A PLACE FOR the arts has become a desirable asset among the five developers competing for the last large tract of city-owned land in South-west Washington.

The Portal Site, as it is known, offers 10 acres at the foot of the 14th Street bridge, a spectacular view of the Potomac River and the potential for making millions of dollars on the more than one million square feet of office space that all five proposals include. The developers -- some of the biggest in the area -- have also included hotel space. And in keeping with the unwritten regulations of the Redevelopment Land Agency, at least 25 percent of each development is minority-owned.

Into this mix of hotel, retail and office space will go some type of arts element, ranging from generalized plans to offer open space for community and artistic activities to plans that include theaters built for arts groups. The RLA is expected to pick a developer in the first part of December, based on projected revenues to the city, new jobs generated, and politics. After that, RLA will set a price for the land.

Why this burgeoning interest in the arts? "If you're going to make a community contribution," says developer Conrad Cafritz, "cultural dollars will have an impact in the longer run than other community involvement." Cafritz's wife, Peggy, is chairman of the D.C. Commission on the Arts.

Patricia Mathews, a consultant to Western Development Corp., noted that cultural activities "bring in more dollars than the Redskins or the hockey team or the basketball team. So it's reasonable for them to be included as a component of a major business." Mathews is a board member of the Cultural Alliance, which happens to be a limited partner in the Cafritz bid.

Then there's the more pragmatic explanation. "I think it's because of the Cafritz proposal," said one developer, claiming that once word of Cafritz's ambitious arts proposal spread, other developers decided to include a cultural element also.

The five development teams are led by:

* Real estate developer Cafritz and Tyroc Construction Co., along with the Cultural Alliance as a limited partner;

* Western Development, which recently opened the Georgetown Park mall;

* Theodore Lerner, who developed the White Flint shopping mall, and Mel and Ed Lenkin;

* The Boston-based Winn Development Co. and Dominic F. Antonelli Jr.;

* The Rockefeller family and the law firm of Hudson, Leftwich and Davenport in a joint venture with former Redskin Ozzie Clay.

The following is a rundown of the arts elements included in their projects:

Cafritz/Tyroc:

Cafritz has proposed a 250-seat theater designed for small performing arts groups and an art gallery to house the Barnett-Aden Collection, a historical collection of black American art. "Emerging groups need a small theater like this with rehearsal space and all the things that small arts groups have never had before," said Cafritz at a press conference Wednesday at the National Press Club. The theater would probably begin operating in 1985 or 1986, according to Cafritz.

The half of the gallery not used for the Barnett-Aden collection would be used for rotating exhibitions of Washington artists. Art work would also be displayed in the office building lobbies and the hotel.

In addition, its limited partner, the Cultural Alliance -- a service and information organization for area arts groups -- would receive 1.5 percent of gross revenues from office space and parking and one percent of hotel revenues. Cafritz estimates that by 1991 that will mean $1.5 million to the Alliance for subsidy of the theater and for a Cultural Alliance outreach program -- setting up remote Cultural Alliance offices in Northeast, Southeast, and Southwest to develop more cultural activities there. Currently, most cultural groups are concentrated in Northwest.

The Cultural Alliance would spend only about $450,000 of that money to subsidize the theater. Debt service and janitorial service on the theater will be picked up from the other project revenues, according to Cafritz. Said Steve Harlan of the Cultural Alliance, "The far more important thing is to look at this partnership as a money machine for the arts. It's an unprecedented partnership."

Cafritz said he decided on cultural involvement because "we thought retail stores wouldn't be as effective . . . . We think it's dollars well-spent."

Western:

The Western Development Corp. has included an 850-seat theater for local, regional and national groups. There would also be a community center -- "20,000 square feet which the community will program," according to Bob Mendelsohn, a consultant to the project. "That will include a smaller theater . . . It will be a multi-use space."

