San Diego’s ELECTRIC GASLAMP Quarter : In the heart of the city, downtown’s historic, once-seedy neighborhood is attracting visitors and a buzzing night life other urban areas can only envy

A dozen pedestrians are huddled on a downtown street corner. It’s sometime between 10 p.m. and midnight on a Friday, and they stand a few blocks below Broadway, in the heart of a downtown zone whose Victorian storefronts have seen decades of seriously bad news. Are these people prowling for hookers? Waiting for a drug connection? Or are they sailors at liberty, looking for that certain special tattoo parlor?

Twenty years ago, when I was a teenager in San Diego, those would have been good bets. But changes have been made. San Diego has revived the night life of its oldest downtown neighborhood with a success that Los Angeles can only envy. Those pedestrians on this March night, myself among them, are trying to decide on their next club. Latin jazz on 5th Avenue? Blues on F Street? Flamenco on Fourth?

In the 16 1/2 blocks of this neighborhood, more than 60 restaurants are in business, most of them Italian, a couple Spanish, surprisingly few Mexican. In about a dozen nightclubs, musicians are holding forth, cue balls are careening and mirror balls are spinning. Along 4th Avenue, at the western edge of the district, the many-colored, phantasmagorical architecture of Horton Plaza covers more than six city blocks with 140 stores and 14 movie theaters. Each weekend, the sidewalks are awash in after-dark shoppers, clubbing young folk, vacationing couples and footloose conventioneers.

For anyone wistful about the lost charms of big-city living, the Gaslamp Quarter is a comforting sight. It may also be a startling revelation for those who think the only healthy historic urban district in Southern California is Old Town Pasadena. Certainly, for one who remembers the sleaze and menace of these streets in the 1970s, the new Gaslamp is an amazement.

From the corner of 5th and F, where we stand, the blues and the jazz are audible already, joining the din of dinner chat from the block’s several sidewalk cafes. Every few yards, another set of “gaslamp” globes glows atop an old-fashioned lamppost, powered these days on electricity. Huffing young men pedal past, delivering diners to their restaurants by bicycle rickshaw.

Finally, we commandeer a sidewalk table, and settle in while the Johnny Eager Band rages beneath the lights of an old movie marquee inside Croce’s Top Hat (cover charge: $6). The night rolls along.

By day and by night, this is a neighborhood alive with all the usual unusual urban things.

In Wonderama at 614 G St., a few blocks beyond the Gaslamp Quarter’s official limits, browsers contemplate “fully poseable” Farrah Fawcett-Majors fashion dolls ($40), “Welcome Back, Kotter” trading cards ($2.95 per unopened pack) and “Bewitched” T-shirts ($14). The Mork & Mindy lunch box is not for sale.

Inside the Cuban Cigar Factory at 551 5th, a crew of 13 cigar makers, most of them exiled Cubans, rolls 4,000 cigars a day--stuffing panatelas, torpedoes, presidentes and robustos with Cuban-seed tobacco grown in Dominica, Honduras, Ecuador and Mexico--while prospective customers look on.

Across the street at 548 5th, in the three-level Rita Dean Gallery, Tohubohu Bookstore and Museum of Death, browsers find a den of grisly photographs, artworks by serial killers and countercultural merchandise from the Melrose macabre school of retailing. Behind the counter stands a cheery tattooed man named James Dean Healy, who, for a dollar, will show you his live two-headed turtle.

“I’ve had problems with the D.A. and the city attorney,” Healy acknowledged when I asked earlier that day about how his controversial merchandise goes over in such a historically conservative city. “People come in here and tell me I should be in San Francisco or L.A. But I tell them, ‘Hey, this city needs me.’ ”

Some bigger retailers feel the same way. In December, the modern furnishing mavens of Z Gallerie, moved out of their Horton Plaza site, took over an idle, old three-story hotel at 5th and Market, and opened the largest store in the company’s 24-location chain.

