OAKLAND -- Anything but the Hillcrest Motel.

That's the saying around the up-and-coming Dimond district this week after residents and business owners learned the city gave partial support last week to two new low-income housing projects likely to bring hundreds of seniors to the neighborhood within the next few years.

"I think it is going to be fabulous, just what this neighborhood needs," said Art Watkins, owner of the Food Mill.

Watkins grew up in the Dimond, a multi-block commercial and residential district off Fruitvale Boulevard in what some people call the Oakland "slants" -- not quite the Oakland hills but not quite the Oakland flatlands either.

In the 1950s and '60s, the Dimond hosted its own movie theater, bowling alley and a smattering of family-owned businesses. By the 1980s, manyshops closed and the housing market stalled.

Watkins remembers spending his childhood there and has watched the district's boom and bust.

"It was great here in the '50s and '60s," he said. "There is no reason it can't be great again."

The area has been getting better.

New businesses, such as a women's gym and a grill, are filling empty storefronts. Home prices are rising.

Last year, Boston Avenue residents had had enough with the Hillcrest Motel, which police said was a magnet for drug activity and crime in the area. With the city and local courts' help, the motel was shut down and eventually razed.

Down the street at the Altenheim, closed two years ago because it was no longer profitable to run the aging full-service senior facility, the expertly-landscaped garden remains lush, thanks to the care of a dedicated Altenheim volunteer gardener.

A senior housing project at the old Altenheim retirement home, proposed by San Francisco-based non-profit organization Citizens Housing Corporation, won about $3.7 million worth of city and federal funding.

The group will build 67 low-income apartments for seniors in its first phase of development. About $1.9 million from the city will be Housing and Urban Development money and another $1.8 million will come from a 2000 Affordable Housing Bond.

James Buckley, executive director of Citizens Housing, said the city's boost will help the organization win more money to build the $13.3 million project.

"This grant is the basis for all our financing," Buckley said. "We will use this funding to leverage other financing sources such as housing tax credits, tax exempt bonds and bank loans."

Citizens Housing has spent more than a year meeting with Altenheim neighbors and stakeholders, shaping a senior housing project to suit the historic building and its surrounding landscape.

Neighbors Maja Brugos said residents are happy with the Citizens Housing proposal so far and glad the city also supports it.

"It is a nice way for the city to give back to an institution that has given so much for so many years," she said.

At the old Hillcrest Motel site -- now a patch of dirt along MacArthur Boulevard -- Domus Development and Self-Help for the Elderly will build 80 apartments for low-income seniors. They won $3.5 million from the city, a loan officials at Domus said they intend to pay back.

"I think Lincoln Courts will certainly fill the void that was there with the Hillcrest," said Meea Kang of Domus Development. She said the company plans to start building the $15 million project by this summer.

Councilmember Jean Quan (Montclair-Laurel) said the future neighbors have encouraged Dimond residents and business owners come up with ways to make the commercial corridor more of a destination than a pit stop on the way home.

"The seniors may be just the first wave," she said. She is also working to bring a farmer's market to the area.

Still, residents say the Dimond is not quite ready for its new neighbors. The area is right off the Interstate 580 Fruitvale exit and attracts heavy-footed drivers.

"My biggest concern is the traffic here," said Connie Ganey, manager of Creature Comforts holistic pet center. A pedestrian was killed near her shop more than a year ago and too often cars can be seen whizzing through crosswalks even if someone is trying to cross.

Getting the city to install traffic-calming measures is not easy, she said. Neighbors asked the city to install a stop sign near where the pedestrian was killed and were turned down.

Food Mill owner Watkins said he'd like to see a beat police officer patrol the area so the new population of seniors feels safe to walk around freely. His said his mother's purse was snatched in the area.

"If they know a neighborhood beat officer is around, they are going be more inclined to feel safe enough go out," he said.

A third Dimond development proposal, one for a controversial inpatient psychiatric facility at Nicol and Fruitvale avenues, will be heard by the city Planning Commission at its March 3 meeting.

"This grant is the basis for all our financing. We will use this funding to leverage other financing sources such as housing tax credits, tax exempt bonds and bank loans."James Buckley , executive director of Citizens Housing.