The National Children's Center, a social rehabilitation and job training program for mentally retarded youth and the workers who care for them, recently celebrated the transformation of its crowded, crumbling building into a modern, $4.3 million facility.

More than 100 people attended the dedication ceremony, where the driving rhythms of the Coolidge High School band rocked the gymnasium of the new education building at 6200 2nd St. NW.

As parents jiggled restless children on their knees, friends, staff members and government officials exchanged grins and knowing glances when NCC board president Lee E. Elsen talked about the 10 years of "blood, sweat and tears" that ultimately produced the funds to rebuild the center.

"We had a dream and that dream has been realized," Elsen said.

The center was built with nearly $3.3 million in grants and loans provided by the federal Economic Development Administration over the past five years. The remaining funds will be provided by the center.

Elsen said the center qualified for the funds by providing vocational training to handicapped people and offering jobs and training to unskilled and semiskilled workers in how to care for the handicapped.

According to EDA officials, the rehabilitation center is the second job development project EDA has supported in the District.

David R. Williamson, director of the Department of Housing and Urban Development's Office of Independent Living for the Disabled, praised the center for its "foundation building" programs, which he said help handicapped people to live as independently as possible.

"You have to remember handicapped children become handicapped adults," he said. "I've been disabled may be 28 years. Many people ask me how would I like to not be handicapped. Quite frankly, I think it would cramp my style at this time," he laughed.

Williamson added that his office has loaned the center "just under $1 million" to open eight group homes within the year.

Samuel L. Orenstein, executive director of the center, said the funds would be used to purchase and renovate single-family homes as group homes throughout the city. The homes, which would house no more than five people, should be open by fall, he said.

"It's quite important that we have a variety of good examples of group homes in the nation's capital," Williamson told the audience. "We don't have that right now."

After the brief dedication ceremony, the celebrants attended a champagne reception in the airy, newly renovated administrative building. Visitors were taken on a tour of the new residential wing.

The center, a private, nonprofit agency, was opened by a group of parents 20 years ago in an old church-sponsored nursing home, which is now the administrative building and diagnostic clinic.

These parents, said Elsen, wanted to develop a center for mentally retarded youth that would provide more than custodial care.

"Some of the parents had retarded children. Some did not. But they all felt there was a need that children not be put in custodial facilities," he said.

Throughout the years, the center has offered a broad range of special education services to mentally retarded youth, many of whom also have physical handicaps such as blindness and deafness.A similar program also helps adults.

Orenstein said the new education building has 20 classrooms, each equipped with its own private observation room; three workshops, an arts and crafts shop and a kitchen to prepare lunches, which are eaten in the classrooms. Training in language development for nonverbal school-age children, sign language, academic and job training and social training is provided daily to nearly 200 youth and adults, ages 7 to 21, including 20 preschoolers.

Twenty-four-hour residential care is provided for 50 people at the school and a nearby group home operated by the center. The residential wing has apartments that house four to eight people and has a lounge and dining area.

About 140 staff members administer the center programs in shifts.

Referrals to the center are made by schools and social service agencies. Fees range from$277 to $1,853 a month.

"For many of our children we're a substitute family," said Orenstein. "Some of the children are literally orphans. Some are abandoned or neglected youth." Only the most severely handicapped youth are usually accepted, he said, although a few are only borderline retarded and could live in foster homes.

"We don't want kids to come here if they don't have to," said Orenstein. "But people still want us to take kids that there's nothing wrong with." The problem, he said, is the nationwide shortage of good foster homes for needy youth.

"In this town, if you're a kid and you don't have a home there's just no good place for you (to go)," he said.

Ironically, this problem helped keep the old, termite-ridden center in existence, said Elsen.

"This was probably the greatest fire trap in the city of Washington, "said Elsen."If it wasn't for the work we were doing we would have been closed down. But there was no place to send these children."

Now there is, he said.