MiMo district supporters hope Sarnoff will relent and permit heights up to 55 feet, which they say would allow property owners more flexibility -- in particular motel owners who may need room to expand to achieve economic viability.

"You need enough height where you can put in some retail, you can put in some parking, and some apartments on top, and you can get a return on the land," Carbonell said, noting that historic districts from Delray Beach to South Beach allow heights of four and five stories.

But Sarnoff says other measures in the works will help property owners. A proposed business improvement district, seeded with $100,000 Sarnoff obtained, would use fees from local owners to promote business activity.

And a new transfer of development rights (TDR) program would allow property owners to sell off air rights they can't use because of district restrictions, and use proceeds to renovate. Critics are skeptical. MiMo association co-founder Nancy Liebman calls the TDR "a fairy tale." Longtime Boulevard business owner Henry Patel, whose King Motel was among the few respectable hostelries at the district's low point, says he's tired of unfulfilled city promises. "There has been progress here, but the credit should go to the people who have been there 25 years, hanging on, like myself," he said. In the meantime, with the restored New Yorker, Liebman says, "We can finally point to something that is worth coming to and staying in." Meanwhile, Diaz and her husband sank their savings, home equity and months of sweat into the New Yorker renovation.

"I wish everyone here would do the same," Diaz said. "This area has flourished. But it still needs a lot of tweaks."