The District of Columbia plans to focus on keeping existing businesses in the city and attracting new ones by establishing a special office of economic development.

D.C. Council Chairman Sterling Tucker, who last March proposed creating the new office on the grounds that the District government had done nothing to stem the flight of business from the city, expects it to start operating by next spring.

"Barring only a congressional veto, the office should start getting set up within the next few months," Tucker said. "I can't see anything but a favorable reaction from Congress, since the office is not part of city budget considerations.

The new office would be directly accountable to the mayor "to cut governmental red tape that might hamper an all-out effort to make the District a healthy, attractive location for business to settle," Tucker added.

Avoiding bureaucratic intervention was one of the reasons the new office was proposed. Tucker's bill calling for the office was passed by City Council in November. The District already has a Department of Economic Development which is responsible for licensing and regulating businesses and professional services and enforcing the city's housing, building and zoning codes, among other duties.

"But the department has no orientation toward developing business in the District. It is more preoccupied with regulating development," Tucker explained. "We throw a major need like attracting new business to the city within that department and it is just going to get lost."

He added that a commerce department has been proposed inthe city "for a long time. But action has to be taken now."

Tucker said the District has been suffering from "chronic underemployment and unemployment and the loss of commerical enterprises from the city for two decades. It has greatly hurt local employment and the city's tax base."

The office would be charged with stimulating new employment opportunities, offering incentives to existing businesses and centralizing functions of economic devlopment in the District within one agency.

The director of the office also would be allowed to enter into contracts, no including the acquisition of land or buildings. Such a contract might be the hiring of a consultant firm to run a publicity campaign to attract business to the city, Tucker said.

Funding for the office will come from several sources, he added, including no less than $300,000 in Community Development Block Grant funds. Other sources may include federal loans, District loans and appropriations and private endowments.

"We've been after this office for a long time," Tucker said. "It's been turned down before because it had been presented as a budget item, then slashed as unnecessary.Meanwhile, there's been no government related thrust to encourage commercial development in the city."

A report to City Council justifying the need for the new office cited several downward trends concerning business in the District. Between 1958 and 1967, the report said, the District lost more than 1.350 retail businesses while the suburban areas gained nearly 3,000. The report added that the District's unemployment rate has risen to 9 per cent, three percentage points above average unemployment rates for the entire metropolitan area.

"Every metropolitan jurisdiction except Arlington and the District has some kind of mechanism to stimulate economic development," Tucker said. "Why not the District which appears to need it most?"

He noted that the types of business the office would try to attract would include retail stores, service establishments like barber shops or laundries and light industry such as assembly plants.

"Why not a plant to assemble paper clips and other office supplies?" Tucker suggested. "A town like Washington would be perfectly suited for such a venture."

The office also would attempt to develop an information center to aid potential businesses and expanding firms; study how the District's scarce supply of land can be used for commercial purposes; encourage more minority businesses and investigate redevelopnent of existing land or unused buildings (inluding areas along New York Avenue leading to the D.C. Md. line.)

The office also is expected to work closely with the Metropolitan Washington Board of Trade and the District Chamber of Commerce, both of which have been supporting an office of economic development since 1971.

"Bringing new business to the city needs a fresh start, a new atmosphere," said Board of Trade Executive Vice President Clarence Arata. "We can mount stronger, more effective campaigns to attract business with support of the District government. Without it, it is rather an uphill battle."