District of Columbia businessmen, developers and city officials expect construction of the proposed Mount Vernon Square convention center to accelerate rejuvenation of the city's sagging downtown economy and spur expansion of the active commercial area northward a few more blocks.

Already, plans for rebuilding parts of Pennsylvania Avenue have provided an impetus and southern starting point for construction that is expected to generate more tax revenues for the city and make its central shopping district more competitive with suburban business areas.

The decision of a House-Senate conference committee to give conditional approval to plans for the $110 million center is expected to initiate similar momentum on the upper fringe of the downtown area, which is now a collection of small stores, vacant buildings and abandoned lots.

"The Pennsylvania Avenue Development Corporation has enforced the southern side. The convention center has put a lid on the northern side," said developer Oliver T. Carr, who hopes to play a key role in rebuilding the area. "It will be a great generator and add some cohesiveness to the whole shopping district. That now puts a healthy element into an area that is now not very vital."

Developers and city officials envision a downtown area with new department stores, office buildings and residences in the stretch of land along G Street between 11th and 13th streets and northward to the southern boundary of the convention center site at 11th and H.

Forty years ago, the downtown area was the commercial hub of the area. The suburbs were only the step children of the city, and F Street, with its clanging trolleys, was a busy through fare.

Twenty years later, however, the city began to feel the economic crunch of shoppers' exodus to suburban centers that could offer one-step convenience shopping and other frills downtown Washington could not.

Today, the downtown economy of Washington is struggling to compete with its suburban counterparts.

The block on which the center complex would be built, bounded roughly by 9th and 11th streets NW, H Street on the south and New York Avenue on the north, is cluttered with cheap apartment, gas stations, liquor stores, store-front churches and occasional cut-rate carry out.

City officials, who first approved plans for the center in 1977, have pegged the rejuvenation of the area to construction of the center, which they believe will generate more than 4,000 jobs and $42 million in new taxes over a five-year period.

Construction of the convention center and redevelopment of the Pennsylvania Avenue area is expected to significantly increase land values in the old downtown area between these two public works projects, according to local real estate sources.

Multimillionaire developer Dominic F. Antonelli Jr. has a financial interest in more land in the area than any other individual, according to land records.

Other major landholders include the May Stores (parent company of Hecht's), Chesapeake & Potomac Telephone Co., Woodward and Lothrop, the Christian Heurich family (heirs to the fortune built by the family brewery, which used to produce Senate beer, Rose Schein Inc. and related corporations, and parking lot magnate and developer Leonard B. Doggett Jr. - a close friend of Antonelli.

William McDonald, vice president for marketing of Woodward & Lothrop, said that his firm is already considering plans to develop portions of the block immediately south of the center and just north of the company's downtown store.

Among the options under consideration, he said, are more retail space, possibly in an enclosed shopping mall, office property, hotels and residences.

Development on the Woodward & Lothrop site is likely to be connected to development on G Street between 11th and 13th. Two firms are now asking the city's urban renewal agency, the Redevelopment Land Agency, for permission to build on the site.

One is Western Development Corp. of Washington, which would like to build "a major retail facility" (including two new department stores and an enclosed mall) and later office buildings on the site, according to firm president Herbert Miller.

The other firm is Carr's, The Oliver T. Carr Co., which is considering building a complex of retail, office, hotel and residential building.

Spinoff development from the convention center project is essential. One of the provisions's attached to yesterday's congressional conference committee approval was that the center's estimated $10 million-a-year operating and construction costs be equaled by the additional revenues brought in by the center's construction and spinoff development.

City budget director Comer S. Coppie said yesterday that from $6 million to $10 million in additional property, sales and income taxes should be generated by projects expected to accompany the center's construction.

However, before Congress approves expenditure of the money, firm committments of intention to carry out such projects must be shown. Ben W. Gilbert, director of the Municipal Planning Office, said yesterday such commitments do not yet exist.

Gilbert and other city officials were confident that sufficient commitments could be obtained. Miller and other developers said it would be easier to get commitments now that the eight-month-old deadlock over the center had been broken.

There could be a possible stumbling block, however. Some of the additional revenues included in the city's estimate are to come from projects in the general downtown area and elsewhere whose construction was not tied to the building of the convention center.

Sen. Patrick J. Leahy, chairman of the Senate District Appropriations Subcommittee and the key congressional convention center foe, said yesterday he is not sure that revenues from these development projects could be counted.