NEW YORK, JULY 11 -- Democratic National Chairman Ronald H. Brown today handed a juicy plum to the Big Apple and his old friend, Mayor David N. Dinkins (D), announcing that the party will bring its 1992 convention to Madison Square Garden.

As an orchestra played from a flag-draped balcony in the City Council chambers, Brown, flanked by Dinkins and Gov. Mario M. Cuomo (D), confirmed that he had picked this city over New Orleans, the other finalist, but said pending antiabortion legislation in Louisiana was only one factor in the decision.

The four-day extravaganza in mid-July is expected to give New York an economic boost worth as much as $100 million by bringing 35,000 delegates, journalists and assorted hangers-on to town. The city, also among several being considered to host the 1992 Republican convention, has pledged to spend $20 million on facilities, hotels, security, buses and amenities for the Democrats.

Unrestrained boosterism filled the air as Brown and Dinkins signed the contract before a pack of photographers at George Washington's old desk. "We're going to have one hell of a party because New York is no 'Bush-league' town," city Comptroller Elizabeth Holtzman said.

For a party trying to avoid a fourth consecutive presidential-election defeat, New York will provide a bastion of Democratic unity and a stark reminder of crack, crime, AIDS, homelessness and other costly urban problems.

"Nominating a world-class leader requires a world-class city," Brown said when first making the announcement in Washington. But he also called the political significance of the choice "overrated," adding: "What matters is what's said from the podium, not where the podium is."

For New York, where the last Democratic president, Jimmy Carter, was nominated in 1976 and again when he lost the White House in 1980, the convention will be a chance to showcase theaters, museums and other attractions.

Robert Rubin, vice chairman of Goldman Sachs & Co., and head of the city's host committee, said the convention would "convey the sense that New York is a place where important things happen. In 1976, the convention and the tall ships here had a tremendous uplifting effect at a time when we really needed it."

Dinkins said cities were being shortchanged by "the voracious military establishment" and "crooks and thieves" in the savings and loan industry. But he tried to dampen local speculation that he is a possible vice-presidential nominee by taking a Shermanesque vow, saying, "I have no intention whatever of seeking national office."

Reporters promptly threw the same question to Cuomo, widely viewed as a potential 1992 presidential contender. Cuomo invoked his standard refrain: "I have no plans to run for president. I have no plans to make plans . . . . You guys don't believe me, that's too bad."

As a reminder that New York is a magnet for noisy demonstrators, a man in the audience unfurled a banner and shouted at Cuomo, "This convention has been hijacked by Mario Cuomo's New York City Democrats using the blood of aborted babies!"

Other advocates are promoting their causes. Peter Smith, president of Partnership for the Homeless, secured a pledge that the Democratic Party will not allow "sweeps" of homeless people from midtown Manhattan.

Noting that many of the homeless live in Penn Station below Madison Square Garden, Smith said the site "is perfect for dramatizing the issue to the country. They just have to take the elevator down. It could be argued that all those homeless are manifestations of the failed Reagan-Bush decade."

Dinkins insisted that "we're not going to do anything to sanitize the convention." But Thomas Reppetto, president of the Citizens Crime Commission, said prostitutes have been "swept up" before previous conventions, "which shows that, if you want, you can keep the streets clean for awhile."

Marshall Murdaugh, president of the New York Convention and Visitors Bureau, said the expected invasion of journalists would highlight the city's strengths and flaws. "The perception of some of our problems is far worse than the reality."

Staff writer Maralee Schwartz in Washington contributed to this report.