Curtains for Cafe? : Business: Changing times in Signal Hill may doom landmark from oil boom days.

Over at Curley’s Cafe, the self-proclaimed home of the best chili for miles around, a bunch of the boys were leaning against the bar, downing their beers or something a little stronger in the middle of the afternoon.

They were oil men, most of them, having a couple after getting off work, not quite ready to head home. Outside of Curley’s, a dark green oil pump bobbed in the parking lot, just as hundreds of others do here in Signal Hill.

Curley’s, a local landmark since 1932, has served generations of roughnecks and roustabouts their breakfasts and their beers. Its walls are filled with oil memorabilia--pictures of drill bits and derricks and the boom days.

But owner David Frick has noticed a change of late. Many who drop in to lunch at Curley’s don’t have anything to do with the oil business. Some even wear coats and ties.

“The oil patch is dying and the roustabouts are leaving,” Frick said as he sat in a restaurant booth sipping a cup of coffee.

And therein lies the story of Signal Hill, one of the most famous addresses in petroleum history as well as being one of the smallest cities in Southern California.

Gone are the days when oil was the only thing that counted here. Today, as the California oil industry declines and petroleum prices stagnate, the surface of the land is becoming more valuable than what’s underneath it.

Signal Hill is responding by mining new riches--luring lucrative new businesses to its commercial center. But in doing so it is unearthing a new question: Can what is left of the oil industry, the city’s lifeblood for so long, coexist with the hundreds of new homes and businesses that are on the drawing board and slated for development?

Curley’s, once surrounded by nothing but oil fields and pipelines and drilling equipment, now finds itself in the middle of a rapidly expanding commercial district that includes, among other things, a major auto mall and a huge Home Depot. A Toys R Us recently opened down the street, as did a major paint supply house. The only obvious thing Signal Hill lacks (not from a lack of trying) is a supermarket.

The 2.2-square-mile city with a population of 8,000 remains a place with oil-soaked earth, weed-clotted lots, cracker-box houses, prostitutes, dumpy motels, dance halls and used car lots on Pacific Coast Highway. But there is also an energy aimed at revamping the city’s stinky, oil-soaked image.

A sober tribute to that success is the fact is that Curley’s, at Willow and Cherry streets, is in danger of becoming a thing of the past.

“The corner is much too important to keep it here,” said Frick, the fourth owner in the long history of the bar and restaurant.

The combination of these forces with the development potential of the hill itself--one of the largest tracts of open land in the Los Angeles Basin, blessed with a panoramic view--spells the beginning of the end of the old and oily version of Signal Hill.

Since the first gusher hit in 1921, the city’s oil wells have pulled almost 1 billion barrels of black gold from the earth.

But here and throughout the state, marginal wells are being shut down by the thousands. In Southern California alone, fewer than 700 oil wells have been drilled in the last 10 years; more than 5,000 have been capped and abandoned during the same period.

Signal Hill is perhaps the most symbolic example of this change, primarily because of a rough-and-tumble history that reflects the tremendous importance the oil industry has played in the state.

Change does not come easily. When the city recently widened an intersection to allow more traffic through the commercial district, workers first had to dig up and haul away 40 tons of abandoned pipelines. Before the auto mall could be built, the city had to spend more than $7 million in redevelopment funds just to decontaminate the land on which it was to be built.

The difficulty of coexistence is witnessed by three lawsuits pending between developers and Signal Hill Oil Co., which operates most of about 500 wells on the hill. The suits, which contain a number of acrimonious claims and counterclaims of mismanagement, have put a hold on a 525-unit hilltop development that would completely change the look of the city.

City officials say the project will not go forward until at least one of the suits is resolved. It is not scheduled to be heard until November.

Craig Barto, a co-owner of the oil company, said he hoped the suits can be settled soon so development can proceed while he continues to pump oil. “There is still a tremendous amount of oil to be recovered,” he said.

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Signal Hill takes its name from the early days of California, when Native Americans used to signal their counterparts on Catalina Island from atop the 365-foot rise.

In the early part of the century, when nearby Long Beach was still a sleepy hamlet, developers eyed the hill greedily because it offered spectacular views in all directions. On a clear day it is possible to see Hollywood, Santa Catalina Island, Newport Beach and the San Gabriel Mountains.

