It’s a little after 8 on a Wednesday morning and a handful of veteran drinkers are already in the dimly lit bar at The Taproom. Small piles of bills and coins in front of them steadily turn into fresh drafts of Budweiser or Coors Light, with perhaps a shot of something on the side.

Through the front window coated with winter grime, they can see the Keystone Trust Building across North Third Street. Until a couple of years ago, the historic stone building was a Harrisburg branch office for Fulton Bank. Now, it’s vacant and a little forlorn-looking.

In perhaps 18 months, though, the view might be much different, with new neighbors named Warhol and Degas.

Plans call for the 95-year-old Keystone building to get a major face lift and anchor one end of a new 20,000-square-foot Susquehanna Art Museum, which will stretch northward inside a two-story, glass-fronted addition. The 1400 block of North Third likely will never be the same.

Taproom owner Dave Larche said the $5.5 million museum project will be good for the neighborhood and, therefore, his business, even if a mostly suburban art crowd won’t necessarily troop into his tavern. But he believes the museum might spur other business activity such as restaurants and galleries that will create more blue-collar jobs.

“In any neighborhood, there’s always a working class bar like this,” Larche said. “I’ve already ordered a new cooler, and we’re going to put down a new floor behind the bar.”

The new art museum will be the most upscale presence in the neighborhood, but prospects for the future already are brighter here than the limited view The Taproom's window might suggest.

“We think there’s a ton of energy in that area,” said Stephen A. Moore, a Harrisburg lawyer and president of the art museum’s board of directors. “It’s an excellent location in a growing and thriving area where there already has been considerable investment.”

Welcome to the heart of Harrisburg’s midtown, a racially balanced neighborhood where drug dealers and college students share the sidewalks, and young professionals wait in line at Sayford Supermarket with widows on Social Security. Located five blocks north of the State Capitol building, this area is poised for dramatic change.

Growing optimism

Two blocks west, a new federal courthouse will be built at Sixth and Reily streets. Federal officials hope to break ground on the $130 million building in 2013.

A company called GreenWorks Development has spent about $50 million in private and public redevelopment dollars in the area, with another $75 million planned. That plan calls for a mix of affordable and market-price housing, plus retail, commercial, educational and cultural activities.

The company owns a lot of property in the area, including the Keystone site where the new museum will be.

GreenWorks’ efforts already have translated into two refurbished buildings, one a former publisher of religious literature, where Harrisburg Area Community College is offering trade and technical courses, plus a new home for Fulton Bank’s branch office.

Then there’s the new four-story Campus Green building at Third and Reily, offering retail and office space. There’s a pizzeria on the first floor, while HACC’s central administration has office space on the top floor. More than half the $14.3 million building is still vacant.

GreenWorks recently bought 44 lots in the dormant Capital Heights townhouse project. Senior vice president Matt Tunnell said GreenWorks is moving ahead and securing loans even in a flat real estate market.

Smaller firms such as Midtown Development also have been active, reviving properties such as the one housing a cafe called Breads ’N Spreads at 1419 N. Third St.

As a result of these efforts, residents and merchants say optimism is up.

Sayford Supermarket owner Yong Kwan, a native of South Korea whose business is across Calder Street from the proposed museum, said he’s seen a lot of improvements in the eight years he’s been in business on North Third Street.

“I’m glad that I moved up here,” said Kwan, a naturalized citizen who used to own an ice cream shop in Washington, D.C., where he was robbed three times. “I don’t have any problems here.”

Frank Cavanaugh is the proprietor — and sole employee — of Midtown Paint and Hardware, a few doors north of the Taproom. He’s been in business for 27 years, surviving the decline of the neighborhood and the rise of home improvement chains like Home Depot and Lowe’s.

“It’s definitely going in the right direction,” he said of the neighborhood. He particularly welcomed news of the museum. “It will just be a total benefit for the area,” Cavanaugh said. “It will bring people in.”

Admittedly, not everyone in the neighborhood cares about the museum project.

“What’s an art museum to me?” asked senior citizen Marie Williams, who lives in a renovated low-income apartment in nearby Cumberland Court.

Her friend, Margaret Rickrode, gave the museum the thumbs up, even though she figures she’ll never go there. “We need something around this place,” Rickrode said.

'We will attract people'

There’s still a hardscrabble quality to many parts of the GreenWorks project area, which covers about 8 acres roughly bounded by North Third, Calder, Hamilton and Sixth streets.

