CALIFORNIA ALBUM : Santa Barbara Is Back in Business : The drought, road work and lousy weather hurt the tourist trade. But winter rains and summer sunshine have made the seaside community appealing again.

The Santa Barbara Writers Conference, a local rite of summer for 20 years, opened last month to bright sun and blue skies that tourism boosters chose to view as an omen of better times.

Because the writers conference gets under way at the start of summer, it has been seen as a harbinger of the tourist season. And for six summers now--a string marked by drought, wildfire, bad weather and freeway work--the signs have mostly been bad.

But this June, the conference attracted a record 400 participants, who in nine days dropped half a million dollars in this coastal town’s economy, which relies heavily on tourism.

“We filled the conference faster this year than we ever have before,” said founder Barnaby Conrad.

City officials hope the summer’s auspicious beginning will carry through the rest of the tourist season, marking an end to the run of bad luck that has pushed merchants out of business and sapped the city’s treasury.

The last good year for tourism was 1985--not so coincidentally, also the start of what is known here simply as The Drought.

Much of California suffered through the dry spell, but few cities were as parched as Santa Barbara. Reservoirs dried up and the Santa Ynez Mountains that rise above the city of 80,000 resembled cracked bricks.

By 1989, local water districts had banned watering, which prompted at least one homeowner to spray-paint his lawn green. The dismal situation kept away visitors.

Then, in 1990, the city suffered one of the worst arson fires in California history. The Painted Cave Fire, which broke out during the week of the writers conference, raged for four days and swept through exclusive neighborhoods, causing $400 million in damage.

That year, hotel occupancy rates dropped below 70% for the first time in 14 years.

Last year, the hotel occupancy rate fell to 64.9%--its lowest level since 1974. “That’s a massive drop in a town that traditionally boasts rates in the low to mid-70s,” said Ed Galsterer, spokesman for the Four Seasons Biltmore Hotel.

Last year began on a down note with the recession and the Gulf War, which slowed vacation business in most California cities. Here, the mood darkened further when the summer writers conference began under a thick blanket of fog that seemed to hang around until fall. “We never saw a sunny day last summer,” said Galsterer.

Aggravating nature’s ways have been a pair of large construction projects that, for the last four years, have turned the downtown area into a dusty and disorderly job site.

In late 1988 work began on the first shopping mall in downtown Santa Barbara. The project encompassed two blocks along the main artery, State Street, and displaced 35 small stores. Also that year, Caltrans began a four-year project to widen U.S. 101 and remove the signal lights that for decades had stopped freeway traffic through Santa Barbara in mid-town.

The $60-million freeway project relocated a few more businesses and rerouted some downtown streets. With State Street closed in 1990 and 1991, retail sales downtown dropped 20% to 30% annually, said Steve Cushman, president of the Downtown Organization.

But the rubble and dust have cleared. The annoying stoplights are gone, and the messy freeway project should be completed by August, according to a Caltrans spokesman.

Even nature seems to be trying to help. A series of winter storms pelted the city with rain earlier this year, easing the six-year drought and making it possible to shut down the city’s $30-million desalination plant three months after it opened.

In an unlikely turn of events, Santa Barbara now has more water that it can use. The city is considering reopening its desalination plant to allow an exchange of water across state lines with the thirsty Las Vegas Valley Water District.

Best of all for local boosters is the weather report--summery.

Capitalizing on its turn of fate, the town’s hospitality industry is wooing visitors with discount hotel rates and heavy promotion. “In the past, we always expected the summer season to fill up,” said Margie Ranc, executive director of the Santa Barbara Conference & Visitors Bureau.

So far, the results have been encouraging. Occupancy rates at beachside hotels--where tourists tend to stay--climbed 10% in June and visitor inquiries have tripled.

“We’ve been hurting, but I think we have a good chance of getting back to the level of 1990,” said Ranc. “And that’s still not where we want to be.”