AD.C. Superior Court judge yesterday refused to grant an injunction sought by a citizens' group to halt the demolition of the entire historic beaux arts facade of the 68-year-old Albee-Keith Theater.

The Judge's action clears the way for the Oliver T. Carr development company to raze the structure and begin building a $60 million office-shopping complex on the site. A Carr official said the demolition could begin within the next two days.

Attorneys for the citizens' group fighting the demolition said they will appeal the judge's action to the D.C. Court of Appeals today.

The ornate white eight-storey building, located at 15th and G streets NW across from the Treasury building already has been partially demolished

But preservationists hoped that the portion of the theater still standing could be incorporated into facade of the new development.

The District of Columbia government, in an effort to save the remaining portion had promised Carr that it would provide the company with a written committment to supply funds needed to preserve the facade by July 15.

At issue in yesterday's court hearing was whether the city had lived up to its promise. Judge Stewart held it had not.

Stewart's ruling came on a request from the group, called Don't Tear It Down, for a preliminary injunction to halt the wrecking, after Carr's announcement that the company would proceed because the city had failed to obtain the $1.2 million needed to preserve the facades.