When Nettie Martino opened a concession booth on the beach of this resort city 35 summers ago, her competition was "nothing but a little hot-dog stand across the street."

Today the 58-year-old seaside entrepreneur owns a string of food, souvenir and amusement booths in the heart of a bustling boardwalk that rivals Ocean City, Md., Myrtle Beach, S.C., and Atlantic City, N.J., as a manjor vacation spot along the Eastern Seaboard.

Martino's expansion mirrors in miniature the phenomenal over-all growth of this booming Tidewater city 220 miles south of Washington.

Just a tiny, isolated town on the Atlantic barely two decades ago, Virginia Beach is now the third fastest growing city of its size in the nation. "The Beach," as it's called here, stretches from the North Carolina border north through miles of falt green farmland, acres of tract housing subdivisions and along expensive oceanfront homes to the Chesapeake Bay.

The city's resort core hugs the Atlantic shore for about 40 blocks, its 70 medium-rise hotels and motels on the beach strip luring an estimated 2.4 million tourists a year. Virginia Beach also has become a year-round home for 265,000 civilian and military residents, most of whom commute to jobs in nearby Norfolk.

"We'll be the largest city in the state by 1980," boasts Virginia Beach's mayor, Patrick L. Standing, who eagerly awaits the next census. He expects it will show the city's population pushing past that of Norfolk, its neighbor to the west.

But this surging development has not taken place without severe "growing pains," Standing, a former city planner here, acknowledged. Long-time residents, for instance, complain they now have to grapple with hoards of tourists just to get to the city's beaches.

At the same time, the city has had to juggle the diverse suburban, resort, military and rural agricultural needs of its geographically huge - 358 square miles - area.

The military - considered the third most important industry in the city - wasn't thrilled when city officials allowed developers to build a 100-acre shopping mall in the flight path of the Oceana Naval Air Station's most active runway.

The rush to build has prompted fears of overexpansion among both the Navy and civilian residents and both have appealed to the city to adopt controlled growth policies. They worry that the pluses of development - a steadily decreasing tax rate and an ever-competitive edge with Norfolk and other cities - soon may be outweighed by negative factors. "My kids don't go to the beach anymore," complained City Council member Meyera Oberndorf, who grew up in the Tide-water area and now lives about 15 miles from the ocean.

A member of the council since 1976, Oberndorf got her start in local politics several years ago when she launched a citizens' campaign to force the city to build public restrooms along the boardwalk.

The near absence of public toilets - there is only one along the 3-mile resort strand - long has been a notorious cause for Oberndorf and others.

Hotel and motel owners, a major political force here, have succeeded in blocking beachfront restrooms except for the new restroom at the foot of 17th Street. At the height of the bathroom debate, opponents warned that public restrooms would attract all kinds of unsavory characters. But proponents suspect hoteliers of trying to boost room rentals by discouraging beach visits by "dailies."

Mayor Standing seems unimpressed by the clamor for public bathrooms, calling those who want them one of several "special interest groups that want to capture their little territory."

In addition to the bathroom problem, residents say traffic congestion and scarce parking space are other obstacles limiting access to the beach. Also, all but 38 percent of the 26 miles of beachfront property in the city is privately or government-owned. That leaves little of the already narrow strip of sand available to the public.

The biggest chunk of beach property is owned by the military, which is also troubled by the current rate of development here. The Navy, which has been in Tidewater since before the Civil War, has tangled repeatedly with city officials over the location of housing subdivisions and commercial businesses.

The Navy has lost in most of these encounters, and it accuses the city of being reluctant to discourage private business interests.

"If it was Boeing Aircraft instead of Oceana sitting out there, we'd probably have an easier time of it," said Lcdr. Sam Jackson, spokesman for the 9,000-employe complex, one of four military bases in Virginia Beach.

Instead, the Navy has recently spent $1 million to acquire easement rights over privately-owned land around its complexes and may spend up to $40 million before it finishes safeguarding what it regards as its territory.

"Development is happening all around us, and then we get complaints when our jets cause noise or if people get worried about crashes," said Jackson. "People seem to forget that we were here first."