Stick to the prosperous blocks of 4th and 5th avenues, and you might never guess that San Diego’s economy is still suffering through the aftermath of defense cutbacks. In the space of three days, I try lunch at Bella Luna (748 5th), sample the busy happy hour at Sfuzzi (340 5th), tuck into a pasta dinner at Fio’s (801 5th), brave a loud crowd for a mixed grill at Dakota Grill and Spirits (901 5th), and sip late-night coffee and tea at Avignon Coffee House (560 5th), then turn up for Sunday breakfast at Croce’s. Except for the Bella Luna Saturday lunch, every dining room was packed.

And if an establishment should fail, a new one rises quickly in its place. At the foot of 5th Avenue, for instance, there is the Baja Brewing Co., where one day I found assistant manager Brian Devine and a squad of others preparing for a March 14 opening. Their menu includes Mexican food, homemade microbrews and 65 premium tequilas. But in the summer to come, it’s their location that may serve them best: Just a few minutes’ stroll from this cantina, the nation’s Republican leaders will convene Aug. 12-15 to select their presidential nominee. Devine told me he has paced it off, and the way he figures it, if they begin at the middle of the convention center, the candidates, delegates, media and hangers-on have about 245 steps to their first shot of tequila.

The Gaslamp Quarter is no nirvana. The handful of holdover dirty movie houses, the panhandlers, the unleased live-in lofts, the down-and-out zone that begins on the Gaslamp’s eastern edge, the six bicycle police assigned to the district day and night--they’re all evidence of that. In fact, if you look hard enough in and near the Gaslamp, I have no doubt you can still find a hooker and a drug connection. The tattoo, of course, would be no problem; a few parlors remain, and these days capture a broader clientele than ever before.

But within the Gaslamp’s boundaries, the crime rate is falling as the after-dark crowds grow. In 1995, San Diego police logged 865 crimes in the area, down from 1,201 the year before. Robberies fell from 62 to 40, aggravated assaults from 190 to 143, murders from one to none. There were six reported rapes, up from one the year before; and 63 vehicle thefts, up from 58 the year before.

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Here is my confession about that club-hopping Friday night. It led from the Blarney Stone and Ingrid’s Cantina to the Avignon to--well, to a downtown Denny’s that wasn’t rid of me, my wife and a couple of our friends until about 3:30 a.m. It was our latest night in many moons, and I blame the electricity of the Gaslamp for it.

Thus, I was a few minutes late, and more than a little bleary-eyed, for my docent-guided tour of the Gaslamp the next morning. (The two-hour tours, which cost $5 for adults, begin at 11 a.m. most Saturdays at the William Heath Davis House at 410 Island St.) But I was alert enough to recognize, as we strolled past the district’s 94 historic buildings, two fine tricks of history.

One is that the redevelopment of the Gaslamp Quarter began not in the 1970s but in the 1860s. After Father Junipero Serra founded his mission in San Diego in 1769, the first East Coast immigrant settlers of San Diego arrived in 1850, tried to set up shop on land that became the Gaslamp, but failed. Instead, those settlers retreated to a warmer area a few miles north and east--Old Town, they call that area now.

The failed town sat idle for most of a generation until a newly arrived developer, Alonzo Horton, bought up 800 downtown acres at about 33 cents each, and gave civilization a second try in 1867. This time settlement took, and within a few decades, a gambling hall proprietor named Wyatt Earp (yes, the same), a thriving red-light district (at least 138 prostitutes in 1912 by police count) and a substantial Chinese population had moved in. (The area was then known as the Stingaree, a slang term of uncertain origins.) Then, in approximate rhythm with the arc of city centers across the country, downtown grew and grew, and peaked and fizzled.

The second trick of history, and maybe the most amazing thing about the Gaslamp Quarter’s latter-day resurgence, is that this last recovery began with a clutch of men in suits who offered this novel sales pitch: They were from the government, and they were here to help.

They began in the 1970s by spending millions, designating a redevelopment area downtown, buying up burnt-out lots and neglected properties. (Remember, this was in those relatively revenue-rich days before Proposition 13.) The local merchants, meanwhile, renamed the oldest area for the gas lamps that glowed there in the late 19th century.

