The District government auctioned three of its surplus properties yesterday, but failed to get any bids on its most valuable piece of excess real estate, the $4 million Georgetown incinerator.

Sold during an hour-long auction were a tract alongside the H Street overpass near Union Station that went for $215,000, a vacant house that went for $30,000 and an abandoned police station that sold for $70,000, almost twice the minimum sought by the city.

Jean Oliver, director of the city's surplus property disposal program, said he was "very satisfied with the sale . . . we sold three out of five" properties put on the block.

Oliver said three prospective bidders talked to city officials about the valuable incinerator site but all withdrew at the last minute because of a lawsuit filed by an investor who is trying to lease the land from the city for a night club.

The would-be club owner, Mokhless Al-Hariri, sued the city for allegedly backing out of an agreement to lease the incinerator to him and took out newspaper ads the day before the sale to state his case.

Al-Hariri tried unsuccessfully earlier in the week to get a court order blocking the sale, but was turned down. A hearing on his request for a temporary injunction to keep the District from selling the land was scheduled for next month.

Oliver said the city corporation counsel has assured prospective bidders that the city will win its legal skirmish with Al-Hariri and be able to turn the property over to a prospective buyer, but the threat of legal problems scared bidders away.

"Nobody wants to put up a $400,000 down payment on a lawsuit," Oliver added. The incinerator occupied a block-square parcel overlooking the Georgetown waterfront in the city's fastest-developing neighborhood.

When sales of the properties auctioned yesterday are settled in a couple of months, the city will collect about $300,000 in cash to help balance its budget. The city originally set out during its previous fiscal year to sell several million dollars' worth of excess land to cover a budget deficit. Because of the stagnant real estate market, the sales had drawn few bidders until yesterday.

The hottest action came in the bidding for former police precinct No. 11 at 2301 Martin Luther King Jr. Ave. SE.

The station was finally told to Anne Mack, the manager of Rare Essence, a well-known Washington disco band that plans to use the sprawling building as a site for practicing and for equipment storage.

In a spirited bidding session that began at $40,000 and climbed a thousand dollars with every nod of the head and wave of a finger, Mack finally topped Helen Allen of Greenwood Transfer by offering $70,000.

"She didn't have to push it up that far," Mack glared at the rival as she signed the sales documents. "I didn't expect to go that high."

Real estate renovator Herman Tribino didn't expect to buy that cheap, but he picked up a vacant row house at 403 11th St. NE. for the minimum bid of $30,000 when no one else showed up to make an offer.

The biggest property sold yesterday was a 28,000-square-foot tract between 2nd and 3rd streets NE alongside the H Street overpass. It went to a group headed by Clyde R. Littlefield of Arlington for $215,000.