The reason trade associations are in Washington is to be close to the government, and you can't get much closer than the building that the American Council of Life Insurance has agreed to rent.

ACLI has signed up to rent about a third of a large new building that will be constructed at 101 Constitution Ave. NW, the closest privately owned tract of land to the U.S. Capitol.

The land is owned by the United Brotherhood of Carpenters and Joiners of America, a union whose headquarters has been on the site since 1961. The five-story, 70,000-square-foot carpenters' union building is small compared with the new one set for the site: 502,000 square feet in a 10-story building that will cover more ground.

The old building is set to be demolished next month, and construction on the new one will start in September. The building, which will cost between $130 million and $150 million, should be finished in late 2001.

For the union, "the primary goal is to take a tremendously underused asset" and make it more profitable, said Randy Sowell, senior vice president of American Realty Advisors, the company developing the building.

Unlike some other unions that in recent years have sold their valuable downtown properties and relocated to cheaper space, the carpenters will own the new building. The union will move during construction, but will return to the top floor.

"Even though there are some monetary issues, there is also some pride of ownership," Sowell said.

From the current building, the view of the looming Capitol dome is unobstructed except by cherry trees. On the top floor balcony, the vista opens up to include the Mall and the Washington Monument, making it a classic spot to view July 4 fireworks.

The life insurance council considered about 50 sites in the District and Virginia before choosing the carpenters' union building, according to Craig Lussi, the broker with Julien J. Studley Inc., who represented the trade group, which now has its headquarters at 1001 Pennsylvania Ave. NW.

Although many other trade associations have moved from the District to Virginia over the past decade or so, that didn't work for ACLI, according to Lussi. "Every time we looked in Northern Virginia . . . we always had to keep a piece downtown," he said.

Herb Perone, a spokesman for ACLI, said his group liked the layout flexibility the new building gave it, and, "location, location, location -- we do a lot of lobbying, and we will be overlooking the Capitol building."

He said, "It is easier to lobby the Congress of the United States from Washington, D.C., than it is to lobby the Congress of the United States from Alexandria."

ACLI will occupy 150,000 square feet on four floors, with the carpenters filling one floor. That leaves five floors still to rent, plus some below-ground space.

The team of brokers leasing the building on behalf of the union, who also work for Studley, say they have had expressions of interest from a range of large tenants, including law firms and public relations companies. "The building hasn't been marketed, and the very largest high-end quality tenants have shown interest in it," said broker Lois Zambo.

The Capitol Hill office market had not traditionally drawn such high-end tenants, who cluster downtown. Instead, the neighborhood is mostly smaller lobbying offices as well as federal and local government agencies.

Earlier this year, though, the law firm of Jones, Day, Reavis & Pogue moved into a heavily renovated building up the street from the carpenters' site. When that move was first announced, it left other lawyers wondering why Jones, Day was moving to such a remote location, but it was also the catalyst that led ACLI's executives to think about moving to the Hill, according to Lussi.

CAPTION: This 10-story building will replace a five-story carpenters' union structure.