PEPPERELL -- Peter Fitzpatrick School sits in a residential zone near the center of Pepperell. The school is closed and town officials are concerned with its fate when the lease with the school district expires in December.

"The selectmen felt Peter Fitzpatrick was a catalyst to get more economic development," said John Moak, town administrator.

Developers that have considered locating on the site of a demolished mill, he said, have been interested in the school.

"They keep coming back to us. What's this spot? When is this going to be available?" Moak said.

Because the building is in a residential zone, it can only be used for housing or school purposes, he said. Currently, the building is used for North Middlesex Regional School District administration offices and other district programs.

If the district does not renew the lease, the town-owned building will become vacant. "There is no plan right now," Moak said.

Not all of the school would be suitable for residences, the only option allowed by the zoning. The building, constructed in the 1930s, has two other additions, one added in 1960 and the most recent in 1994.

Several years ago, the Board of Selectmen and the Planning Board formed an Economic Development Advisory Committee. Part of its task was to understand and determine how Pepperell could be more sustainable economically without altering the environment of the town, Moak said.

At the spring town meeting, the committee proposed forming a neighborhood business zone. The zone would have a few more restrictions than the general commercial zone and would have required developers to meet guidelines the Planning Board established several years ago, Moak said. It was defeated 60 to 63.

A neighborhood business zone would have allowed a more mixed-use for the neighborhood, a concept Moak said is something homebuyers with young children might be looking for.

"We've lost a lot of people in the 30 to 40 age group. I don't think it's just Pepperell. I this it's the area," he said.

As a result, the number of schoolchildren in Pepperell is declining. Around 160 children are in each grade level at the middle school. At the elementary school that number has dropped to around 125 students at each level, Moak said.

When Nissitissit Middle School was built, the Massachusetts School Building Authority relied on local projections that indicated population would rise, he said. It did not and Peter Fitzpatrick was closed five years ago.

Pepperell elementary school students attend Varnum Brook, renovated from a middle school into an elementary school. Middle school students go to Nissitissit, built in 2001. The regional high school opened 50 years ago in Townsend.

The district may continue to use Peter Fitz in the near future. The high school needs major renovations or to be replaced. A district-wide committee is currently working on building studies. One option under consideration examines using existing buildings in the district. Peter Fitz could be included in that option.

Pepperell has to wait for the study to be completed before anything can be done with the building, Moak said.