Is preservation good for Miami Beach?

Coconut palms planted by some earlier dreamer etch feathery lines on the sky. On the porch of the Beacon Hotel a half-dozen retirees break into a melancholy round of ''Que Sera Sera.''

In the twilight stillness, their only audible competition is a piano tune wafting down the beach from the Cardozo, where upscale young professionals are drifting in for an evening of jazz at the hotel's chic new cafe.

It's a warm summer night in the Art Deco District - a square-mile slice of south Miami Beach honored in 1979 by being added to the National Register of Historic Places, making it the first district of 20th-century vintage to hold that distinction.

But as you walk through the district, which holds the world's largest collection of Art Deco architecture, there is no hiding the fact that it has come precariously close to being a seaside slum.

Tattered buildings hint of faded glories and things that never were true: porches wrapped with ocean-liner railings; towers shaped like Buck Rogers rockets; sunbursts embedded in terrazzo floors. Just off the main shopping district, less than a block from the beach, a shattered barbershop window has been taped and glued, but not replaced. Along Washington Avenue, remote-control cameras marked ''Police'' now keep a mechanical eye on the loafers and shoppers, because the crime rate here has been one of the highest in Dade County.

As far as Gabriel Santucci can tell, however, his neighborhood is making a comeback - of sorts.

''The big guy (the owner) says he's going to fix this place up,'' says gray-haired Mr. Santucci, relaxing in his favorite chair on the porch of the Nash-Senator Hotel. If there's one thing he knows, it's the neighborhood, having watched it from various porches since coming here from New York in 1959.

''I suppose it's all for the best,'' he adds, after a moment's hesitation.

Still, he has heard stories of elderly tenants having to move from their apartments with only a few weeks' notice. Many others, he knows, are deciding to leave the area altogether.

As recently as 1970, retirees accounted for 90 percent of the district's population. Now they make up only 50 percent.

The decline of the district was spurred by a muddle of misguided redevelopment plans that discouraged owners from fixing up their hotels and apartments, most of which were built during the 1930s when the Art Deco style flourished.

The architecture here, a unique style dubbed ''Tropical Deco,'' is at once sultry and whimsical. The pool at the Nash-Senator, for instance, evokes images of a steamship cruising a moonlit sea, complete with fake portholes and a bas-relief mermaid.

But the revival of the Miami Beach Architectural District illustrates a growing challenge - how to save neighborhoods without displacing people already there.

''When we started, it was because we saw preservation as a tool to save the neighborhood for the older people,'' says Barbara Baer Capitman, president of the Miami Design Preservation League. She was the driving force behind getting the area listed on the National Register of Historic Places.

''The idea was to fight gentrification with the government's help,'' says Ms. Capitman, who sees the influx of younger people as a mixed blessing. She says the district should be slowly restored, rather than built over with glittering high-rises.

The neighborhood has become something of a hangout for local artists and musicians, prompting promoters to call it the emerging ''SoHo of the South.''

When the artist Christo came to wrap the islands in Biscayne Bay with 200 -foot-wide skirts of pink plastic, he chose to stay here. Magazines from New York and Paris have come to do photo spreads. Al Pacino filmed his forthcoming movie, ''Scarface,'' here.

On a weekend night, a Bohemian atmosphere prevails on the porch of the Cardozo, where a pair of barefoot college students might sit with young professionals and artists to listen to music and talk.

''The market we're reaching is 25 to 40 years old,'' says Ted Hankoph, manager of the Art Deco Hotels - a company redeveloping a chain of Art Deco buildings, including the Cardozo and Carlyle. ''We mostly attract people in the arts: architects, musicians, fashion designers, anyone with an interest in preservation or Art Deco.''

Mr. Hankoph, over lunch in the air-conditioned chill of the Carlyle Grill, says the plan is eventually to own a string of 20 hotels that could be operated as one resort.

It's hard to imagine that a year ago this trendy restaurant was just another tacky lobby along Ocean Drive. Between the potted palms and cut gladiolas, it's the new colors that attract the wandering eye: red plastic chairs, pink walls, and deep green curtains.

The entire hotel has been gutted and redone with Art Deco interiors, including mauve-colored furnishings and reading lamps shaped like seashells.

According to Hankoph, only five elderly residents had to be moved when renovations began. All were given comparable spots in a nearby residential hotel , owned by the same corporation.

''Their only complaint now is about the jazz going on too long at night,'' Hankoph says.

The Cinema Theater, meanwhile - complete with etched glass classical figures in the entry and two huge murals in the auditorium - is being redeveloped by three New York investors into a ''high-tech nightclub.'' The club is expected to attract as many as 2,500 patrons a night after it opens next fall.

Says Barbara Capitman, ''I don't know what that will do to the fabric of the neighborhood.''

If you wander into Uncle Sam's Fruit Company, a sort of combination neighborhood grocery store, lunch counter, and fruit stand, you sense another change that has gripped the Art Deco District in the last decade.

''There is no Uncle Sam,'' admits the dark-eyed clerk in unaccented English. Her father, she says, has owned the place for more than a month now.

Uncle Sam, if he ever existed, sold the place to Herman Silva, a Cuban who speaks English only when necessary. He's one of Miami Beach's growing community of Spanish-speaking business people determined to make a go of it on this sun-baked isle.

In recent years the southern half of Miami Beach has attracted a growing number of Haitians and second-wave Cuban refugees. Store signs in the main shopping district that once bore English (and perhaps Hebrew) now, more often than not, include Spanish.

