A 75-year-old building that has survived two fires and one public auction is being renovated in Washington's historic financial district.

The structure, originally designed to attract financial institutions based in the South, included a number of one-room offices. It was sold at public auction in 1933 to Smoot Sand and Gravel, and damaged by two small fires, one in 1950 and the other in 1973.

After several unsuccessful attempts, developer S. Jon Gerstenfeld, who had owned the Woodward Building across the street since 1968, bought the Southern Building in 1973 from Smoot Stone and Gravel for about $2.75 million. Gerstenfeld said he was fascinated by the Southern Building, at 805 15th St. NW. "I could see it from my office window. I've always admired the lovely lines" of the building and its highly sculptured terra cotta facade. The structure was leased to office tenants until Gerstenfeld decided to renovate it, and work began in August 1985.

When renovations are completed in early 1987, Gerstenfeld estimates that the Southern Building will be worth approximately $40 million. Leasing agent Peter Larson is once again attempting to lease to financial organizations.

Renovation of the locally designated landmark, which will cost about $12.5 million, is based on the original design of Daniel Burnham, who also designed Union Station and the Flatiron Building in New York City. When the builders ran out of money in 1910 and limited the structure to nine instead of 11 floors, Burnham designed it so that the top two floors and a fifth elevator could be added later. Shalom Baranes & Associates, a local firm, is following that plan in renovating the building. The original floors, stairs, interior columns and marble lobby have been preserved.

Because the Southern Building is not on the National Register of Historic Places, it does not qualify for a historic tax credit, but Gerstenfeld will get a 20 percent investment tax credit for renovating a structure built before 1940.