It’s Still Fun and Games at Newport Beach : The Fun Zone mini-amusement park stands the test of time while other businesses come and go.

Ah, this is the life. The overcast that had frowned on the beach is gone this morning. The ferry churns on its endless circuit to Balboa Island while sailboats glide across Newport Harbor. A yuppie couple--squinting into eyepieces of matching video recorders--take pictures of a bewildered toddler.

Peaceful, isn’t it? Unless you own a business here. Then there are all kinds of shoals and jagged reefs beneath these placid waters, just waiting for unwary merchants to run aground and sink.

Bob Speth, 55, a burly man with a handlebar mustache, owns a business on the beach. He’s clad in the uniform of local retailers: T-shirt, shorts, baseball cap and sneakers.

He takes a seat at an outdoor table near the merry-go-round and welcomes a visitor to an anachronism: The Fun Zone, the vest-pocket amusement park that has outlived two bigger seaside rivals--Pacific Ocean Park in Santa Monica and the Pike Amusement Park in Long Beach. Both were gone by 1978. The Fun Zone, meanwhile, is still going after more than half a century.

Eight years ago, Speth and Joe Tunstall realized a boyhood dream when they bought the amusement park. Four years later they were considering selling and looking over a couple of offers. It turned out that running an amusement park was a lot of work. Tunstall was retired and didn’t want to work full time. Speth already had a job as a Fountain Valley firefighter. The Fun Zone, in short, wasn’t fun anymore.

But none of the offers panned out, so the two decided to hire a manager. It would mean less profit but less work, too.

The Ferris wheel, merry-go-round, bumper cars and a haunted house ride perched next to the harbor take in about $1 million a year and yield $370,000 in profits before taxes, the owners said. The rides are doing well, an adjoining arcade not so well, Speth said.

The rides are better off, at least, than the art galleries, sunglass shops and hamburger stands that bounce in and out of the 1 1/2-story building like yo-yos. There are empty stores--reminiscent of missing teeth--all over the place in this little beachside neighborhood.

The entire Fun Zone building, in fact, is hurting. A Japanese restaurateur from Osaka bought it in 1988 for about $10 million--which in retrospect was way too much.

Now the building is in receivership and the lender, American Savings Bank, is pondering whether to foreclose and sell it off. The Osaka restaurateur reportedly lost a quarter of a million dollars a year on the place.

There are big problems doing business at the beach: Tourism is one of the first businesses to take it on the chin in a downturn like the one California is in now. And the tourist business is really only good for the summer. You’ve got to plan and save for the lean winter months.

“The rent doesn’t stop in the winter,” Speth said, “but the tourists do. In the fall, you can see a bunch of new cars parked around here because people have done so well all summer long.

“Then winter rolls around, and they’re saying ‘uh-oh.’ ”

The Fun Zone, meanwhile, endures. The original Ferris wheel, made in 1918, is gone. But there are two newer ones--the one that’s running now and a replacement that’s at Tunstall’s desert ranch, where he has a whole collection of carnival rides. The wheels get switched every four years because you can’t repaint one while it’s at the beach. The reason: “By the time you got to the top, you’d be spraying every boat within a hundred yards,” Speth said.

When they started out in 1985, Speth and Tunstall already had the Ferris wheels. What they didn’t have was a merry-go-round.

A new one would cost $120,000, too rich for the two partners and their 38 investors. One of the people they called was Ed Morgan, who made carousels in the little town of Scotts Valley, between Santa Cruz and San Jose. Morgan told them he had designed one in the 1950s that was “in the weeds” at a boarded-up Santa’s village. And it only cost $20,000.

Morgan Manufacturing--which also makes roller coasters and had just shipped a carousel to Kuwait--got the old merry-go-round up and running again at a cost of $80,000.

“It was great,” Speth said, “having the guy who designed it around when we took it down. We’d say, ‘OK, dismantle that part,’ and he’d say, ‘no, you better start with this part.’ ”

On this day at the beach, the weather promises to stay hot through the weekend, which means business at the Fun Zone will probably be good.

“The best weekend weather,” Speth said, “is when it’s hot inland and cloudy here. Everyone comes down here--but then nobody wants to sit on the beach.”