Three-hundred and forty-five driving miles north of Los Angeles, 72 miles south of San Francisco and many leagues to the left of Middle America, Santa Cruz calls out to newcomers like a lazy mermaid atop Monterey Bay. With tie-dyed scales.

"Dude," this mermaid drawls. "What's your hurry?"

What with the redwoods, the shapely waves, the historic beachfront amusement park, the barking sea lions under the old wharf and the fluttering monarch butterflies that alight here every fall, Santa Cruz has always possessed plenty to lure tourists.

But there's never been a full-fledged stampede, maybe because the nearest commercial airports are in San Jose and Monterey. Or maybe it's because there's no easy freeway access. Most people come and go amid the heavy traffic on California Highway 1 (the coast) or California Highway 17 (inland).

Yet in the last two years, the eating and sleeping options here have taken a giant step forward. And thanks to the recession, many businesses, new and old, have been cutting prices or reinventing themselves.

On visits in October and November for this story, I checked out about a dozen lodgings and restaurants that have recently opened, upgraded, moved or cut prices. You can get ocean views for less than $200 a night. You can eat great meals for less than $20 a head.

Unless you're a true newcomer, you already know that surfers and students dominate the local culture.

The first surfers, three Hawaiian princes, apparently arrived here in 1885, which might make Santa Cruz the birthplace of surfing in California. The shaggy herds of university students arrived 80 years later, when the University of California opened a campus amid the big trees and meadows.

I could try to tell you that the place's reputation for hippie liberalism is overblown, but then I'd have to explain away the university's recent acquisition of the Grateful Dead archive. And I'd have to keep mum about Bookshop Santa Cruz, where every customer buying a copy of Sarah Palin's new autobiography last fall was offered a free bag of "Just Plain" nuts.

I suppose somewhere there's a surfer or student who came here and left, never to return. But that is hard to imagine as you're sidestepping the marimba players on Pacific Avenue or dodging the surfboard-toting bicyclists around Lighthouse Point and the Hook in Pleasure Point.

Despite the crippling Loma Prieta Earthquake of 1989 (which killed three people here and forced demolition of 27 buildings on Pacific Avenue), the city's population has doubled since the university opened its gates. It's about 56,000 now.

Most of the new and improved spots are downtown, where Pacific Avenue serves as the city's main drag, or along West Cliff Drive near the oceanfront boardwalk. But a couple of prime eateries (the Bonny Doon Vineyard Cellar Door Cafe and Kelly's French Bakery) sit in a former industrial zone on the fast-gentrifying West Side of town. A couple of the lodgings (Pleasure Point and Bella Notte inns) are in the Pleasure Point Area, an especially surfer-friendly zone where surfwear pioneer Jack O'Neill has been selling wetsuits since the 1950s.

Stay to play

When it comes to sleeping, the Santa Cruz Dream Inn is the big dog on the waterfront, a 10-story slab of '60s grooviness that reopened in July 2008 after a major renovation. The redo put an exclamation point on the building's vintage, emphasizing such details as the yellow and orange tiles in the bathrooms and the lime-green window shutters. Rates start about $169.

Each of the 165 rooms has a balcony or patio and a view of Monterey Bay, and you can step straight from the hotel onto the beach sand. The building stands a short walk from the popular but semi-gritty boardwalk and wharf. The hotel's restaurant is Aquarius (breakfast, lunch and dinner, seafood a specialty).

By the way, because of the city's perch at the top of Monterey Bay, this stretch of coastline faces east, so you won't see the sunset over the ocean. But if you rise early enough, you can watch the sunrise.

Right across the street from the Dream Inn stands the West Cliff Inn, a bright white three-story Victorian home now converted into an upscale nine-room bed-and-breakfast. The mostly commercial neighborhood is awkward for a B&B. But once you're inside, the interiors are impeccable, with stained-glasswork above the stairwell and California landscape paintings on the walls.

Before we leave the neighborhood, let's cross West Cliff Drive again and give the Sea & Sand Inn its due. This is a sleeper. From the street it looks like another forgettable roadside lodging, one with cramped parking at that. But Sea & Sand has killer views and spacious, well-tended grounds for a place with only 22 rooms. Moreover, the owners finished a major renovation in May that improved interiors and landscaping and added two rooms.