The red brick building sits in the shadow of a towering smokestack, with white lettering running its length that announces, "MILLYARD." The Nashua River runs behind the building, as the water cuts through downtown Nashua. Wide wood-planked circular stairs carry visitors through the Civil War-era structure. A distinctive smell on the staircase hints at the years gone by.

Inside the Picker Building, artists and artisans are opening studios carved out of former manufacturing space.

Rita Nichols arrived some six years ago, and her Warm Stone Studio was the first business for the creative set.

"I begged and pleaded," Nichols said recently about convincing the owner to let her move in. Nichols, 62, sat in a white wicker chair, and the studio's future owner, Leslie Maloof, sat in a stuffed wingback chair during a conversation last month. The two were sipping tea from mugs made in the studio.

A native of Indiana, Nichols worked in the hospitality business before opening the studio. It started with a small potter's wheel in a corner room. Requests came in from folks interested in turning wet clay into handcrafted pottery. There are now six wheels and a 2,000-square-foot studio.

"It is interesting to watch the joy emerge when (the students) can control an artistic medium," she said.

Nichols and her husband, Fred, are ending a conversation that lasted three years and moving to 26 acres in western Pennsylvania, to retire, open another pottery studio and maybe a retail store.

As she leaves Warm Stone Studio behind, Nichols is credited with being the first presence in what has become a budding art colony in the building.

"It's such a little secret kind of place," said Kris Maffee, of Out on a Limb Pottery, a tenant of three years.

The building was built between 1861 and 1865 as part of the Nashua Manufacturing Co. empire. It gets its name - the Picker Building - from its role in the textile process back in the millyard's heyday.

Workers in the building picked seeds and debris from cotton bales before the bales were dispatched to other parts of the industrial plant.

Production of textiles left here in the mid-20th century, but the millyard remained a manufacturing haven.Jack Bolger, of Chelmsford, Mass., owns the building at 99 Pine St. Ext. He is an engineer by training and ran a coated fabric line in the building for a time. Bolger is a walking encyclopedia about the building and a jack-of-all-trades for tenants.

The change in the millyard that Bolger witnessed started around the time the Nashua Manufacturing mill became the Clocktower Place apartments in the 1980s.

The factories and the hundreds of employees started to move out, he said. People seemed to want a folksier atmosphere, he said, not the dirty and loud work of manufacturing.

The river views are prized by those involved in the creative arts, he said, while in the past, products and debris would just as likely have blocked the windows. Indeed, there are overflowing leftovers of past enterprises, such as woodworking equipment and even cars, scattered throughout the building.

"Manufacturers could care less. (about the views)," Bolger said. "I don't want to say craftspeople are dreamers. They like the ambiance."

When Bolger rented to Nichols about half a dozen years ago, hers was the first arts-focused business in the building. There are eight businesses now that focus on the arts or related work, such as window treatments or photography, helping to fill the building.

"I have a lot of variety and they are very good people," he said.

Bolger sees them as cottage industries, since they are often small, one-person shops. His building remains profitable with the change of tenants, but he carries a torch for the industrial jobs with wages high enough to raise a family.

"If these guys make a living, they are lucky," he said.

The Picker Building is not the only building undergoing change in the millyard. Another building hosts a yoga studio, and a third will be the future home of the Nashua Area Artists Association.

That is not to say all manufacturing jobs are gone. Nim-Cor continues to operate here making machinery, and the Nashua Technology Park houses high-tech firms. The Picker Building still has a sign shop, and a heating system and air conditioning company just moved in.

But long-timers know those jobs are becoming fewer and the long-planned Broad Street Parkway is mapped to roll right through here. Some structures have already been torn down in the millyard, but the parkway spares the Picker Building, swinging to the west of it.

Maffee, the potter, said she worked for a time years ago on the assembly line at Sprague Electronics before the conversion of the mill to an apartment building. Working so close, she still didn't know about the Picker Building.

Now, she uses it as a refuge from ringing phones and the clothes dryer buzzer, to focus on art. In truth, noise is part of the building, too. As Maffee talked one day last month, the loud buzz of a machine next door cut through the air. "You just come here to hide," Maffee said as she made small vases for holiday gifts.

Windows overlook the river. Two kilns sit off to the side. She proudly pointed out a kitchen made up of a second-hand cupboard and old science tables grabbed from the yard sale of school hardware before the renovation of Nashua High School South.

Maffee, along with a friend, Peggy Anderson of Majestic Windows, found the building after spying a flier for Warm Stone Studio.

She wanted to talk about a pottery course. Instead, she opened a studio herself.

"I thank her every day for it," said Maffee, who described herself as "40-something."

A door between Anderson's shop and Maffee's studio is often kept open. Anderson said the building has a neighborly feel, where people borrow things like reams of computer paper, instead of the proverbial cup of flour.

She sat at a Singer sewing machine putting in pleats in a mustard fabric. Bolts of cloth and sewing thread make the room colorful.

It is a popular place, now that word is getting out, and its rent is "wicked cheap," said Anderson, who used to work in the basement of her home. "I know five more people who want space," she said.

Back at Warm Stone Studio, Maloof said it would remain a community studio after Nichols' departure, open to people wanting to learn and more experienced potters.

The Nashua resident recently graduated from the New Hampshire Institute of Art with a bachelor's degree in fine arts. And she looks forward to the future in the Picker Building. "I was totally struck by it," she said.

Illustration: Staff photo by Don Himsel Staff photo by Don Himsel Leslie Maloof, left, is taking over the Warm Stone Studio space in the Picker Building, in the Nashua millyard from Rita Nichols. Nichols is continuing her art in Pennsylvania. The Picker Building