Even in Friedman's Bakery, one of the more fragrant neighborhood institutions , Cuban bread and pasteles de carne (beef pies) have found their way into the counters alongside the challahs and bagels.

Says one young baker: ''This is really a Jewish bakery. But the neighborhood is changing, and we've got to change with it.''

Mr. Silva, over at Uncle Sam's, says it's high time the neighborhood was spruced up - for the benefit of the elderly as well as for newcomers like him. He grumbles about dirty streets, peeling paint, and troublemakers.

''It's not good for business,'' he says.

Dan Kransdorf, executive director of the Miami Design Preservation League, says the district is just going through a natural evolution - and not the first one, either.

''When Miami Beach was founded, there were no Jews allowed,'' Mr. Kransdorf says. ''It was a restricted resort. Then it became Jewish. And now you hear more Spanish than Yiddish on the streets.''

The changing character of the district is even reflected on the playground of the local elementary school.

Fran Schmidt, a sixth-grade teacher, says her class of 34 children this year included 25 nonnative English-speakers from more than a dozen countries, mostly in Latin America.

Just four years ago the school was about to close for lack of students, she says. Since then the enrollment has jumped from fewer than 400 pupils to more than 1,300.

''It's great to teach these kids,'' she says, ''because whatever part of the world you talk about, there's somebody in class who knows firsthand about the area. It's a mini-United Nations.''

The influx of new money and people evokes mixed reactions from older residents, most of them retired New Yorkers who have been coming here for decades.

Slowly fanning herself on the porch of the Waves Hotel, one elderly woman in a bright print dress quickly assesses the situation:

''They care about us like they care about fish. They can't get rid of us fast enough,'' she says, as three friends nod in agreement. ''They don't think there's enough room for old people.''

Another woman pipes in: ''But the neighborhood is getting better. They used to be arresting people everywhere. There was always a wagon out here taking people away.''

One thing they all agree on, however, is that the hamburgers in the new cafe are too expensive.

Elderly residents like these remember the gracious touches of an earlier era on Miami Beach, when the palms along Ocean Drive were lit with blue, green, and yellow spotlights and big-name entertainers considered this a good booking.

''You wouldn't dare sit on the grass with your chairs -- that's how beautiful it was,'' says one woman, pointing her cardboard fan toward the park across the street.

Local preservationists, meanwhile, insist that their efforts are not displacing these older residents.

''Retirees just aren't coming to Miami Beach anymore,'' says Kransdorf of the Design Preservation League. ''They're going to places like Fort Lauderdale and Arizona instead.''

As vacancies open up, he says, it's natural for younger people to want in. After all, ''Where else can you find a one-bedroom apartment overlooking the ocean for $400 a month?''

The Miami Design Preservation League has a plan to funnel elderly citizens into the economic revival of the district. The idea is to start up cottage industries among the retirees, utilizing their skills in tailoring and dressmaking.

''We'd like to start a local fashion industry producing Art Deco clothing,'' Kransdorf says. Art Deco was a complete style, influencing everything from fashion to perfume bottles as well as architecture and interior design.

Another idea being batted around is to establish tax incentives for owners who revamp hotels and apartments and set aside space for the elderly. This would include rent controls to keep retirees on fixed incomes from being priced out of the district.

But you don't need to walk very far to find a hotel owner who would like to see ideas like that packed inside a barrel and floated out to sea on the next tide.

''I'm in favor of the Art Deco concept,'' says Ron Wallis, co-owner of the Waves Hotel. ''But I am opposed to having someone tell me what to do - all the way down to what colors I can use.''

The Waves happens to be in the midst of a new paint job; dropcloths and paint cans are piled in the corner of the lobby. Says Mr. Wallis: ''Of course, I'm not going to paint my building black. I'll use the bright colors the Deco people like.''

As it stands, owners are free to do what they like with their buildings. The district's historic label simply means they can snag tax credits and incentives that encourage preservation. But the owner has to be willing to invest at least 100 percent of the original price of the building to qualify.

''If the Art Deco people are opposed to what you're doing, they can stall it with all sorts of legal blocks,'' says Murray Gold, executive director of the Miami Beach Resort Hotels Association. And there have been some public protests aimed at developers who tore down buildings.

Mr. Gold maintains that the Art Deco District should have been limited to a much smaller chunk of the island. ''If it's such a good thing, it will spread by itself,'' he argues.

But even the sidewalks along Ocean Drive are a reminder that this is a city where development has long sparked controversy - and probably always will. There was once even a wrangle over what color to make them.

For decades, Miami Beach has added red color directly to concrete, giving sidewalks and curbs a subtle pink complexion. At one point, a community leader argued that they should switch to a ''cool yellow'' instead of the ''hot pink.''

About the only place in the district to escape the bickering, it seems, is under the palms in Lummus Park.

Just a few feet from the beach, a young Haitian family is having a picnic of spicy West Indian chicken and fruit, while two elderly men play chess on a nearby bench.

Gazing across at the row of old beachfront hotels, it's easy to imagine more prosperous times in the past, when the wail of jazz saxophones beckoned from the Warsaw Ballroom and each sunset promised brighter mornings to come.

The tourists who flocked here in the 1930's were fleeing not only the ice and snow of the North, but bread lines and bank failures, too. In those days, the palms in Lummus Park were still relatively small, having ben planted by Henry Lum in te 1800s.

He hoped to squeeze a commercial success out of coconut oil - just the first in a long parade of dreamers and developers to land on these shores.