A six-year dispute between the Alexandria city goverment and the owner of a residential-area gas station that has involved lawsuits, special grand jury investigations, public hearings and intricate negotiations, apparently is about to end with the city purchasing the station for $175,000.

Under a proposed agreement, which must be approved by the City Council, Antonio Damiani would sell to the city Tony's Gulf Station at 2301 Commonwealth Ave. in Alexandria's Del Ray section. developer who plans to build townhouses. Damiani expects to move his business to a larger site off U.S. Rte. 1.

The controversy has centered on complaints by some Del Ray residents that the service station's bustling automobile repair business disturbs their quiet neighbourhood. Residents complained of noise and lack of parking spaces because cars waiting to be repaired overflow into surrounding streets.

Four years ago several residents filed suits against Damiani and Alexandria, charging that the station had become a public nuisance and accusing the city failing to enforce zoning regulations. The suit against Damiani was thrown out by Arlington Circuit Court Judge William L. Winston, and the residents then dropped their suit against the city.

"I think we're going to see a big difference in the neighbourhood," said Marilyn Doherty, one of the four who filed the suit. She said that under the agreement between Damiani and the city "he'll have much better working conditions and we'll have a residential neighborhood that's really a residential neighborhood."

In 1976, a special Alexandria grand jury investigated allegations that some city employes got discount service from Tony's. A three-week investigations did not find sufficient evidence to indicate criminal activity or conflict of interest on the part of any city worker.

Damiani, an Italian immigrant who has owned the business since 1969, said yesterday he thinks the agreement is fair, but expressed regret he was not allowed to expand on the Commonwealth Avenue site.

"I wanted to expand it right here," he said. "When you get a business situated in one location you like to improve it where it is."

About 80 cars ranging from Cadillac to Toyotas were parked around the service station yesterday waiting for repair by Damiani or one of his 26 mechanics. Customers waited in an anteroom.

Damiani maintained that "the Del Ray Citizens Association does not want me to be here. But if you take a vote, the people who live near here do not want to vote against me." The citizens association has been active in trying to close the station.

Persons interviewed at random yesterday tended to agree with Damiani's assessment. "I really don't see why people bother him," said Kim Jones, who lives across from the station.

A businessman, Richard Sewell, said, "I'm on his side, I let him use my parking lots." Sewell, who runs The Furniture Shop at 1 East. Del Ray Ave., said that because the area is zoned residential he is worried that the city will move against his business next.

Such sentiment is by no means unanimous. "Tony's is something we've lived with for a long time. We've been very unhappy with the situation," said AnneMarion, president of the Del Ray Citizens Associations.