Downtown reborn: with a few simple decisions, Ecuador's splendid colonial capital has peeked out from under years of neglect.

A little more than two years ago, Quito was a very different place. The plazas and sidewalks of the Ecuadoran capital were overrun with street vendors. It was impossible to walk. The area was congested, unkempt, unsafe and plain disagreeable. Even the view was depressing: blue or black plastic sheets used by street vendors as makeshift roofs against the occasional shower were what most tourists noticed first. Downtown Quito was basically a place for poor people in the capital to buy the most immediately necessary goods.

Despite the fact that most Latin American capitals often have architectural, historic or artistic treasures hidden deep within, Quito is an unusual case. The downtown area was, along with Krakow, among the first two places in the world declared a World Heritage Site by the United Nation's agency UNESCO. Quito's downtown has 20 blocks of colonial buildings and plazas that are difficult to find anywhere else in the region.

Hoping to take advantage of what Quito has, in 1994 the government created a public-private entity called the Empresa de Desarrollo del Centro Historico (ECH) to promote urban development and cultural and tourism projects with the aim of restoring the city center to its former splendor. "The face of downtown Quito has changed significantly because one of our main projects was to relocate the street vendors" says Edmundo Arregui, director of the ECH.

In July the company completed the last of 12 shopping centers built to house the more than 8,200 wandering street vendors that for decades have taken up public space in the heart of the city. "Before, the streets were occupied by informal vendors," says Arregui. "Relocating them in appropriate shopping centers in a consensual process, without throwing anyone out, without violence, has allowed larger and better investments in the area."

When the ECH began, it got a US$41 million loan from the Inter-American Development Bank, while the Ecuadoran government put in another $10.3 million. The money has been used to improve sidewalks and electrical infrastructure, to build a museum, the construction of parking lots and the renovation of 17,000 square meters of buildings that were in precarious condition, among other projects.

Resources were also spent in the execution of projects to demonstrate to private companies how to best invest in downtown Quito. As a result, two buildings were bought to turn them into hotels. According to ECH, one is the Hotel Patio Andaluz, which has since been sold to private investors for $1.2 million. The other hotel, known as the Majestic, was sold for $2.4 million to Swiss investors that expect to invest another $5 million into the property. ECH is also in talks with private investors and the religious order to turn a former Carmelite convent into a hotel, an expected expenditure of $25 million. "We are working toward 350 first-rate rooms in an area of more than 20 blocks," Arregui says.

Another part of the strategy was to create several restaurants in conjunction with private entities. To date, there are six top-shelf eateries, of which a standout is Mea Culpa, distinguished by its colonial architecture and baroque decor. "The company has a stake in these businesses only as a strategic shareholder in order to facilitate the investment," says Arregui. "Little by little we are ceding our holdings in these businesses to the private investor."

To continue the work, the Inter-American Development Bank recently approved another $8 million loan to ECH, while the government kicked in another $2 million, funds which have to be invested in three years' time.

Cultural change. For most in the capital, however, it has been the complex process of relocating the street vendors that is considered the current mayor of Quito's major achievement. Aside from rehabilitating downtown, the decision ostensibly improved the quality of life of poor independent vendors and, in addition, allowed them to acquire their own business storefronts of between three and four square meters for $700.

Joselito Curo, a 33-year-old street vendor who sells sportswear, says although things are better out of the rain and bad weather, sales have declined by half. "Ecuadoran culture is one of buying in the street. It's faster and easier," he says. "Now the customers have to come into the shopping center. Cultural change doesn't happen overnight."

Jacinto Collaguazo, head of communications for the Fund to Save Quito's Cultural Heritage disagrees. "The streets of Quito were overwhelmed," he says. "The measures they have taken have allowd the old Quito to shine through."

ANDRES F. VELAZQUEZ * QUITO