SPECIAL REPORT * A stone’s throw from the Walk of Fame and upscale residential enclaves lies an area known more for graffiti and tawdriness than glamour. But here and there . . . : Signs of Renewal Are Dawning in East Hollywood

Drive east out of the heart of Hollywood and the surroundings become less and less promising. The faded elegance of prewar midrises gives way to featureless mini-malls, drab storefronts and worn apartments. The sidewalk stars disappear and the asphalt stops twinkling.

This is the other Hollywood, the one the tourists don’t visit, the one largely ignored by developers planning mega-block projects to the west. It is the one where talk of a Hollywood revival can seem like a distant echo, where some companies have turned their backs to the street, putting entrances behind parking lot gates.

This Hollywood has plenty of early studio history but lacks the major tourist draws that are helping spark developer interest in the central and western portions.

Instead of Mann’s Chinese and El Capitan theaters, it has struggling mom and pop restaurants and stores, auto repair shops and fast-food franchises. In several of its census tracts, half the population has income below the poverty line.

Still, there are scattered signs of hope on the eastern front, roughly bounded by Wilton Place and Franklin, Vermont and Melrose avenues.

Some smaller redevelopment projects are in the works. Private entrepreneurs are sprucing up a few buildings. Blocks once plagued by drug sales and prostitution are now largely free of them. A trendy coffee chain is even venturing into the area.

There is also a gritty ethnic vibrancy. Lured by cheaper rents and the central location, immigrants from around the world have settled here on their way to a better life, making it one of the most diverse corners of Los Angeles.

On a few blocks of a single street can live Armenians, Filipinos, Central Americans, Serbs and Chinese. Every other business seems to be Armenian or Thai owned. Neon signs blink in foreign script.

To the north and east lie the Hollywood Hills, Los Feliz and Silver Lake. Yet most of east Hollywood has remained oddly untouched by the affluence and emerging hipness of those neighboring communities.

“I don’t know many people in my neighborhood who go along Hollywood [Boulevard],” said Mike Lyons, who lives in the Oaks, a hillside enclave of winding roads and spacious old homes that have attracted the likes of Brad Pitt and Nicolas Cage.

“There’s no reason to stop. There’s nothing there I would frequent,” Lyons said. “I really believe developers are missing a big opportunity. So much young Hollywood money has come into the hills in recent years.”

If that young money drives down Western Avenue to Hollywood Boulevard less than a mile south of the Oaks, it will find vacant lots, subway construction, Le Sex Discount Shop and a garishly painted bargain store selling plastic pig sculptures and $17.99 velveteen Doberman pinschers.

The bargain shop is on the ground floor of the historic Art Deco building that for years housed Central Casting offices. Its upper-floor windows are smashed. Graffiti is scrawled near the cast plaster nudes cavorting on the balconies.

Though its sorry state symbolizes the decay that has befallen the area, the Hollywood-Western building is also one of the signs of improvement. The structure is being renovated with federal earthquake recovery funds. Two other corners of the intersection, one of the worst in Hollywood, are poised for redevelopment.

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On the southeast side, a Community Redevelopment Agency-backed project of low and moderate-income housing and commercial development is planned. On the northeast side, the CRA hopes that Ira Smedra’s long-delayed mixed-use development will soon get underway.

That project will include a Ralphs supermarket, a Ross Dress for Less store and government-financed apartments for low-income elderly.

Another source of tentative optimism is the end of subway construction and the scheduled opening of Hollywood’s leg of the Red Line early next year.

“Maybe this area can come back if the subway is actually used and people feel it’s safe,” said Sam Schapiro, president of Johns + Gorman Films, which makes television commercials.

Schapiro’s company, located in a renovated bank building on Hollywood Boulevard just east of the Hollywood Freeway, is one of those sealed from the street. The entrance is off a gated parking lot. Lunch is brought in so the staff and visitors don’t have to venture out.

Still, the drug sales and prostitution that fostered that fortress mentality have all but disappeared from the block, and a couple of nearby buildings have recently been fixed up.

The owner of Hollywood Billiards, which until the Northridge earthquake was in the basement of the Hollywood-Western building, bought an abandoned car dealership that had been taken over by street people, gutted it and turned it into the new home of the city’s oldest pool hall.

