By LEAH WEATHERSBY

For years, University Way NE, the main thoroughfare of the University District, has been plagued with a myriad of urban problems such as crime and panhandling.

Perhaps no one is more aware of those problems than Fred Hart, co-owner of a the La Tienda Folk Art Gallery, which has stood on the south end of The Ave (as University Way is also known) for nearly 40 years.

Hart has witnessed The Ave's plight both as a merchant and, last year, as the president of the Greater University Chamber of Commerce. During his one-year term as Chamber president, which ended Dec. 31, he has been in the thick of planning for the future of the entire U-District business community.

Hart has been part of the The Ave scene for a long time. In the late '60s he met and married La Tienda's founder, Leslie Grace, a Seattle native who first opened the shop, which is located at 4138 University Way NE, in 1962. A former middle-school science teacher and lab technician, Hart began working at the store in 1972. Although he and Grace divorced in 1980, he continued to be involved with La Tienda as both a bookkeeper and manager until 1995 when Grace decided it was time to retire. Fearing she wouldn't be able to find a buyer for the business, she was ready to close her store down for good. However, Hart said, by that time he was near enough to retirement that he felt it would be better to buy the store himself than change careers. He and another employee, Monique Tran, purchased La Tienda. Hart describes his ex-wife as woman with a good head for business. While some might see the U-District's funky character as a challenge for merchants, Hart said that Grace saw the worldly, eclectic community that surrounds the store as a necessary ingredient to success. The store currently carries exotic clothing, jewelry, cards and other art objects from around the globe.

"She felt the kind of business she was envisioning needed a fairly unusual market to be successful," Hart said.

The U-District and La Tienda may have been a perfect match in the '60s, but over time that shop, like other businesses, has faced hurdles. Like many other U-District establishments, Hart said, La Tienda doesn't own its space. He is worried that the building is not as well-maintained as it could be. That concern, he said, led to the opening of a second store in Ballard located at 2050 NW Market St. Hart describes that shop as "an alternate space we could jump to" if the U-District building ever became a real problem.

In contrast to the U-District, Ballard is a neighborhood that seems to have undergone a sort of renaissance in the last few years, adding a number of up-scale boutiques and restaurants. Hart said that cooperation between landlord and local merchants may be one key to success that the U-District currently lacks.

"The critical relationship is having property owners that are interested in keeping a business district going and are willing to reinvest," Hart said, adding "there are a lot of absentee landlords on the Ave."

Hart also said that while the U-District may have problems, the close proximity of the University of Washington guarantees a local market for merchants along the Ave. Some landlords, he said, see that as a reason to raise rents sharply when leases are up, leading businesses to move out.

"Once landlords figure they can get (a given amount of) rent, it's very difficult to turn the tap down," Hart said. "There isn't a lot of creative negotiation (between landlords and merchants)."

However, change is on the way. The City is planning a renovation (known as the Ave Street Project) to University Way between NE Campus Parkway and NE 50th Street which will add several enhancements including wider sidewalks, new pavement, landscaping and a street lights. The venture is seen by many as a ray of hope for the beleaguered Ave residents and merchants.

"You hope it puts a light bulb on in somebody's head saying maybe it is time to reinvest in this place," Hart said.

One of the major issues facing the U-District this last year has been finding funding for the Ave Street Project, an idea that first surfaced nearly 10 years ago. The City now plans to pay to start construction this year on the $8.6 million project (including engineering and contingency costs) by advancing funds it hopes to receive from the federal government in 2004. Work on the Ave is currently set to start this summer and Hart said it will likely take about a year to complete. Hart added that he is pleased that funding for the project has finally been secured and acknowledged that that was one of the Chamber's major focuses during his term. He has now turned the Chamber presidency over to Jim Moran, an employee in the public affairs office at Safeco Corp., the insurance giant whose headquarters is located in the U-District. Hart will continue to be involved with the Chamber as a member of the board of directors. As for the future of the U-District, Hart said, "(I) can't predict it, (but) I have great hopes."

For details about the Ave Project, call Rob Gorman at Seattle Transportation, 233-7205. For information about the Greater University Chamber of Commerce, call 547-4417.