A year-long battle over which of two groups would build a new multi-million dollar hospital in a fast-growing section of Montgomery County was resolved this week when one of the groups accepted a $120,000 payment from the other and withdrew its building request.

As a result of the settlement, the Shady Grove Adventist Hospital will break ground this summer for its $20.5 million, 224-bed facility, to be located at the intersection of Rte. 28 and Shady Grove Road, in the northwest section of the county.

The new hospital will be the only hospital in the western portion of upper Montgomery County, according to Melinda Howes, a spokeswoman for the group. The hospital will be built on a 25-acre site which will be leased from the county at a cost of $2.27 million over a period of 30 years, according to documents signed last Tuesday.

The facility will serve more than 60,000 people, according to Charles Maier, an aide to county executive James P. Gleason.

The $120,000 payment will be made to Gaithersburg Hospital Group, headed by Silver Spring physician Dr. Raymond T. Benack. The money will cover "most" of the group's development and planning costs, Benack said.

In addition, Benack, Eric Stanley, Patricia Hames and Ted Coleman, all of whom were executives of the proposed Gaithersburg hospital, will join the Shady Grove Adventist Hospital advisory committee, and might be named to the hospital's board of directors, Benack said. Neither post carries any financial compensation, he said.

Benack said his group decided to withdraw its application because "we had invested less money than they had, and because they agreed to expand their hospital to a full-service one, as opposed to a statellite hospital," he said.

Shady Grove Adventist Hospital is owned by the Washington Adventist Hospital, located in Takoma Park, Howes said. According to Benack, the original Shady Grove proposal called for it to rely on the existing facility for many of its medical services. Howes said that the new hospital would be fully functioning on its own.

The conflict between the two groups arose last year when the review board of the Maryland state health department granted the Gaithersburg group's request to build a $16 million hospital one year after the Shady Grove group had received permission from the Maryland state health planning agency to build their $24 million facility - on the same site.