Former Washington real estate whiz kids Robert D. Holland and Bruce D. Lyons apparently are selling their interests in their largest project, the Papermill condominiums at the southern end of Georgetown.

A former associate said yesterday that he believes the two -- whose financial empire has been crumbling -- had sold their interests to another partner. Representatives of the other partner at the job site alongside the Potomac River said that Holland and Lyons no longer have any connection with the project. However, according to another source, the deal is in the works but not yet consummated.

The Papermill project was Holland & Lyons' most ambitious project, a $20 million complex of town houses and condominium apartment buildings on K Street west of Wisconsin Avenue. It would have been the flagship for the two young developers and network of firms they established during the 1970s -- a go-go decade for real estate in Washington in which they were among some of the fastest movers.

During the past year, however, Holland & Lyons have sold off millions of dollars worth of assets in an effort to salvage their operations. Most of the 16 telephone listings for the firm and its spinoffs have been disconnected, and the Holland & Lyons office in the Papermill complex is vacant. A telephone installer was at work in the office yesterday preparing it for its next tenant -- the presidential campaign headquarters for independent candidate John B. Anderson.

In fact, according to creditors who have tried to locate the firm and others, it virtually has disappeared. But the president of the National Bank of Washington, where Lyons is on the board of directors, said the firm still is active.

Warren Avis, who once provided financing for Holland & Lyons' projects, said yesterday he is not in close touch with the situation but that he believes one of their partners in the Papermill project has bought them out. That partner is apparently Ronald M. (Mickey) Nocera.

"I think they worked their problems out pretty well," Avis said. "I like the boys, too."

Other sources said they believe that Nocera bought Holland & Lyons out within the past few months. Nocera, Holland and Lyons all could not be reached for comment. Their attorney, Norman Deckelbaum, refused to comment on any questions about Holland and Lyons' affairs, including whether they still are actively in business.

The two already have sold many of their assets and cut their staff from approximately 150 to 30.