In 1979, after spending more than $33 million to buy up 6 1/2 blocks just below Broadway, San Diego’s City Council agreed to sell the property to mall developer Ernest Hahn for $1 million. He, in turn, pledged to build a mall.

This might seem a rather expensive, activist, imprudent style of city government, especially to some of the GOP conventioneers due here in August. And in fact, one dissenting city councilman named Fred Schnaubelt warned at the time: “Everyone knows the whole development is economically impossible.”

But the leading politician behind the deal was a Republican named Pete Wilson, who served as San Diego’s mayor from 1971 to 1982 before going on to the U.S. Senate and California’s governor’s mansion. And the plan worked.

Horton Plaza opened to raves in 1985, and within two years its stores, restaurants and movie theaters were together grossing more than $95 million annually. By 1994, the county’s weak economy notwithstanding, the number was about twice that.

Still, in its first years, Horton Plaza remained a largely self-contained phenomenon. The Gaslamp remained a risky district, enlivened by a few pioneer restaurateurs, but still heavily populated by pornography patrons and a whole lot of squalor. Then in 1989, the city’s waterfront convention center opened its gates just a few hundred yards from the Gaslamp’s southern edge, and everything accelerated.

It’s a fascinating exercise, 11 years after the opening of Horton Plaza, to stroll the Gaslamp and pick out the enduring pioneers. Some of the most striking historic buildings, such as the four-story Italianate former City Hall at 672 5th, hold some of the youngest enterprises. The vastly popular Johnny Love’s, latest in a San Francisco-based three-restaurant chain of nightspots, only opened there in November. Conversely, the business behind the clever window displays at 840 5th is San Diego Hardware Co., headquartered there since 1923.

Meanwhile, one of the most impressive historic buildings in the area, the Vaudeville-era Balboa Theatre, stands at the 4th Avenue edge of Horton Plaza, its bright yellow exterior immaculate, its potentially spectacular interior forgotten and seldom seen, in need of a multimillion-dollar renovation that no one seems able or willing to pay for.

One genuine pioneer among restaurants is the Old Spaghetti Factory, a dark, cavernous, antique-filled place that opened in 1973 in an 1898 building. Standing at 275 5th, the enterprise makes no one’s list of top 10 restaurants, but it may offer the cheapest Italian dinner on a long street filled with Italian eateries: spaghetti for $4.35.

Another veteran is Patrick’s II (428 F St.), a long, narrow jazz and blues bar that fills to standing-room only every weekend night. The original Patrick’s was next door, but the Matranga family bought the bar and moved it in 1976, and made it the only venue for live music in the neighborhood. Twenty years later, Larry Matranga and his son, Mario, pour drinks while Tina Matranga, wife of Larry and mother of Mario, works the door, possibly the tiniest bouncer in town.

A few steps east of Patrick’s II stands Croce’s, the brainchild of Ingrid Croce, widow of the late singer-songwriter Jim Croce. Begun with a single restaurant in 1985, Ingrid Croce’s Gaslamp empire now fills half a city block: There is Croce’s Restaurant and Jazz Bar, neighbored by Croce’s Top Hat Bar & Grill, neighbored by Ingrid’s Cantina & All Night Cafe.

The Gaslamp’s acceleration, meanwhile, continues.

Street Scene, a three-day outdoor pop music extravaganza with a growing national reputation, takes over 22 blocks adjoining the Gaslamp every September, and last year offered about 100 performers on 12 stages. (This year’s program, just as ambitious, is scheduled to run Sept. 6-8, with ticket prices set at $22-$25 per day.)

The Children’s Museum/Museo de los Ninos, a 25,000-square-foot retreat of primary colors and hands-on exhibits, arrived in 1993 as an interim tenant at Island Avenue and Front Street, four blocks outside the Gaslamp. Encouraged by public response, museum officials decided to stay and bought the building. The museum now serves as anchor in a newly devised plan to develop a “Kids Block” of youth-oriented private and public enterprises.

The city’s main railroad station, the old Sante Fe terminal, where Amtrack and commuter trains and out-of-towners arrive, stands on lower Broadway, a 12-block walk from the Gaslamp.