The developers would like the Smithsonian Institution to manage the larger theater, working with a community advisory committee. "We've had extensive discussions with the Smithsonian Division of Performing Arts," said Mendelsohn. "They've been looking for space, and it's literally two blocks away. They've expressed a great interest in it, but they're not absolutely committed. Our feeling is that if it's built, the Smithsonian will run it."

But one Smithsonian official called such plans "very premature." James Morris, director of performing arts at the Smithsonian, said, "We've made no commitment. That would have to go through long policy procedures . . . . We've expressed an interest."

Consultant Patricia Mathews said that there is a "crying need for theater space," other than the large houses like the Kennedy Center. "We don't have moderate size theaters where a group can expand their audience and expand their scenery," she said.

The project would also include a plaza that Mendelsohn said would be used for, among other things, performances by local groups and international festivals "highlighting the food and fine arts of various nations."

There would also be space in the office building lobbies to display art, and a Southwest commercial gallery, Gallerie Triangle, has agreed to provide art for the offices, according to Mendelsohn.

Winn/Antonelli:

This project includes about 200,000 square feet of space suitable for arts activities. This space, between buildings, is enclosed by glass shields on the top and sides that are part of a solar heating system. "It's a series of enclosed parks," said Jack Kerry, the Washington partner of the Winn Development Co. These would be used for display of art works as well as for performances.

Kerry said his company told the D.C. Commission on the Arts that they would pay for the costs involved in arts programs: "Sound systems, stages, and you need walls on which to hang artwork. We agreed to provide those as well," said Kerry. "Our main job is to create very nice spaces within which the arts could take place. We didn't feel it was our place to program it. But we would be willing to sit down with the commission afterwards."

The Winn/Antonelli proposal also includes a trade center with a 600- to 800-seat auditorium that could be used by arts groups.

"We would be providing artists with not only fine space but with a big built-in audience," said Kerry. "The people coming in to trade are the same people who buy art."

Rockefeller:

These developers pledged $1 million to buy art for permanent display in the public space of the complex, according to Rockefeller Center Inc. spokesman Jerry Berke.

"We can't be specific as to the type of art we would buy," said Berke. "It could be paintings, sculpture, murals. Who will buy it is something that will also have to be decided."

The design also calls for 2 1/2 acres of open park space and a 40,000-square-foot enclosed winter garden, according to Berke. "The architects had in mind the kinds of arts and activities involving community groups like at Rockefeller Center," said Berke. He mentioned some of those activities: summer concerts, the Christmas tree lighting, a demonstration of solar energy by Boy Scouts, fashion shows, an open rehearsal by the Joffrey Ballet. "There are groups in Southwest that could utilize this space," he said.

Lerner/Lenkin:

Although these developers will set up and fund a community foundation if they are chosen, the Lerner, Lenkin et al. team -- known as Banneker Associates for the purpose of this project -- has no extensive arts plans.

"We looked at the possibility of arts-related improvements in the project -- a gallery or a theater," said S. Lee Narrow, an attorney and a limited partner in the project, "but the city -- and Southwest in particular -- at this time has enough theaters. To create another theater and subsidize it wouldn't be to the benefit of the city. We talked to people about it. It wasn't an area we ignored. If there was going to be any cultural impact with this, it was going to be on a smaller scale."

The developers did create indoor spaces "which can be used for arts-related activities," said Narrow. "Our attitude in the design is 'Let's do something flexible enough to meet needs of the community,' but not say 'Here's another theater.' "

They do have a commitment from sculptor Henry Moore to do a work for the plaza. "We've been in contact with a couple of local artists about doing specific pieces for the plaza," said Narrow.

If chosen, the developers will set up the Banneker Foundation with $5 million over the next 10 years "whether or not the project is successful." The foundation is specifically for the Southwest community and would be operated by community trustees. "The developer will not control the foundation," said Narrow. Funds will go for cultural, community, education activities as well as for job training and entrepreneurs. "The community should decide," said Narrow.