Across the street from the bustling new shops and restaurants of Harborplace, an aging institution that passed its heyday 20 years ago is girding for fateful news.

The News American, a scrappy, Hearst-owned afternoon daily, is on the auction block. Hearst Corp. executives are expected to decide soon -- possibly as early as this week -- on a buyer.

Their decision could bring an injection of capital and perhaps a new mission to the troubled News American, or it could shut the paper down, leaving Baltimore with only one newspaper company.

Among those interested in buying the News American, which publishes on weekdays and on Sundays, is a group of its employes, which has joined forces with a local businessman. Another bidder is former Baltimore County executive Ted Venetoulis, who owns three suburban weeklies and plans major, unspecified changes in the paper's format, including, he said, making it more "community" oriented.

There are reportedly three or four other bids, including one from a real estate venture interested not in the paper, but in the choice, square-block parcel of land on which it sits. Although Hearst executives say they hope to sell the News American to a buyer committed to operating it as a newspaper, they say they will consider all bids.

The prospect of the paper folding has many people concerned.

"It would be a very, very serious loss," said Mayor William Donald Schaefer, who has been conducting behind-the-scenes talks with Hearst representatives and some of the potential buyers.

"When you only have one newspaper in a city, they can formulate views without anyone else having much input," said Schaefer.

It could be argued that the News American, overwhelmed by the venerable Sunpapers, has little impact now. The Sun and the Evening Sun have a daily combined circulation more than three times that of the News American, which sells about 100,000 papers a day.

The News American, founded 213 years ago and purchased by Hearst in the 1920s, lost its dominance in the marketplace in the late 1960s to the Sunpapers. Since then, like afternoon papers across the country, the News American has seen advertising and circulation take a long downward slide.

A brief infusion of capital and editorial talent by Hearst in the early part of the decade resulted in an emphasis on colorful writing and sophisticated graphics. But those changes appeared to alienate old readers without attracting new ones in large numbers.

Still, the News American remains aggressive in covering sports and local news, deploying its small staff carefully and often coming up with stories not covered in the Sunpapers.

"I think the paper has a lot of energy," said News American managing editor Tonnie Katz. "It's true we don't have the space and the staff, but that makes us even more dedicated. It becomes even more gratifying when we beat the competition."

A source involved in the negotiations said the paper's losses are reported to be $7 million to $8 million a year. The two bidders who have been identified -- Venetoulis and the employe group -- acknowledged that the paper's immediate survival will probably require trimming its 500-member work force.

"Those are stopgap measures," said newspaper analyst John Morton. "The paper needs a lot of capital," he said, as well as a strategy for recapturing advertisers.

"I don't really see any miracles happening," said Morton. "It will be interesting to see who gets separated from their money."

One way of raising capital would be to sell the News American's valuable property on Lombard Street and construct a new plant elsewhere, something Schaefer believes would be good for the paper and for the city. The property, worth an estimated $5 million to $10 million, is ripe for redevelopment as a hotel or office building, he said.

As Hearst weighs the future of the News American, staff members say the mood there is generally upbeat, particularly among the printers, press workers and other mechanical employes who are spearheading the drive for employe ownership.

About 150 employes voted Thursday night to join forces with Harold Goldsmith, a local bank president and businessman who is seeking to acquire the paper. The employes, who would own a 30 to 40 percent share of the paper, agreed to contribute $150,000 in "good faith money" toward the purchase.

Columnist Jacques Kelly said enthusiasum is particularly strong among blue-collar workers, most of whom are native Baltimore residents with a strong desire to stay in the city. Kelly, from Baltimore himself, is hopeful about the purchase bid by employes. "I've had a feeling that this . . . thing might work," he said.

But his optimism is not shared by everyone. "Some of the newsroom people are terrible fatalists," he said, noting that many of them are young reporters and editors who expect to move on to other papers someday anyway.

Ties to the paper are strong among its longtime readers, including City Council President Clarence (Du) Burns, who said he got his first job 55 years ago hawking the paper on street corners. He has been a subscriber for 40 years, he said.

"It has a lot of sentimental value to me," said Burns. "It's been around for a long time and it has a place in Baltimore City history."