Something very similar has happened in the past 5-7 years in Cincinnati. OTR (Over-The-Rhine) is the oldest neighborhood outside of downtown in Cincinnati. It was very popular with the city's German population in the second-half of the 19th century, hence the name. There's some really great architecture there.
By the 1930's, it had become unfashionable and the middle-class people moved out. An influx of poorer, mainly African-American, people took their place. By the 1960's it was the unofficial "black" section of the city. It also gained a reputation for violence, poverty, and drugs.
All that changed a few years ago when a company called 3CDC began renovating house by house, street by street, block by block. It used to be that it was unsafe to drive past Central Avenue (the border between downtown and OTR). Now the entire section between Central and Liberty is renovated and home to upscale apparments / condos, restaurants, shops, galleries, etc.
Right after the transformation, the city's newspaper printed a lot of articles about how gentrification of OTR was disadvantageous to the native population. How the rents have raised dramatically, how the native populations wouldn't feel comfortable in the new stores, or how they wouldn't enjoy the fruits of this renewal.
I can see both sides. And to be fair, not all of OTR is now "safe." The area between Liberty and the base of Clifton hill is still really gritty. Only about a half of OTR has currently been revamped. So now you have this odd Bohemian mix of middle- and upper-middle-class white people and poorer minorities interacting. Crime has dropped to historic lows. Drugs are still there, but not as obvious now.
All in all I think the transformation has been great. The entire front lawn of Music Hall (Washington Park) has been redone. It used to be nothing more than a grassy lawn for homeless people to loiter, use drugs, and for criminals to commit crime. Now it's got areas for games, for walking / jogging, reflecting pools, areas for music groups to play, etc.