And from the trolley stop at the foot of 5th, a pedestrian can catch one of the bright, red cars serving San Diego’s 39-mile light-rail network, which stretches south to the Mexican border and east to El Cajon. (Further expansions to Old Town and Mission Valley are in the works.)

Beyond that, city and San Diego Port District officials are proposing to double the size of the convention center on adjacent property owned by the port.

If I asked a few more people, no doubt I’d soon hear even more about people’s plans for the Gaslamp, now that the ball is rolling. But frankly, the sun is sinking low, the buzz of evening activity is building, and I’m tempted to wander out onto 5th Avenue and find a seat with a view and something cool to sip.

Also, before the foot traffic gets too thick and the cash registers start ringing too loudly, I have a toast to propose: Here’s to the former Councilman Schnaubelt. Long may he be wrong.

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GUIDEBOOK: Turning on the Heat in the Gaslamp

Getting there: Downtown San Diego is about 125 miles south of downtown Los Angeles.

From LAX, American (actually, its junior partner, American Eagle), Delta (actually Skywest) and USAir Express fly 19- and 30-seat planes to San Diego’s Lindbergh Field. Restricted fares begin as low as $79. Flight lasts about 45 minutes.

A better option for many is Amtrak ([800] 872-7245). Fares from Los Angeles Union Station to San Diego’s downtown Santa Fe Station--about 125 miles south--run $24 one way or $32 round trip. (Custom class runs $7 more each way.) Fares from Orange County are slightly lower.

Where to stay: The boutique-style Horton Grand Hotel (311 Island Ave.; tel. [800] 542-1886 or [619] 544-1886, fax [619] 239-3823), was created in the 1980s from the bricks and woodwork of two 1890s hotels. Standard doubles, $139; weekend rates of $105 sometimes available.

For high-end lodgers, the U.S. Grant Hotel (326 Broadway; tel. [800] 237-5029 or [619] 232-3121, fax [619] 232-3626), opened in 1910. Standard doubles. $155; occasional bed and breakfast specials as low as $109 nightly.

Another high-end property, one block west of the Grant, is the Westgate Hotel (1055 Second Ave; tel. [800] 221-3802 or [619] 238-1818, fax [619] 557-3737), built 25 years ago, but furnished to suggest 18th century luxury. Standard doubles: $174-$204; occasional weekend specials as low as $125 nightly. (The city’s fanciest convention center hotels, the Marriott and Hyatt, are a few blocks farther away from the Gaslamp area.)

More affordable is the Clarion Hotel Bay View (660 K St.; tel. [800] 766-0234 or [619] 696-0234, fax [619] 231-8199). Standard doubles, $89-$139 per night; occasional weekend specials as low as $69.

The Doubletree Hotel (910 Broadway Circle; tel. [800] 222-8733 or [619] 239-2200, fax [619] 239-3216) adjoins Horton Plaza and is often filled by groups. Doubles run $109-$159. The Gaslamp Plaza Suites (520 E St.; tel. [800] 874-8770 or [619] 232-9500, fax [619 238-9945) is in a restored historic building and has rooms for $69-$179; as a hotel that doubles as a “vacation ownership” property, it hosts frequent time-share presentations.

Where to eat: During my stay, I enjoyed meals at the following places. Dakota Grill and Spirits (901 Fifth Ave.; tel. [619] 234-5554), American cuisine, dinner entrees: $9-$19. Fio’s Cucina Italiana (801 Fifth Ave.; tel. [619] 234-3467), dinner entrees $11-$22. Bella Luna (748 Fifth Ave.; tel. [619] 239-3222), Italian, dinner entrees $9-$14.

When not to go: The Republican National Convention, Aug. 12-15, will take over San Diego’s downtown convention center, close key streets, and fill every hotel anywhere near downtown. Any visit in the second half of July or anytime during August is likely to be affected by convention-related preparations, activities or cleanup.

For more information: San Diego Convention & Visitors Bureau, 401 B St., Suite 1400, San Diego CA 92101; tel. [619] 232-3101.

--C.R.