$2.75-Million Grant Awarded for Madrid Arts Center : Entertainment: Officials, business leaders predict new theater will spark revitalization of business district.

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A $2.75-million federal grant will transform the site that once was home to the X-rated Pussycat Theater into the Madrid Theatre, a performing arts venue that will feature family entertainment, city officials announced Wednesday.

City Councilwoman Laura Chick hailed the grant from the U.S. Economic Development Administration as a step toward revitalizing the area's downtrodden business district--bruised by both the recession and the Northridge earthquake.

"Out of something so very bad and tragic, like our earthquake, is coming something very good," said Chick, who was instrumental in securing the grant, part of a $30-million federal renewal program for Los Angeles.

Mayor Richard Riordan in a prepared statement said the theater would be a catalyst for business growth.

The grant provides for the construction a two-story theater with 499 seats. The Pussycat was razed after the quake. The money will also pay for sidewalk repairs, tree planting and street lighting within the six-block business district surrounding the theater.

The Madrid, sentimentally named after the original silent movie house at 21622 Sherman Way, will open by January 1998 as a community theater suitable for plays and concerts, said Karen Constine, Chick's chief of staff. It is expected to provide at least 18 jobs.

Once built, the city Cultural Affairs Department will manage the theater. It will cost the city about $250,000 to maintain the site.

"This is a very concrete thing, but it has emotional and psychological implications," Chick said. "The people of the west San Fernando Valley . . . have felt overlooked in terms of arts funding."

One immediate psychological ramification is "community euphoria," said Jim Domine(cq), music director of the West Valley Symphony and a Canoga Park business owner.

Domine, who hopes his symphony will find a home base at the Madrid, believes the center could spark a Canoga Park arts renaissance--provided the theater's first performance is solid.

With the theater to be located on a stretch of Sherman Way housing antique stores, a book shop and an aquarium supply store, members of the Canoga Park/West Hills Chamber of Commerce said they expect business owners will want to spruce up their storefronts in anticipation of the opening.

Nancy R. LaSota of the Community Advisory Committee said she hopes that graffiti and trash will be cleaned.

"Property values are bound to go up," she said.

The planned family-oriented performances are expected to draw visitors from Ventura County and the San Fernando and Simi valleys, according to Chamber of Commerce President Ed Kasaba.

"This isn't a flash in the pan. It's not a gas station or a Jiffy Lube. It's something to build on," he said.

Within the next few months, the city will hire an architect for the project, using community input to determine the building's final design.

Already, Domine expects a packed house for the Madrid's first performance, be it musical, theatrical or otherwise.

"Opening night?" he asked rhetorically. "Sold out. Not only will I be there, but there will be at least 10 members of my family there too."

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