By JOHN IWASAKI
SEATTLE POST-INTELLIGENCER REPORTER

Downtown Monroe "may remind people of the little town they grew up in many years ago," says Rich Hartzell, a Monroe native and director of The Evergreen State Fair.

Across Main Street and down a block from the jewelers, the smell of specialty breads wafts from Sky River Bakery, where ardent fans rave about the tangy lemon muffins and sticky cinnamon rolls.

Mary Thorgerson, one of the bakery's three owners, moved to Monroe from Seattle's Wedgwood neighborhood 11 years ago, seeking a smaller, less busy community with access to Seattle and the Eastside.

Like other Main Street-area shops, the bakery has felt the growing impact of new businesses along the north side of Highway 2, which range from strip mall specialty stores to a Fred Meyer complex.

The Main Street customer base, already eroding because of mall competition and the lack of parking, took another hit when a fire destroyed a Coast to Coast hardware store in the heart of downtown Monroe earlier this decade.

"That literally took people off the street," Thorgerson says. "It's nothing for us to hear people say, 'I've lived here for three years and never knew a bakery was here.'"

Ann Plunkett has heard similar expressions about her shop from surprised customers at Chanticleer's Books, a bright, well-ordered store she opened last July next to Broughton's Jewelers.

"I didn't want a highway-type bookstore," Plunkett says. "I wanted to preserve a small-town atmosphere and make it a nice place to come."

But it has taken some time for shoppers "to realize that Monroe isn't (just along) the highway," she says.

In addition to Highway 2 passing east-west through Monroe, the city is the northern end of state highways 522 and 203, making traffic an ongoing concern. Over the recent Memorial Day weekend, for example, recreational vehicles, cars and trucks towing boats crawled to and from the Skykomish River Valley.

On other weekends, the highways are loaded with visitors to the fairgrounds, which holds car, horse, craft, gun and other shows throughout the year. The Evergreen Speedway at the fairgrounds features auto races from April through September.

The fair, which attracts nearly 800,000 people during its 12-day run, also brings traffic to a standstill.

When he opened his small variety store in 1975, Adrian Taylor says, Monroe had "a relaxed, easy pace. In the last 20 years, the community just matured. You don't have to go out of the community for things."

Taylor and his wife, Deanna, own Ben Franklin Crafts, a store packed with indoor fountains, picture frames and scrapbook materials. The store moved to its present location on the north side of U.S. Highway 2 in 1981.

Horse trainer and Goose Down Farm owner Joan Emerson tries to support downtown businesses but sees growth along the highway in a mostly positive vein, citing convenience and customer choices.

"When you go to a store in Monroe, you're treated so nice," says Emerson, who moved from Santa Fe, N.M., to a 6.1-acre farm north of Monroe in 1989. "They take you to where the item is. I find this fascinating. They have people skills for keeping customers in town."

She bought her property -- five barns, a house and a spectacular view of the Cascade Range -- for $145,000. Friends thought she was crazy to pay so much.

Today, the low end for a similar-sized parcel is $600,000, says Darling Belle Healy, a Windermere Real Estate agent who has lived in Monroe since 1980.

New starter homes springing up in west Monroe go for $140,000 and up. Subdivisions with names like "Lord's Lake" and "Reflections" make up part of a sprawling area generally known as the Fryelands.

With residential development in the city nearly complete, the next growth area will be north of Monroe, including a 360-acre site that the city is in the process of annexing.