Shuttered storefronts, graffiti-covered walls and littered sidewalks dot the steets around MacArthur Park. Shops are a hodgepodge of discount stores, pawn shops, shoe stores, fast-food outlets and health clinics many of them with faded, handwritten signs advertising their goods.

In front of the stores, street vendors hawk shaved ice treats and taco lunches.

The Westlake Theater, although its sign still remains, has been replaced by a permanent swap meet. Nearby Langer’s delicatessen recently added curbside service for pastrami lovers who don’t want to linger in the deteriorated neighborhood.

The one shining element in the neighborhood besides the park itself is the Westlake/Alvarado Metro Rail station. And city officials, community activists and business owners are hoping that a new $17 million retail center to be built around the station will help revitalize one of Los Angeles’ most economically depressed areas.

The center, which is being funded partially with government grants, is expected to include a 40,000-square-foot grocery store, 30,000 square feet of retail space and a 40,000-square-foot community area.

City officials, developers and others working on the project hope that it will help not only rebuild one of the most deteriorated parts of the city, but also give local street vendors a place to permanently locate their businesses.

“If we can turn this area around, we can turn anything around in L.A.,” said Ed Reyes, chief deputy for economic development to Councilman Mike Hernandez, whose district includes the project area.

San Francisco-based Catellus Development Corp. is in exclusive discussions with the Metropolitan Transportation Authority, which owns most of the land upon which the center will be built.

Catellus has been in exclusive discussions with the MTA since December 1996, and a firm agreement is expected between the developer and the agency within the next two to three months. Groundbreaking on the project is expected in the spring or early summer of 1998, Huber said.

The center, once built, will be run by a non-profit organization, Transit Community Development Corp., whose board will be comprised of three MTA representatives, one community representative, one representative from Catellus and one city representative Reyes.

The developers are in discussions with two grocery store operators one chain and one independent to run a neighborhood market at the center.

Miles Huber, project director for Catellus’ Southern California development group, would not disclose the store operators, but said that the choice is not limited to the two.

“It’s still wide open,” Huber said. “We wouldn’t want to exclude anyone.”

The MacArthur Park area, just west of downtown L.A., has an average of 147 residents per acre more than 10 times the average density in the city. It is also one of the poorest parts of the city with an annual median household income of less than $15,000.

More than 36,000 people live within a three-block radius in the area, and 60 percent of households do not own automobiles, making public transportation such as the Metro Rail important to the community, particularly since 70 percent of working residents commute downtown or to the suburbs to work.

Jean Baur, general manager of the 72-year-old Park Plaza Hotel, also located near MacArthur Park, hopes the new retail center will help surrounding, existing businesses as well.

“From what I’ve heard, it’ll bring in new business, and that is welcome in any community,” Baur said. “And hopefully it will have a positive influence on the area.”

Between $8 million and $10 million of the project’s $17 million cost will come from county transportation funds and will be used to build a four-level parking structure and to improve the plaza around the Metro Rail station.

The city also is applying for another $3.4 million in federal Economic Development Administration funds for the project. If secured, the funds from the EDA’s Infrastructure Development Program will be used for land acquisition, demolition of an existing earthquake-damaged building, and building of infrastructure.

Huber said that the rest of the money to build the center will likely come from the city’s Community Development Bank, though Catellus is also looking for state funds to help build the center.

One of the most important elements of the new center, said Reyes of Hernandez’s staff, will be the 30,000 square feet of retail space for local street vendors to permanently locate their businesses in kiosks.

Reyes said vendors likely will sell items that are “a reflection of the character of those countries” where community members are originally from. Items sold likely will include food, toys, furniture and clothing such as guayaberas formal shirts popular in Central America, South America and the Philippines.

Don Spivack, deputy administrator for the city’s Community Redevelopment Agency, which is developing a redevelopment plan for the area, said that the retail space will help give residents of the area a chance to find a permanent location for a small vending business close to home.

“The whole idea is to try to encourage local people to establish and operate businesses,” Spivack said. “This would be an opportunity for local people to establish a site for a new business and make a go of it.”