Washington business leaders yesterday urged the District government to launch a major new effort to manage the booming development in the downtown business district.

Unless the city gains control of new construction, much of the old business district quickly will be turned into another K Street, a sea of office buildings lacking the amenities that make for a vital downtown, warned the Greater Washington Board of Trade.

The Board of Trade recommended that Mayor Marion Barry appoint a "downtown coordinator" as the first step toward planning development in a 50-block area bounded by 15th Street on the west, Third Street on the east, New York and Massachusetts avenues on the north and the Pennsylvania Avenue redelopemnt area on the south.

The business group also asked the city for a series of incentives to subsidize preservation of historic buildings and construction of new facilities to make the downtown "a people place."

The height limit for buildings in the downtown area should be increased from the present 130 feet plus rooftop machinery to 160 feet including rooftop gear, the same height permitted along Pennsylvania Avenue, the Board of Trade recommended.

A trolley to shuttle shoppers into downtown from the Mall and move them around the retail district, an annual downtown festival and a major art work to serve as a symbol of downtown Washington also were recommended.

The business community's prescription for downtown was produced after a year-long study by a group of committees headed by developer Oliver T. Carr, who outlined the recommendations at a morning press conference.

Mayor Marion Barry and City Council Chairman Arrington Dixon joined Board of Trade officials at the session. The mayor said he supports "the direction of the report" but did not endorse any of its specific recommendations. Barry said the city government and business leaders are "at the stage where we can begin a public-private partnership to develop the downtown."

Dixon also praised the plan, citing its potential for creating jobs in hotels, restaurants and retail stores. "If we can get that kind of package," Dixon said, "there ought to be some willingness to consider incentives."

Board of Trade President Pat Galloway said the downtown study was started in an effort to plan development in the neighborhood before the rapid growth of the area makes it too late for planning.

"Our concern is not whether development will occur," he said, "Our concerns is with the quality of that development."

Carr said government action is needed to direct development in downtown, because the easiest and most profitable thing builders can do there is put up more office buildings.