But before much development could take place, the Shell Oil Co. brought in the famous Alamitos No. 1 on June 25, 1921, creating one of the great oil rushes in history.

Almost overnight, wooden derricks were erected on virtually every square foot of Signal Hill. One magazine of the day described the scene as filled with “blowouts, gassers, gushers, fires, explosions, craters and geysers. Machinery, trees, telegraph poles and buildings are torn to bits and scattered with a sea of mud over large portions of the landscape.”

Also on the landscape were hucksters, shills, investors, oil field workers and tourists , all drawn to Signal Hill by oil fever. At one point, platform workers of Alamitos One had to push back the onlookers with ax handles because the crowd had grown so large.

The frenzy was so great that oil drilling equipment was erected on the Sunnyside Cemetery on Willow Street. For years afterward, next of kin of the deceased received royalty checks because of drilling that was done on family plots.

The discovery of the Signal Hill field, along with others in the state, allowed California to temporarily become the leading producer of oil in the nation. By the start of World War II, Signal Hill--a part of the larger Long Beach field--was producing almost 20% of California’s output.

Joy Elliott, a salty 81-year old resident of Signal Hill, remembers those days when the town was booming and oil field workers boarded at her house.

“They were rough as a cob and they were wild, but they were kind to all of us,” said Elliott, who worked as a drugstore soda jerk in those heady days. “I got my education in the oil fields.”

Elliott and her close friend, Peggy McClanahan, 82, were reminiscing about the old times not long ago, talking about how the oil men decided soon after the first strike that being a part of Long Beach was not in their best interests, of how they worked in secret on incorporation papers so Long Beach authorities would not find out and try to stop it.

“There’s a lot of history on this old hill,” McClanahan said with a chuckle.

But much of it was bad.

Over the years, Signal Hill developed the reputation of being a rough place with rogue cops who needed only a hint of an excuse to use brute force.

It culminated in the death of a young college football player named Ron Settles.

Settles, 21, a member of the Cal State Long Beach squad, was found dead in the Signal Hill jail hours after he was arrested by police in June, 1981, on a speeding violation. Police said he resisted arrest and then hanged himself. Settles’ parents and others insisted he was murdered. The controversy became a national platform for the ongoing debate about police brutality. It ended when a jury ruled that Settles had died “at the hands of another” and awarded his family $760,000.

“It was awful,” said City Councilman Girard Goedhart.

Eventually, the police force was turned inside-out in the wake of the Settles case and people in the town swear by its three-minute response time. Many point to the fact that while surrounding Long Beach was burning in the 1992 riots, not a single fire was set in Signal Hill, thanks to police and other law enforcement officials who blocked all routes into the city.

And a process of economic redevelopment that began more than 20 years ago is finally paying off, as Signal Hill, the “hole in the doughnut” of Long Beach, continues to add to its economic arsenal.

Yet despite the sprucing, large sections of the city have a blighted look where oil operations have left their mark. Even the most exclusive areas of Signal Hill, with their glorious views, have bobbing oil pumps next to them. Hookers still ply their trade along the city’s southern border, Pacific Coast Highway.

“The prostitutes still do their walking up and down,” said Val Rodriguez, a high school substitute teacher who can see them from his apartment. “The old reliables are still out there.”

For perspective, City Manager Douglas LaBelle keeps a large aerial map in his office, circa 1990, showing little more than dirt and sludge and oil field equipment where new businesses are now located.

“It reminds me of where we have been,” he said.

At the Smith Paint Co., a huge store that caters to contractors, partner Ken Kelter was explaining why, after 30 years in Long Beach, the move to Signal Hill this year was an easy decision. He said permit applications that would have taken 60 to 90 days in Long Beach took two weeks in Signal Hill and that members of the City Council actually drop by to see how things are going.

“It’s carving its own niche, there’s no doubt about it,” Kelter said.

Long Beach City Councilman Alan Lowenthal said his city looked on with dismay as auto dealership after auto dealership moved to Signal Hill along with other businesses. But he also said that Signal Hill played it smart in luring businesses and keeping residential density levels down.

“Long Beach had lots of reasons it couldn’t react [to business needs] as quickly as Signal Hill,” he said. “But the bottom line is that Signal Hill did it.”

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Mining New Riches Gone are the days when oil was the only thing that counted in Signal Hill; instead, the community is luring lucrative businesses to its commercial center-to the dismay of surrounding Long Beach.