their greed decide rather than a combination of greed and conscience."

Love or hate the new Lower East Side (dubbed "the Lower East Slide" recently by The New York Post and mocked in the current Time Out New York as home to "hipster zombies"), what is not debatable is that Mr. Misrahi's strategy of attracting bars and clubs, then vintage clothing stores and sex boutiques, has worked. By fostering an artsy culture, fertile ground was created for economic development, even if some of the original bohemian touchstones are gone. Collective Unconscious, a performance space, moved in 2003, shortly after Mr. Misrahi purchased the building.

The storefront that housed House of Candles, an avant-garde playhouse, is now the Stanton Social, where diners sit on lizard-skin banquettes. And Tonic, a club for live music that opened on Norfolk Street in 1998, closed last month around the time that Blue, a glass condominium tower next door, welcomed residents who paid 0,000 for one-bedroom apartments.

The demise of Tonic, whose owners explained on its Web site that "we simply can no longer afford the rent and all the other costs associated with doing business on the Lower East Side," brought out more than 100 protesters.

Rebecca Moore, one of the protesters, said that the "over-bar-ification" and gentrification has created unbearable nighttime noise, and a culture where landlords will use every trick of the housing code to drive out rent-stabilized tenants.

DESPITE the losses of some cultural capital, the perception of the neighborhood as cool by large developers - not often the most cutting edge of folk - is now firmly established.