By MARK HIGGINS
SEATTLE POST-INTELLIGENCER REPORTER

It is Communion Sunday and pastor Anthony Simmons is working up a sweat as he paces and preaches from the altar at Bethel Temple, a gospel church in Seattle's historic Denny Regrade.

In the pews, their arms raised in worship, are blacks, whites, Native Americans, Pacific Islanders, the well-dressed, the homeless, seniors, raggedy street kids and fresh-scrubbed families.

They sing out their praises: Hallelujah! Sweet Jesus!

The bleached-white church -- like no other place in Denny Regrade -- is a showplace for the neighborhood's ethnic and social diversity.

One of Seattle's oldest inner-city neighborhoods, the Regrade is a place where the rich worship with the poor; where secretaries, architects, artists, busboys, laborers and lawyers live and work beside the homeless and unemployed.

It is a working-class neighborhood of growing contrast: By day, at least 15 social agencies dish out a cornucopia of food and services. By night, hip new restaurants serve up some of Seattle's finest meals.

The local clubs and bars sell wine by the glass, while corner markets sell it fortified and by the jug.

Steve Higgins, Bethel Temple's administrator, knows the Regrade's charms and disparity: "We have members of our congregation who live in the best apartments in the Regrade and people who sleep under the bridge."

As it approaches its centennial birthday, the Regrade is in a state of upheaval and revival. Powerful economic forces are at work, chipping away the old veneer, redefining the neighborhood. It is one of Seattle's most dynamic communities. And it is experiencing all the pain and excitement of rapid change.

Garrett Cobarr, a multimedia artist who lives and works in a Regrade loft, believes Seattle and the Regrade are coming of age. "There's a general feeling in Seattle that it could be the capital of the Pacific Rim and within that is the Regrade.

"The Regrade is like a nice sketch, but there is still room to paint. The challenge will be to maintain the heritage, direction and ambience."

The pace of development is startling. More than 2,000 apartments and condominiums were built here since the late 1980s. Some 50 eateries have opened in the past five years.

The neighborhood has almost 6,000 housing units, of which 1,400 are condos. Of the apartments, roughly half are subsidized.

The city is well on the way to achieving its goal of making the Regrade downtown's residential community, though 35,000 people work in the neighborhood. Half of all residents downtown live in the Regrade -- that's about 8,000 people. That number is projected to double in 20 years.

The building boom ushered in a new market of mid- to high-end apartments and condos. The average sales price of a Regrade condo last year was about $180,000, real estate agents say.

Studios, smaller than some suburban garages, sell today for $60,000 to $70,000. A penthouse condo in Bay Vista Tower recently went for $1.3 million.

Six years ago, then-Gov. Booth Gardner and his wife, Jean, spent almost that for their three-bedroom, three-bath condo on First Avenue.

The neighborhood real estate market appears to be warming up again. At least three projects are in the works that would add about 500 apartments to the Regrade. A handful of other projects are in various stages of development.