Is this the end of the party?

It’s easy to understand why the L.A. fire marshal shut it down: 175 people were partying in a space permitted for just five. Candles were burning. There were wooden steps. And the only two doors weren’t up to code.

Such was the demise of Hangar 1018 -- a 6,000-square-foot space that until its closure this month had been a locus of activity for the city’s burgeoning downtown underground art scene. Located on an industrial strip of Santa Fe Avenue, across the street from a rubber stamp maker and a strip joint, the Hangar was a major gathering place for artists of all stripes -- a venue for unknowns to show their work at weekly cultural gatherings that drew hundreds of like-minded souls, creating a rare bit of community in a city where sprawl makes it difficult.

The question now is what an unsanctioned arts hub does after a bust. Pony up the estimated $50,000-plus to change the building’s use permit and bring it up to spec? Move it into an official club or gallery at more expense, but with less control? Or find a different space entirely?

Hangar 1018’s founders are still weighing their options but are determined to continue.

“It’s frustrating because I think we’re doing something positive,” said Lance Sanders, 29, a musician who co-founded Hangar 1018 in summer 2003 with sound technician Phil Jordan and artist Nathan Cartwright. “To actually make something totally 100% legit is very, very expensive, and none of us young artists have that kind of money. So we try to do things as legit as we can, and unfortunately things like the fire marshal shutting us down happen.”

Guilty as it was of fire code violations, Hangar 1018 also fell prey to an association with, and proximity to, raves. The week it was closed, Hangar 1018 was swept up in a crackdown on illegal parties that kicked into high gear in late November, when an after-hours rave at a downtown pool hall ended with two people dead and three others shot, including a police officer. Two weeks earlier, at an illegal party in the nearby fashion district, two teens were shot and another was stabbed.

Hangar 1018, however, was not home to raves. It held “art parties” -- a distinction many in the art scene think the authorities fail to understand. (On the night it was shut down, however, the space was sublet for a primarily music-oriented gathering.)

Raves and art parties do have one thing in common: They both involve music. But whereas raves attract mostly teens and focus on dancing, drugs and sex, serving no greater purpose than having a good time, art parties draw an older, more varied crowd supporting a higher ideal: the work of unknown artists. At art parties, the music might be rock, jazz or opera, and the art covers all media, including installations, paintings, video projections and performance.

“I’m hoping they’re not just shutting down anything, and I’m hoping they’re paying attention to the friends and the enemies,” said Leonard Croskey, 39, founder of the roving Cannibal Flower art shows, which often took place at Hangar 1018. “We’re friends to the art world. There’s hundreds of people that will not show their artwork if things like Cannibal Flower didn’t exist, and I’m hoping the city doesn’t want to do that to the arts.”

According to Capt. Al Hernandez, assistant fire marshal for Los Angeles, the city is not targeting art parties.

“We are doing sweeps for illegal rave parties. If you get caught in that, we’re going to enforce the law the way we would against anybody else,” he said. “You’re not exempt.”

Even so, in light of the Hangar 1018 bust, many in the underground art scene fear that galleries holding art parties may come under closer scrutiny by police and fire officials.

“I’m trying to show [officials] that it’s OK to celebrate art, celebrate life,” said Michelle Berc, founder of Create:Fixate, a downtown gallery that holds bimonthly events.

“It’s just the same situation as a nightclub. If they’re going to allow nightclubs to happen, then what’s wrong with an art show or a party that’s in a different atmosphere?” Berc said. “They have biased opinions of what a party is and their vision of what has the potential for getting out of control.”

While nightclubs are better understood, they aren’t exempt from the long arm of the law either. If they’re over capacity or violating building codes, the fire marshal and/or police will shut them down as well. The issue, officials point out, is public safety.

Berc, 31, has been throwing art parties for three years, beginning in her downtown loft. In May, she moved to the Spring Arts Tower, where she jumped through a lot of hoops to meet the city’s requirements for a liquor license and the right to hold a party there.

“[We were] calling them for weeks and waiting for them to call us back and waiting till the last minute to get our permit,” she said.

“In the beginning of my art shows, I didn’t necessarily do that, because I didn’t know any better. But as they got bigger, I started going by the rules because I want to be a voice in the community in a positive manner. I’m not here to cause any trouble. I’m here to make a difference.”

Working with the L.A. fire marshal and police has been difficult, Berc said, but she does it because downtown is pretty much the only place where she can find a large enough space to accommodate her artists’ work and its audience. Create:Fixate shows generally draw 1,000 visitors over the course of a night, with each of the gallery’s 25 artists being given 15 feet of wall space.

The wide-open spaces and relatively low rents have caused downtown to become the heart and soul of L.A.’s art community. For those who have yet to break through, it also holds an entrepreneurial appeal: the novelty of the undiscovered and the challenge of making something out of nothing, be that the art itself or an entire art scene.

Over the last few years, that scene has grown at near warp speed. Galleries that could once be counted on a single hand now number in the dozens. Many are in Chinatown. Still more are on Gallery Row -- that stretch of semi-gentrified terrain on Main and Spring streets between 2nd and 9th. When the Row opened in May, there were only four galleries. Now there are 13.

Hangar 1018’s founders did their first show at the Row’s grand opening. Appropriately titled “The Max,” it was on the top floor of an outdoor parking structure and featured dozens of DJs, bands and artists. The Max then became a bimonthly event at the Hangar 1018 space. The next one is scheduled for Jan. 22, but its location is not yet known.

When Hangar 1018 began holding art parties in 2003, the events served a dual purpose. The space would not only be a venue for artists with no other outlet, it also would help the Hangar’s founders cover the $4,400 monthly lease. The $850 to $1,500 they charged to rent the space for a night a week, plus proceeds from a minimal cover at the door, was enough for them to break even, even after forking out for security guards, insurance and -- most of the time -- a liquor license.

Renters, however, are usually not as careful with a space as its owners are. The night the Hangar was shut down, none of its founders were on site to supervise. The space had been rented to Club JuJu, a music-oriented party that had thrown events at a space on South San Fernando Road; that space was also recently closed by the fire marshal.

“There’s no school for how to do this,” said Croskey, who’s been running his Cannibal Flower shows since 2000. “You just open your doors and try to figure out what’s happening. The [fire marshal] should at least give a warning, but what they do is fine them and it makes it sad for the pioneers -- the people that put all their money and effort into getting the art scene going.”

The pioneers, it seems, now have three options: to become even more clandestine in their operations, to legitimize the spaces in which they operate or to leave the area. The crackdown, coupled with the city’s fast-track gentrification, will most likely result in a bit of all three.

As for Hangar 1018, Sanders is working on a business plan to solicit investors to buy a downtown building that will meet the city’s requirements for its events. If that doesn’t happen, the Hangar may relocate to East L.A.

“I know for a fact it’s going to continue, I just don’t know where,” he said. “Downtown has a vibe you can’t re-create anywhere.”