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In Hollywood, what`s hot and what`s not can change quicker than a yellow traffic light.

But for now, one of the town`s hottest properties is overseen by Richard Walter, a professor at the University of California, Los Angeles. He is an unlikely mogul, who wears granny glasses and prefers to keep his blond ringlets shoulder length.

Six, seven, eight times a day, Walter`s phone rings. The calls are from talent agents and producers inviting him to the city`s swankiest restaurants. They want to do business.

What Walter is sitting on is talent. Student talent. As chairman of UCLA`s screen-writing department, Walter has seen the popularity of his crop of students and recent graduates soar as Hollywood has begun viewing the department as a gold mine.

”UCLA is on roll,” said Richard Lewis, a producer at Tri-Star Pictures. He rattled off the names of seven screen-writing alumni, all in their mid 20s, who have had movies released recently.

”I defy you to name any other school that comes close to that,” he said.

The department`s credits also extend to television scripts. When the 1985-6 television season premiered, UCLA students and recent alums had penned the opening episodes for ”Miami Vice,” ”Amazing Stories,” ”Twilight Zone,” ”Scarecrow and Mrs. King” and a network movie.

The students in the two-year graduate program have not let this phenomenon go unnoticed. About two-thirds of them have employed Hollywood talent agents to represent them. A few students have made enough money from their scripts to pay for their education.

Walter said that the young screen writers can earn up to $30,000 for a half-hour television script and somewhere in ”the low six figures” for a movie script.

It wasn`t this way when Walter arrived at the school 10 years ago.

”When I got here there was tremendous disdain for what is called Hollywood mainstream,” Walter recalled. ”Back then I couldn`t give these kids away. I couldn`t get anyone to read their scripts.”

So why are scores of producers and agents seeking out UCLA talent in a town where it often seems that every other person at a cocktail party is a would-be screen writer?

First, it`s considered less risky to hire a UCLA-trained scriptwriter who comes recommended than to use an unknown.

The industry`s herd mentality also could explain the school`s popularity. For instance, when Shane Black, a recent graduate, was successful, many producers went to eat at the same trough.

”A lot of agents, a lot of people because of the success of (UCLA)

writers like Shane Black are wanting to see other scripts,” said Karen Kehela, vice president of production at Imagine Films Entertainment, owned in part by actor/director Ron Howard.

Kehela and others also suggest that UCLA has an edge because Walter, a screenwriter himself, is ”phenomenally helpful” in alerting them to hot talent.

”Some schools are certainly more receptive than others,” she said.

”Some think their students are in school now and work should wait until they graduate.”

The other Hollywood farm club is at the University of Southern California, across town in the heart of the inner city. But George Lucas` alma mater, some say, has built its reputation in recent years on directing. New York University also boasts a highly regarded screen-writing program.

Walter`s unabashed chumminess with Hollywood has raised some concern among those who believe that there is something untoward about the school`s commercialism. Walter suspects that his tenure was not granted until the last possible moment because some professors believed that the department was engaged in ”basketweaving.”

Walter has heard the complaints enough times to have taped the Oxford English Dictionary`s definitions of ”commerce” to the wall in his closet-sized office, crammed with scripts. It is to prove to skeptics, he said, that it is ”not a sin to be commercially successful.” Prone to discourses on entertainment since ancient times, Walter could have academic purists grabbing for smelling salts.

For instance, Walter suggests that all great playwrights, including Shakespeare, Sophocles and Aristophanes, were commercial successes in their lifetimes and could be considered the ”Neil Simon`s of their day.”

And, Walter notes, more people watched a recent television episode of

”Who`s the Boss?” that his teaching assistant wrote ”than saw all of Shakespeare`s plays during his entire lifetime.”

But students agree that no one has to sell his or her soul to Hollywood to get good grades at UCLA. Students can be as experimental as they like. For example, one woman who submitted a coming-of-age story about a Catholic lesbian with Marxist sympathies, of no commercial value, received glowing praise.

Nonetheless, the lure of fame and fortune is too strong for some to ignore.

”At UCLA it`s okay to be artsy and not commercial, but students reject that,” said Gregory Widen, 28, a 1983 graduate. UCLA students in recent years, he observed, ”are not interested in doing documentaries on Nicaragua. They want to be Hollywood screenwriters.”

The competition to get into the program is intense. Past grades are meaningless. Successful applicants write their way into the school; once accepted, they must churn out a full-length screenplay every 10 weeks. This year, 156 people submitted samples of their writing, much of it published work, for 15 slots.

The route to UCLA for those who do make the cut is often circuitous. The program`s roster includes a fireman, social worker, television anchor man, international lawyer, advertising executive, salesmen and single mothers working odd jobs. The average student is 30.

Dulany Ross Clements, 38, a student from New Orleans, claims one of the more unusual pasts.

”When I was a Playboy bunny all the comedians told me I was hysterical and I should write,” she said. ”It took me 15 years to get into gear.”

Clements, a fan of Edgar Allan Poe, discovered that what she enjoys most is ”dishing up the blood and guts.”

Some success stories at UCLA seem like something only Hollywood could dream up.

Widen, for instance, hit pay dirt immediately. When he submitted his first script in Walter`s class, he received an ”A.” But when he circulated it at 20th-Century Fox, he bankrolled close to $300,000.

The film, ”Highlander,” was released last year to mixed reviews. The movie, starring Sean Connery, jumps from a sword-fighting scene in Madison Square Garden to clan battles in 16th-Century Scotland.

The downside is Hollywood`s fickleness. One producer could recall only three or four graduates in his 1981 UCLA class who have succeeded in the fickle business. Bill Bryan, who left the film school in 1982, said he knows one industry executive who calls promising young writers ”flavor of the month.”

”It`s relatively easy to get a first job or first couple of jobs; I made three deals the first week I tried,” said Bryan, who is working on a love-triangle comedy for Paramount Pictures and an NBC pilot on three generations of a show-biz family. ”But when you aren`t so fresh anymore, it does get harder.”

Not everyone is ready for Hollywood. Most of the students will not sell any of their class assignments, and at least one said she finds the agents`

preoccupation with the students and their presence at some student functions a trifle irritating.

”I`ve always told people I`m a full-time student,” she said. ”That`s what I want to be.”