In the C&C Grocery market, a one-room store on Newark's West Kinney Street where the sidewalks are littered with glass and the empty lots tell a tale of arson, Jerome O'Neal explained why he voted against Kenneth A. Gibson, the mayor who has run this city for 16 years.

"We needed a 'Sharpe change,' " said the Vista worker, picking up on the campaign slogan of Sharpe James, the city councilman who routed Gibson in a major upset Tuesday. James pledged today that he would bring Newark, one of the nation's poorest cities, "together as one" after he takes office July 1.

A college professor, James ran on a populist platform, calling Newark "fear city and dope city" and accusing Gibson of neglecting its crumbling neighborhoods in favor of glittering downtown development.

Gibson, elected in 1970 as the first black mayor of a major Northeastern city, had a hefty campaign chest, the endorsement of The Star-Ledger, the city's newspaper, and the tacit support of its white business leaders. His defeat took the city's establishment by surprise.

"I can't think of anything I would have done differently," Gibson said today, adding that he had had no indication he might lose. He promised to give James "a lot of advice. I'm sure he will be prepared to do the job."

James' wide victory margin -- 55.6 percent to Gibson's 40.4 percent in a four-candidate field -- underscored a deep undercurrent of dissatisfaction in this majority black and Hispanic city.

Since 1970, the middle class has fled and Newark's population has dropped 17 percent to 320,000. Forty percent of its households have income of less than $10,000 a year. The 11.2 percent unemployment rate is twice the state average.

For many of its citizens, living in squalid housing projects plagued by drug addicts, the city's budget surplus, improved bond rating and new skyscrapers for which Gibson takes credit seemed small comfort.

"Newark has become a tale of two cities," James said during the campaign. He repeatedly attacked Gibson for reducing the size of the police force.

James, who taught in Newark schools before becoming an education professor at Essex County College, was Gibson's ally until recent years when he broke with the mayor over the police issue.

In introducing his 17-year-old son today, James noted that the youth was a victim of a pistol whipping by muggers on a Newark street corner.

Although Gibson, a taciturn engineer, had been widely admired for helping to calm racial tensions in the early 1970s and had become nationally prominent as head of the U.S. Conference of Mayors, his image was tainted by corruption charges, of which he was acquitted, and by a governing style some called detached arrogance.

Asked today if he might run for Congress, Gibson said, "I have never felt Ken Gibson should be one of 435 anything."

Outgoing, athletic and elegantly dressed, James projects a more relaxed style. "Sharpe James was visible and accessible as a councilman, and as mayor he will be even more visible and more accessible," he said.

When Gibson suggested today that James' campaign promises could not be quickly executed, James replied that not only could more police officers be hired in short order, but also, "If we want to clean up our city, I can get a broom right now and sweep up some of those lots and make a difference, instead of just driving past them."

James expressed bitterness toward "the business community which did not assist Sharpe James, but stood on the sidelines and waited for a winner." But he said business leaders had called him today and "I extend my hand to them . . . . The city is bigger than all of us."

The sense that Gibson had become part of the business establishment and no longer listened to the people was evident here this week. Cordrol Carr, a credit investigator for the Broad National Bank, said, "Gibson wasn't listening to the people. He listened to big business. Look at the housing, the drugs, the crime."

O'Neal, who had cited the James campaign slogan, added, "We have no recreation for our kids, no place for them to play." Outside the store, teen-age youths leaned listlessly against rusted cars, graffiti marred the walls of a tenement. An elderly woman stood dazed in the street, complaining that she couldn't find an apartment. Nearby, Deborah Carr said she had been drinking all day. She said she had been unemployed since 1980 when the vending machine company where she worked moved to Pennsylvania. Her child lives in Alabama because "I wouldn't want my children to go to school here."

She said she is registered to vote, but hadn't. "Gibson's been mayor for 16 years and what has he done? They ain't ever going to clean the drugs up. This place is the pits."

Assemblyman Willie Brown, James' campaign manager, said Gibson had been a good mayor at first, but "had lost touch with the people."

James, he said, "relates to the grass roots. People feel comfortable talking to him on a street corner."