IT'S A FAMILIAR tale: a city has some run-down warehouses or lofts that no one knows how to revive. Then come some artists who want large spaces with low rents. They set up studios and shops. Then come the shoppers. Then come the developers -- and the artists wind up being squeezed out.

Is that going to happen at the Torpedo Factory in Alexandria?A determined group of local artists persuaded the city to rent part of that homely hulk to them in 1974. They have transformed it into an internationally known art center that provides low-cost studios and shops for over 200 artists, holds classes for about 350 students and attracts some 8,000 shoppers and tourists per week. What's more, the artists managed to repay the city's original $140,000 loan within three years -- and their rents alone net the city about $40,000 a year.

All this helped spur the city's plans for redeveloping the torpedo-plant complex as a whole. But some city officials have drawn the wrong conclusion from the art center's success. Instead of seeing it as a great asset to be featured, they have decided that the key building along King Street could draw even more people and profits if it were converted to offices and stores. Besides, they argue, selling or leasing that space could provide funds for renovating the area into which the artists would be squeezed.

Such arguments may be seductive, but the city council should resist. Partly because it provides a respite from bars and boutiques, the art center is more of an asset on King Street than any more commerce could be. And if money is a problem, surely selling or leasing other parts of the complex will provide more than enough revenue for basic repairs. The art center does not need elaborate renovation, anyway; quaintness or cuteness would be jarring there. It is a place that works just as it is. The best thing the city could give it is a longer-term lease.