This week in State College, art -- not time -- is money.

Thousands of people swarm town, complete with the fat wallets and temporary extravagance of vacationers.

A lot of money is spent this week, that's certain. That makes a lot of downtown business people happy, especially given the lull the rest of the summer represents in Happy Valley.

"If it wasn't for the Arts Festival, it'd be tough to pay the bills," said Sam Zeigler, manager of the Corner Room, corner of College and Allen Streets.

"Our business grows three to six times as great," compared to normal summer business, he explained.

Customer traffic and sales increase for more than just the food industry this week. Many stores featuring artsy merchandise get overspill from patrons of the outdoor exhibits.

"We get at least three times the amount of people as usual," said Judy Dranov, owner of Art Works, 103 S. Allen St.

"We like to think that Arts Festival motivates people to think about buying art," said Douglas Albert, owner of Douglas Albert Gallery, 107 McAllister Alley.

Margaret Wyant, owner of Maggie's Memories, 153 S. Allen St., has seen this happen before -- sometimes people are so motivated to buy they want things that aren't even for sale, she said.

"Last year a couple from Philadelphia came in and took my gilded mirror off the wall and said they wanted to buy it," she said, laughing. "They took it home to Philadelphia!"

Although the festival brings a major boom for many downtown businesses, it causes a drop-off for others.

"A lot of retail businesses do get slighted," conceded Marie Librizzi, chairperson of the State College Downtown Business Association. But she added, "you have to find ways to cater to the thousands of people that are here."

Albert, who admitted he sometimes feels frustrated with competition from exhibitors for sales, demonstrates the innovative spirit to help alleviate frustration.

"We're setting up a tent in the parking lot where we'll be having a special sale," Albert said.

Even considering the temporary drop the festival may cause for some businesses, Librizzi believes the festival's benefits to the community far outweigh individual detriments.

"The festival does so much good . . . it helps the economy in so many ways that eventually it does filter down," she said.

Richard Gitelson, director of tourism research at the University, agrees. Gitelson and colleagues conducted a 1988 study to examine the economic impact of the festival on State College.

He said even if some retailers don't see immediate positive results from the festival, the money spent by the thousands of visitors at hotels, restaurants and other businesses is bound to have a positive impact on the local economy and retailers.

"They have four or five days to show people what they have," Gitelson said, "and even if people don't buy anything during the festival, they might come back here in the future, remember you, and buy something at that point."

Gitelson's study was conducted in a questionnaire during the 1988 festival and a six-page follow-up survey. Nearly 1,100 festival-goers were asked to list their expenditures made during the festival, distinguishing between festival and non-festival expenses.

Total purchases at festival exhibits for the five days were estimated at between $840,000 and $2.3 million.

The study's estimate for non-festival expenditures, including money spent at restaurants, hotels and retail stores, was between $988,000 and $2.3 million. Some of that money, Gitelson said, is certain to have an effect on the local economy.

"I think it has a very important impact," he said.