When the downtown department store of Porteous, Mitchell and Braun left its large building at 522 Congress Street in Portland three years ago, it joined a string of retail departures.

Now, just several blocks from City Hall, vacant stores stand as testimony to a time of downtown decline - mainly due to the recession and mall competition.

Enter the Maine College of Art, which bought the old department store last year to consolidate and improve its programs. Currently the college is spread out among several buildings in Portland.

The move is serving as a catalyst for an evolving arts district for the city. ``The arts district concept gives a soul, a core to downtown,'' says Roger Gilmore, president of the Maine College of Art.

Mr. Gilmore adds that the college will be collaborating with other arts organizations nearby, such as the Children's Theatre of Maine. ``The school is filling the vacancy not only physically, but psychologically,'' he says.

Barbara Hager, executive director of Portland's Downtown District, hopes the move will have a ripple effect by attracting retailers and other arts-related activities. ``Realistically speaking, things will flow when the Maine College of Art is in the building,'' she says.

According to Mr. Gilmore, everyone is ``quite excited'' about the move. ``There are people who are attached to the other buildings, but this will be better, larger, with everything under one roof,'' he says.

Purchased for $525,000, the building is a 1904 example of classic Beaux Arts/Renaissance Revival style and will provide the college with 150,000 square feet of space, Gilmore continues.

Architects Van Dam & Renner foresee an ``arts city within a city,'' whereby the school will have studios, classrooms, offices, galleries, a cafe, a library, a lecture hall, retail space, windowfront performance space, and more.

Environmental designer Randolph Croxton, who helped the National Audubon Society renovate a department store in Manhattan for its headquarters, is helping with the college building's ``green'' design.

The renovation will take into consideration such things as proper ventilation, use of natural light, energy conservation, and earth- and people-friendly materials.

Renovation costs will run close to $9 million and fundraising is already under way. The goal is to have the school ready for classes by September 1995.

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