Oldtown Salinas appears to have all the trappings of a vibrant, economically viable downtown. Replete with purple-haired kids hanging out in front of the Cherry Bean cafe and a new aggressive anti-panhandling ordinance, the district--recently dubbed a "Main Street City" by the U.S. Dept. of Trade and Commerce--is finally coming up for air after a 15-year spiral into economic gloom.

But while city officials and Oldtown merchants agree that past losses are metamorphosing into slow but steady gains, there''s also a consensus that Oldtown''s got a long way to go before this "business improvement district" becomes a thriving zone. The proof''s written for all to see: Just past the "Welcome to Oldtown Salinas: Uptown Style, Downtown Charm" banner that beacons the entrance to Salinas'' historic downtown, a small "for lease" sign waves in the wind.

Filling empty buildings and attracting customers is the aim of the Oldtown Salinas Association, a nonprofit association of 400 area merchants. The Association is waging an image campaign through TV and newspaper ads and organizing special events like last summer''s Passport to Oldtown food festival in an effort to bring people downtown. "We want people to know it''s a safe place to walk and to realize what a nice district we have," says director Patti Bowie.

Next week, the Salinas City Council will seal the fate of a project many deem crucial to Oldtown''s success: a hotel for businesspeople and tour groups. The hotel, to be built on redevelopment land next to the Steinbeck Center, has been in the works for almost a decade.

"When we first hired a feasibility consultant for the hotel, they said there''s no market for a commercial tour operator in Salinas," says Larry Bussard, head of the Redevelopment Agency. "He checked out the Bay Area tour operators and came back to me and said, ''They know where Monterey is and they''ve heard of John Steinbeck. But where the hell is Salinas?''"

And so it went for many years. But then came the Steinbeck Center in 1998 with its accompanying tour group contracts, joined by increasingly high prices and occupancy rates in Peninsula hotels, and lo and behold, the San Jose-based developer Barry Swenson Builder came in with a plan. And the opposition, if there is any, is hiding in the trenches while area merchants and city officials alike line up in favor of the hotel.

Few are poised to gain as much from the hotel''s coming to fruition as the Steinbeck Center. Says CEO Kim Greer, "The hotel would help an awful lot because we could sell it to tour companies and corporate events. And we could sell downtown Salinas as a destination, as opposed to just the Steinbeck Center."

Speaking of the 40,000-square-foot Steinbeck Center, some merchants blame the center for being too self-contained and thus not having a greater impact on surrounding businesses. Indeed, the Steinbeck Center alone could not stem losses up and down Main, and in the past year, the well-known Oldtown Anti-ques closed down alongside two clothing stores, the farmer''s market was discontinued and Oldtown''s only book shop, Book Worm, relocated to Monterey.

"Some merchants had the unfortunate perception that the Steinbeck Center would be to Salinas what the Monterey Bay Aquarium was to Cannery Row," explains Bussard. "We never had that expectation. But it has absolutely been a catalyst for restaurant and retail growth." Since the center''s opening, Salinas resident Tim O''Grady has begun a fundraising campaign to save the 1,100-seat art deco Fox Theatre, the ARIEL Theatrical has begun construction of a children''s theater, a huge multiplex theater is in the works and the Taste of Monterey, an aggregate of 20 some wine growers that''s operated on Cannery Row for 20 years, has agreed to join the party.

And anyone would agree that Oldtown is a much happier place for the palate than it was five years ago. Restaurateur John Spadaro was one of the first brave souls to take a risk in trying out his Peninsula-based formula for success--concocted in Alvarado''s Tutto Buono--in Oldtown. Spadaro says his modern Mediterranean steakhouse Spado''s brings in steadily growing business. Spado''s has been joined by other culinary haunts over the past five years, including a copy of Pacific Grove breakfast spot First Awakenings and Yangtse''s Taste of Thai, establishing the beginnings of a burgeoning restaurant district.

Most recently there''s been much ado about Hullabaloo. Hullabaloo co-owner Will Reynolds, a former owner of Tarpy''s Roadhouse, concedes that a year after opening, the restaurant is "financially making it, but not booming."

Don Saety, manager of the Cherry Bean coffeeshop--an Oldtown fixture for over nine years--says the key to getting Oldtown hopping is entertainment. "There''s no out-of-town business here because there''s no entertainment locally," says Saety, who notes that mornings are busy but afternoons and weekends are virtually dead because the shops close. "Everyone''s playing the waiting game--waiting for the new big theater and the ARIEL theater. Any one business can''t do it on its own."

Indeed, next on Oldtown''s radar is a 14-screen multiplex theater boasting 2,500 seats to go in across from the future hotel. The theater, which would offer a mix of blockbusters, art films, film festivals and Spanish-language films, comes hand-in-hand with a 500-stall parking garage paid for by the city. Bussard and councilmember Jan Collins are confident that the theater will soon come to fruition. "We leave dissension to the Peninsula--we don''t have any dissenters in Salinas," says Bussard facetiously in reference to Montereyans Against the Megaplex, the Peninsula group that has rallied against a 16-screen theater at Del Monte Center. "But seriously, the downtown business community has reacted in positive ways to the idea."

But with the old Salinas jailhouse on its way out, much to the dismay of local historians and preservationists, and a megaplex perhaps on its way in, it''s fair to wonder how--if the theater makes it through Oldtown''s design review board, the City Council, and the Planning Commission--it will change the face of Oldtown. With Bussard at the helm, the Salinas Redevelopment Agency has invested $1 million through grants and loans to help restore old buildings along Main, and he remains confident that none of the proposed developments in Oldtown will alter its charm.

"The vast majority of people thoroughly enjoy downtown because it''s reminiscent of when they grew up," Bussard explains. "It''s a very pleasant place. That''s why restaurants are doing well, because people enjoy the feeling, the landscaping, the trees. It''s absolutely important to retain that. I see nothing that''s at risk."