Of particular concern has been the city's decision to build its first major shopping center, Lynnhaven Mall, and its much-heralded Arts and Conference Center under the two busiest runway approaches at Oceana.

"The sites are all wrong," complained Jackson, noting that both projects - set to open in 1980 to compete with similar facilities in Norfolk - are in high noise areas. The runways are used mainly by new pilots making practice flights in unfamiliar planes.

Virginia Beach's boom and accompanying stresses can be traced to its 1963 merger with adjacent Princess Anne County, a move that gave the city room to grow and effectively blocked Norfolk from annexation.The subsequent completion of interstate Rte. 64 from Richmond and the opening of the Virginia Beach-Norfolk Expressway increased Virginia Beach's attraction as a suburban community.

Gradually, the city began to lose its image of being just a resort town.

"When I first came here in 1965," recalls State Del. Bernard Barrow (D-Virginia Beach), "you could drive down Atlantic Avenue the day after Labor Day and you wouldn't see a light on. Nothing stirred."

Now, says Barrow, an attorney who lives within a bike ride of the resort area, "you drive down (on) Christmas Day and the parking lots of the hotels and motels are half full. Most of the summer cottages are now full-time residences."

Having increased in population from 85,000 in 1960 to 265,000, the city has also made economic strides. Agricultural products such as corn, strawberries, soybeans, hogs and tomatoes contributed $150 million to the city last year; tourists spent $123 million; the military employs 20,000; and more than $246 million worth of construction is under way. The city also has developed three industrial parks for light manufacturing work.

With such a solid base, Virginia Beach has lowered its tax rate every year for the last four years. It is now 73 or 74 cents per $100 of assessed value compared to $1.30 for Norfolk.

Other councilmen, like mechanical contractor F. Reid Ervin, think the city has grown too fast but say most of the major developmental mistakes have already been made. Complaining that more than 10 percent of the city's $170 million budget is the debt service for badly needed roads, water and sewer lines, Ervin said he would have preferred "orderly, planned growth rather than leap-frogging growth."

John Baum, a grain and soybeans farmer who also serves on the council, said officials "have gradually tried to get some handle on this thing and restrict growth to the northern half where we have water and sewer and roads."

Baum says he hardly ever goes to the resort area of the city, and he complains that many members of the council "are so involved in the suburban problems that they forget more than half the city is rural."

Mayor Standing bristles slightly at suggestions that all is not going well in his city. Noting that Virginia Beach is spending about $70 million on water, sewers, schools and roads, he says its rapid growth is preferable to the situation in Norfolk, where the population has been dropping steadily since the mid-1960's.

"If I had to choose between dealing with a city in decay or with the problems caused by growth. I'd rather deal with the latter," he said.

Hemmed in by water and other cities, Norfolk has been making an effort to reverse the flight of people and businesses from the port city.

One regional planner, however, said such efforts "are like trying to stick your finger in a dam you know is going to burst."

Norfolk's city manager, Julian Hirst, sighs as he begins a discussion of Virginia Beach's growth and assets "I think Norfolk has gone through a long period of being threatened, but our obligation now is to re-cycle what we have," he said.

Hirst thinks his city's population has "stabilized" at 287,000, and that Norfolk residents are taking a more positive look at the city's place as Tidewater's banking, medical, shipping and cultural center.

"We look in the direction of Virginia Beach and Chesapeake and Suffolk, and we know what's happening," said Hirst, "but I think we've passed the handwringing stage. Now the attitude is keep your face to the sun and make the best of it."

Virginia Beach residents, even those who are critical of their city's growth problems, feel the same way.

"My wife hates to go shopping in the throngs of people, and it's impossible to drive a car," said Del. Barrow. "But it's worth it, I can't imagine any place to live in Virginia that would be nicer." CAPTION: Picture, As tourists cruise Atlantic Avenue searching for parking places; Picture 2, sunbathers crowd the 3 1/2-mile shoreline; Picture 3, Rows of hotels attest to the city's phenomenal growth. Photos by Margaret Thomas - The Washington Post