The Washington Project for the Arts, the artist-run museum that helped restore vitality to Washington's downtown, may have to move again -- in part because of the downtown revival it helped create.

Carry Albert Properties, owner of the building at Seventh and D streets NW, where WPA is now housed, yesterday confirmed the building will be sold to an undisclosed private purchaser.

The WPA had to leave its G Street location in 1981 when the building was demolished to make room for the Metro Center building by the Oliver T. Carr Co.

"I see the whole art scene [in Washington] as being dismantled and no one trying to do anything," said Eric Rudd, a sculptor who sublets the building to WPA and other arts groups. "My understanding with the owners was I would have the right to buy the building . . .

"I came up with a formula to buy the building and hold the tenants [WPA and other arts groups] on an interim basis for two to four years," Rudd said. His plan, he said, was to buy time until the completed renovation of the neighboring Lansburgh building. The federally funded Pennsylvania Avenue Development Corp. is seeking development offers for the building, which will include the establishment of 50,000 square feet for art space. But completion of that project isn't expected until 1989, according to PADC Executive Director Jay Brodie.

"But rather than the owners getting back to me," said Rudd, "they went with this other offer."

"The WPA is dismayed that the Didden family has not contacted us directly," said WPA Director Jock Reynolds. "The owners-to-be have not made contact with us. We have no notions of any future here. We certainly would like to remain in the building. But anyone paying the reported price we've heard is certainly going to drive rents up astronomically."

The Didden and Carry families, who own the building through Carry Albert Properties, would not disclose the building's buyer or selling price. But Stephen Schwartz, a local representative for an out-of-town partnership that had also made an offer, said the families had told him they sold the building for a figure "in excess of $2 million." Schwartz said the families had not disclosed the name of the buyer.

"I personally felt Eric Rudd should have a shot at buying the building," said Charles A. Carry Jr., property manager of Carry Albert Properties and minority owner in the business. "He had his shot . . . The best offer was taken, that was all. I don't know where Rudd got the idea he had an option on the building."

He acknowledged that Rudd had renovated the building, which "admittedly . . . was in poor condition. But still . . . We've been getting way below what we should in rent out of there."

Carry admitted that there may have been other factors, including Rudd's sublease to the Making Waves hot tub establishment.

"I have a feeling that my family felt when [Rudd] put those hot tubs in the basement there without our permission, it was sort of a sour taste in their mouth," said Carry. "It didn't bother me personally, but I think some of the members of the family felt they wouldn't have allowed that there at the time had they known."

"And when they painted that red stripe around the building I was highly incensed that they did that without anyone's permission . . . That's really nothing to do with the sale of the building. But I didn't appreciate that when they did it."

"There are things the D.C. government can do," said James Backas, executive director of the D.C. Commission for the Arts and Humanities, who was planning to attend an emergency meeting of the WPA last night. "The mayor has appointed a special commission to come up with some solutions to try to work out, not just for WPA, but for the artists in the Lansburgh building, the Howard Theater, the Dance Place. It's striking all over. We're going to try and work out what we can to produce a package of incentives we can offer to developers, builders, landlords that might be able to slow the gap that exists now between private investors who need to get what they need per square foot to make their investments and what artists can afford to pay. It's a tough gap to fill. I hope we can do it fast enough."

Said Reynolds: "Our only hope for WPA is a benevolent developer who could find tax advantages" to keeping WPA. "And to see if the city government working with PADC can come together. The only real hope is a partnership between private and city development. What's unrealistic is to expect that we can afford to pay full-market real estate rent, and WPA is certainly the most stable arts organization of all. We can't afford $25 a square foot."