In "Arts Space," a 45-page report to be released tomorrow, the Mayor's Blue Ribbon Committee for Promotion of the Arts and Economic Development proposes to place the performing and visual arts, traditional backdrops in the District's budget and bit players in its bureaucracy, much closer to center stage.

Chief among the recommendations of the 64-member panel are those to elevate dramatically the role of the city's Commission on the Arts and Humanities, to create a nonprofit Municipal Arts Assistance Fund supported in part by a special assessment on commercial developers, and to establish a revolving loan fund for arts groups in need of space.

The report is sure to create some controversy, and will take the full support of Mayor Marion Barry if it is to become a reality. Certain recommendations, such as the special arts assessment, would require legislative action by the D.C. Council, while others, such as the revolving loan fund, could be accomplished by executive action.

Behind the report is a sense of urgency in the local arts community due to the pressure of rising land prices downtown, in contiguous areas and even in outlying neighborhoods where significant "arts clusters" are foreseen.

Hence, its principal intention is to link arts activities to economic development, its chief rationale is the economic stimulus these activities produce, and its main focus is the need for more and higher quality spaces among theaters, dance companies, musical ensembles, visual artists, art galleries and "arts-related" enterprises such as book, record, crafts, video and arts supply stores, and cafe's, night clubs, restaurants and bars.

The report contains block-by-block analysis of the "Downtown Arts District," centered on Seventh Street NW between Pennsylvania Avenue and the National Portrait Gallery at F Street, and the "E Street Theater Corridor" running from Seventh to 14th Streets.

It also identifies four "primary" neighborhood arts centers -- Shaw (14th Street NW from Rhode Island Avenue to U Street), Minnesota Avenue NE, Anacostia and Brookland. Listed as "potential" neighborhood clusters are Takoma Park, D.C., Columbia Heights (centering at 14th Street and Park Road NW), Hanover Place/H Street NE, and Fifth and K streets NW.

To implement its many, specific recommendations, the report urges the District government to adopt or consider a good many changes in the rules of the development game. An "arts space assessment," for instance, imposed on a dollar-per-square-foot basis, would be required for all new development in the arts district downtown. Developers would have the option of complying by providing arts space in a given building or by paying directly to the proposed Municipal Arts Assistance Fund.

Also suggested is an "arts overlay zone," similar to the existing hotel overlay zone, which would offer the incentive of added density to projects providing spaces for the arts. The revolving arts loan fund, to be administered by the Office of Business and Economic Development, would help arts organizations expand, renovate or purchase spaces now occupied under long-term leases.

To strengthen the hand of the Commission on the Arts and Humanities, the report proposes the creation of an Interagency Task Force meeting "at a minimum on a biweekly basis" to oversee implementation. Besides directing this task force, the commission would "expand its existing arts policy to include economic development" with appropriate increases in staff and funding.

In coordination with the Office of Planning, the commission would compile inventories of existing and planned arts spaces in each area in order to determine "thoughtful, flexible goals for square footage" allocated to the arts. The commission also would operate a streamlined apparatus to disseminate information about myriad city regulations and guidelines concerning the arts.

There's also a significant "jawboning" element to the report. Under the commission's leadership, city agencies are urged to stress the city's arts goals in discussions with developers and operators of specific projects.

The Shubert Organization, for instance, would be contacted with the intent to ensure that the National Theatre "is dark less frequently than has been the case in the past two years." The Kaempfer Co., owner of the 2,000-seat Warner Theatre, would be advised to retain a "minimum of 1,500 theater seats" when renovating the building. The Smithsonian Institution would be urged to convert the Tariff Commission Building into "a museum of Afro-American history and institute for slavery studies" instead of an extension of the Portrait Gallery and the National Museum of American Art, the present plan.

In addition, several specific financial outlays and incentives are recommended. Owners of the building that houses d.c. space, a restaurant-cabaret at Seventh and E streets NW, would be offered money to retain that business as well as other arts-related enterprises for the next five years or until permanent locations downtown can be found.

Additional city funding is sought for the capital campaign of the Washington Project for the Arts, which will move next week into temporary quarters while awaiting completion of renovations to the Jenifer Building, its home at Seventh and D streets NW. The WPA is seeking public and private money to obtain an equity position in the building. Similar policies and incentives would be applied to the neighborhood clusters. For example, the District government is urged to purchase or to assist in the purchase of the building housing the Takoma Metro Arts Center, 6925 Willow St. NW, when the center's lease expires in 1991, and also the former home of Studio Theatre, 1401 Church St. NW, now leased by the Woolly Mammoth Theatre Company. Public-sector funding would be sought to ensure the Lincoln Theater be devoted to "flexible performance spaces, rehearsal and pre-production areas" for local arts groups. This theater is the centerpiece of a large-scale redevelopment project in the 1200 block of U Street NW.

The report pays special attention to the development of the "theater corridor" on or near E Street. In addition to the National, Warner and Ford's theaters and the 500- and 200-seat performance spaces planned for the Lansburgh's project under agreement with the Pennsylvania Avenue Development Corp., the report recommends a 300-seat theater for either the LeDroit or Atlas buildings, F and Ninth streets NW; a small, second-floor performance space in a building near Ford's Theatre; a 400-seat theater or a large-screen movie house at the Gallery Place urban renewal site; a 150- to 250-seat space for use by local dance companies at the old Hecht Co. site on Seventh Street; and a 250-seat theater in a major downtown office complex being developed on 11th Street NW by the Oliver Carr Co.

Also proposed is a public transportation "arts loop" connecting the downtown and Shaw area arts centers, the use of vacant or underutilized schools, warehouses and apartment buildings for artists' housing and studios, and the location of a "major arts school" (presumably the space-squeezed Corcoran School of Art) in the Hecht Co. project.

The panel was headed by Peggy Cooper Cafritz, former chair of the Commission of the Arts and Humanities, and developer Mortimer Zuckerman, president of Boston Properties. Also on the executive committee were lawyer Max Berry; Kwasi Holman, former executive director of the city's Office of Business and Economic Development; Ted Gay, former vice chairman of the arts commission; and William F. McSweeny, president of Occidental International Corp.