Earlier quoted context omitted.
Contrary to that anecdote, Jersey City (across the Hudson river from Manhattan), created a no-car zone near one of its busier subway stops and what was once a dead-zone after 8pm is now an extremely vibrant place filled with bars, restaurants and shops. Proximity to mass transit and having density that already discourages driving helps.
It has nothing to do with car free streets and everything to do with the Jersey City being on the other side from Manhattan with rents being 50% or lower than the rents in Manhattan and Jersey city being accessible by PATH.
Still, this was a pretty dead place at night. In 2008, I would go to one of the two bars there and it would be a literal ghost town, with stores boarded up with metal gates and such- it looked almost post-apocalyptic. It was a little better from 2011-2014, but still it was a quiet area at night.
After the pedestrian plaza was put in, the amount of foot traffic increased ten fold, particularly during the day when it was a heavily traffic-ed street. This brought in a new wave of bars and restaurants to the area, and its now a destination on its own, filled with people nearly 24/7. In fact it has gotten so popular and become such a destination, the city is now trying to introduce ordinances to reduce noise at night.
The change was instantaneous after the pedestrian plaza was put in place.
People seem to forget these days how much Jersey City was shit on up until 2011 or so. It was "jersey" and it was absolutely not a definite that it would gentrify.