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One of the finest neon signs ever erected in southern California came down last December. The neon figure of a woman diver somersaulting into a pool had made Steele`s Motel a splashy landmark of Ventura Boulevard in Van Nuys since 1934.

In less enlightened times, this spectacular example of vintage roadside advertising might have gone to the scrap yard. Lovers of Americana were relieved when it was donated to Los Angeles` Museum of Neon Art.

MONA, as it is called, has been tagged the Disneyland of fine art, and its lively collection of kinetic art justifies the comparison. The museum is dedicated to the proposition that neon, long associated with the crude commercialism in American culture, can express the most elegant aspirations and fantasies of art as well.

Yet, said Managing Director Gayle Rendelman, traditionally ”it`s not the type of art galleries have ever considered showing.”

MONA resides in an unprepossessing warehouse distinguished by a neon Mona Lisa above the entrance. Downtown, not far from the new Museum of Contemporary Art, the 7-year-old neon center draws about 10,000 adventurous art lovers annually.

A recent MONA show, ”Sculpted Light/Sculpted Motion,” featured an eclectic array of work by 20 artists. Some exhibits employed plasma chambers in which sparks crackled like bottled lightning, resembling gadgets in Dr. Frankenstein`s laboratory.

One witty and elaborate piece, titled ”As the World Turns,” by artist Jim Jenkins, was a motorized assemblage of a typical suburban scene: An easy chair, mounted on an arm extending from a TV console, revolved around the console, while a channel changer on an arm extending from the chair revolved around the chair. In turn, the whole piece revolved, as rabbit ears spun on top of the TV.

Several works recalled pop-art cartoons sketched with a crayon of brilliant liquid light. Another re-created, down to tiny ”twigs” of neon, the look of bonsai trees. Each displayed vivid beauty in a medium once considered garish, cold and banal.

That`s no small accomplishment, because neon was never intended for artists` use. Made practical in France in 1910 by Georges Claude following pioneering research by Nikola Tesla and others in the late 1800s, neon was largely confined to commercial signs from the late 1920s through the mid-`50s. The lighting is produced by passing an electric current through tubes containing neon mixed with krypton, helium, argon, xenon and other gases, which emit different colors of light. Combinations of gases and tinted tubes create variations on those hues.

Neon caught the public`s fancy in the `30s and entered its golden age in the `40s and `50s as ever more elaborate designs were introduced. But the novelty`s fascination began to fade, and the use of neon declined as less expensive plastic signs illuminated by fluorescent bulbs became popular.

According to Lili Lakich, MONA`s founder and an avid historian of neon, it wasn`t until the 1960s that artists began experimenting in the medium. For her first sculpture, she was forced to salvage scraps of neon tubing and discarded transformers.

Lakich has carried the torch for neon since her childhood in the `50s. She saw much of the country from the back seat of an automobile as her family followed her father`s military career. As they crisscrossed the country, they looked forward to the doggerel rhymes of Burma Shave signs by day and elaborate animated motel signs after dark.

Lakich began working with neon in 1966 as a student at New York`s Pratt Institute. Bored by traditional art techniques, she realized that her true love was the roadside attractions, the neon signs that had become an integral part of America`s landscape.

She is no longer a loner: A small but growing number of contemporary artists, including several in Chicago, work with light. By the early `80s, although neon works had been exhibited in galleries and museums, none offered a continuing commitment to the medium.

Lakich filled the gap herself in 1981, establishing MONA to exhibit and preserve neon works, including some of the classic signs from motels, theaters and shoe-repair shops that had inspired her love for the medium. Long-range plans are to move the museum from its 5,000-square-foot home to a space five times as big.

Still, it has been an uphill battle to convince the grant-giving foundations and the public that neon can be an art form. MONA receives no major grants, and only a handful of the nation`s art museums have neon works. One consideration that has kept neon out of the artistic mainstream is that it`s a stubborn medium to work in.

”It`s real hard grunt-work to do neon tubing,” Rendelman explained. The glass tubes must be painstakingly bent to precise angles while maintaining consistent diameters.

Another complicating factor is expense. Neon artworks are inherently fragile and must be shipped in exactly fitted containers. That adds to the expense of mounting and insuring exhibits. Materials are costly as well.

In light of these difficulties, most neon artists create detailed designs but leave the work of constructing the pieces to experienced neon craftsmen.

Few neon artists support themselves through sales of their work, Rendelman said. It`s their love for the medium that sustains them. Rendelman began working at the museum seven years ago as a favor to her friend Lakich and has become a convert.

”At first I thought it was sort of wacko that somebody would make tubes that lit up, but now it`s like painting to me,” she said. ”They`ve got the passion and the emotion that these things are supposed to exude.”

”The belief still is widespread that because neon is used in signage, it can`t be used as an art form,” Rendelman said. ”But I think it will just be a matter of time for people to become educated.”