Preservationists are struggling to persuade Henry Luce III, son of the Time magazine founder, to sell them rights that would prevent development on the family estate.

Luce, chairman of the $900 million philanthropic Henry Luce Foundation, canceled an earlier agreement with preservationists in Chester Township to sell them the rights. He said in an interview that he had no intention of "giving away" 80 acres, more than half of the estate's 166 acres of fields and panoramic mountain views.

Luce, 74, of Manhattan, and his brother Peter Paul Luce, 70, of Englewood, Colo., put the estate, called Lu Shan, or "the way up the mountain," on the market for $9.5 million after their mother's death in March.

Town officials vowed to keep trying to persuade Luce to change his mind, but he has refused. "We're not interested in giving away any real estate," Luce said.

Asked why, as head of one of the world's largest charitable foundations, he was not inclined to donate the tract, he said, "This is private property that my brother and I own," and the estate and the foundation "are two different entities. . . . Why should we give this real estate away?"

Louis Farrelly, an agent for the Coldwell Banker real estate firm, said he had shown the property to more than 20 prospective buyers "and there are some serious players."

Henry R. Luce, who also founded Life magazine, built the private retreat in Gladstone, N.J., in 1933 for himself and his first wife, Lila Hotz Luce Tyng. Two years later, he divorced her to marry Clare Boothe, the playwright, first congresswoman from Connecticut and ambassador to Italy, who died in 1987.

Luce gave his first wife the 21-room, castlelike mansion with huge stone fireplaces, fields, apple orchards and sculpted gardens. She summered at Lu Shan and lived there the last few years of her life, dying there in March just after she turned 100.

The month before her death, Morris County, N.J., officials received a letter from Henry Luce stating that he intended to accept their offer of $1.8 million for development rights to the 80 acres.

He would still have owned the land--a sloping field that splays out toward panoramic views of the Watchung Mountains from the mansion's terrace--but he would have been restricted from developing it.

Luce confirmed that he sent the letter but said his mother's death "raised the question of selling the property as soon as possible rather than later on" to provide cash to pay death taxes and beneficiaries of the will, some of whom will receive a percentage of the proceeds of the estate's sale.

"There is no cash in the estate whatsoever, so any bequests have to be made good from the sale of the property," said Luce, who, with his brother, is executor of their mother's will. The land could be preserved by the new owner, but Luce said he has not made that a condition of the sale.

Local officials, bent on saving land threatened by encroaching development, say they will again approach Luce if Lu Shan does not sell in the next few months.

"We're definitely still going to try," said Ken Caro, a former Chester Township mayor whose administration preserved 1,000 acres of land and who is now chairman of its Open Space Committee.

Caro said Luce may not have understood that he would get the full payment in cash within months of finalizing a deal. "And cash is king with Henry Luce. That's where our hope is," he said, offering to bet that a cash down payment from a sale would be less money.

Luce said he understood the conservation terms but preferred to sell the property. Meanwhile, the town is looking at several other large tracts for preservation.

"New Jersey's getting homogenized, urbanized by overdevelopment," township Mayor Benjamin Spinelli said.

"We don't want Lu Shan [at the southern entrance to the town] to become just another housing development," spoiling the landscape, adding traffic and hiking property taxes by increasing school enrollment, he said. "We've got to get to the land before the developers do."

CAPTION: Luce gave his wife the estate when he divorced her to marry Clare Boothe, left.