Kmart Corp. officials are meeting this week with District officials to discuss possible construction of the retail giant's first store in the city at the D.C. vehicle impound lot on Brentwood Road NE.

Kmart "is in some very early, preliminary talks with the city about the possibility of developing in that Northeast section of the city," said Mary Lorencz, a spokeswoman for the Troy, Mich.-based company. No agreement has been reached, officials said.

Lorencz said Kmart has been interested in building a store in the District "off and on for years. . . . That would be a great new market for us."

Eric Price, deputy mayor for economic development, said discussions between the District and the company began last year when Mayor Anthony A. Williams attended an international retail conference in Las Vegas. Kmart officials and members of the mayor's economic development staff have met several times since then and another meeting is planned for Thursday.

"I'm very optimistic," Price said of the negotiations. "So far there's been progress."

A Kmart store on that site would generate 250 to 300 new jobs. Price said the District is asking the company to guarantee that a majority of the jobs would be reserved for local residents.

The site under consideration is 12 acres of land now used by the city's Department of Public Works to house abandoned or seized vehicles.

D.C. Council member Vincent B. Orange Sr. (D-Ward 5), who represents the area, called the impound lot a "eyesore" for the community.

Kmart "would give us an opportunity to turn that area around," Orange said. "We wouldn't be displacing anyone but the Department of Public Works."

Cyril Crocker, project manager for the Department of Planning and Economic Development, said city officials have not resolved where the impound lot would be relocated.

"That's one of the issues that needs to be overcome," he said. "It's far from a done deal."

Crocker said the impound lot is a good location for Kmart because it is close to the Rhode Island Avenue Metro station.

Joseph E. Cater III, director of regional economics for Fannie Mae, said the Brookland area also is attractive because of its proximity to the Capitol Hill housing market and to New York Avenue, a major commuter route on the city's Northeast side.

"They're pretty cagey in selecting that site," he said.

Cater said Kmart's interest in the District could signal an important economic turning point for an important family neighborhood in the District.

"For a major department store--and that's what Kmart really represents, the 1990s department store--to come into the city begins the first stage of reinvestment in the city," he said.

Robert I. Artisst Sr., president of the Brookland Civic Association, was more cautious. "I'm always a little leery about these companies that want to come in," Artisst said. "Like the rest of the city we are hungry for development and growth. But we want to see some kind of real solid plans."

Kmart was the third largest retailer in the country in 1998, based on sales, according to the National Retail Federation, which conducted the survey with American Express Co. Wal-Mart Stores Inc. was the top retailer, and Sears, Roebuck and Co. was No. 2.

Sales from Kmart's consolidated operations for the first nine months of 1999 were $24.9 billion, up 7.2 percent from $23.2 billion for the same period in 1998, according to the company.

Kmart employs 265,000 people and operates 2,177 stores in the United States. Its target customers, according to the company, are low- and middle-income mothers with children.

The company unveiled a new logo in 1990 and announced a five-year, $3.5 billion program to upgrade its stores. The Big Kmart and the Super Kmart Center were born out of that initiative.

The Super Kmart Center sells groceries and general merchandise. The Big Kmart, which is the type of store proposed for the District, is a revamped version of the traditional Kmart store.

The Big Kmart refocused sales on frequently purchased brand-name goods and moved these items to a "pantry" near the front of the store. The children's and home departments also were given greater emphasis in the Big Kmart.

"Kmart today is not the same Kmart you had five years ago," said Daniel Binder, a financial analyst with Brown Brothers Harriman Co. in New York. "They've done a good job of going in and closing a lot of the bad stores."