This is a Christmas tale, in which the spirit of the season prevails after a touch-and-go battle with assorted private and governmental Scrooges. But it begins with a routine announcement that would seem to belong in the real estate pages.

A major landowner here has announced lavish plans for a new $6.4 million hotel and retail center to fill a city block a short walk from downtown 17th Street, the Wall Street and Madison Avenue of the Rocky Mountain West.

Normally, a new development in the business core of a prosperous city would seem a ho-hum item with little relevance to Christmastide. But this is not a normal new hotel.

In this case, the developer is the Roman Catholic archdiocese. And the hotel will cater not to upscale business travelers, but rather to the poor, the needy and the homeless, who will pay a fee of $0.00 -- nothing -- for a room and two hot meals each day.

"What we're saying is, in this cold, snowy city, there will finally be room at the inn," said the Rev. C.B. (Woody) Woodrich, pastor of a downtown Catholic church and the driving force behind the new hotel.

"The poor always get second-class everything," Woodrich said. "They sleep on rotten beds in old crummy buildings and wear second-hand clothes. But now we're going to give them something first class."

Woodrich said his new hotel for the homeless is the kind of innovation demanded by the American Catholic bishops' new draft letter on the U.S. economy, which demands greater public and private help for the poor.

And just as that letter has sparked a strong national controversy, so the church's proposal for a new Denver hotel touched off a furious legal and political battle here.

It is not that anyone denies that some people need shelter from winter's icy blast -- a particularly brutal blast here, a mile above sea level.

Like every place, Denver has its share of drifters and deadbeats who basically live on the streets. The city also has a population of unemployed newcomers who have left the Frost Belt and headed west in the sometimes erroneous belief that jobs are as plentiful as snowstorms here.

"They started coming about three years ago," Woodrich said. "They take the family and come here thinking they'll land a job in a week or two. They live in their car. Of course, they have no address, no phone for an employer to call. And they're cold."

On a particularly cold January day in 1982, Woodrich opened the doors of his center-city church and invited some car-dwellers inside.

Last winter, the archdiocese went further. It converted an abandoned Catholic high school into "Samaritan Shelter," providing temporary housing for some 200 job-seekers and their families. The basic rule was that no one could stay longer than a month. "Well, that's the rule," Woodrich said, "but rules were made to be broken."

Although the high school still is operating as a temporary home for the needy, it will not for long. For one thing, it has been difficult adapting a school into a home for a couple of hundred families. For another, "we've been offered $15 million for the land that school is sitting on," Woodrich said.

After searching in vain for a more suitable building, the archdiocese finally decided that the only way to provide a real home for the needy in Denver's center city was to build one.

Last fall Woodrich plunked down $2.4 million for a full city block near the central business district and commissioned an architect to design a new, $4 million Samaritan Shelter providing free room and board for some 350 guests per day.

The church's plan, announced just before Thanksgiving, initially drew unanimous huzzahs. The governor expressed delight; the newspapers were ecstatic; the city instantly granted the construction permit.

At this point, Scrooge appeared.

A group of downtown homeowners formed an association -- "Neighbors for a Better Approach" -- hired a lawyer and began lobbying their elected representatives.

The group's spokesman, Mike Bissenius, said Samaritan Shelter "would act as a magnet for societal problems and would have a devastating effect on several blossoming neighborhoods."

Under pressure from the homeowners, the city council voted 10 to 2 for a resolution condemning the church's venture. To seal its fate, the homeowners' lawyer found a clause in the zoning ordinance that seemed to ban a new shelter.

Shorty before Christmas, Mayor Federico Pena announced that there was no room for the inn.

But just when things looked bleakest, the church played its trump card.

At a summit meeting with the mayor, Auxiliary Bishop George Evans set forth a new plan. The shelter would not be a shelter. It would be a hotel, a use that is permitted by the zoning law. The rate for a room and two meals at the "Samaritan House" hotel would be 1 cent per day.

While the two were meeting, Woodrich, the church's media expert -- he's a veteran of ABC's "Nightline" -- leaked this ploy to the local media, which gave it predictable play.

The mayor, an astute politician, realized that his position was untenable. After a couple of days' temporizing, he reversed himself and announced that Samaritan House would receive all necessary city permits. The archdiocese will not even be required to charge guests the daily penny.

"It's a pretty nice Christmas present for everybody," a satisfied Woodrich said. "Because the whole idea of Christmas is that we have to get personally involved in helping other people instead of just pushing them away."