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Angered and saddened by the LAPD raid on her neighborhood and deportation of her father, Rita takes to the small stage inside the speakeasy to voice her discontent through song. She is joined by the Hot Tamale Dancers, Cha Cha and Gert.
Olvera is the show’s mariachi-styled opener. It takes place in 1932 on a forgotten alley near downtown Los Angeles. Mrs. Christine Sterling, a socialite and do-gooder, must convince Mexican Americans living and working on the alley (Olvera Street) to embrace her plan to turn the street into a replica of a quaint Mexican village. Her plan is to create a tourist destination where some of the revenue will be used restore the dilapidated adobes on the street—the last historic structures from the City’s beginnings. Sterling must also convince owner of the LA Times, Harry Chandler, for funds to help her realize this vision. Eventually everybody gets on board except Rita (lead), who’s uncomfortable with pretending to be something she isn’t—a Mexican peasant when she’s actually a modern American woman.
After deporting Rita’s father to Mexico and having her brother beat up, McAfee returns to the speakeasy to give Rita an ultimatum— give him control of her speakeasy business or he’ll shut it down.
Rita’s mother Isabel has decided to go to Mexico in search of her ailing husband Diego, who’s been deported. Before she boards her train at Union Station she says goodbye to her children, Rita and Jerònimo, knowing she may not be able to return or ever see them again.
Jerónimo, Rita’s brother, meets clandestinely with a couple of fellow art students afterhours in the darkened speakeasy. They’ve been swayed by Siqueiro’s radical ideology, and are planning to hand out flyers on behalf of the American Communist Party at a protest rally for people unable to find work. Their meeting is cut short when Rita unexpectedly enters and discovers what they’re up to.
The LAPD raid the speakeasy arresting Rita and Jerònimo as subversives for the Communist Party. Rita is innocent of any involvement in the matter, but because she is in the wrong place at the wrong time. Siqueiros bails out both. Outside the jail Jerònimo tells Rita he’s on his way to Mexico to find their parents and declares he will not be coming back to the US. Rita begs him to stay. If he leaves, he will be a fugitive. Jerònimo, unconvinced, leaves for Mexico. Rita, deserted by her only remaining family member, hits bottom.
Tony the Hat waits for Rita at the speakeasy. Cha Cha enters to let Tony know Rita’s running late. Tony, who has a crush on Cha Cha, gives her a dazzling diamond bracelet. Gert enters as Cha Cha gives the bracelet back to Tony, explaining she can’t accept it because he’s married. Cha Cha and Gert share a laugh about it, which baffles Tony. They explain they used to perform a number at another club called Married Guys, and they launch into the vaudeville-style comedy song.
Rita leads McAfee and his Goons to a tunnel where Tony has stashed a shipment of illegal booze. McAfee believes she’s leading him there to steal Tony’s booze, but she has schemed with Tony to double-cross McAfee, blackmail him, and shut down his plans to take over her speakeasy.
After capturing an incriminating photo of McAfee guzzling booze, Rita and Tony celebrate their scheme, mocking McAfee who’s been forced to desert his plans of taking over Rita’s speakeasy and squeezing Tony out of being her booze supplier.
After the controversial mural América Tropical is unveiled, it’s declared indecent by the City of LA and is ordered to be destroyed— whitewashed over. As workers begin to cover it up, Rita asks them to give her a moment to take it in— the mural is what she holds dearest in her heart that Jerónimo was a part of. She watches as América Tropical disappears under the whitewash.
When Rita spurns McAfee’s (LAPD Vice Squad Commander) attempts to take over her speakeasy, he orders a sweep of her family’s neighborhood to capture Mexicans, including American citizens, for Repatriation (deportation to Mexico). Diego is captured for deportation. Rita feels betrayed by a former high school classmate, Michael, who is a LAPD rookie and part of the raid.
On a rooftop above Olvera Street, the site of the proposed mural, Siqueiros (the revolutionary and celebrated Mexican muralist), has gathered the art students he’s selected to help him create it. Among the students is Rita’s younger and impressionable brother, Jerònimo. Siqueiros has just told the students the mural they’re making won’t be the phony idealized notion of tropical America (Latin America) that Mrs. Sterling has commissioned. In Out With the Old he ignites a passion in the students to help him create something important; a mural that will reveal an ugly truth that society must face.
The Great Depression has brought with it hard times, and Prohibition is in full swing— alcohol is illegal. To bring in extra money Rita has opened a speakeasy, a secret bar behind her family’s tamale stand. Hot Tamales Tonight is a diegetic song, cabaret-style, and designed to entertain the speakeasy’s patrons while encouraging them to enjoy themselves and to drink her booze.
When Olvera Street is named as the City’s number 1 destination by the LA Times, Mrs. Sterling commissions David Siqueiros, a famous Mexican muralist, to paint a romantic mural celebrating the street’s success. When Siqueiros meets Rita sparks fly. Their attraction plays out in the tango, South of My Border. Although from the beginning Rita can see him for what he is—a womanizer, she’s annoyed that she’s attracted to him anyway.
Rita is upset by Mrs. Sterling’s demands of how her and her family’s lives must change to be a part of the new tourist attraction— Olvera Street. Bend Don’t Break is a father/daughter duet where Diego advises Rita that her life would be a lot easier if she’d bend a little to get along with others.