In 2000, Bill Schwartz, founder of the San Francisco Theater Festival, began working toward a new kind of theater district in San Francisco’s Mid-Market area. He organized panel discussions, rallied his theater colleagues, met with elected officials and worked with the city’s redevelopment office, which since 1995 had been surveying the area as a possible redevelopment zone.
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When the city’s Board of Supervisors, unable to agree on affordable-housing issues, killed the redevelopment plans in 2005, Mr. Schwartz said he saw “10 years of meetings” go down the drain.

“I was a bit peeved, to put it politely,” he said.

Mr. Schwartz took a hiatus after that defeat, but now he is optimistic again about the prospects for a revitalized arts district downtown. His Coalition for a Mid-Market Theater District has more than 20 theater companies committed to creating a shared rehearsal and performance space. “The stars are aligned; there is momentum,” he said.

And he is not alone in that feeling. Mayor Gavin Newsom has put the arts front and center in his current high-profile campaign to revitalize the neighborhood.

“I think, candidly, that the past efforts have been marked by more failure than success, and we need a different approach,” Mr. Newsom said. “One catalyst that can truly activate storefronts, sidewalks and public spaces is the arts and arts organizations.”

The emphasis on arts, the mayor continued, constitutes “the big difference between this effort and previous ones.”

The Mid-Market district is roughly defined as Fifth Street to 10th Street along the main promenade, bleeding into the Tenderloin and South of Market neighborhoods on either side of the street. Huge venues like the now-defunct Fox and Pantages Theaters lighted this Western “great white way” until the mid-1960s, when construction of the Bay Area Rapid Transit system tore up Market Street, permanently altered foot traffic and cemented the decline of what had been a major urban entertainment center.

Now this stretch is characterized by boarded-up storefronts, a high concentration of social service agencies and open drug use. According to Mr. Newsom, city officials have been trying to change the area for 40 years. “We’re still waiting,” he said.

Arts financing for the area has recently streamed in. In June, the mayor announced an $11.5 million loan program, financed by the Department of Housing and Urban Development, to help attract nonprofits and arts businesses to the area. Two weeks ago, the National Endowment for the Arts announced that San Francisco would be one of four cities nationwide to receive $250,000 for arts-driven neighborhood development (with the city and private donors contributing $950,000 more).

The arts approach to attacking urban blight is multifaceted. The loan program is intended to help arts organizations secure long-term leases. The national endowment grant and accompanying money are earmarked for street-level projects, like a weekly arts market, lighted “gateways” at UN Plaza and Sixth Street, public performances and a continuation of the Art in Storefronts program. The city helped organize a Central Market Arts Festival, scheduled for September.

Mid-Market, for all its disrepair, is attractive to theaters and galleries looking to move or expand. It is easily accessible by public transportation, it has huge historic buildings and theaters, and it is close to the museum-rich Yerba Buena area.

Elvin Padilla Jr., executive director of the Tenderloin Economic Development Project, said that the American Conservatory Theater, one of the largest repertory houses in the region, was backing a proposed 300-seat multiuse arts space in Mid-Market.

Other new potential entrants to the neighborhood include the Black Rock Arts Foundation, the nonprofit arm of the Burning Man Festival, and Intersection for the Arts, which opened 5M, a satellite gallery, inside the Chronicle building at Fifth and Mission in May and is now looking for permanent space.

These new projects join a healthy mix of organizations already in the area. Darryl Smith, the co-owner of The Luggage Store, counts about 30 kinds of “creative undertaking” — individual artists and organizations— in his immediate vicinity. “I definitely see an escalation,” Mr. Smith said.

But according to Josette Melchor, founder of the Gray Area Foundation for the Arts, city efforts go only so far toward the “most crucial” factor in establishing an arts presence in the area: negotiating with building owners.

Joe Landini, founder of the Garage in SoMa, has been trying to relocate to Market Street and said, “We want to get involved in shaping that neighborhood.” He has been talking to the landlords of the now-empty Strand Theater, but the economics seem prohibitive.

Mr. Landini said that his entire yearly budget was around $80,000, and that the Strand wanted $10,000 a month in rent.

There are many opinions on how arts and redevelopment should work together. Randy Shaw, a longtime Tenderloin activist, is most enthused about the national endowment grant’s focus on using public spaces. Mr. Schwartz holds tight to his vision of a “multiplex” for theaters to anchor the area. Mr. Smith sees the key to be diversity — of organizations, of financing, of perspectives.

“Everyone has an idea of how to best do Market Street, and we have to get past that,” Mr. Smith said. “There are many ways, and they all matter.”