As the result of wanting to redevelop the southwest corner of the Thomas Circle with" something more than just another office building," a group called DRG Ventures is making plans for an early 1978 start on a $31 million, multi-use, curving structure that will combine 205 luxury rental apartments with office and commercial space and indoor racquet-ball facilities.

Donald M. DeFranceaux, who heads the development group that is subsidiary of DeFranceaux Realty Group, said the 52,000-square-foot site stretches from the Madison Hotel eastward to the south side of M Street NW and around Thomas Circle to the Burlington Hotel on Vermont Avenue. Some of the older buildings now on site are scheduled to be razed in November so it can be used temporarily as a parking lot.

DeFranceaux said the multi-use concept was provided by the architectural and planning firm of Thomson, Ventulett, Stainback and Associates of Atlanta. He heads DRG mortgage banking operations in six major U.S. cities.

In discussing plans for the 130-foot-high structure tentatively called One Thomas Circle, DeFranceaux and project manager, Gary Malasky - an attorney and member of the DRG executive staff - emphasized that the approach is to take a "reasonable gamble" and the attractiveness of the small, but expensive apartments will uncover an upper-end rental market for intown living. Both men are aware that the Thomas Circle area in recent years has been identified with the "streetwalker syndrome."

However, the redevelopers are also aware of the prestige of the nearby Madison, the strikingly contemporary headquarters of the National Association of Home Builders and the array of financially oriented groups now based in office buildings on the east side of 15th Street. Also the relatively new International Inn is fighting to regain prestige in the northeast quandrant of Thomas Circle and a new hotel that recently became a Holiday Inn is in the southeast quandrant. Two churches are also on the circle.

The site, which was assembled from half a dozen real property parcels (including the old, now vacated Manchester Hotel) three years ago for approximately $80 per square foot, is in a downtown redevelopment area ranging east of 15th Street and the south of Massachusetts Avenue, DeFranceaux pointed out. Thus, the project is eligible for FHA Section 220 mortgage financing at 8 1/2 per cent interest on a 40-year term and a 90-10 mortgage ratio. However, no subsidy would be involved.

While the favorable financing is one of the feasibility factors, Malasky added that the multi-use aspects of the 465,000-square-foot masonry building would give it an unique identification in downtown. "In addition to having office space as a basic income producer on lower floors, the multi-mix would also provide 24-hour occupancy by higher-income persons," who want to live in the city, he said. "And they would have the advantage of having available, on a reservation, membership basis, five racquet-ball, three squash and four tennis courts, plus the sauna, steam and whirlpool facilities."

DeFranceaux and Malasky said the athletic facilities would be geared to a accomodale both men and women, in recognition of the increasing number of business and professional women seeking downtown sites for physical exercise. They said that athlete-attorney Donald Dell is serving as a consultant on creation and operation of the courts. Memberships will not be restricted to apartment or office tenants.

DeFranceaux also said the developers believe "that this city is becoming increasing cosmopolitan, and needs and will support the restaurants in both the lower and upper parts of the building."

Because the site curves around the circle, the building will have about 300 feet of frontage on M Street and 140 on Vermont Avenue. Approximately 120,000 square feet would be used for office and commercial space on lower floors. Underground parking will be provided for more than 250 cars. While both the office and apartment entrances would be along M Street, which is one way west, the entrances would be separate but related to a dramatic foyer.

In explaining the choice of a Georgia-based firm to do the building design that will include a vaulted rooftop (for upper courts,) DeFranceaux said that the Washington group originally has considered submitting the location as the potential site of a downtown convention center. "We chose Thompson, Ventulett, Stainback because the firm had done a convention center in Atlanta and also the Georgia Trade Center. Because we worked well together, we decided to stay with them." He added that the general contract probably will go to the Thomas P. Harkins firm in Silver Spring.

Asked about potentials tenants in the building, DeFranceaux said that DRG itself might relocate from its presently leased space on K Street and that his father, George M. DeFranceaux, who is chairman of DRG, and mother also might be potential apartment tenants. They have maintained an apartment in the District since building a home near St. Micheals, Md., nearly ten years ago.