Northeastern Shanghai's Tilanqiao neighborhood feels like a living time capsule. The streets spill with people clad still in Mao suits, drying clothing and small dogs, and tiny specialty shops are crammed with everything from homemade niangao, glutinous rice noodles, to chamber pots emblazoned with red "double happiness" characters. In a barbershop with chairs and décor from 1920, one can get a haircut for 50 cents.

     Shanghai used to be full of areas like Tilanqiao, but they are quickly disappearing in the face of government ambitions to reduce the downtown population and erect shiny new skyscrapers before hosting the World Expo in 2010. Tilanqiao's uniqueness lies in its remarkable history as a home to thousands of Jewish refugees from the Holocaust during World War Two. Originally, much of the area was slated for demolition as part of the surrounding North Bund project. Shanghai's urban planners are notoriously inflexible, but intense lobbying by a few dedicated individuals and growing governmental awareness of the area's historical importance and tourist possibilities have won Tilanqiao a new chance for survival. On 20 January, the Canadian Living Bridge Corporation signed a contract with the Hongkou government to restore much of Tilanqiao, but the usual challenges of a Chinese redevelopment project still lie before them.

     Tilanqiao is only a part of Shanghai's colorful Jewish history. Sephardic Jewish business families like the Kadoories, Sassoons and Hardoons were major forces in building concession-era Shanghai. After 1917, the White Russians who streamed into the city included many Jews. In the late 1930s, Shanghai's status as an open port, not requiring any passport or visa, turned it into a last resort for European Jews fleeing Nazism. After 1937, Shanghai was controlled by Japan, and in 1941 Japan rounded up the city's foreign population, with the Allied nationalities sent to prison camps like those depicted in "Empire of the Sun". Stateless Jews were required to live in the so-called Jewish Ghetto in Tilanqiao.

     The area was neither precisely a ghetto nor Jewish. It was technically a "Designated Area for Stateless Persons," with only refugees required to reside there, and they were allowed to move freely otherwise. According to Pan Guang, dean of the Center for Jewish Studies Shanghai and author of several books on Jews in China, about 80% of Shanghai's Jewish population at the time lived in Tilanqiao. Dvir Bar-Gal, an Israeli photojournalist who gives tours of Tilanqiao and is conducting a project to rescue old Jewish tombstones, explained that Russian Jews already been living in the area for thirty years prior to the designation, as rents were cheaper than downtown. The buildings were constructed by Chinese, American and Japanese developers; Hongkou had previously been the never-formalized American Settlement, later taken over by the Japanese. The 20-25,000 Jewish residents of Tilanqiao coexisted with some 100,000 Chinese.

     A thriving "Little Vienna" emerged, centered around the Hole Moshe Synagogue and Broadway Theater. Those buildings have survived, along with many residential buildings, some still with English or Yiddish signs above their doors. Famous Tilanqiao alumni include former US treasury secretary Michael Blumenthal, movie mogul Michael Medavoy and Far Eastern Economic Review founder Eric Halpern; many others have penned memoirs. Various documentaries have been filmed, and according to Dr. Pan a number of Chinese movies and TV series – "all bad" – about the refugee community are in the works, including a musical by movie star Zhou Xiaoli.

     However, a colorful history is rarely enough to save historic neighborhoods from the juggernaut of Shanghai's development. Compared to Harbin, which according to Dr. Pan just spent two million RMB restoring its old synagogue, Shanghai has been fairly indifferent to its Jewish heritage sites. Tilanqiao was included three years ago in the government's massive North Bund Project, which plans to transform Hongkou's waterfront into a shipping, business and entertainment district, complete with a massive Ferris wheel. The synagogue and a few other landmarks were to be preserved, but little else. "The government always considered it a cultural site, but have a different sense of culture, things like the Ferris wheel and themed entertainment tied to the waterfront," explained Chris Choa, managing director of architectural firm HLW.

     According to Mr. Bar-Gal, the government's changed vision for Tilanqiao came somewhat from pressure the international Jewish community, "but more from their own growing understanding. The mayor realized its value, that it could bring in tourists, and figures that Jewish people are rich."

