Two Neighborhoods / Two Destinies : L.A.’s recovery from the Northridge quake has become a tale of two cities. Below is the story of a stretch of Hollywood Boulevard, where a vibrant community has turned into a virtual ghost town. : Where There Was Struggle, Now There Are Death Throes

Along a dingy row of stucco and brick buildings on Hollywood Boulevard straddling Western Avenue, the quake showed little mercy.

Lorena Martinez fumbled half-naked down four flights of a pitch-dark tenement with her baby and toddler in her arms, escaping the building just as a shower of bricks crashed to the ground. Down the street, Maria Ramirez flung herself hysterically over her two youngest children as her yellow stucco low-rise lurched two inches toward the street. Lena Bagdasarian joined dozens of elderly immigrants stampeding down the hallways of her apartment building as one of its four-story brick walls sheared away, exposing the interior of her home as if it were a dollhouse.

The women spilled into the parking lots dotting Hollywood Boulevard, where they and hundreds of others remained encamped for days. The colonies of newly homeless stayed to guard meager belongings still inside the buildings, but as one apartment complex after another was condemned, the parking lots cleared, leaving behind an eerie emptiness.

In a three-block area, 400 units in a dozen apartment buildings are boarded up or closed. Lorena Martinez’s garish pink 80-unit building is in foreclosure and city workers, concerned that it is a hazard, have torn it down.

Some landlords await word on applications for government loans. Others have simply announced they won’t mend broken buildings because it doesn’t make economic sense. Mohammed Siddiqui said the owner of the building that houses his grocery store pointed out the obvious: Siddiqui’s $975 monthly rent won’t cover repair costs. “Fix it yourself! Or leave!” he says the landlord told him. More than 10 stores around him have already closed.

Glitz and glamour had long eluded this part of Tinseltown.

Rodrigo Velasquez, a 31-year-old Guatemalan immigrant and father of three, paid $500 a month for a run-down, one-bedroom apartment in the 62-unit yellow stucco building. Water dripped from the apartment above. When Velasquez turned on the kitchen light at night, the floors were alive with cockroaches.

To lure new tenants to the building, the manager had stopped requiring deposits and allowed people to pay rent two weeks at a time. Newer arrivals sold marijuana and vials of crack cocaine, placing sentries near the door to watch for police cruisers. On the third floor, 15 adults and children slept on the floors of a one-bedroom apartment, where each paid $50 a month. Most of the tenants survived by driving vegetable trucks, picking aluminum cans from trash bins, or buying wood pallets for $2 and reselling them for $5.

Velasquez’s neighbor, Maria Ramirez, kept her four children inside, away from the prostitutes who waited in stiletto heels on the corner and gangs that gathered across the street. “I see the druggies do something, I keep my mouth shut. I fear they will kill me,” says Maria, 41, smoothing her green church dress and darting a nervous glance at her husband, Carlos.

By driving off the area’s more stable and hard-working residents, the quake catapulted a struggling neighborhood toward full-fledged urban decay.

Rock cocaine dealers now proliferate outside a doughnut shop. Homeless squatters and prostitutes have already claimed three red-tagged apartment buildings, transforming them into drug dens. Police estimate there has been a 25% jump in the number of homeless on the block, lured initially by Red Cross and government relief efforts, then by an abundance of abandoned buildings.

Magnum malt liquor bottles are strewn on the soiled blue carpets inside Velasquez’s building. He wanders the hallways of the battered building, where the smell of urine permeates the air. Drug addicts and drunks have appropriated his old home, No. 103, climbing in through the apartment’s shattered windows.

Mingled with the new tenants are those who lived in the building before the quake but couldn’t get government aid. “The homeless are taking over these abandoned buildings like rats,” says Glenda Turner, 31, adjusting her pink curlers as she steps under the building’s crumbling front columns, her 2-month-old baby crying inside Apartment 119.

Left behind on the desolate stretch are mom-and-pop business owners, first devastated by earthquake damage, then by the loss of their customers.

Lucy Martirosian has scrawled “Open” in Armenian on plywood sheets covering windows of the El Adobe Pharmacy on Hollywood, but scaffolding holding up the roof scares most patrons away. Rows of mustard-colored vinyl chairs, where elderly Armenians waited patiently for prescriptions, are empty. Across the street, seven stores are shuttered.

“After the earthquake, this became a desert,” says Martirosian. About $75,000 in medicine shattered during the temblor. Then, business plummeted 80% as clients cleared out. Even if apartment owners rebuild, the process will take more than a year, Martirosian says in despair. Meanwhile, El Adobe hemorrhages from $70,000 monthly losses. “We can hold on one or two months longer,” says Martirosian, staring helplessly at the vacant store.

