Adaptive reuse of historic buildings in Los Angeles, both officially sanctioned and ad hoc, often results in odd juxtapositions, with none odder than the nutty provenance of Dan Bernier and Amy Finn Bernier’s loft in Chinatown. In 1939, their building was born as the Rice Bowl restaurant, a politically incorrect “palace in the sky” that served a stiff Mai Tai and was home to the only Asian cabaret in town. Later, it became Madame Wong’s—which, to any cool kid raised in the post-punk 1980s, occupies a place as seminal as CBGB but as obscure as Machu Picchu: Once, the Berniers’ 1,200-square-foot living/dining room held a stage graced by then-junior-varsity bands like Blondie, the Go-Go’s, Oingo Boingo, and the Police. Dan Bernier tells his favorite story about “Madame” Esther Wong (1917–2005), who was nothing if not adaptable: A failing restaurateur who got into music for the beer sales, she roamed the club’s audience to sniff out marijuana smokers. In her most infamous Chinese-grandma moment, “Madame Wong stopped the Ramones in the middle of their set, because someone had written graffiti in the girls’ bathroom, and she made them go clean it up,” Dan says with a laugh, sprawling on a sun-drenched couch in the former West Coast temple of New Wave.

From the mid-1980s until the Berniers bought it in 2003, the building on Sun Mun Way was a 4,000-square-foot furniture warehouse upstairs and a series of low-rent merchants downstairs, all moldering in concert with the declining fortunes of the master-planned, tourist-friendly shopping village north of downtown once known as New Chinatown. (Old Chinatown had been bulldozed and redeveloped several times over by the 1930s.) Today, just-plain-Chinatown is experiencing a renaissance, with bars and art galleries occupying formerly empty storefronts, new housing and light-rail nearby, and a multicultural 24-hour street scene that exists nowhere else in urban Los Angeles. Some call it gentrification, but there may not be a word for the repopulation of a fake place with real residents. For the Berniers, it’s like raising a family in the middle of Colonial Williamsburg. Weird, but fun.

By the time the Berniers got the property, the only remnants of its fascinating past were a disused kitchen in the back—now a bedroom for their sons Maurice (Moe), five, and Lewis, eight—and a distinctive circular opening between the show lounge and dining room, now an open living/kitchen area and lofted sleeping/bath quarters. The “big circle” still serves to separate the front of the house from the back: “We wanted this big public area where people could be eating, cooking, talking—a shared space,” says Dan, “and on the other side of the circle is really ‘our’ space. It exists as another realm.” A couple of swings for the boys are bolted into a beam just beyond the circle, and while homework, playtime, and bedtime occur in the back rooms, the whole house is a free-fire scooter zone.

Kid-friendly touches pop up throughout the space. In the bathroom, a sink for shorties is placed next to one for adults; the bathtub is ensconced below the overhang of the sleeping loft to keep it warm and cozy, while the tooth-brushing area opens up all the way to the skylights. Moe and Lewis’s bedroom looks out on the not-so-scenic rear of the Hop Louie restaurant next door, but it also has a great view of Dodger Stadium; in the summer, the boys can watch July 4 fireworks from their beds.

In addition to the big circle, the most prominent design elements are the 14-foot-tall ceilings painted bold green, red, orange, and blue, and the golden southern light that flows through the double-hung windows, some of them new, some of them originals buried under decades of stucco and drywall. “It was a club, so they didn’t want any natural light, and when it was a furniture warehouse, they were afraid of people breaking in,” says Dan. French doors open up onto an original balcony that runs the length of the eastern edge of the building, allowing parents to keep an eye on kids scooting around the concrete plaza below. An IKEA kitchen features red plastic panels that riff on the faux-Chinese lacquer seen in Chinatowns everywhere, and a bargain-priced green granite countertop that Dan considers retail waterloo (but in a good way).

The entire place is lit by a cacophony of floor lamps, including a plastic snowman. There’s also a reupholstered Saarinen Womb chair, given to Amy by a formerly homeless client when she worked for a nonprofit that builds housing for people with AIDS. And all the other furniture? “Everything else is from the St. Vincent de Paul thrift store,” Amy says with a laugh. Fine art is everywhere, much of it by 1990s L.A. art stars like Martin Kersels and Steve Hurd. This is not just a quirk of taste: After running a cutting-edge art gallery in Los Angeles during the ’90s, Dan retired from the economically mercurial art world at age 40 to go back to school and earn a degree in real estate. Before working in housing and finance, Amy was an architect. She designed the entire renovation of the Chinatown building, with Dan acting as project manager. Sort of.

“I think we were very naive,” says Dan of the undertaking. They’d bought and sold a few houses before, living in some, rehabbing others for a profit. But all had been small-scale projects; the Chinatown building was a wholly different animal. A job that was supposed to take a few months stretched into a year and a half. “I would often buy the wrong toilets,” Dan admits.) But in the interim, they had time to think. The decision to actually live in the upstairs space, rather than convert it into multiple rental units as they had first planned, was a slow dawning.

First came the intergenerational, and financial, appeal: At the same time the Berniers were considering buying the loft, Amy’s parents were looking for a condo in Los Angeles to be near their grandchildren. Stymied by high prices, they helped make the Chinatown purchase, and in return, Amy designed them a two-bedroom, two-bath apartment on the western side of the building.

And the more time they spent in Chinatown, the more Dan and Amy realized it was a great place to raise their boys. “We can walk to a restaurant without having to cross a street, and they can ride their bikes without the fear of cars,” Dan says, pointing to the courtyard of Central Plaza below, where Chow Yun-Fat’s shoeprints and a statue of Dr. Sun Yat-sen mark the traditional gateway to Chinatown. (Not to mention 25-cent kiddie rides and firecrackers available at every corner store.) Amy notes other comforting elements, like a 24-hour bicycle security patrol, and the late-night foot traffic, perhaps the greatest urban crime-stopper of all. “We actually let the kids out of our sight,” she adds happily, words few suburban Los Angeles moms would ever dare to utter.