“I’m very happy where I am,” said Jeff Bey, whose billiard tables are attracting studio wrap parties.

Bey considers Hollywood the “most undervalued real estate in L.A. County” and insists that with million-dollar-plus homes so close by, the neighborhood has got to go up. “I just see this area as getting nothing but better.”

So eager for improvements are the locals that they have blessed Stanley Key for opening an antiques shop in a once-filthy building just renovated by his cousin.

“I have never encountered anything like this,” Key remarked last month, surrounded by old furnishings he has plucked from swap meets. “People come by, they thank you. ‘Are you the owner? God bless you for changing it.’ ”

They’ve even bought a few things.

Down the boulevard, things do not seem so rosy to Babic Babikian, who has owned a pharmacy at the corner of Normandie Avenue for 20 years. “Unfortunately, I don’t see much of an improvement. . . . The western part of Hollywood is getting all the attention. Down this way, nobody cares.”

He keeps six sandbags under his greeting cards and pulls them out when it rains to divert the drainage from his building. He paid local gang members $100 to paint a mural (snow-capped mountains, a cross and a church) on the side of the pharmacy so they would stop scrawling graffiti on it, which they did.

He says the nearby apartments are filled with people receiving some sort of public assistance. Many are immigrants, too new or too shy and insular to raise a community voice. The landlords live somewhere else.

If he looks up Normandie he can see the Griffith Observatory and expensive hillside homes. The rear gate of Los Feliz’s Laughlin Park, a well-to-do neighborhood where such movie icons as Charlie Chaplin and Cecil B. DeMille once lived, is within walking distance. But its residents are not stopping by Babikian’s shop.

Crime is down in Hollywood, as it is in most of the city, and a number of store and restaurant owners said the streets have become more hospitable. Yet that has not necessarily helped them.

People “still think it’s not safe to park or drive around this community,” said Somchai Vongpiansuksa, owner of the Palms Thai restaurant, where business is “OK.”

At Anoush Armenian Russian restaurant, the lunch crowd consisted of one couple eating with a young boy. Much of the large dining room didn’t even have tables.

There is so much competition now, explained Voskan Jinian, whose brother-in-law opened the restaurant a decade ago.

Armenian restaurants, markets and bakeries abound, the means by which many in Hollywood’s large Armenian community are trying to work their way up the economic ladder. Mostly from the former Soviet Union, they arrived in the 1980s and early 1990s with little money and are now feeling the pinch of welfare cuts and recent restrictions on aid to immigrants, said Heidi Zatikyan, who is active in the community. Those who get on their financial feet often move to Glendale or Northridge, though that pattern reversed itself somewhat after the Northridge earthquake.

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The quake took its toll on Hollywood as well. According to the redevelopment agency, in east Hollywood and just to the south, 509 buildings sustained an estimated $15.5 million in damages.

The agency created a post-earthquake redevelopment fund to help with repairs and rebuilding, but it has no money in it because property values have fallen since it was established. The area has nonetheless managed to recover from the temblor to a large degree.

The city cobbled together community block grants, and small business owners forged ahead with government loans. There remain some vacant lots and buildings that have not been repaired, but many businesses reopened or built anew once the rubble was cleared.

In Barnsdall Park on the community’s eastern edge, the quake-scarred Hollyhock House, designed by Frank Lloyd Wright, is due for renovation, and the sprawling subway excavation area at the park’s entrance will be re-landscaped with MTA money.

Loralie Ogden, a commercial real estate broker who is active in rejuvenation efforts in the western end, sees hope in the east. “I think you’re going to see it slowly [come back]. But it’s not going to have an entertainment complexion. It’s going to be more service to the community.”

She points to the new Home Depot on Sunset Boulevard near Western. With its basic cinder block and parking lot design, the huge home improvement store is not much of an aesthetic addition to the neighborhood, but it is drawing so many customers that it’s now open 24 hours a day.

And with a small Starbucks Coffee opening this week across the street in a brand-new 24-hour coin laundry complex, who knows what else will pop up?

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The Other Hollywood

East Hollywood is an ethnically diverse pocket of Los Angeles bordered by better-known and generally more affluent areas such as the Hollywood Hills, Los Feliz and Silver Lake.