Will the last gay bar in Laguna Beach please turn out the lights?

The bungalow at Pacific Coast Highway and Cress Street used to be a happy hour beacon in Laguna Beach. Young men holding hands, Will-and-Grace types, the occasional gaggle of curious straights, the random lesbian couple--all would gather on weekends at Woody's at the Beach, a cottage-y gay bar. By midnight, the party would spread down the block to the venerable Boom Boom Room, with its dancing and drag queens, and to Bounce, a smaller joint across the street.

Sometimes neighbors complained. Sometimes tourists gawked and hollered. But the scene, like the town's art galleries and surf shops, was part of the area's character and history. Before Laguna Beach was conjuring images of drama-prone TV teens and oceanfront mansions, it was the city that elected America's first openly gay mayor. Its incidence of AIDS was, for a time, among the highest per capita in the nation. The Boom Boom Room is where Rock Hudson and Paul Lynde and Bette Midler once partied. Woody's, under one owner or another, had been gay for two generations.

The block-long promenade between them was like a miniature West Hollywood in the heart of once-conservative Orange County, and locals insisted the town wouldn't be itself if it went away.

Then the Boom Boom Room was sold to a billionaire with plans to eventually turn the site into a boutique hotel. Within a year, the owners of Woody's got an offer to cash out. A family-owned Mexican restaurant took over the space. Down went the fence that hid the back patio. In came the highchairs. When the new Avila's El Ranchito opened last month, leaving the Boom, as it is locally known, to boom alone into an uncertain future on its side of the highway, the block took on the feel of both a beginning and an ending.

And now, though the margaritas at the new place are both popular and delicious, the talk of the town is what will become of the local gay scene. Or, as a quipster at a coffeehouse put it one recent morning: "Will the last gay man in Laguna please turn out the lights?"

Laguna Beach isn't alone in its evolution. From South Beach to San Francisco, progress and economics are creating similar debates.

Though gay neighborhoods are thriving in some cities--Houston, for example--other, more settled enclaves are changing fast. The Castro district in San Francisco has had to make room for more and more straight families. In West Hollywood, straight college kids have infiltrated gay bars, sometimes by the busload, and one of the biggest concerns is what a city official has termed "heterosexualization."