The school, built in 1905, operated until 1996. Three years later, the city decided to tear it down, even allowing an architectural salvager to strip the building's terra cotta ornaments and winged gargoyles. But a coalition of neighbors and preservation groups persuaded the city to reverse course, and the ornaments are now laid out like archaeological finds in unlit rooms on the school's first floor.

A second battle, over how to use the building, has been fought for the seven years since. Finally, an answer seems to be emerging: housing for artists. It was this prospect that brought Will Law, the chief financial officer of Artspace, a large, Minneapolis-based nonprofit developer of artists' housing, to the peeling auditorium of P.S. 109 last week. Artspace had received a $200,000 grant from the Andy Warhol Foundation for the Visual Arts to find space for artists in New York.

''Painters like northern light because it's very consistent,'' Mr. Law said, admiring the school auditorium's 10-foot-tall windows, which face due north and south. ''When you talk about your writers, your poets, they're going to love that great, warm, long, inspiring southern light.''

Under the Artspace plan, the building would accommodate 64 combined living/studio spaces, for which preference would be given to low-income artists from the surrounding neighborhood. The ground floor and basement would house meeting space and offices for community groups.

The proposal, which would depend on public financing to defray most of its $24 million cost, would have to win approval under the city's Uniform Land Use Review Procedure. So far, the light seems green: several city agencies have expressed preliminary support, and a $1 million allocation for the conversion was provided in the new City Council budget, at the request of Councilwoman Melissa Mark Viverito.

But the project has angered some neighbors, who want the building to become a school again. Lampposts are papered with fliers urging residents to ''Stop Minneapolis 'Artspace' Culture Vultures From Stealing Kids' School Space.''

The Department of Education has, however, ruled out the reopening of P.S. 109, said a spokeswoman, Margie Feinberg, who added that that the surrounding district's schools were at only 74 percent of capacity.

That was news to Miguel Pacheco, 37, a large man with pigtails and a goatee, who lives across the street from the school. He said the city's refusal to reopen P.S. 109 as a school was ''messed up.''

''There aren't too many schools around here,'' Mr. Pacheco said, ''and the schools that we do have are too packed.'' ALEX MINDLIN

Photos: P.S. 109, long abandoned, may be turned into artists' housing, but some in the neighborhood want their school back. (Photographs by Hiroko Masuike for The New York Times)