Financial Problems Close Homeboy Bakery, but Hope Remains High : Job program for former gang members needs $200,000 and a partner.

If peace had a smell, then in Boyle Heights it was the sharp and pungent odor of jalapenos and Cheddar cheese that wafted out of the tiny, mural-emblazoned bakery on Gless Street.

But the odor has vanished and no one can be sure if it will return.

Homeboy Bakery, the bold experiment that converted gang members to bakers, has closed again, a year after an ambitious and optimistic restart.

“The fat lady hasn’t sung yet,” said Father Gregory Boyle, who founded Homeboy Bakery and its parent company, Homeboy Industries, as part of his Jobs for a Future program. “It’s closed temporarily.”

But the difference between temporary and permanent closure this time is vast: $200,000 for a renovation, and a partner willing to form a joint venture. One Santa Monica bakery backed out after Boyle could not raise the funds.

“At this point we have another Plan B and Plan C, which is to get another partner to join in with us,” Boyle said. “We’ve got a lot of irons in the fire as far as loans and things go, but at this point it’s at least three months away.”

Boyle, who has found himself in the midst of controversy stemming from his role in trying to help gang members, admits that the timing for raising funds may not be the best: The gang shooting of a 3-year-old in Cypress Park on Sept. 17 and a series of drive-by shootings in the San Fernando Valley have infuriated the public.

Boyle was the object of threatening telephone calls soon after a national television broadcast about the Cypress Park killings showed old footage of him walking arm in arm with gang members--none of whom were associated with the gang that police say opened fire on the car carrying Stephanie Kuhen, killing her and wounding her 2-year-old brother and the car’s driver.

“It’s just the most phenomenal thing I’ve ever seen, because this office is associated with trying to turn their lives around,” said Boyle. “I’m perceived as the guy trying to help these [gang members], and no one wants to do that now.”

Boyle does not apologize for showing an unconditional love for young people who are either despised or abandoned. But it is not easy love.

“If that [murder] had happened in a gang in our neighborhood, I’d try to find the guy and like I’ve done a bazillion times before, try to get him to turn himself in,” Boyle said. “We’re all horrified by this. The whole idea of Homeboy Industries is to address that issue and make sure it does not happen again.”

The flagship of Homeboy Industries, Homeboy Bakery, was born in the aftermath of the 1992 riots, originally making tortillas. But two years later it succumbed to heavy competition.

Last year, Homeboy got serious, enlisting the computer and business savvy of UCLA and USC before launching a specialty bread line--including its trademark jalapeno cheese rolls. They renovated their decrepit Gless Street bakery. In September last year, Homeboy began marketing specialty rolls for institutional customers such as USC and White Memorial Hospital.

Attracting customers was never a problem, Boyle said. Plenty of people were willing to pay money for the product and what it represents: getting gang members off the streets and into jobs.

But the kind of debts a small business accrues in its infancy proved a burden for Proyecto Pastoral, the Dolores Mission parish organization sheltering Jobs for a Future and Homeboy Industries. In addition to those programs, Proyecto Pastoral funds an alternative school, food program, day care center and shelter.

Despite the setback, Homeboy Industries survives with two shoestring companies employing five people. Three former members of rival gangs market merchandise with the Homeboy Industries logo, and a husband and wife team operate a silk-screening business.

Juan Carlos Marquez admits that the business does not make much money. But at least it is honest money and a reprieve from the violence of gangs, he said. Marquez and Gustavo Mojica have left their gang and joined with Rogelio Lopez, known as Smiley, of a rival East Los Angeles gang to make a go of it.

Four years ago, rival gang members pumped a dozen bullets into Smiley, putting him in a wheelchair. With a perpetual shy grin, Smiley shrugs off the incident as “history,” and his partners concur.

“Once a person realizes what he did, that’s where the forgiveness comes,” said Marquez, 25. “We made peace a long time ago. I realized what we were doing was morally wrong.”

These days, Marquez, Mojica and Smiley espouse a new morality: Beyond the intimidating trappings and checkered pasts of some of Boyle Heights’ all-too-expendable youths lie talent and initiative.

“I guess if you come from the projects, you’re a hustler,” Marquez said with a laugh. “An entrepreneur. Maybe not so legal before, but legal now.”