By LEAH WEATHERSBY

These days when visitors cross University Way between NE Campus Parkway and NE 43rd Street, they're still looking both ways - but they're watching out for bulldozers, not cars. The City's renovation of University Way, which is also known as The Ave, started in June with the shutting down and tearing up of the street from Campus Parkway to NE 42nd. In August, construction work expanded to include the portion of University Way from NE 42nd to NE 43rd. Street closures on other sections of The Ave will continue into the latter half of next year. While most University Way merchants agree that improvements to The Ave are needed to bring back customers and fill vacant storefronts, some shopkeepers say they are feeling the pain of street closures.

It appears that although summer is usually slow with University of Washington students gone, construction could be exacerbating the problem.

"It's very unclear how much is construction and how much is summer," said Teresa Lord Hugel, executive director of the Greater University Chamber of Commerce. "The restaurants (along The Ave) are especially hard hit."

Shultzy's Sausage, located at 4142 University Way NE, is one of the Ave merchants which has seen a noticeable drop in sales since the construction began. Owner Don Schulze said his business is down 35 percent this summer. He has suggested to his employees that this might be a good time for them to take their vacations.

Despite the drop in sales, Schulze sees the long-term benefits to renovating The Ave.

"I definitely see the value of the entire project," he said, adding that the only thing more he'd like from the City at this point is quicker response to his requests for information about the project.

Ersel Anar, owner of La Vaca, a Mexican restaurant across the street from Shultzy's, said his sales are down 40-45 percent, which has forced him to cut back his employees' hours. Noise and dust, he said, are driving even some of his regular customers away.

Making matters worse - several signs, which had been posted along University Way to let the public know that Ave businesses are open despite the construction, are now missing, said Hugel.

Not all Ave merchants are feeling the pinch. Fred Hart, co-owner of La Tienda Folk Art Gallery at 4138 University Way NE, said business has been "holding up pretty well" during the construction.

Art Brochet, a spokesman for The Ave Project, said the City has worked with the construction company that is working on the project to ensure that public and delivery access to businesses along University Way remain open. He said from now on, only one intersection along The Ave will be closed at a time for construction, and that the intersection at NE 45th Street will, for the most part, stay open.

Brochet said the City and the Chamber also plan to launch a marketing campaign this fall to draw customers to The Ave.

Hugel said she believes the City has done all it can to keep the impacts to businesses caused by the road construction project to a minimum - short of giving Ave merchants financial aid. Anar thinks compensating businesses for lost sales due to The Ave Project may not be such a bad idea.

Don't count on it, said Liz Rankin, a spokeswoman for the City's Department of Transportation. "Direct cash gifts (to Ave merchants) would be a gift of pubic funds and there's no mechanism in place to allow that, but we will seek opportunities to work with businesses," she said. "We know merchants have been excited by this project but the irony is that what goes with (it) is some of the difficulties."

The Ave Project, which is expected to cost $9 million, includes repaving the street, widening the sidewalks and installing trees, public art and new bus shelters. Work on the first portion of the project, from Campus Parkway to NE 42nd, is scheduled to end in September. To celebrate, local businesses are planning a celebration on Saturday, Sept. 21. For details, call Art Brochet at 547-1008.