Residents living in the single, cluttered rooms at the Stratford Hotel - some of them disabled, mentally ill and poor - circulated a petition this week to prevent the possible closure of the downtown Salt Lake hotel.

The hotel is at the center of a dispute between its owners, Mountain America Credit Union, which wants to raze the building, and Salt Lake City, which wants to keep it as a source of housing with historical significance.But a compromise could be forged if Mountain America, with the help of Salt Lake City, could find a buyer for the building, 169 E. Second South, a Mountain America official said.

To the hotel's 50 residents, most of whom live on government checks, the Stratford represents a final niche where they can find shelter, a sense of community and, perhaps most important, dignity.

"You can come in here and make it a home," said nine-year resident Jim Henderson, sweeping his hand across the dingy confines of his one-room apartment. "All this stuff in here belongs to me."

The $45 to $50 weekly tenants pay buys only a single room. But if rent were more expensive, tenants might be on the streets. "If you can find any place cheaper, why, we'd all be there," said Ben Collyer, another tenant.

Mountain America wants to sell the building, which the city cited last May for several code violations. Although the city would like to save the building from the wrecking ball, both parties see room for compromise.

"I think we can come to a solution," said Mountain America Executive Vice President Douglas Cline. That solution would be finding a buyer willing to acquire the Stratford for an "appropriate price."

"We're not bent on demolishing it," he said.

Pete Suazo, executive assistant to Mayor Palmer DePaulis, also would like to find a solution. "We think this is resolvable," he said. The city would be willing to contribute financially to rehabilitate the hotel, Suazo said.

Salt Lake City already offered $5,000 to Mountain America, but withdrew the offer this week when the city said Mountain America broke an agreement to keep the hotel open until May 1989.

Suazo said Mountain America agreed to keep the hotel open until May but broke the accord when it began closing rooms vacated by residents moving out. "It was very clear the commitment was to keep it open until May," he said.

But Cline said they had planned for some time to close the building through "voluntary attrition" as tenants moved out so as not to disturb the lives of residents.

Hotel manager Steve Mallon said residents rarely leave voluntarily. Instead, they leave temporarily at the end of the month when they run out of government support. "Now they know once they leave they can't come back," he said.

Although Mountain America would rather demolish the building and develop the empty lot, Cline said they also want to help with the community's homeless problem.

"If we can sell it to someone who specialized in that kind of community project, we would like to help in anyway we can," Cline said.

The credit union will not, however, help to finance a buyer for the hotel. "That just ties us to the hotel again," Cline said.

Razing the building would mean the loss of valuable single-room-occupancy housing used by low-income tenants in Salt Lake City, Suazo and another homeless advocates said, especially if a nearby hotel is converted into elderly and low-income housing.

Owners of the New Grand Hotel, which currently has 144 single-occupancy rooms, are awaiting approval of federal grant money to help subsidize conversion of the hotel's rooms into one-bedroom apartments.

Richard Tuttle, of the Homeless Organization for People Everywhere, said New Grand could become too expensive for many and reduce the number of single-room-occupancy units in Salt Lake City from 448 to 252 units.