Texas developer JPI Lifestyle Apartment Community LP will pay the federal government $16.5 million for a tract of downtown land where it plans to build an apartment complex, the General Services Administration said yesterday.

The proposed complex on Seventh Street NW between D and E streets would include 405 apartments, as well as a 250-seat theater that will be occupied by a local theater group, the Woolly Mammoth Theatre Company, and retail space that will include a small grocery store.

JPI beat out two other national developers for the land, which is being sold at a price well below what it might bring for office use. JPI and GSA officials said they plan to close on the deal in the spring, with construction due to start in 2001 and finish in 2003.

"If you needed an indication that downtown was back, this is it," said Anthony Costa, GSA assistant regional administrator.

The Seventh Street land, officially known as Square 457-C, is the last piece of ground owned by the now-defunct Pennsylvania Avenue Development Corp., a federal agency that bought land and resold it to developers at sometimes bargain prices to encourage construction near Pennsylvania Avenue.

Although city officials have talked for years about creating a "living downtown" with residents as well as office workers, the only major residential projects actually built in the neighborhood have been with PADC help.

The $16.5 million purchase price works out to about $27.50 per developable square foot for the 600,000-square-foot project. In comparison, a piece of land nearby at 500 Fifth St. NW, where the National Academy of Sciences is constructing a new office building, sold this year for about $80 per developable square foot.

Costa said JPI beat out the competition by offering more money and also by excelling in its proposed design and in the mix of development it plans.