Oscar Parties: Plums for Restaurants : * Publicity: Competition is fierce for the soirees, which can drive business for months or even years. Just ask Spago.

“It ought to be one hell of a do,” Irving (Swifty) Lazar once said of his funeral.

Lazar clearly understood the value of a good “do,” judging by the attention lavished on the annual Academy Awards soiree he used to host at West Hollywood’s Spago. But the late literary agent wasn’t the only one who benefited from those parties, as the race to fill his void reveals.

Restaurateurs say the star-studded events generate enough positive publicity to drive business for months or even years. The competition for parties tied to Monday’s Academy Awards celebration was so intense this year that many restaurants offered to host them for free.

“I think (Spago) gained international stardom because of the party,” says Wolfgang Puck, the restaurant’s chef and owner. But he denies widespread reports that he footed the bill for Lazar.

Among those who angled this year to join the exclusive Oscar night ranks is Victor Drai, owner of the trendy West Hollywood restaurant Drai’s.

After plans to throw a party with CNN talk show host Larry King fell through, Drai says, he offered to host a party for Steven Spielberg, who is expected to walk off with an armful of statuettes for “Schindler’s List.”

Says Drai, a sometime film producer: “If I do a party and it’s the party of the year, it would cost me what, $10,000? It’s worth hundreds of thousands of dollars. You have TV cameras. . . . It’s broadcast all over the world.”

Others agree that the return on investment is considerable, even if the cost reaches $30,000, which it reportedly did for Lazar’s parties at Spago.

Chef Leonard Schwartz, whose Maple Drive restaurant will serve dinner to about 230 paying guests for its fifth annual Oscar night party--this year an AIDS benefit hosted by Elton John--says the event is already generating publicity.

“I’ve never been interviewed (before) by German TV,” says Schwartz, who was visited recently by a production crew from Berlin filming a segment on the Oscars.

Schwartz and others say it’s impossible to put a price tag on the Oscar night return. Most restaurateurs agree, however, that the visibility it provides translates into increased business from both out-of-town visitors and locals and gives the establishment lasting leverage with important Hollywood types.

“There’s a subliminal message that this must be a good place if a party such as this happens here,” Schwartz says.

Last year, Nicky Blair and Warner Bros. co-hosted a lavish affair for Clint Eastwood, who swept the Oscars with “Unforgiven,” at the Sunset Boulevard eatery that bears Blair’s name.

As a result, “we had a thousand reservations for the following two weeks,” according to Blair, who says the party cost Warner Bros. between $75,000 and $80,000.

In Blair’s case, the direct effect on business was somewhat short-lived, which he attributes mostly to a poor economy that hurt restaurants throughout the year.

Blair re-entered the Oscar derby this year, adding his name to the list of those more than willing to host a Spielberg party. (The director rejected all of the offers in favor of party hopping.) “I was desperate to get the ‘Schindler’s List’ party. . . . I thought it was a great asset for the future,” Blair says.

“If I had had the Oscar party every year for the last three years, I would be packed every night now,” he said.

Many competitors feel that the best example of that theory is Spago, which held Lazar’s party for nine years.

“I think Spago is what it is because of that party every year,” Drai says.

Puck says the party was only “the icing on the cake” for Spago and that it owes its success to more than a single event. But he concedes that he is still seeing the payoff from last year’s Oscar party.

“If you read Vanity Fair this month, they still talk about his (Lazar’s) last party here,” Puck says, referring to the magazine’s profile of Lazar in its April issue. “People read it and they say, ‘Oh, God, this must be an interesting place.’ ”

Like any investment, however, an Oscar night party has its risks. Restaurant owners must be able to draw an all-star crowd or expect a lukewarm reaction from the press.

“If I do it, I have to have at least 80% of the stars,” Drai says, adding that he is trying to organize a party for next year.

That usually requires a high-profile host. For Spago, the well-connected Lazar drew everyone from Walter Cronkite to Placido Domingo to Madonna.

“He was an international jet set!” the Austrian-born Puck says.

A celebrity host can also relieve the owners of the responsibility of deciding who gets invited and who doesn’t.

Puck and his wife, Barbara Lazaroff, hosted their own exclusive Academy Awards parties in the early 1980s, and they were a customer relations disaster.

“I alienated so many people doing it myself,” Puck says. “Irving was a dream come true. He was the perfect solution because he could say no to anybody.”