Mohammed Siddiqui, 33, frantically points at the lone, empty-handed customer who strolls the aisles of his Alison’s Mart grocery store. “Look! There are no customers. This was my dream. It’s finished now,” he says, grasping his head with both hands.

Siddiqui toiled 10 years as a $5-an-hour grocery clerk to save the $44,000 he paid just two months before the quake to take over the store’s goodwill and merchandise. Monthly sales of $22,000 have shriveled to $1,000--mostly sales of butane lighters to the drug dealers and vagrants who have multiplied since the temblor. With the streets empty, he fearfully shutters his doors two hours early, at 6 p.m. His store has been robbed twice since the earthquake.

For months, he has called in vain asking what is holding up his application for a $45,000 government loan. Meanwhile, his entire savings of $2,400 has gone to restock shelves that remain half-bare. Siddiqui paces as he talks about the eviction notice he received to clear out of his one-bedroom apartment for failure to pay the $645 rent. Another landlord is threatening to padlock the store if he doesn’t cough up the rent. “I have scratch, zero. I am standing now where I was 10 years ago.”

Low-rent districts like Hollywood have always been slowest to rally from disaster. After the 1989 Bay Area quake, the upscale Marina district quickly mended. Meanwhile, 90% of apartments, many in low-income areas where owners could not hike rents to recoup construction costs, had not rebuilt one year later; as of last year half remained shuttered, one state-funded study found.

Government assistance developed in response to disasters such as floods and tornadoes, which mostly occurred outside urban areas. As a result, there are no government programs to replace affordable housing, said Mary C. Comerio, a UC Berkeley, disaster expert.

Hollywood may lose up to 4,000 affordable apartments as owners abandon buildings to the banks, said Mirta Ocana, an aide to Councilwoman Jackie Goldberg, who represents the area. “We will see boarded-up buildings and blight,” she said.

The government’s main source of disaster assistance is low-interest loans provided by the Small Business Administration. But the rejection rate for businesses and apartment owners is not pretty: So far, more than half have been spurned.

Like any bank, the SBA analyzes a business’s ability to repay the loan. The area of Hollywood Boulevard and Western Avenue is so run-down that landlords cannot command rents higher than $400 to $500. As a result, most probably won’t qualify for loans because they can’t generate the income from their properties to repay them.

Ocana and others fear the earthquake will undermine the city’s fledgling efforts to renovate Hollywood.

“You can’t isolate the problem,” Ocana said. “It will spill over, five blocks, or more. “The transients . . . will move down Hollywood Boulevard. It will have an impact on what we are trying to do in Hollywood, which is try to turn it around.”

Ironically, the area’s exodus was accelerated by an infusion of federal housing aid that allowed many low-income residents to escape their roach-infested apartments for better homes in other parts of the city.

Rodrigo Velasquez is among those who used the housing subsidy to leave his old neighborhood.

Sitting in his new home at a kitchen table under a velveteen rendition of the Last Supper, Rodrigo jumps up, happily pointing out his newfound luxuries. The children, for the first time, have their own bedroom. The modern building, in another part of Hollywood, has an Art Deco glass-block entryway, secured parking and elevators paneled with fake marble the color of cream. He pays just $235 of the $800 monthly rent. Rodrigo’s wife, Veronica, is ecstatic. “I tell her: Woman, don’t get used to it. She says: ‘How do I do that?’ ”

Lena Bagdasarian, 65, also moved out of the neighborhood with government assistance, but she misses her block, an Armenian cloister in an otherwise unfamiliar and unforgiving world. The wrinkled woman, holding a black bag, stands outside the 42-unit building, her home of three years since immigrating to the United States, and looks fearfully at the chunk of brick wall that sheared away. Many of the elderly Armenians here, she says, knew each other in their home city of Yerevan. Although many have dispersed, some as far away as Glendale, another Armenian enclave, at least 10 keep in close touch, sharing strategies on the phone about how they will return to the building if it is rebuilt.

“Every morning I wake up with heart arrhythmia. I am scared to death,” she says, clutching her chest as she looks up at a building that entombed the few things she brought from Armenia. She longs for her world of familiar faces, shops and bus stops, but acknowledges that the building may never be rebuilt. “I want to come back.”

Tomorrow: The city’s strategy for fighting blight.

Losing the Battle

The earthquake has helped turn a stretch of Hollywood Boulevard into a near ghost town. At least 10 businesses have closed and 400 apartment units in 12 buildings have been condemned.