Faced with cost overruns and the need for additional financing, the developer of the Shaw area's $3.5 million O Street Market project took Mayor Marion S. Barry and officials from the Commerce Department and D.C. banks on a tour of the project yesterday in search of more money.

James C. Adkins, who has developed other D.C. food and retail markets, estimates that it will take another $300,000 to patch a leaky roof and restore the brick on the 100-year-old building before a planned October opening.

And unless he receives financing to let the contract, the project could be set back further by weather damage on construction already completed, he said.

"Something will be done," said Barry walking through rubble of the project which includes an adjacent 38,000 square foot Giant Food store.

"We're limited too," Barry said referring to other city investments. "But our philosophy is one of committment to the project. The question is funding -- how much and from where. But this market has got to go."

The two-year-old project already has received a $1.6 million development loan from the U.S. Department of Commerce and another $1.6 million construction loan from Riggs National Bank.

Additional financial assistance and equity was provided through Prudential Life Insurance, the District of Columbia National Bank and Opportunity Funding Corp. Adkins, who is in partnership with his wife, put up about $485,000.

After huddling in a corner near the empty vegetable bins, the officials decided to meet again Monday to discuss a means of funding.

However, onlookers discussed problems the farmers market concept has faced. Apparently, part of the restoration problems were caused by the city's efforts to protect the building by painting it with an epoxy mixture which has to be scraped off.

Adkins also has been subject to harsh criticism from the community for not using workers from the area. However he told the mayor that the 75 employes hired to work in the markets will be from the Shaw area.

Part of the discussion included talk that the city should help back the project since it will be dedicated to the district.

However, Adkins, who reportedly took a second mortgage on his house to get more financing money, believes he will receive an additional loan. Unless its a deferred loan, part of the problem will be passing the add-on costs along to merchants who have been promised low rent.

Adkins said he wasn't disappointed with the outcome of the meeting. "I think that's the way it ought to be. It's a private project but it's important to the community," he said.

"It's a damn good investment," said Tom Condit, president of D.C. National Bank. "There aren't too many markets around here and there aren't any specialty markets."

Initially, neighbors resisted the project in the area which was part of the 1968 riot area. But after receiving approval, Shaw cleared deteriorating houses and replaced the sewage system before beginning construction on the new store.

In addition to the 75 jobs created by the Giant store, independent merchants can rent stalls in the historic landmark build in 1886. A drug store, pedestrian mall and 171 car parking lot are included in the market.

Reportedly, a District of Columbia National Bank branch will be located on a corner of the site.