Associated Press

SAN JUAN, Puerto Rico (AP) _ Laura Feliciano was scouting locations for a new restaurant in the Puerto Rican capital when she discovered she was priced out of the upscale waterfront districts that were her first choice. Instead, she set up several blocks inland on a grungy street lined with discount stores and pawn shops.

Feliciano named her new restaurant and bar “Pa’l Cielo,” a Puerto Rican saying that translates as “To Heaven,” but she was far from it in the Santurce neighborhood. Prostitutes and drug dealers hissed to prospective customers from darkened corners, and diners insisted on being escorted back to their cars, sometimes to find their vehicles had been broken into.

Feliciano, who had returned to her native Puerto Rico from Los Angeles in search of an affordable place to open a business, almost gave up. “We thought about closing so many times because we would have felt responsible if something happened,” she recalled of the early years, referring to her clients’ safety.

But Feliciano persevered, and her patience has been rewarded.

In the six years since “Pa’l Cielo” opened, the Santurce neighborhood has been a success story in Puerto Rico, which suffers from a 13.5 percent unemployment rate after eight years of economic recession.

While tens of thousands of Puerto Ricans have left to seek better opportunities abroad, a few entrepreneurs like Feliciano have tried to make a go of it within San Juan. In Santurce, Feliciano’s restaurant has been joined by dozens of other new businesses including cafes, vintage boutiques and a bookstore. The renaissance also features an arts festival that draws artists and tourists from around the world.

Some investors in Santurce are considerably larger than Feliciano. Among the many building projects that have moved forward in recent years is a sleek glass-and-steel tower called Ciudadela, acquired by New York real estate developer Nicholas Prouty.

Despite a deep slump in the island’s housing market, Prouty said at a Sept. 18 news conference that all of the building’s 312 units had been sold. Puerto Rico’s Economic Development and Commerce Department says Prouty plans to add 252 apartments, 50,000 square feet of retail space and a public park for a $114 million expansion to the project “in the heart of Santurce,” a location that would not have been trumpeted in the past.

Prouty says he sees promise in the neighborhood of about 100,000 people because of recently declining crime, undervalued properties and an influx of young people.

“Santurce has acquired a sort of coolness, a favored spot for San Juan’s new generation,” Prouty said at the news conference. “My partner and I saw the possibilities, immediately.”

Feliciano, 39, says her “Pa’l Cielo” restaurant has attracted celebrities such as actor Benicio del Toro and members of the Grammy Award-winning hip-hop group Calle 13. She was so confident about the area’s future that she has also opened a small Mexican eatery. “It’s still a place where people with limited means and a strong will can make it,” she said of Santurce.

The neighborhood is bounded on the north and east by the upscale Atlantic Coast districts of Condado, Ocean Park and Isla Verde, areas familiar to tourists visiting Puerto Rico. To the west lies the largely middle-class area of Miramar and the approach to picturesque Old San Juan, a colonial district of cobblestone streets and the seat of local government.

The area turned to slums in the 1970s as people moved out to suburbs near San Juan. Many who stayed behind were immigrants, mostly from the Dominican Republic and often living in large blocks of public housing dominated by drug gangs amid surging crime in the 1990s. Longtime residents recall the neighborhood’s deterioration with bitterness. “Santurce was a forgotten place,” said Juan Luis James, a 56-year-old tire repair shop owner who has lived there all his life.

Today, abandoned buildings still pock the area, though many now feature vibrant murals painted as part of the arts festival called “Santurce es ley,” which translates as “Santurce is the law.”

Outdoor movie nights also are held in an empty lot near Feliciano’s businesses in a spot named Cinema Paradiso created by filmmaker Michelle Malley Campos, 28, upon returning from New York.

“There were a lot of people who told me, `Are you crazy? It’s dangerous there. Nobody’s going to go,”’ she recalled with a laugh. “Now they’re eating their words.”

Some people trace the neighborhood’s comeback to the government-led restoration of La Placita, a plaza that features an outdoor produce market surrounded by bars and restaurants, some considered to be among the best in Puerto Rico. The area now draws thousands of people, including many tourists, to eat, drink and dance to salsa music every weekend.

The transformation is far from complete. Despite occasional police roundups, sex workers wearing little more than G-strings and mesh shirts are sometimes still found along Ponce de Leon Avenue at night, a few blocks from Departmento de la Comida, a small shop and restaurant that specializes in organic arugula and other produce from the Puerto Rican countryside. The 30-year-old proprietor, Tara Rodriguez, said she doesn’t mind.

“It’s not perfect, it’s not polished,” she said. “And that’s something I celebrate about Santurce. It has its characters, it has its flaws. There’s a lot to work with here.”