New flavor Comes to Heart of Former Jewish Retail Hub. (Spotlight on Fairfax District).

JACQUELINE Canter remembers as a child when Yiddish was spoken along Fairfax Avenue almost as often as English.

Times have changed. An older generation of European Jews has passed on and much of the younger generation has moved to the San Fernando Valley or along the Pico Boulevard corridor. And though a sizable population of orthodox Jews remains, Fairfax in recent years has become known as much for its bars and thrift stores as it has for its ethnic flavor.

"The street still has its (Jewish) character, but it's a colorful mix of people," said Canter, granddaughter of Canter's deli founder Ben Canter.

Now the historical heart of the city's Jewish community is in for a more dramatic change, and people who live and work there are divided about whether that's a good thing.

Construction crews are hustling to meet a targeted spring completion on developments that will add more than 600,000-square-feet of retail, dining and office space to the 31-acre property at Third Street and Fairfax Avenue site of the venerable Farmer's Market.

A.F. Gilmore Co., which has owned the land since the 1880s, is expanding the market, while nearby Caruso Affiliated Holdings is proceeding on The Grove. Anchored by a Nordstrom department store, the enormous project will include a 14-screen cinema complex, an F.A.O. Schwartz and acres of mostly upscale retail and dining.

For some locals, optimism about renewed economic life in the area is being tempered by fears of increased traffic and the erosion of the small commercial district's distinct character.

"Los Angeles has a problem sometimes with not leaving well enough alone," said Perry Doty, the owner of All Spice, a gourmet seasoning store about three blocks north of Farmer's Market on Fairfax. "I'm just afraid we are going to see more of the negative impacts than the positives."

Doty doesn't think most visitors will walk the few blocks from Farmer's Market or The Grove to visit his store, but others believe renewed interest in the neighborhood will benefit everyone.

"It will bring more customers to the established merchants in the area," said David Lash, a long-time area resident who is executive director of Bet Tzedek legal services. "It's a wonderful neighborhood and nobody wants to see it lose its character, but there is a need for revitalization."

During the 1940s and 1950s, the half-mile stretch of Fairfax between Third Street and Melrose Avenue was filled with Jewish bakeries and bookstores, pickle sellers and Kosher butchers. As the Jewish population has aged, many of the ethnic shops have been supplanted by a patchwork of thrift stores, pizza parlors, coffee houses and night clubs.

These days, it's not unusual to see neighborhood hipsters clad from head to toe in black sharing sidewalk space with Orthodox Jews -- also dressed from head to toe in black.

Alarmed by increasing vacancies and deteriorating conditions on Fairfax, Jacqueline Canter was among a group of businesspeople to lead the push for a Business Improvement District in the early 1990s. Although that effort failed when many of the local merchants balked at paying assessments, the merchants, with the help of former City Councilman Mike Feuer, were able to secure $310,000 in federal neighborhood improvement funds to help spruce the area up and make it more pedestrian friendly.

That effort, which included improved lighting, new sidewalks, crosswalks, bus shelters and long-overdue tree maintenance, was completed this summer and appears to be paying off. "There are fewer vacancies now than there have been in years," Canter said.

Though vacancies may be lower, rents on Fairfax continue to be stagnant at $1.25 to $1.75 per square foot, said Matthew May, of May Realty Advisors, a local retail leasing and investment company.

May said that there may be some upward pressure on Fairfax rents as a result of the new development but probably not enough to dramatically alter the business mix.

"I don't expect higher foot traffic up there to justify higher rates. It's a different tenant mix and a different clientele," said May. "It's a huge project and people aren't going to walk (up Fairfax) from there. Once they pull in the parking lot, they are not going anywhere."

That's what worries Doty.

"If it drives up rents without the commensurate foot traffic, then all we're going to end up with is Starbucks and a bunch of national businesses," he said.

Gilmore Vice President of development Mark Panatier said the company is spending millions of dollars on traffic improvements, including opening a north-south thoroughfare through the Farmer's Market that will help the flow of vehicles in the neighborhood.