By PAUL CONSTANCE, DAVID MANGURIAN, Salvador, Brazil

Now, Brazil's most famous author can also pride himself for unintentionally helping to revive a singular historic neighborhood.

Most of Amado's novels are set in and around Salvador, capital of the Northeastern state of Bahia and former capital--until 1763--of all Brazil. In Salvador, few neighborhoods capture the city's rich colonial heritage more vividly than Pelourinho, a compact jumble of 17th, 18th and 19th century buildings and alleys where Amado lived as a college student.

Each year thousands of the author's fans, seeking to experience the world that inspired his fiction, make pilgrimages to Pelourinho. Many of them go straight to the Fundação Casa de Jorge Amado, an arts center founded in 1987 that maintains a large collection of materials on the author and hosts literary and cultural events in a spacious building on the district's main thoroughfare.

Some of these visitors venture into Pelourinho with trepidation, having heard grim warnings about crime and decay. But lately, many of them find that their concerns were exaggerated.

On a typical weekend afternoon, Pelourinho fills with visitors, many of them local residents. They are drawn by some two dozen museums and art galleries, three theaters, 20 restaurants, bars and cafes, three youth hostels and all manner of shops.

In the evenings, many people stick around, lured by the sound of music emanating from dozens of bars, parks and outdoor stages. The rhythms are contagious, and dances spontaneously break out in the streets when the bands are playing.

What a turnaround! "Most of this activity didn't exist a few years ago," says Paulo Gaudenzi, Bahia's secretary for culture and tourism. "What you had in Pelourinho was abandoned lots, houses without roofs, shanties."

Like historic districts in many other Latin cities, Pelourinho fell into neglect by the middle part of this century, burdened by the lack of modern infrastructure and the cost of upgrading its aging buildings. Many structures were abandoned outright or taken over by squatters. Crime flourished and tourists were often warned to stay away.

Then, in 1992, Bahia's state government launched a program known as Recovery of Salvador's Historic Center. The goal was to restore key sections of Pelourinho and a few other historic areas in Salvador, to encourage tourism and investment by businesses and home owners. The program took a novel approach: the city would offer to completely renovate residential buildings for free, so long as the owners would let the city rent the ground floor of the property for 12 years following the renovation. Rental revenues would help the city recover some of the costs of the renovation.

After devising a comprehensive renewal plan for the district, the government began restoration works on a block-by-block basis. Eight years and some $50 million later, the program is nearly complete. Some of the most recent work, including the restoration of eight historic churches and the construction of a large new parking lot, has been financed under a tourism program partly funded by a $400 million IDB loan approved in 1994. Designed to make this region more attractive to private tourism investment, this Northeastern Tourism Development Plan has focused on building and upgrading infrastructure works such as water supply, sewerage and solid waste disposal. It has also financed projects to upgrade the area's five most important airports and build or improve access roads to key tourist areas.

So far, more than 500 structures in Pelourinho have been restored, and visitors to the district's central area are immediately struck by the bright pastel façades and beautiful architectural details on the buildings.

"Today this area is generating jobs and has been transformed into a social focal point for the city," says Gaudenzi. "In addition to all the restaurants, shops, galleries and other businesses that have come in, we have a program known as Pelourinho Dia e Noite (Pelourinho Day and Night), that sponsors more than 1,000 concerts, plays, poetry readings and other artistic events each year."

The crown of the restoration program is the Praça das Artes, da Cultura e da Memória. Here, the government has taken over an entire block of crumbling 17th and 18th century residences that once served as the city's red light district. Based on an integrated design, the city is restoring and adapting each building to specific uses. Eventually, the complex will include a museum, a theater, an art cinema, a bookstore, a restoration workshop and school, several art galleries and a hospitality institute. Traffic problems will be relieved by a three-level underground parking garage that is topped with a terraced sculpture garden.

"The goal was to support the grassroots cultural activities that were already taking place in Pelourinho," says Vivian Lene de Correia Lima e Costa, a consultant to the state tourism secretariat who helped design the complex. "For example, although the district has numerous performance spaces, there are not enough facilities designed for theater and dance troupes who need to practice and rehearse. So we built a rehearsal space above the art cinema."

The road ahead. It is still too early to determine how much the restoration program has helped Salvador's tourism industry, but there are some promising indicators. In a recent survey conducted by Gaudenzi's staff, for example, 32 percent of tourists said Salvador's historic heritage was the main motive for their visit. This level puts Pelourinho on a par with the area's perennially popular beaches as a stated reason for visiting the city.

"In a survey conducted before the restoration program , only 7 to 8 percent of visitors named historic attractions as their main motive," says Gaudenzi.

On the other hand, Gaudenzi recognizes that the program has fallen short in some areas. For example, it has proven difficult to lure home buyers into Pelourinho. "We have plenty of businesses, but since there aren't too many residences, parts of the district can become a ghost town at night," he says. "We're worried about this, because ultimately residents are the ones who sustain economic activity on a daily basis."

Other observers have pointed out that budget constraints will make it difficult for the state of Bahia to continue investing in restoration works in Pelourinho, and that the funds needed to sustain the program over the long term will have to come from the private sector. Up until now, there has been relatively little private investment on the scale needed to build much-needed hotels, for example. Gaudenzi says the government has extended special lines of credit to new businesses who invest in Pelourinho, but he acknowledges that more must be done.

It will take time and more money to turn Pelourinho into a fully integrated mix of residences, businesses and tourism facilities. "You can't transform a place like this in a few months," says Augusta Passos Galvão Sampaio Reis, owner of the popular Casa da Gamboa restaurant in Pelourinho. "But the word is getting out. People are no longer afraid to come, and today we are getting visitors from all over the world!"