The District of Columbia hopes to use a future Metro station as the sparkplug for revitalization of Columbia Heights, a once-flourishing commercial center on 14th Street NW at the upper end of the 1968 riot corridor.

As one of his last acts before leaving office this week, Mayor Walter E. Washington sent the U.S. Department of Transportation an application for $300,000 to complete plans for developing the area with a combination of stores, offices, apartments, public facilities and transit services. The proposal is supported by new Mayor Marion Barry.

Through its urban renewal agency, the D.C. government already owns nearly 12 acres along 14th Street between Columbia Road and Newton Street NW. The area was once the city's second busiest commercial center, although it was in sharp decline long before the 1968 riots destroyed many of its stores.

The Columbia Heights subway station will be within this area, with entrances at Irving Street and probably near Kenyon Street. Train service to and from downtown is scheduled to begin in 1985. The line is planned to extend northeastward as far as Greenbelt, Md.

Joint development -- with the subway on the bottom, bus platforms and stores on the surface and offices and apartments above -- is encouraged by federal policy. Secretary of Transportation Brock Adams recently cited Columbia Heights from a list of transit stations around the country that seem ripe for such projects.

Beyond planning funds, the federal government would provide money for special amenities related to the actual development, such as underground walkways interconnecting the buildings and the subway station.

Such joint development, minus the apartments, exists at the new Journal Square station on a subway line in Jersey City, N.J., which officials hope will be the magnet for a revitalized downtown.

In Canada, models for such development exist in both Toronto and Montreal. Sweden, in constructing suburbs outside Stockholm, has created community centers surrounding transit stations. The largest include branches of major department stores.

According to the D.C. Municipal Planning Office, which prepared the application for the federal planning grant, there has been substantial reconstruction of housing in Columbia Heights. But commercial development has been lagging.

"Nowhere esle in the District is so much vacant land already assembled and in single ownership," the planning office said in its proposal.

The city, which has been working with citizen groups, anticipates that there will be substantial equity ownership of the Columbia Heights development by area residents and businesses, investing through the newly-formed Park Central Development Corp.

Once the project begins moving, the corporation plans to register with the U.S. Security and Exchange Commission for permission to sell stock. No individual will be permitted to own more than 20 shares.

"The aim of the (corporation) is to increase the power and influence for the people of the community as a whole -- not just for a few individuals or groups," the planning office said. Stockholders will choose a community-based board of directors.

The proposed planning activity will be conducted jointly by several city agencies and the Washington Metropolitan Area Transit Authority working with a six-month timetable. The study will include such elements as:

An evaluation of the type of development the sales and leasing marked will accept.

Financial packaging, including the identification of sources of funds and a tabulation of economic benefits to the city government.

Legal and organizational structure for the project.

Ways of typing together various government agencies that must participate in the project.

Creating mechanisms for community participation.

Determining the environmental impact, including the ability of sewer, water and utility facilities to provide necessary services.

Devising development plans and models.