Joseph Threatt, a co-chairman of the Downtown Retail Merchants Association, was incorrectly identified in a Business column in Friday's editions.

Small-business owners in downtown Washington find themselves in the rather awkward position of opposing a key legislative proposal to help commercial tenants who are threatened with displacement caused by redevelopment.

Although conceding that the relocation-assistance measure is an improvement over an earlier proposal, James Threatt, cochairman of the Downtown Retail Merchants Association, says the measure is unrealistic. "In our opinion, the bill stinks. It's a fairy tale," Threatt grumbled. "I'm sick and tired of the District playing games."

The source of Threatt's ire is a bill introduced last fall by D.C. City Council Chairman David A. Clarke. Under Clarke's bill, the council's approval of a request to close a street or an alley for redevelopment would be contingent upon the developer's agreement to offer displaced retail tenants relocation assistance or a preferential opportunity to lease space in the new or rehabilitated building.

The original version of the bill provided for a payment of up to $3,000 in reimbursement to each eligible retail tenant for moving expenses. That sparked a bitter protest among small merchants, however, leading to an amended version that now provides for relocation payments of up to $25,000 each for eligible retail tenants. The relocation payment is to be calculated by multiplying the assessed value of the existing building by the proportion of square feet occupied by the retail tenant.

To be eligible for relocation assistance, a retail tenant must have been at the site in question for at least three years before introduction of the legislation, which the council approved on first reading last week. At the same time, the retail tenant must have had annual gross revenue of not more than $1 million from all operations in the District in the year preceding the date of displacement.

Threatt's assessment of the proposal is that it's too little, too late. "All we have left is a few [small retail] stores on F and G streets," he lamented. As for the relocation payment, Threatt contends, "With the high costs of rent these days, and the high costs of salaries and taxes, $25,000 wouldn't do very much." A relocation assistance payment of $50,000 to $100,000 would, in his opinion.

When he introduced the bill last year, Clarke envisioned it as a tool to "help retain viable small merchants in the District, particularly those retailers in the downtown area who stuck it out during the years of recession, urban decay and subway construction." Those retailers, Clarke had said, "provided valuable goods, services and taxes" while others "fled to the suburbs."

Neither Clarke's bill nor his public praise for those small businesses that stayed downtown have won much support among them.

In the past, some small retail tenants complained that city officials had failed to use the D.C. Comprehensive Plan in guiding development downtown.

Ironically, Clarke's relocation-assistance bill incorporates part of a policy statement that is contained in the downtown component of the comprehensive plan that became effective two years ago.

A major objective, according to the plan, is to retain small and minority businesses and encourage their growth and development, especially downtown.

A policy statement in the comprehensive plan emphasizes the necessity of adopting measures that, for example, would create incentives "to incorporate these businesses into new projects" or to establish mechanisms for relocation assistance "to enable these businesses to relocate within the downtown retail core."

Clarke's bill isn't the solution for most small businesses that would be affected by redevelopment.

Clearly, every developer wouldn't need to close an alley or a street to complete his project.

However, the bill does give the District some leverage in making the retail core a viable location for small businesses.

Whether $25,000 is enough to offset relocation costs, or whether the formula for calculating the payment is fair are matters that might have been resolved in favor of the small-business community. But the Downtown Retail Merchants Association refused to testify, according to Threatt, because the bill is "unrealistic."

"I've fought the District Building the last six years and haven't accomplished a thing," Threatt complained.

Ironically, the one thing that might have been accomplished, after years of petitioning city officials for help, is being rejected by leaders of downtown's small businesses community.