The main cause of the damage lies 50 feet beneath the feet of the thousands of tourists who daily flock to the seedy neighbourhood in the vain belief that it reflects the glamour of the movie industry. Construction workers are digging beneath Tinseltown, extending the city's first, tentative effort at a subway. The subsidence - up to 9 inches in one place - has caused cracks in buildings, evacuations, and road closures. Twenty-seven stars have been dug up with jackhammers and placed in temporary storage while repairs to the walk are carried out.
This may have disappointed some of the displaced celebrities, who pay dollars 5,000 ( pounds 3,250) for the privilege of being trodden underfoot. But it was a much larger blow for Los Angeles' transport authorities, whose attempts to bring underground rail to this car-addicted city have been marred by mishaps, delays and overspending.
The line being built under Hollywood is an extension of the 4.4- mile subway which runs between downtown Los Angeles and Wilshire Boulevard, a smart business area. There are plans eventually for the underground, called the Metro Red Line, to run 35 miles out to commuter communities in the San Fernando Valley.
It has not got off to a good start. By the time it opened last year, amid much rhetoric about a brave new world of public transport, the Red Line had run up a dollars 1.4bn ( pounds 903m) bill - dollars 200m over budget - making it mile-for-mile the most expensive metro ever built. Eight months later, it was revealed that sections of its walls are considerably thinner than the 12-inch thickness called for in the design contract, a measure intended to protect passengers during an earthquake - an important consideration in fault-riddled California. An independent panel launched an investigation, which declared the line safe.
But critics say it is an absurdly expensive project which is destined to be a white elephant. The daily number of riders is 15,000. This is a tiny proportion of the 9 million residents of Los Angeles County, 97 per cent of whom travel to work by car - mostly on the heavily jammed, smog-spouting 700-mile freeway network.
This is despite its unusual attractions. Unlike most underground systems, it is pristine, uncrowded and graffiti-free. Armed transport police ensure there is almost no crime. Their main task has been issuing scores of dollars 50 fines to passengers caught breaking a ban on eating underground.
There is growing urgency in the debate about how to solve Los Angeles' severe transport woes - its congested roads and health-threatening air pollution. No one disputes that something has to be done. Officials estimate that, by 2010, average freeway speeds will drop to 17mph. Until recently they have been talking about building 400 miles of rail, although a lack of money has forced them to rethink.
But some experts argue that rail is not the solution, mostly because it moves too few people for far too great a cost. A passenger on the Red Line is - for capital costs of the project alone - subsidised by more than dollars 52 per round trip. 'It is extraordinarily expensive,' said Jim Moore, Associate Professor of Urban and Regional Planning at the University of Southern California. He believes there would be more hope of success if the city's bus system was opened to private competition.
One reason to question rail is LA's geography. The metropolis has no centre, but comprises satellite communities sprawled across a 70-mile wide basin between the Pacific and mountain ranges.
To fund its grandiose projects, LA's Metropolitan Transportation Authority has raised bus fares. Most bus passengers are low-income blacks and Hispanics, many of whom don't vote. So the poor are paying a price for the burrowing under Hollywood's stars, and for a metro which most of them will never use.
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