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Abraham Vasquez of JC Smith Band plays at the 2nd annual of Redwood City PAL Blues Festival.

It's Friday night in Redwood City. Live mariachi music blares from the Margaritas Restaurant. Outdoor tables at numerous other eateries are packed with diners enjoying absolutely perfect weather. Earlier in the evening, several hundred people filled Courthouse Square for free live blues music.

By all indications, downtown "Deadwood City" is getting a life.

"Look at it - it's teeming with people!" says Joe Ryan, a member of the band Sage.

The changes can be credited to a collaboration involving city agencies, business owners and residents, who say the downtown streets used to be mostly empty of pedestrians, but now restaurants, movies and live music are drawing people from all over the Peninsula. Some argue the changes haven't been as good as they might appear, but all agree the city is no longer stuck in neutral.

Julie Snaman, an urban recreation specialist who has lived in Redwood City for 15 years, is happy with the change. "I hope for my sake I never hear `Deadwood City' again," she says, referring to the taunt that's been used to characterize the municipality of 74,000. "We call this our living room," continues Snaman, noting that one person even brought a recliner to a recent outdoor movie screening.

A big draw has been "Summer in the City," a series of free events in the wide-open square at the steps of the Old San Mateo County Courthouse, a glass-domed building dating from 1905, which now houses a museum. Its Roman Renaissance-style facade was recently renovated, and now events in the square are bringing hundreds of people downtown every day of the week. There is live music; outdoor movies; dance lessons and performances of swing, hip-hop, country and salsa; and juggling and other entertainment for kids. The city is spending an estimated $40,000 to $50,000 to present the series.

Another attraction is the music at the nearby Fox Theatre and Little Fox. The smaller venue hosts several performances every week, and the larger presents acts such as Neil Young and Dave Brubeck on a less regular schedule.

Not far from the square, a 20-screen movie theater opened in 2006, and it's surrounded by restaurants. The city also is planning for more retail businesses and new housing.

The transformation of Courthouse Square was completed late last year, after a courthouse annex was demolished. The dome of the historic building lights up in colors at night. The square, which is adorned with palm trees and fountains, has been widely praised.

The city spent more than $40 million revitalizing the area, including the courthouse facade, the square itself, some street work and an underground garage, according to Malcolm Smith, the city's public communications manager.

One recent Friday night, a diverse mix of several hundred people ate, drank or danced with their families and friends while the Bluestate Band played. The city allows people to bring their own alcohol to the square.

Charles Hunter, who has spent much of the past 30 years in Redwood City, listened to the music with his daughters and grandchildren. He said at first he didn't like the changes, but now he recommends the downtown environment to others.

"Before, everything closed at 6, everything shut down," he says. Referring to the city's residents, his daughter Brittney says, "We never had a place to gather before (but now), instead of the grocery store, you see us here."

John Anagnostou, who co-owns the Fox theaters and other properties in the area, says, "People in Redwood City who haven't been here yet come down and go, `Wow, when did this happen?' "

Anagnostou, who is also a real estate broker, had long envisioned a more vibrant downtown, with lots of entertainment. He was a driving force in the redevelopment effort. He gets excited talking about the changes and the diverse mix of people they've attracted. And he says more change is on the way. "I can't tell you how many phone calls I'm getting from businesses who want to come here," he adds.

Randy Nasrah's family owns the Eden Café restaurant chain. Sitting in a lawn chair near the square and enjoying the music, food and drinks with friends, he explains why he's thinking about bringing one of his cafes to the city where he grew up.

"The development and amount of people brought in mean you could actually have a successful business," he says. "They've created an atmosphere that's welcoming for people. . . . They didn't have this when we were younger."

The square and environs appear to be a magnet for Redwood City's young people. In front of the 20-screen Century theater, which opened last year, teenagers chatter on cell phones while waiting for movies. Elsewhere along Theatre Way, as this stretch is called, people dine at restaurants such as Portobello Grill and Citrine.

The city's redevelopment agency has preserved some historic buildings while mixing in new construction. The restaurants represent a diverse mix, and at places like Mr. Pizza Man it's possible to get dinner for under $5. You can get coffee downtown, too, but chain outlets such as Starbucks are few and far between; the area includes at least as many independent businesses as chain outlets.

A couple of blocks from the square, Enrique Ramirez is cleaning up between waves of customers at Young's Ice Cream. He says "business has been excellent," and more people definitely have been venturing downtown recently. But he shares the opinion expressed by several other people as well that, after 10 p.m., things start to slow down. And the vibrancy fades just a few blocks from Courthouse Square. Ramirez, 19, who is the member of a band, says there aren't many places for teenagers to enjoy music. He thinks nightlife will probably continue later into the night if the area attracts more bars and clubs.

The Fox theaters and a couple other establishments do offer late-night entertainment. Tarboosh Mediterranean Cuisine and the European-style bakery La Tartine are still buzzing long after most others have closed. But by soon after midnight on a recent Friday night, the streets were mostly empty, except for small groups leaving the cineplex.

Still, Smith, the city's public communications manager, says great gains have been made in the past few years, and even more reasons for people to come downtown are on the way.

Many rave about the music and other changes in the city. But some say the improvements haven't brought as much business as expected. Bob Bryant, co-owner of Bob's Courthouse Restaurant, says his business has declined, adding he lost customers during construction of the cineplex. He says a lawsuit against the city is being planned.

In 2004, the city settled one lawsuit over its use of eminent domain before the case went to court, and another suit before it went to trial.

Smith, however, says the city has gone to great lengths to work with businesses. He also says eminent domain is the "last choice," adding, "We think the final result is worth it."