In the beginning, there was Georgetown, then Capitol Hill. Run-down neighborhoods gave way to hanging plants and the word "gentrification" was coined. Not long afterwards, Old Town Alexandria property values took off, followed by the mass renovations of Dupont Circle and Adams Morgan.

Now, the same young, upwardly mobile people who ushered these neighborhoods out of low-income isolation have discovered Takoma Park, a quiet enclave of Victorian houses that fans out from a central Metro stop over Montgomery and Prince George's counties and the District of Columbia.

The town's evolution has been dominated for many years by the Seventh Day Adventist Church, which has its international and local headquarters in Takoma Park. Prohibition of alcoholic beverages near church property has inhibited restaurant development.

But now a "commercial revitalization" resolution, combined with the possible relocation of the Adventists, is beginning to get off the ground with the help of private investment and federal, state, county and city funds.

Conceived by Takoma Park Mayor Sammie Abbott, the city council and concerned citizens, the "Takoma Old Town" proposal includes "facade standards," on a Victorian art-deco theme, for the area's 93,000 square feet of "downtown" retail space. Multistory office and retail buildings have been proposed. A plan to redesign the town square would evict its bag ladies and make it a place for concerts and other activities.

This is the type of change being engendered by a population Abbott described as including "a good number of people from Capitol Hill and Adams Morgan, younger people who lived in those areas as singles but once they became established as couples with children, moved to Takoma Park.

"The wives retain their maiden names. They are environmentally conscious. In the '60s, they made political commitments," Abbott said.

The influx of these families, combined with the proximity of Metro, has had the well-rehearsed effect of driving Takoma Park property values steadily upward. Local architect Travis Price, who designed the main street renovation plan but lost the contract to a College Park firm that outbid him by $1,000, put the property value picture into numbers. Price owns a home in Takoma Park.

"Five years ago, an average-sized bungalow or Victorian home went for $50,000 to $80,000," Price said. "Now, you can't touch anything under $85,000 and the market is turning over homes up to $175,000."

For the past eight years, the city has offered low-interest loans for rehabilitation of private residences. But the Takoma Old Town plan, which got its name through a city-sponsored contest, is presently the centerpiece of the area's development.

Public funds that have already been committed include a community development block grant of $375,000 from the Department of Housing and Urban Development to put in brick sidewalks, landscaping, benches and street lights; a $50,000 grant from the Maryland-National Capital Park and Planning Commission to replace the park gazebo and landscaping, and $5,000 in "technical assistance" from the Maryland Industrial and Commercial Redevelopment Agency.

Takoma Old Town supporters are enthusiastic about recent private investment in the area. Consultant Frances Phipps, whose firm Economic and Energy Resources Inc. is managing the revitalization project, said downtown property is starting to change hands after remaining stagnant for 12 years.

Phipps said an investor recently bought the town's largest office building, which was not on the market until he made an offer.

"He said he thought the area was turning around and he wanted to get in early," said Phipps. "He'll rehabilitate the building. He's also talking about putting a new, three-story office and retail building on the parking lot adjacent to his [building], which the city would like to see happen."

Phipps said that another large space, which currently houses an auto parts store, has been purchased by an investor "with the idea that it would be ideal for an Eastern Market," the old-fashioned market on Capitol Hill that was imitated in an upscale fashion by Georgetown's Market House.

Takoma Park's Victorian summer festival had the desired effect of arousing business interest in the community, according to Phipps. She said seven people offered that day to lease one commercial space that at the time had not yet been renovated.

The owners of that space, which also includes apartments, received a low-interest loan from Montgomery County that helped them complete $100,000 in rehabilitation work. Phipps said the apartments were booked overnight once they went on the market. A 5,000-square-foot vacant lot next to the office-residence recently sold for $40,000, according to Phipps.

In November of last year, the city council passed an ordinance requiring all business owners in the Old Town district to meet "facade standards," designed by architect Price, within 24 months. But the council eased the new rule's sting by offering a low-interest loan package in cooperation with Suburban Bank and Citizens Bank.

The banks agreed to offer rehabilitation loans at favorable terms to the Old Town businessmen who were "customers of record," and the city then "would knock four points off that loan," according to Phipps. She added that some merchants got money from the banks at 10 and 11 percent interest, had that rate reduced by 4 percent, and then were able to apply for tax credits for costs incurred in the rehabilitation of commercial property over 30 years old.

So far, the one thing Takoma Old Town does not have that Georgetown, Capitol Hill and Adams Morgan are famous for is a restaurant business. The outlook for attracting an eatery or two does not seem especially rosy, in the minds of Old Town boosters, mainly because Takoma Park is one of the last remaining "dry" towns in Maryland.

Local laws prevent the consumption of alcoholic beverages within 1,000 feet of church property, and the Seventh Day Adventist Church has its international and local headquarters, a hospital complex, Columbia Union College and churches in the town. The Adventists also ran a printing plant there until they moved it to another Maryland location.

In a survey of Takoma Park residents conducted by Phipps' firm, 85 percent of the respondents said the first development they would like to see there is a "full-service restaurant." Meanwhile, the Adventist church has bought a large tract of land off Maryland Route 29, but the group's plans have not been made public.

A public hearing on the liquor question is scheduled for later this month. All involved have predicted, based on past experience, that the issue will be controversial.

Those familiar with Takoma Park often seem to comment at some point on its "diversity" or its "balance." One observer said the town must have "more neighborhood political groups than anywhere," ranging from a historical preservation committee to crime watch groups. Residents of "Tacky Park," as it is affectionately known, have access to a "tool library," not to mention a regular book library supported by city, rather than county, funds.

A food co-op some residents said would never make it is reported to be flourishing. At a recent folk festival, one person said the performances ran the gamut from clog dancers to Root Boy Slim, giving some stock to Abbott's claim that Takoma Park has "the greatest concentration of musicians in the metropolitan area."

It's a small town with all the uniformity of a crazy quilt. With about 17,000 people living within its two-mile radius, city administrator Alvin Nichols can say, "I feel like I know most of the people in the city."