A web of federal rules, a newspaper story, and a letter that was sent to the wrong federal agency have delayed -- at least temporarily -- the demolition of Kann's department store, a vacant downtown landmark whose 19th century facades have been hidden for two decades by a sheath of aluminum.

The old store, which faces Pennsylvania Avenue NW, from Seventh Street to Eighth Street, is scheduled to make way for a park and eventually for new housing as part of major redevelopment plan being carried out by the Pennsylvania Avnue Development Corporation (PADC).

Despite protests by preservation groups, the District government granted a demolition permit in December.

A wrecking crew, hired by PADC, began taking off the gray aluminum sheets from the outside of the store two weeks ago, revealing old columns and areches belonging to a group of 15 late 19th century buildings that Kann's put together to make its big store.

Since 1965, however, Kann's has been part of a designated national historic area, which urns along Pennsylvania Avenue from the Capitol to the White House.

Under the 1976 federal tax reform, unliss the property is taken off the National Register of Historic Places before demolition occurs, the devlopers of any new building on the site would lose major tax breaks.

PADC officials assumed that removing Kann's from the register, which is kept by the Interior Department, would be almost automatic, because it was recommended by the city government.

Rita Abraham, public information dirctor of the federally funded corporation, said approval was expected by Thursday. She said demolition was scheduled to start the next day.

However, on Wednesday, Abraham said, PADC learned that the District government had sent information about the project to the wrong federal agency -- to the Department of Health, Education and Welfare instead of Interior. As a result, she said, the 30 days required for federal action, will not expire until Feb. 18.

Abraham said Kann's won't be torn down unless it is removed from the historic register.

%meanwhile, Interior Secretary Cecil D. Andrus announced that he intends to decide himself whether of not Kann's should be saved, rather than relying as usual as subordinates.

Robert Mendelsohn, an assistant to Andrus, said the secretary was made aware of the scheduled demolition by a story in last Sunday's Washington Post and a telephone call from a congressional staffer.

"The secretary takes very seriously his responsiblity for historic preservation," Mendlesohn said. "When he leaves office and goes back to Idaho or does something else he wants to be looked back on as someone who added to the monumental areas of Washington rather than detracted from them."

Recently, Andrus personally initiated federal legal action to try to block construction of new high-rise office building in Arlington, just across the Potomac from the dapital's major monuments.

Ernest Connally, the Interior Department official whose division normally reviews the designation of historic sites, said the test for preserving a building is that it has unusual merit itself or "contributes to the values of a historic district."

If Kann's old facades had remained hidden, Connally said there "probably would have been no choice but to grant permission" to take it off the historic register.

"But now that somebody went up there and peeled off some of the aluminum, it looks kind of interesting," Connally said. "It's kind of ironic that the wrecking crew did this."

PADC officials said the corporation wants to tear down Kann's because the store has deteriorated so badly since it colsed four years ago that it now is a safety hazard, requiring about $2 million to fix for even temporary use.

The housing planned for the site, PADC said, is a major part of its plan to revitalize Pennsylvania Avenue, which was approved by Congrees in 1974.

W. Anderson Barnes, PADC's executive director, said the agency intends to save parts of the old facades behind Kann's aluminum siding, and place them in front of new buildings it hopes to have contructed nearby on Seventh Street. CAPTION: Picture 1, Workmen remove sections of gray aluminum that since 1959 had covered the buildings of Kann's Pennsylvania Avenue between 7th and 8th Streets NW. Copyright (c) Linda Wheeler; Picture 2, Varying facades of Kann's along Pennsylvania Avenue, left, are shown in view from 7th Street intersection before aluminum sheathing of buildings in 1959. By Jim McNamara -- The Washington Post