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Two very different lifestyles-the laid-back California beachgoers and the flashy-cash set-are vying to set the tone of Newport Beach. Designer-dressed big spenders mingle with tanned surfers. Gleaming Mercedes-Benzes compete with decal-covered vans for limited parking space.

The average single-family house here sells for $545,000, and the median household income is $64,000.

But I don`t rely on statistics to keep track of the ups and downs. I count Rolls Royces. If I don`t see a couple each day, then I worry about the local economy.

Newport Beach is on California`s coast, 50 miles south of Los Angeles, 85 miles north of San Diego. Permanent population is 70,600. A good beach day can add up to 100,000 visitors.

Today, the mention of Newport Beach conjures up visions of wealth. A couple of decades ago, Newport meant only beaches, Bal Week when hordes of students partied during Easter week, summer vacations in a beach house.

The vestiges

Tidbits of the old beach town remain. You just have to know how to find them.

First, a quick geography lesson. The Balboa Peninsula-”the Peninsula”-

is a three-mile long sand spit separating Newport Bay from the ocean. A bridge links the mainland and Balboa Island, which is actually two islands-” Big” and ”Little,” separated by the Grand Canal.

Corona del Mar, which was my home for 20 years, is a postal designation for a small section of Newport Beach.

A few guidelines:

– Confine your explorations to the area between the Pacific Coast Highway and the ocean.

– Rule of thumb for restaurants: Waterfront restaurants are chains, and/

or overpriced, and/or the food`s mediocre. Drinks only, eat elsewhere.

– Wherever you go, it will take too long to get there, and there won`t be enough parking.

When I yearn for ”the way things used to be,” I head to Balboa Island. It`s Newport`s most densely built area, but also retains the old beach charm and a village-like atmosphere. Walking and eating are the main occupations.

Balboa Island is bordered by a sidewalk that runs between houses and bay. Lots are minuscule, yards rare, prices astronomical.

A walk around both islands is a bit over 2 1/2 miles. You might have worked off just a bit of the snack you picked up on Marine Avenue, the short business district.

Along with the usual ice cream cones, sundaes and sodas, there are the Island classics-frozen bananas (dipped in chocolate and assorted garnishes)

and Balboa Bars (vanilla ice cream likewise dipped and decorated).

For an al fresco breakfast on a bench or on the seawall, pick up a cappuccino, a cinnamon roll, a muffin or one of Dad`s fresh donuts.

The ”Do-Dads,” a group of island males, congregate in front of the shop every morning. Over the years and over countless cups of coffee, they`ve solved most of the world`s problems (but not the island`s parking problem).

Where to eat

Yes, you can sit down and eat. Wilma`s, where the windows open onto the sidewalk, is the island`s most popular breakfast spot.

After two decades in Newport, we`ve moved east, so I`ll reveal the name of our favorite restaurant-Amelia`s. Fresh seafood and Italian cuisine are the specialties. I`ve yet to find a better cannelloni.

Giorgio`s also serves Italian food, but I find it a bit heavy. For Chinese, there`s the popular Shanghai Pine Gardens (go for the sizzling-rice soup).

Between the restaurants and ice cream stands, you`ll find shops, most selling beachwear. The Balboa Beach Company`s T-shirt is the most sought-after Newport souvenir. Across the street is the Sandpiper, a classic dime store.

Pick up the three-car Balboa Island Ferry at Agate and South Bayfront for a two-minute ride to the Peninsula.

The landing is right at the Fun Zone, a reconstructed, sanitized version of the one that stood here for years. A nighttime array of colorful characters and garb that not even Central Casting could assemble ride the bumper cars, ferris wheel and carousel.

The sightseeing boats docked beside Balboa Pavilion will take you on cruises for close-up views of the thousands of pleasure boats in the harbor and of property whose value often soars to $4,000 per waterfront inch.