Barber shop owner Bob Travitz has been in business on the 1300 block of North Third Street for 47 years. He’s been robbed, and he’s seen the neighborhood’s fortunes rise and fall.

“We had a lot of dope up here, but we are slowly getting rid of that,” said Travitz, who charges $10 for a haircut and $5 for a shave in his tiny shop, which is enfolded by Fornwald’s Window Shades, another longtime business. “I hope the museum goes in. It will push the drug dealers right out of here.”

That’s probably not on the list of mission goals for the museum board, but tough-minded management is.

“Believe me, we know this is a mixed neighborhood,” said SAM board member Andrew J. Giorgione, who played a major role in the Keystone negotiations. “We expect to play a part in changing that.”

Moore said he doesn’t think museum visitors will be scared away by the neighborhood’s rougher aspects.

“Given the progress that’s already been made and what’s slated, this is an up-and-coming area,” he said. “We will attract people into that area and help the revitalization. We hope to keep all our old friends and make lots of new ones.”

Elsewhere in the neighborhood, boarded-up windows and “For Lease” signs still dot many building fronts. The door is padlocked at Club 1400, where a shooting occurred last year, and a lighting store, The Bright Spot, is closed. More than a few buildings show evidence of flood damage wrought nearly 40 years ago by Hurricane Agnes.

“It would be nice if neighborhoods just came back all at once, but that’s not how it happens,” Tunnell said. “It’s always bits and pieces. We just keep working diligently on our plan.”

'A thriving arts community'

SAM’s arrival might kick off a new wave of investment.

Former Gov. Ed Rendell, who announced the Keystone site during his final news conference, said the new museum might serve as an anchor for an arts and cultural district along the lines of Philadelphia’s Avenue of the Arts, which he helped to develop during his time as mayor.

“There’s already a thriving arts community in midtown,” Tunnell said. “It’s always been viewed as the center of the arts community in Harrisburg. To bring this [museum] right into the center of this revitalization project is going to be perfect.”

The state is providing a $5 million matching grant for the museum project. Moore, the board president, said the state has agreed to accept money already spent on revitalization in the neighborhood as the matching funds, sparing SAM the need for what could have been a lengthy fundraising campaign.

Even before the museum and courthouse arrive over the next few years, the neighborhood has assets in place.

A couple blocks to the south, the thriving Broad Street Market and the Midtown Scholar Bookstore cater to downtown office workers and professionals. On Reily Street between Second and Third streets is the Midtown Cinema, an arthouse owned by GreenWorks that shows independent films.

A handful of cafes and ethnic restaurants already operate in the area as well.

Supermarket owner Kwan acknowledged that businesses — and even residents — in the neighborhood could be hurt if ongoing revitalization causes property values and rents to rise dramatically.

“That can be a factor, but I don’t think it can change everything,” he said. “They can’t change the whole neighborhood.”

Bryan Davis, director of the Harrisburg Redevelopment Authority, said the neighborhood already has a lot of affordable housing, with more on the way, making widespread gentrification unlikely.

“You are building on success,” Davis said. “I think this will just solidify the neighborhood.”

A coalition of museums

SAM left its former site at the Kunkel Building in downtown Harrisburg when its 10-year lease expired in December.

Museum employees are temporarily using office space in Strawberry Square. The State Museum of Pennsylvania has agreed to host some of SAM’s planned exhibits until the new museum opens, possibly by early 2012.

Moore said the museum needed a site that could meet the requirements for accreditation by the American Association of Museums, which involves strict guidelines for lighting, security and even the quality of the loading docks. “That is one of the principal motivations for this undertaking,” he said.

The accreditation, once received, will allow the museum board to proceed with its own plan to create a coalition of art museums in Pennsylvania, including the Warhol Museum in Pittsburgh, the Philadelphia Art Museum and many others. That would allow SAM to exhibit significant artwork that would otherwise be in storage and out of public view.

Rendell said the plan could significantly upgrade SAM’s image.

“Harrisburg, as a capital city, should have a world-class art museum,” he said.

Now, if only people can find a place to park when visiting it.

Tunnell acknowledged that parking is a tough challenge. A small lot beside the Keystone building will be lost to the museum addition, while a couple of GreenWorks-owned lots behind the museum site aren’t big enough to handle the museum traffic.

“What we really need is a parking garage,” Tunnell said. “I don’t know when that might happen.”