The District's urban renewal agency's termination of development rights on the Portal site in southwest Washington may be regarded some day as a valuable public service.

Even Mayor Marion Barry may get around to thanking the Redevelopment Land Agency board for breaking off negotiations with Banneker Associates, the group that had been awarded the rights to develop the valuable 10-acre waterfront site at the foot of the 14th Street bridge.

The mayor recently chided the RLA for what he considers a lack of success in "making sure any major development happens" in the city.

To be sure, the RLA has not compiled a record of distinction in redeveloping prime commercial property over the past 10 years. In all fairness, however, the agency hasn't always been at fault when proposals for developing city-owned property failed to materialize. Changed market conditions and developers' failure to make good on financial commitments have delayed development of urban renewal sites as much as anything.

Plans for the Portal site collapsed when developers tried to get the RLA board to accept $38 million for the property instead of the $45 million they originally offered.

By rejecting the offer and taking back development rights to the property, the RLA has made it possible for the District to rethink its approach to the land disposal process. In the case of the Portal site, termination of the development rights gives the city a chance to atone for its blunder in the handling of a priceless asset.

Baltimore's Inner Harbor development is irrefutable proof that a city's waterfront can be such a priceless asset to the local economy if properly developed. Other cities--New York, Norfolk and Charleston, S.C., to name a few--have followed Baltimore's lead and have either developed or are in various stages of transforming rundown or underutilized waterfront property into vibrant centers of economic activity.

The long-term potential revenue gain from a mix of offices, shops, residential units and entertainment along the Southwest waterfront offers the District a more appealing alternative than just another stack of office buildings and a hotel as proposed in the Banneker plan.

Baltimore's 250-acre Inner Harbor dwarfs the Portal site and allows for a greater mix of uses. The same concept on a smaller scale should not be dismissed here as unworkable, however.

The Portal site is only a short distance from the waterfront property that has been targeted for a proposed International Cultural and Trade Center. It shouldn't be too great a task for some imaginative planners to come up with a proposal to link the two parcels architecturally and thematically. Baltimore's Inner Harbor development is, after all, an extension of Charles Center, a mixed-use project in the heart of the business district.

The payoff for Baltimore, after years of planning and a mix of public and private funds, is a major employment and revenue-producing center, combining all of the classic mixed-use development elements as well as entertainment and tourist attractions.

Washington, meanwhile, continues to squander opportunities to make waterfront areas such as the Portal site the economic assets they can be. Waterfront property that hasn't been acquired by the military for marginally justifiable reasons has either been neglected or lined with look-alike seafood restaurants and boat slips.

Perhaps city planners will see fit to address this issue more specifically in the new comprehensive plan when the document is approved.

City officials concede in a planning report accompanying the plan that a great deal of attention needs to be given to Washington's shorelines and water-related activities.

"Lack of coordination, direction and sensitivity are largely responsible for the present state of affairs" along the city's waterfronts, the D.C. Office of Planning acknowledges in the report.

"There is no clear, comprehensive and coordinated vision of how to use the city's valuable waterfronts and shorelines," the report continues. "Working together, the District and federal governments, along with private property owners, can ensure that the waterfront resources serve as the valuable assets they can be."

As a principal gateway to the city, the Portal site and adjacent city-owned property can become valuable assets in the local economy with the right kind of planning. Even if the city does sell the property to the highest bidder, it should attach some strings next time to ensure greater economic benefits from more enlightened planning.