A LOOK AHEAD * Recession slowed the famed Japanese neighborhood. But now new construction signals . . . : Big Excitement for Historic Little Tokyo

Tom Donaldson gazes at the messy construction site in Little Tokyo, beaming at the sight of sawdust swirling as workers carry supplies back and forth. He grins at the mass of wooden planks stacked up within the hollow insides of the old church.

Passersby may not comprehend Donaldson’s delight in the chaotic scene. But for him, the sawing and hammering signal new life for the abandoned church and the neighborhood around it.

Donaldson’s theater company, East West Players, is planning to move into the renovated building on a stretch of San Pedro Street renamed Judge John Aiso Street. An art gallery and multimedia production group will join the theater company as tenants.

“This is very exciting,” said Donaldson, the theater’s technical director. “I think it’s a vital statement for East West Players to be able to come and have a home in part of the historic core of Little Tokyo.”

The resurrection of the long-vacant Union Church, which housed Japanese Americans returning from internment camps after World War II, is one of many projects that leaders in Little Tokyo hope will invigorate the old corridor.

Near Union Church, several other developments are underway. Up the street, the Japanese American National Museum has begun building a 120,000-square-foot expansion that will more than double its space for exhibitions, programs and collections.

Construction is expected to start next spring for a 40-foot-high memorial honoring Japanese American war veterans.

The Little Tokyo Service Center is considering opening a community gymnasium. The service center is also helping owners of historic storefronts apply for grants to preserve their old buildings.

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“There’s a lot of excitement now, given that Little Tokyo is the heart and soul of [the] largest Japanese American community in the mainland United States,” said Al Muratsuchi, regional director of the Japanese American Citizens League. “We’re hoping that with these developments, we’re looking at the revitalization of the area.”

These projects are welcome news for community leaders who were dismayed in 1994 when the city dropped a $150-million development project slated for the north edge of Little Tokyo. When the recession hit earlier this decade, local merchants suffered and other plans for new businesses fizzled out. Many feared that the increasing movement of Japanese Americans to the suburbs would further erode Little Tokyo’s vitality.

Now, merchants and residents point to the current projects as seeds of change.

“I think for most of us in the business community, it is a real plus any time there’s this kind of activity,” said Frances Hashimoto, president of the Little Tokyo Business Assn. “It will bring more community members in and it’s also a visual boost. We haven’t had too many of those.”

The renovation of the Union Church and the museum expansion bookend the north side of 1st Street, where Brian Kito’s family has run its confectionery shop Fugetsu-do for 93 years.

“I think both projects will help the area by filling a void,” said Kito, standing next to the counter where even rows of pink, white and green pastries line the shelves. “One project brings the history of Japanese Americans, and the other brings performing arts.”

The renovation of the Union Church, the first Christian house of worship in Little Tokyo, has excited many people in the area. Built in 1922, the brick building with large concrete pillars has sat abandoned for nearly 20 years--a crash pad for the homeless.

The Little Tokyo Service Center is now rehabilitating the building with $3.4 million from public and private grants.

East West Players hopes to move into the new location from its current site in Silver Lake by January, opening with a production of Steven Sondheim’s “Pacific Overtures.”

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“It’s going to be a knockout,” Donaldson said. “There won’t be another theater like it in Los Angeles.”

The theater is expected to draw more than 20,000 patrons a year, a crowd community leaders hope will visit surrounding businesses.

“I think people are really happy to see the church being brought back to life,” said Erich Nakano, project manager with the Little Tokyo Business Center. “This was just a vacant building, but now it will become a major destination point.”

A block away, a large steel superstructure is taking shape on a lot across the street from the Japanese American National Museum. The museum has raised about $24 million for the expansion--more than half its goal--and directors expect the facility to be completed in a year.

The first exhibition should be opened by January 1999, when curators will be able to launch more comprehensive exhibits than they can in the current building, a historic Buddhist temple.

“I believe that with the Union Church and our facility, you’re looking at the one thing that can keep Little Tokyo going: the cultural attractions,” said Chris Komai, spokesman for the museum.

Nearby on Central Avenue is the planned site for the “Go For Broke” Monument, a memorial to Japanese American soldiers who fought in World War II.

Groundbreaking on the memorial is expected to take place this spring. So far, a group of veterans spearheading the campaign have raised almost half of the $2.5 million needed for the monument, which they hope to unveil next September.

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Designed in the shape of a hill, the structure will contain the names of almost 15,000 soldiers who served overseas while their fellow Japanese Americans were being held in camps at home.

“I think that the people in Little Tokyo have not given up on the revitalization of the community,” said City Councilwoman Rita Walters, who wants to build a Japanese-style garden on top of a subterranean parking structure slated for construction on 1st Street.

Residents and business owners also say the atmosphere of the neighborhood has dramatically changed since the Police Department opened a substation on 1st Street last year and stepped up its presence in the community. A public safety committee, mostly made up of merchants, started volunteer patrols during the evening hours in the last several years.

“On hot nights, I see people standing out on the sidewalks,” Kito said. “Shop owners let their kids run around outside during the day. Five years ago, you never would have seen that. It feels like the old neighborhood I remember as a kid.”

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New in Little Tokyo

1. Old Union Church being renovated for East West Players.

2. Expansion of the Japanese American National Museum.

3. Site of future memorial honoring Japanese American WWII veterans.