     HLW was one of the three winners of the design contest for North Bund, and Mr. Choa has since campaigned to publicize and preserve Tilanqiao. He was one of many: Dr. Pan, whose has hosted a steady flow of scholars, officials and families of former Shanghai Jews since the late 1980s, said that many foundations, individuals and businesses have approached the Shanghai government with proposals for restoring or redeveloping old Jewish areas like Tilanqiao. "The main interest is in the Ohel Rachel Synagogue," Shanghai's other surviving synagogue, built by Sir Jacob Elias Sassoon, "since the Sephardic families are the ones with the money," but several have been for Tilanqiao. The sixtieth anniversary of World War Two this year, he added, has increased international interest in Tilanqiao. None of these, however, have made any progress

     However, with the contract signed on 20 January, Living Bridge succeeded where others failed. Toronto artist Ian Leventhal came to Shanghai as a tourist in 2001 and was charmed by Tilanqiao and by Wang Faliang, an octogenarian Tilanqiao resident who shares his stories with visitors to small Jewish museum in the Ohel Moshe Synagogue. Teaming with interior designer Thomas Rado, Mr. Leventhal established Living Bridge, which organized an art project called "Gift of Friendship" with Holocaust-themed works by Jewish- and Chinese-Canadians, which is now installed in a former Matzo factory behind the synagogue. "Immediately after the opening, Tom and myself were approached by the Vice Mayor of the Hongkou district, Madame Yao Zhongqiang, to assist the government in further promoting Jewish Culture in the area," Mr. Leventhal recalled. "We enthusiastically accepted."

     According to Mr. Choa, development projects like this in Shanghai usually start with the district or city planners soliciting ideas from a couple of urban design firms. Then the land is made available by auction, and, unless authorized to act as a wholly-owned enterprise, the winner enters into a joint venture agreement, usually partnered with the district-owned development company. Then a master plan is drafted, outlining specific uses, densities and functions, for official approval. "Then the company starts transferring money to the district to buy the land rights and resettle the current occupant, and they have a deadline to do so or forfeit the contract."

     Mr. Leventhal declined comment on whether Living Bridge competitively bid for the Tilanqiao project or went directly through district officials, but confirmed that the 20 January contract marked the official approval of their master plan, drafted by Tongji architectural professor Ruan Yisan. The plan covers only the central part of Tilanqiao and the wartime designated area, sixteen blocks stretched between Dong Daming Road, Lintong Road, Haimen Road and Gongping Road.

     "[W]e are retaining the low profile of the existing buildings, and making sure infill construction is sensitive and in keeping with the traditional styles We fought diligently to keep the car out of the renewed neighborhood, and in fact we are pedestrianizing Zhou Shan Lu," Mr. Leventhal described. About fifty buildings will be preserved. "The zoning overall is of mixed use, reflective of earlier times. Again this concept was foreign to the local planners who originally wanted us to abide by pre set zones for commerce, retail and residential. In order to have a lively and vibrant community it was essential we explained, to have cafes, bars and stores on the ground level with boutique offices and residential units above. On a cultural level, we have plans for a Jewish museum to showcase the Jewish experience in Shanghai…built adjacent to the Ohel Moshe Synagogue. We have plans to restore the Broadway Theatre, reconstruct the Vienna Cafe, and plaque and mark all the significant sites of interest. There is a proposed urban park with a significant water feature that will link the north facing Synagogue to the south facing Xia Hai Temple."

     Living Bridge now has a "two year exclusive period as sole developer for the Tilanqiao area," Mr. Leventhal explained, during which they must raise funds to acquire the property rights, part of a total price tag of $700 million. It has yet to be determined how many of the area's 16,000 Chinese residents, many of who still remember and bought their houses from the refugees, will be relocated.

     Alongside with optimism that the area will be mostly preserved, observers expressed skepticism at Living Bridge's lack of experience in urban planning or doing business in China. "The program has no money, and I don't know if or how they will raise it," said Dr. Pan. "Agreements, contracts mean nothing without the money to back it up. It will be difficult for them to." Regardless, the efforts by Living Bridge and others to make the district government aware of Tilanqiao's importance have made it almost certain the area will remain, even if the nostalgic octogenarians and homemade niangao shops that make it so colorful do not.

Ms. Movius is a Shanghai-based writer.