A dispute over small bronze plaques that some Alexandria homeowners say are as good as gold has been settled out of court. And the settlement seems certain to make the plaques-said to add $10,000 to the value of homes in the Old Town District-even more valuable.

Sold for $95 each by the Historia Alexandria Foundation, the plaques until recently have been freely availble to anyone with an Alexandria building that is at least 100 years old.

But that ease of purchase is gone thanks to the efforts of developer Bruce Duncan, who sought six of the plaques for townhouses he planned to refurbish in the 700 block of Gibbon Street, Duncan applied for the plaques last fall before he began work on the fram houses and discovered their wooden timbers rotten and infested with termites.

Duncan said city building inspectors forced him to alter his plans and to rebuild the homes with new materials because of the damage. "We made a valiant attempt" to save the original structure, the builder sid.

But the Historia Alexandria Foundation said Duncan didn't save enough. His townhouses would be neither "historic or 100 years," complained foundation president Andrea Dimond who lives five blocks from the houses. She said the houses would contain only 27 two-by-fours and a handful of bricks from the original structures, built in the 1850s.

With that, Duncan sued the foundation in Alexandria Circuit Court, charging that he was as entitled to the plaques as have been other developers who secured them for restored, or in some cases, brand new homes in Old Town.

The foundation, which has issued about 630 plaques since its formation in 1954, has said that about 1,400 Alexandria structures could qualify for the plaques. It drew the line, however, at Duncan's houses, which were advertised as offering "all the original charm of Alexandria's architectural history, including registered building plaques."

Duncan said he was entitled to the plaques because the old buildings were still standing when he applied and because the foundation had accepted his money. "We had a contract," he said.

Dimond said Duncan's claims about plaques granted to new homes built on the sites of historic ones "unfortunately appears to be true." But she argued that the time had come to place some new standards behind the plaques.

The issues never got a jury. The nonprofit foundation recently agreed to an out-of-court settlement that will prevent Duncan from getting the plaques for his townhouses. But the foundation will give him a letter of commendation for his restoration work and return his fees.

The foundation, meanwhile, will be free to draw new restrictions on issuance of the plaques. It is a task that Dimond says the Duncan case has made urgent.

All future applicants for plques probably will be required to notify the foundation if their building is demolished or substantially changed, said Dimond.

The exact language of the new agreements has yet to be determined but current plaque holders will be asked to voluntarily sign similar agreements, she said.

Under the agreements, the foundation would have the power to revoke a plaque and require its return. The cost of the plaque would be refunded, if it has to be surrendered, she said.