Can South Africa’s commercial hub, the city that gold built, rise again? That might seem unlikely, given how squalid Johannesburg became in the decade after the black-majority government took over in 1994 and whites abandoned the city in droves. Laundry still hangs from the balconies of once-tony apartment blocks. Thousands of poor people, many illegal immigrants, pay slumlords modest rents to sleep in former office buildings and run-down apartments without water or electricity. It’s a striking contrast with life in the suburbs, where whites and a new black middle class live behind high walls and shop in antiseptic malls.

But after a decade of decline, Johannesburg is making a comeback. Office buildings, once home to vagrants, are being rehabilitated. Chic coffee shops are popping up in the financial district, and artists are building studios in former factories in the industrial neighborhood of Fordsburg. A new pedestrian mall will become a six-block green zone. Crime has fallen dramatically. In a new gold rush, city real-estate prices are shooting up. A developer who plans to rehab gorgeous art-deco office buildings into luxury apartments quickly sold all 100 units this spring. Local government have adopted pragmatic strategies to help pull the inner city out of its death spiral–and attract interest from private investors. Left-wing activists say that as developers move in, the poor are bound to suffer. But the black establishment stands behind Mayor Amos Masondo’s vision: to create “a world-class African city.”

Creating a new, multiracial Johannesburg departs radically from the city’s original design. Johannesburg was founded in 1886 after the discovery of the Witwatersrand Reef, a 97-kilometer-long gold formation in South Africa’s central plateau. From the beginning, the city was made for the white ruling class. In the 1930s, mining profits financed construction of stunning corporate headquarters, some of the world’s finest examples of art-deco architecture. The so-called Randlords, captains of the mining industry, took lunch at the lavish Rand Club, a gem that boasts a 50-meter bar, while they built hostels in the hinterlands for black migrant workers who labored deep in the mines. In the 1940s, laws designed to separate the races codified this kind of division, formally forbidding blacks from living in central Johannesburg and adjoining Hillbrow, a residential district where high-rise apartments soon sprouted.

The Carlton Center, once Johannesburg’s showcase office and hotel complex, charts the city’s boom, bust and new beginning. The giant mining conglomerate Anglo American, along with South African Breweries and Barclays Bank, spent seven years building the Carlton, which was completed in 1972. Over the next 25 years, its guests included Mick Jagger, Margaret Thatcher and Francois Mitterrand. But the political uncertainty of the late 1980s provoked an exodus of business tenants from the city, and the guests stopped coming. Consumer traffic in the Carlton mall disappeared. Crime soared. Although the African National Congress staged its 1994 victory party at the Carlton, the end was near, symbolized by a murder committed in the hotel foyer. The Carlton Hotel was mothballed in 1997, and two years later Anglo American sold the entire center to a government-owned transport subsidiary for only $4 million. Soon the nearby Johannesburg Sun, another swanky downtown hotel, went out of business, too, leaving the city center without an upscale hotel.

A revolution in crime prevention, combined with cheap office space, has helped revive the Carlton Center and other downtown office buildings. In 2001 the city hired a private firm to install 200 closed-circuit cameras in the city and set up a sophisticated monitoring hub in the Carlton, complete with a police post. Operators trained to spot criminals could zoom in on the action in real time. Police soon announced they could reach any crime scene in 60 seconds. The effect was dramatic; street crime dropped by 80 percent. The last bank robbery was two years ago, and there hasn’t been a street shooting since last August. Meantime prohibitively expensive leasing rates in wealthy suburbs such as Sandton–nearly six times as high as in the city center–prompted tenants to look again at downtown Johannesburg. Today the Carlton office building is almost fully occupied again, and its shopping mall is bustling. Several companies are vying for a chance to reopen the hotel.

That’s not the only good news. Clothing manufacturers in the traditional fashion district, on the east side of downtown, backed the creation of a 10-story fashion center that will train novices, host shows and support up-and-coming designers. A new government-subsidized housing complex is rising in nearby Newtown. On the city’s northern fringe, a former women’s prison has been converted into an art gallery that also houses the Constitutional Court.

For some whites, coming back to the city represents more than just a smart financial decision. They’re now confident they can find security in a black-led society. “The transformation is here,” says Manfred Lindner, tapping his chest. A former policeman, Lindner, 57, this month opened a luggage shop in the Carlton. He says friends joked that he’d have to serve customers in a bulletproof vest. But years ago he stopped carrying a pistol, and he now feels comfortable in the city. “[Old] Johannesburg was an artificial white island,” he says. “It’s becoming an African city. Now there’s buzz, there’s vibe. What you find in Joburg that you don’t find in Sandton is ubuntu [humanness]. In Sandton, you could die and people would step right over you. Here people already greet me in the morning.”

Advocates for the poor worry about the beginnings of gentrification. Many had high hopes for empowering slum dwellers through collective housing schemes. The local council tried that in the early 1990s through the Seven Buildings Project, which created a tenant-run corporation to refinance and rehabilitate a group of run-down buildings. The experiment in tenant-led common ownership collapsed, however, amid factionalism and charges of fraud. The company went bankrupt and was liquidated last year. New owners last September evicted tenants of one building, Stanhope Mansions, by force. “The government is supposed to help us, but they put us on the street,” said Mike Zulu, 39, who once ran the collective.

The city is now promoting private development. The municipal government has taken bids on 49 problem buildings, and it plans to offer as many as 150 more to developers within three years. Under the plan, the city will transfer title to the new owners and cancel delinquent taxes and utility charges. The owners pay a purchase price and undertake specific upgrades, which may leave the current occupants out in the cold. More than 150 companies already are competing for the properties; the first 21 bids are on the verge of approval. “Council consciously subordinates all development to its greed for profit, despite knowing full well that this holds no possibility of ending poverty,” a group called the Inner City Forum said in a formal rebuttal to the plan to be published this week. “Ordinary people will undoubtedly organize and resist the consequences.” City officials aren’t deterred. “Just because you live in a building, you’re not the owner,” says Geoff Mendelowitz, manager of the Better Buildings Program. “These people don’t believe in private ownership.”

The fight might slow down Johannesburg’s transformation, but the market now has the upper hand. In fact, government authorities have a deadline for putting the city’s best face forward: 2010. That’s when South Africa will host the World Cup–arguably the world’s biggest sporting event. By then, a new high-speed train is scheduled to whisk passengers from the state-of-the-art international airport to Johannesburg, Sandton or Pretoria. It promises to be quite a party–and a showcase for a newly vibrant Johannesburg.