City funding spurs residential, mixed-use construction boom. (Spotlight on Western Avenue).

HERE'S one redevelopment effort community leaders are crowing about, at least or now: completion of the long-delayed Hollywest Promenade at Hollywood Boulevard and Western Avenue.

The Community Redevelopment Agency has poured $16.7 million into the stretch of Western Avenue from Hollywood to Santa Monica boulevards, including cleaning up graffiti and trash, improving facades and backing new construction.

The agency focused its efforts on that stretch because of the dense population, the Red Line Metro Rail station at Hollywood and Western's role as a north-south transportation corridor, according to Donna Hemer, project manager of the Hollywood and East Hollywood redevelopment zones.

The lion's share of the CRA's investment has been at the corridor's northern end, where the $55 million Hollywest is the crown jewel.

The CRA pumped $5.1 million into the. mixed-use project, developed by San Francisco-based MacFarlane Partners and the Retirement Housing Foundation. Street-level retail space is 94 percent leased; about 35,000 square feet of second-floor retail/office is available at $1.75 per square foot. It is anchored by a Ralphs, and its 100 seniors-only affordable housing units are slated to open next month.

Hollywest has set the tone for the rest of the strip, where the projects planned or underway are largely mixed-use or affordable residential. The Louis B. Mayer building, at 5500 Hollywood Blvd., will have 150 affordable family units; another 174 units are planned within a few blocks and 60 units are fully occupied at Carlton Court at the corner of Carlton Way and Western.

"It's encouraging that affordable housing is a priority," said Beatrice Hsu, legislative deputy for housing for 13th District Councilman Eric Garcetti. "They're changing the gentrification process by deliberately keeping the area mixed income, not driving out current residents."

That will help retain longtime businesses, most of which are tiny shops and restaurants designed to meet the specific needs of the neighborhood's diverse population of Latinos, Armenians and Thais.

Originally settled in the late l920s, the Western Corridor was populated by small restaurants, barbershops, banks, markets and service stations. At the Blacklight Bar, big-time prizefighters were known to gather and swap stories. It still stands today, as a transvestite bar.

"Our business was founded when this was a prime area," said Mike Baron, owner of Hollywood Trophy, which has been at Western at Virginia avenues since 1934. He has owned the store for 35 years.

The Depression hit the area hard, forcing many residents out and nearly killing the commercial district. By the late '50s, it slid into decay along with the rest of Hollywood.

"When I got here in the late '60s, there was a prostitute on every corner, and lots of X-rated theaters and massage parlors;' Baron recalled.

Through the '70s and '80s, Hollywood and Western was a haven for drug dealers, gang activity and chronic vagrancy.

Today, storefront churches, swap-meet type stores and auto shops dominate commercial activity. Vestiges of the avenue's notorious past remain: the Tropicana strip club, XXX Video and the Pussy Cat Theater.

Hollywood Trophy has held on, but Baron is still waiting for the revitalization.

"Nordstrom's is not going in across the street any time soon:' he said. "They're touting the revitalization but it's not happening here. We're the forgotten people."

Hemer expects a planned development at Sunset Boulevard and Western to fuel the changes Baron wants.

Walgreen's recently purchased the land currently occupied by Best Buy Shoes and the Pussy Cat Theater on the northeast corner of Sunset and Western.

Its project will include 56 affordable family housing units and is expected to get under way later this year with the help of $3.6 million from the CRA.

At the corridor's southern terminus at Santa Monica Boulevard, one of the busiest pedestrian areas in the city, they're still waiting for improvements.

"I'm delighted to see what's happening in terms of commercial development, and the trend is favorable," said Ed Hunt, a member of the East Hollywood Neighborhood Council. "But I haven't seen many improvements down here."