PAYING FAME'S PRICE HOLLYWOOD BUSINESSES DISRUPTED.

Byline: Greg Hernandez and Brent Hopkins Staff Writers

With splashy movie premieres, movie shoots, new shops, new restaurants and the Academy Awards scheduled to take place Sunday at its Kodak Theatre, a rejuvenated Hollywood Boulevard is once again basking in the national spotlight even with the nation at war.

``Hollywood is hot again,'' said Leron Gubler, president of the Hollywood Chamber of Commerce. ``The area's respectability and credibility have been restored with the public.''

The driving force behind Hollywood Boulevard's improved image is the Hollywood & Highland entertainment and retail complex - home of the Kodak Theatre - that opened last year next to the historic Grauman's Chinese Theatre.

``It's the only place in L.A. that feels like a real street,'' said Michael Escalante of Trizec Properties Inc.'s Retail & Entertainment Group, owners of Hollywood & Highland. ``You can walk out at 11 at night and see it totally busy.''

But behind the renewed glitz and glamour are struggling businesses, old and new, in desperate need of the international tourists who have long been the lifeblood for merchants along the boulevard. First the Sept. 11, 2001, terrorist attacks stopped the flow of visitors, and now war with Iraq is keeping them away.

Even with Oscar night preparations buzzing all around them this week, the mood remained bleak among the operators of souvenir stores, photo shops and other businesses on Hollywood Boulevard and connecting side streets.

``After this summer, I will have to get some solution,'' said a downcast Charlie Kim, owner of the WOB gift shop on Orange Drive. ``I still have a lease, but in my mind, I have to get out.''

Adding to the grim mood are war-related safety precautions that included the abrupt removal of audience bleachers this week, since the elaborate red carpet arrivals of celebrities before the Oscar ceremony have been eliminated. Still, the boulevard remains closed to traffic between Highland Avenue and Orange Drive.

Merchants are particularly bitter about these frequent street closures for events that may bring the boulevard international attention, but make it difficult for tourists to get to the shops as some tour buses are diverted from their usual drop-off spots near the stores.

``It brings more people here, definitely, but they are the people who just want to look and not buy,'' said Manny Cohen, manager of JM Electronic. ``When they shut down the boulevard, they are using and abusing the system very badly. These multimedia companies that are throwing all these events have to think about the little people who are here 365 days a year.''

Cohen has been further frustrated by the long lines of people who block the entrance to his store as they wait to file into the El Capitan Theatre each weekday for the taping of ABC's ``Jimmy Kimmel Live.''

``There are 800 people lining up, ignoring that we have a livelihood here,'' Cohen said.

But Escalante counters that retailers like Cohen benefit from publicity they wouldn't have otherwise.

``Think of it this way: (If) we don't get the Academy Awards, (then) we don't build this,'' he said of the Hollywood & Highland complex. ``We don't come here, Jimmy Kimmel doesn't come here. Every night, there's shots of our retailers on his show. So, yes, it's a double-edged sword, but one side - the good one - is sharper.''

Since the opening of Hollywood & Highland in November 2001, its Kodak Theatre has not only hosted the Oscars, but also numerous movie premieres, the Latin Grammys, the ESPY Awards, the ``American Idol'' finale and many other high-profile events.

``Hopefully, we will be able to come to some kind of balanced approach recognizing the needs of businesses and residents with the fact that this is basically Los Angeles' public stage,'' Gubler said.

There has also been an increase in demand for filming on the boulevard, with three movies shooting there in November and December alone, including ``Hollywood Homicide'' starring Harrison Ford and Josh Hartnett. In addition, the boulevard was also shut down for an anti-war march, a foot race and a parade in recent weeks.

``All of these things coming at once have created somewhat of a backlash from merchants ... (on) the issue of closures,'' Gubler said. ``It's an issue that can't be resolved overnight. There are a lot of differing interests and needs that need to be weighed.''

Meanwhile, the Hollywood & Highland development has brought an improved aesthetic to the boulevard, but its post-9-11 debut has been sluggish. Not only has there been a dearth of international tourists, but also indifference from locals who seem to have little interest in most of the complex's retail stores. In contrast, locals have flocked to The Grove, 1 year old and just a few miles away.

``There's no music store or book stores, which is not a good thing,'' said Los Angeles resident Oz Stiles, 23, who was with a group who went to see the horror flick ``Willard'' last Friday at the Grauman's Chinese Theatre multiplex in the Hollywood & Highland complex.

Business owners and employees at the complex declined to talk on the record but some complained privately about the center's confusing architecture that makes shops and restaurants difficult to find. They are especially concerned about the lack of a magnet retail store.

``If they put in a CD or DVD store instead of boutique stores, more local people would come in,'' said one store employee. ``They don't want it to be a mall, but they have to suck it up and put a department store in here. I live near here, but when I have errands to run, I go to Beverly Center.''

Escalante, executive vice president of Trizec, described the complex as ``part of a lifestyle experience more than pure shopping.''

``(The retail component) has not allowed us to meet our expectations; that's no secret,'' he said. ``As we refine our mix, we expect things to improve. We're looking for unique offerings.''

Ken Gillett, Trizec's vice president of operations, said the tourists wanted ``a tangible, real piece of Hollywood.''

``You could never really get that before,'' Gillett said. ``Sure, it was great at Grauman's, but after 20 minutes of putting your hands in the handprints, you kind of ran out of things to do.''

But the tourism slump has made for slow days and empty shops. Studio Hollywood, a stylishly upgraded version of the older souvenir shops that dominate the boulevard, has yet to reap any benefits from its spot in the complex right next to Grauman's Chinese Theatre.

``We get a lot of foot traffic from locals, but as far as buying things, the tourists do that,'' said sales manager Henry Kang.

While the Kodak Theatre, the Grauman's Chinese Theatre multiplex and The Renaissance Hotel have proven popular, many other businesses have failed to catch fire. Still, the complex reported more than $300 million in taxable sales during its first 12 months of operation. This is money, Gubler said, that has never come into Hollywood before.

The city-owned underground parking structure at the complex has also proven popular after the price was lowered to $2 for four hours with validation. Parking had initially been $10, which led to almost a boycott of the structure.

The upscale Lucky Strike bowling alley is scheduled to open in May and could bring more locals in. Across the street at the historic Roosevelt Hotel, a brand-new version of the legendary nightclub, The Cinegrill, is set to reopen Tuesday after the original room was closed more than 18 months ago.

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(1 -- 2 -- color) Even while basking in the nation's spotlight, Hollywood Boulevard merchants have their troubles, such as audience lines for TV shows, blocking shop entrances, and street closings to motor vehicle traffic for movie shoots, movie premieres, the Oscars ceremony and other special events.

David Sprague/Staff Photographer