ARTS CENTER OPENING AT THEATER SITE.

Byline: Sharline Chiang Daily News Staff Writer

The bright white marquee bears a new name that conjures images of Spain's culturally rich capital, rather than smut and seediness.

Children's choirs and symphonies will replace flicks for adult viewers only.

Finally, after years of wrangling and hard work, the Madrid Theatre will open Thursday in the shell of the old X-rated Pussycat Theater on Sherman Way in Canoga Park.

For nearly two years, Los Angeles city crews painstakingly tore down the adult film house to make room for a community arts center, the first major project in the San Fernando Valley by the city's Cultural Affairs department.

The theater is expected to accommodate as many as 135 events a year, offering music, drama, dance and a forum for public meetings that will bring in about 50,000 spectators a year. Organizations already signed up include the Woodland Hills Community Theatre, the San Fernando Valley Symphony and the Valley Cultural Center.

The effort to convert the theater after it was deemed damaged beyond repair from the 1994 Northridge Earthquake was spearheaded by Los Angeles Councilwoman Laura Chick, who called for the building to be razed and replaced by the city.

With the help of Mayor Richard Riordan's Office of Economic Development, Chick secured $3.5 million in federal recovery funds and used $550,000 for sidewalk improvements and beautification. Also created were six public parking lots, most of them located on nearby Remmet Avenue.

``The Madrid Theatre is a symbol of all that city government officials can do when they work in partnership with one another and the surrounding community,'' said Chick, who represents the area. ``This is an exciting time for Canoga Park and the whole West Valley.''

The look of the new 499-seat theater is simple - almost no-frills - with its blue, gray and red color scheme.

Most striking is an abstract, Kandinskyesque design covering the lobby floor. The tile mosaic, which extends outside onto the sidewalk, is one of several features aimed at encouraging pedestrian activity, said Karen Constine, Chick's chief of staff.

Windows of the ticket booth and concessions face the sidewalk. During intermission, theatergoers can hang out on the marquee, which doubles as an elegant balcony.

``We want people who are walking down Sherman Way and driving down Sherman Way to see all the people that are here,'' Constine said.

Old-fashioned street shopping is the theme running along Sherman Way as the strip undergoes revitalization from Reseda to Canoga Park.

Outside the Madrid, new blue light fixtures bearing icons of the various stores line the street for six blocks. Sidewalks boast new benches, garbage bins and trees.

Pamela Wood, board member of the Friends of the Madrid Theatre, stopped by last week to arrange a performance.

``It's a miracle. It's nothing less than a miracle,'' she said. ``I've lived here for 25 years, and I don't know of anywhere else that has a theater like this.''

The theater is named after the site's original 1920s vaudeville and cinema house, which eventually deteriorated and became the Pussycat.

Opening day couldn't come a day sooner for the many owners of antique stores and other mom-and-pop shops. Sherman Way's historic Antique Row includes more than 30 antique shops.

Still recovering from a decline in business after the earthquake, shopkeepers see the Madrid as a last hope for the embattled neighborhood.

``We're hoping, of course, that it improves business and attracts people to our area,'' said Patricia Needham, owner of Now and Then antiques and collectibles.

CAPTION(S):

3 photos

PHOTO (1) The forecourt of the new Madrid Theatre on Sherman Way contains a plaque commemorating the original theater built in 1926.

(2 -- 3) A crew works on lighting on the stage of the Madrid Theatre, above, which replaces an old X-rated Pussycat Theater on Sherman Way in Canoga Park. The exterior of the theater, left, features a marquee that doubles as a balcony.

David Sprague/Daily News