The gayborhood is moving even further off the back streets of Washington Square West.

Later this year, Denise Cohen - who ran the longtime lesbian bar Sisters before its demise two years ago - will set up Toasted Walnut Bar & Kitchen at 1316 Walnut St., just down the street from the new Boxers gay sports bar.

Cohen is aiming at gays, lesbians and "our straight allies," promising a menu of more than just bar food. (She's shopping for a chef now.) The keys will be live entertainment - DJs, karaoke, comedy shows, and trivia nights.

Cohen will do some mods to the nearly new space she inherited, which was a Japanese restaurant called Hokkaido, whose 17-foot ceiling included a mezzanine atop a sunken dining room lined with a sushi bar. There will be plenty of in-house catering opportunities.

And as for "Toasted Walnut"?

"It sounds like fun," Cohen said. "It appeals to all age groups. It's like, 'Let's get toasted!' Where? 'On Walnut.' "

She's hoping to open this fall.