Local developers are fighting a federal plan to build a $624 million headquarters for the Department of Transportation on land that they own adjacent to Union Station.

Robert Gladstone, president of Quadrangle Development Corp., a D.C. real estate company, Tuesday urged a congressional panel to send the DOT somewhere else, such as the Southeast Federal Center, a desolate and dilapidated tract of government property that other federal agencies have refused to make their home.

Quadrangle and its partners, CSX Realty Inc. and Metropolitan Structures, already have invested $2.5 million in plans to develop an office building on the site that they own east of Union Station. They do not want to sell the property to the government, Gladstone said.

The government has the option of seizing the property and paying the owners its fair value as determined by a federal court.

Gladstone said the land is worth "at least $100 million." Government officials said it is worth less.

Tentative government plans would place the new DOT headquarters on the Quadrangle site and on a massive platform spanning the train tracks north of Union Station. The structure would be one of the federal government's largest buildings and would serve 10,800 employees now working at three District locations.

If the government chose to seize the Quadrangle site, it would be taken off the D.C. tax roll at a potential cost to the city of $6 million annually, Gladstone said.

The House subcommittee on public buildings and grounds in May recommended authorization of $70 million to acquire a site for the DOT project, an early step on the path to congressional approval. But in light of the developers' objections, the subcommittee met again to reconsider the issue.

Subcommittee Chairman Douglas H. Bosco (D-Calif.) expressed some sympathy for the developers' arguments. "Given the cost of acquiring this land and the fact that it isprivate land ... maybe we shouldhave been a little more extensive in looking at property the government already owned," Bosco said.

After the hearing, a spokesman for Bosco said, "He has eyes for the Southeast Center, but he wants to examine it a little more before actually making that a proposal."

David Bibb, a representative of the General Services Administration, which finds office space for government agencies, said the Union Station site is "a more natural fit" for DOT.

Under a general design that has already been drafted for developing the Southeast Federal Center, DOT, if it became the major tenant, would be dispersed among 10 to 15 buildings on more than 40 acres, defeating the effort to consolidate the agency, Bibb said.

Jon H. Seymour, DOT assistant secretary for administration, said the agency prefers the Union Station site.

Over the past several years, real estate investors have bought property near the Southeast Federal Center, gambling that the future opening of the Navy Yard Metrorail station and a major government presence would hasten redevelopment of the area.

GSA raised expectations in February 1989 when it announced that the Environmental Protection Agency would move there. But EPA officials resisted the idea, and, two months ago, GSA agreed to find another site for the agency.