Developers and local business leaders are locked in a battle with preservationists and residents over the future trajectory of 125th Street, a Harlem thoroughfare that, despite a recent renaissance, has for decades epitomized urban blight and decay in an area defined by poverty, high unemployment, and soaring crime rates.

Yesterday, the City Planning Commission, headed up by Chairwoman Amanda Burden, held public hearings to weigh a rezoning that would affect the area running between 124th and 126th streets and between Broadway and Second Avenue.

The city’s plan would allow for private developers to build taller and denser buildings and to institute incentives to encourage the construction of housing for low-income residents. In an attempt to maintain the artistic signature of the street — represented by institutions such as the Apollo Theater — “artistic bonuses” would be handed out to developers as incentives to produce developments that dedicate 5% of their floor space to arts and entertainment. The plan would also limit the street presence of banks, which have crowded out retailers in other parts of Manhattan.

Two of the three community boards affected by the plan have conditionally voted in favor of the city’s plan, but opposition groups are characterizing it as the first step in dislocation of the district’s culture and long-term residents. “We have seen time and time again how development can force residents out of the neighborhoods that they have always lived in and loved,” an organizer for SEIU 32BJ, Walter Cooper, said. Like many in the opposition camp, Mr. Cooper argued that the rents set for the “affordable” housing element of the plan would be far too high for residents of the Harlem district.

A number of business leaders, developers, and local politicians yesterday said the rezoning would lead to economic development of the neighborhood, including better-paying jobs and a potential cultural resurgence.

“We are at a pivotal point and using this zoning is an important opportunity,” the president and CEO of the Apollo Theater Foundation, Jonelle Procope, said. “The plan presented here has at its heart a time when 125th Street was famous. When it was a great night out,” she said.

The chief executive officer of Integrated Holdings, Derek Johnson, who is working with developer Vornado Realty on a building on the corner of 125th Street and Park Avenue, said the zoning could limit the types of new jobs that are attracted to the neighborhood. Mr. Johnson said he had already acquired two notable “media companies” to anchor their commercial building, which would allow for the infusion for higher skill jobs.

“In this instance we are talking about the nature of the jobs. These are skill-establishing, career-building roles that will endow people with professional skill sets that are transferable,” he said.

City Council members Inez Dickens and Melissa Mark Viverito said they would support the plan as long as a number of slight alterations were made, but the local state senator, Bill Perkins, said the development could have a tsunami-like effect on the rest of the community.

The group that has staked out the firmest opposition to any development is Vote People, a grassroots organization that has teamed up with civil rights advocate Norman Siegel. Vote People is asking that buildings already submitted for landmark status be approved before any rezoning takes place, that any development should involve only local firms, and that the rates for “affordable” housing should be set at a lower level to accommodate low-income residents, according to the group’s Web site.

“Within the plan you have the potential for 20-story buildings,” the executive director of Vote People, Craig Schley, said in an interview.

The commission is scheduled to vote in March. If passed, the council will then have 50 days to vote on the proposal. Another hearing is likely if the proposal moves to the council.