From the ferry landing, walk toward the Pavilion, turn right on Main Street, and head to the ocean and the Balboa Pier. On the way you`ll pass Britta`s, a comfortable, open-air cafe where two can have a pasta dinner with wine for less than $30. Britta`s also serves the best breakfast in town.

Ruby`s, a `40s style diner, stands on the end of the Balboa Pier. It`s a great place for a burger, fries and a thick malt or a vanilla coke.

The freshest fish

Two miles west, at the Newport Pier, the fishing fleet has been coming ashore each morning since 1890. You can buy the just-caught fish at the open- air market at the foot of the pier.

For a fresh fish dinner, cross Balboa Boulevard to the Crab Cooker-it`s the red building with the long line in front. Local custom is to step inside to the fish market for a shrimp cocktail or a bowl of chowder to stave off hunger pangs while you wait.

Of course you`ll want to hit the beaches. Newport has six miles of wide, sandy beach, plus 25 miles of shoreline in the harbor. Oil from February`s offshore spill has been cleaned up from the beaches.

There`s great body-surfing at the Wedge, at the tip of the Peninsula. The combination of strong waves, and tricky cross-currents makes this a place for pros only.

The body surfing is good, and safer, at 10th Street (no restroom or eating facilities), 13th Street and 22nd Street (by the Newport Pier)-all on the Peninsula.

Board surfing is best at 18th and 54th Streets.

Corona del Mar State Beach is always jammed, but there`s a parking lot

($3) that`s not always full, and fire rings for cookouts.

Little Corona, where Poppy meets the sea, is less crowded and has wonderful tidepools. You`ll have to park on the street, walk down a steep path. (No facilities.)

The bay beaches-Balboa Island, the harbor side of the peninsula-have no surf, ideal for small children. You won`t spend the day, though-no restrooms around and no picnics allowed.

The cleanest bay water is close to the harbor entrance. There`s a clean-water bay beach at the end of Balboa Boulevard on the Peninsula and a couple in Corona del Mar. One is by the Coast Guard Station on Bayside Drive. China Cove, at the foot of Fernleaf Avenue, is secluded. You have to park on the street, then take the stairs down to the tiny beach.

Tranquil oasis

There`s an unexpected block of tranquility in the midst of Corona del Mar`s commercial area-the Sherman Library & Gardens. The library, open to the public, specializes in the Pacific Southwest. Rotating exhibits, in a small adobe that was one of the city`s earliest homes, utilize the library`s outstanding collection of photos and documents. The gardens, with beds and hanging baskets of seasonal flowers always at peak bloom, wood sculptures, pools and fountains, and tropical conservatory are glorious.

Newport has some great old movie theaters. The Balboa Cinema, whose loge section has rocking seats, features nostalgia, foreign and less-frequently screened domestic films. The Lido Cinema has an art deco exterior, florescent fish and sea scenes on the walls. Corona del Mar`s Port Theater features foreign films; $2 on Monday evenings.

There are some inviting inns that reflect the comfort of old Newport.

The Little Inn on the Bay is on a quiet channel facing Lido Isle. Owners Herrick and Janice Hanson have individually decorated each of the 30 rooms with an 1800s Cape Cod theme.

The Little Inn has a pool, complimentary boat tours and bicycles. Starting with a continental breakfast and ending with ”milk and cookies,”

the lobby is a friendly gathering place.

All 10 rooms in the romantic, Victorian-influenced Doryman`s Inn have fireplaces and marble sunken tubs, some with whirlpool baths. The Doryman is right by the Newport Pier, and most rooms have ocean views.

Two blocks away, the Portofino Beach Hotel has definite European overtones. Rooms vary in their amenities-ocean views, private sundecks, whirlpool tubs. With complimentary wine or champagne in hand, you can`t beat the view of beach, sunset and Catalina Island from the hotel`s downstairs bar or cozy upstairs sitting area. Savor the fleeting glimpses of the old beach town-there`s not much left.