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Associated Press
ADVANCE FOR USE SUNDAY, DEC. 18, 2011 AND THEREAFTER - In this Monday, Nov. 28, 2011 photo, electricity meters cover a wall on the bottom floor of an apartment building on the Malecon in Havana.Just about anywhere else in the world, it would be a playground for the wealthy, diners in four-star restaurants and tourists willing to spend hundreds of dollars a night for a million-dollar view. But along the seafront boulevard, many buildings are dank, labyrinthine tenements bursting four or five times beyond capacity, plagued by mold and reeking of backed-up sewer drains. (AP Photo/Javier Galeano)

HAVANA — Along Havana's northern coastline, storms that roll down from the north send waves crashing against the concrete seawall, drenching vintage cars and kids playing games of chicken with the salty spray.

Fisherman toss their lines into the warm waters, shirtless men play dominoes on card tables, and throngs of young people gather on weekend nights to laugh, flirt and sip cheap rum.

This is the achingly beautiful and most instantly recognizable part of Havana's cityscape: the Malecon seafront boulevard, with its curlicue lampposts and pastel buildings rising into an azure sky.

Just about anywhere else in the world, it would be a playground for the wealthy, diners in four-star restaurants and tourists willing to spend hundreds of dollars a night for a million-dollar view.

But along the Malecon, many buildings are dank, labyrinthine tenements bursting beyond capacity, plagued by mold and reeking of backed-up sewer drains. Paint peels away from plaster, and the saline air rusts iron bars to dust. Some buildings have collapsed entirely, their propped-up facades testimony to a more dignified architectural era.

Now, for the first time since the 1959 revolution, a new law that permits the sale of real estate has transformed these buildings into extremely valuable properties. Another new law that allows more people to go into business for themselves has entrepreneurs setting up shop and talking up the future. And a multimillion-dollar revitalization project is marching down the street improving lighting, sidewalks and drainage.

The year has seen some remarkable first steps toward a new Cuban economic model, including the sacrificing of a number of Marxism's sacred cows. The state is still firmly in control of all key sectors, from energy and manufacturing to health care and education, but increasingly people are allowed to carve out independent personal economies. Officials say the changes are irreversible, and this is the last chance to save the economy.

Yet Cubans will tell you that change comes slowly on the island. Strict controls on foreign investment and property ownership mean there's precious little money to bankroll a capitalist revival. Even some Malecon denizens who embrace the reforms see a long haul ahead.

"It's not that I see the future as black, more like I'm seeing a little spark from someone 3 kilometers away who lit a match," said Jose Luis Leal Ordonez, the proprietor of a modest snack shop."But it's a match, not a lantern."

Leal's block, the first one along the promenade, has offered a front row seat to five decades of Cuba under Fidel Castro. The residents of Malecon 1 to 33 have watched the powerful forces of revolution play out beneath their balconies, and today they're bracing for yet another act as Castro's younger brother Raul turns a half-century of Communist dogma on its ear.

Given that Cuba's national identity has been inextricably bound up with its powerful neighbor 90 miles to the north, it is perhaps fitting that the Malecon is the legacy of a "Yanqui."

The year was 1900 and the country was under U.S. control following the Spanish-American War. Governor General Leonard Wood, who commanded the Rough Riders during the war with friend Teddy Roosevelt as his No. 2, launched a public works program to clean up unsanitary conditions and stimulate the economy. A key element was the Malecon.

At that time Havana ended about a block from the sea, separated from the waves by craggy rock. Raw sewage seeped into the bay nearby, so fishermen and bathers avoided this part of the waterfront. Only later would high-rise hotels and casinos spring up to make the Malecon a world-famous tourism draw.

For those early American occupiers, "The idea was to create a maritime drive so the city, which until now had its back to the sea, would begin to face the ocean," said architect Abel Esquivel. Since 1994, he has been working with the City Historian's office to restore the crumbling Malecon.

As the boulevard and promenade took shape, buildings sprang up on this block. One of the first was a three-story boarding house for singles and childless couples who occupied 12 apartments.

Today those have been subdivided horizontally and vertically, again and again, to take advantage of every last inch of space, and some 70 families live crammed into every nook and cranny.

Leal runs his cafeteria in the home where he was born 46 years ago, at the dark crux of an interior passageway. It caters mostly to neighbors and goes unnoticed by tourists on the sun-drenched walk outside.

He is one of the people on this block who is buying into Castro's entrepreneurial challenge.

Another is Omar Torres, who operates a private restaurant known as a "paladar" on a second-story terrace with sea and skyline views. He praised the government for lifting a ban on the serving of lobster and steak and allowing him to more than quadruple the number of diners he can seat.

From its early days, the Malecon was a place to see and be seen. By the 1920s the Malecon was a favorite strip for middle-class Cubans who motored up and down to show off their vehicles.

Havana developed without a strong central plan or dominant core, and the Malecon became one of its most important communal spaces, said historian Daniel Rodriguez, a Cuban-American researcher at New York University.

"I think the closest thing Havana has to an urban center is this long seawall," Rodriguez said. "It's a long, ribbony main square."