Thousands of documents of the National Archives are being stored in the old Lansburgh's department store downtown, despite a report that the deteriorating structure poses "a hazard to those employed there and to the contents of the building."

A panel of General Accounting Office officials told a House subcommittee yesterday that the General Services Administration signed a 10-year lease in 1976 with City Stores Co., former owner of the property, and that the signing occured despite a recommendation by GSA's own accident and fire prevention bureau that the building is a fire hazard, and that the absence of temperature controls can ruin valuable papers kept there.

City Stores signed a lease with GSA on July 30, 1976, which calls for use of 65,000 square feet on the fourth, fifth and sixth floors. The building is located in the block bounded by E, 7th, and 8th streets and Pennsylvania Avenue Development Corp. on June 15, 1978, for $4.75 million.

Rep. Richardson PREYER (D-N.C.), chairman of the House suncommittee on government information and individual rights, called the abandoned department store "an unlikely site for preserving historical records."

Preyer said he will ask archives officials too appear at a hearing in September texplain why they picked the building, which is scheduled for demolition in the mid-1980s by the development corporation.

None of the documents stored at Lansburgh's are in the class of the Constitution or the Declaration of Independence, which are housed in the main Archives Building. But the material is of sufficient importance to scholars that it generated 200 reference requests in the last three months of last year, according to Robert Gilroy, GAO's assistant director of logistic and communications division, told Preyer yesterday that he has been unable to get new information about the gaps in record-keeping that might clear up how and why the lease was signed. Horan first testified about the "turnaround" decision on June 25.

"A recitation of the facts we have uncovered shows at best," Horan said, "that poor judgment and questionable decisions led to the Lansburg lease agreement."

Horan said that, in June 1975, GSA's Public Buildings Service regional office reported that its accident and fire prevention branch had determined that the old department store building "did not meet (archives) standards that require fire restrictive construction. The "did not meet (archives) standards that require fire restrictive constuction. The sprinkler system was about 50 years old, and untested," GSA officials said in recommending against a lease.

As a result of that report, Horan said, the acting commissioner of PBS in a memo dated June 17, 1975, advised the archivist that it would be "impractical and unfeasible to correct the basis fire-safety deficiencies" and that therefore he could not approve use of the building.

"Nevertheless," Horan went on, "in December 1975, the [fire prevention branch] approved the Lansburgh building as meeting GSA fire safety requirements, and a lease was entered. The lease, despite archives standards requiring 24-hour temperature and humidity controls, did not include a provision for humidity controls.

"The conditions at Lansburgh's as should have been expected, were eventually deemed unsatisfactory" Horan said. So last September, at the request of the archives, PBS inspected the building and found fire hazards which it said endangered both the documents and their keepers.

"For example, there were numerous unprotected holes in the vertical utility shafts which would allow smoke and heat to penetrate the shaft and be transmitted to the floors above," Horan testified last month. "These conditions still exist."

Repairs were requested by the archives last Oct. 13. On april 5 of this year, PBS told archives officials that repairing the heating, ventilating and air conditioning would cost $246,000 and the work "still would not bring the building up to the level requested," Horan said.

Also, in May, the archives told Pbs to provide 24-hour heating and air conditioning, needed to keep old documents from crumbling, but "as far as we know the service has not yet been proveded," Horan said.

The absence of both records and good memories by those involved has not allowed us to fully assess the conditions and/or circumstances which brought about the Lansburgh's lease," Horan said.

However, the existing fire hazard as described by PBS, and the extensive cost involved to bring the building up to less than desired storage standards, indicates to us that Lansburgh's offers further problems rather than a solution to archives storage needs," he concluded.

W. Anderson Barnes, executive of the Pennsylvania Avenue Development Corp., said last night that PADC, a public agency, will consult with GSA and "determine whether it would be cost-effective to take the necessary corrective steps, or whether it would be sensible to terminate the arrangement.'

We are particularly interested that people and things not get hurt," said Barnes.

He said the PADC plans to demolish the building sometime in the mid-1980s, to make way for Market Square, a 750-unit housing development that is part of the restoration of the avenue. CAPTION: Picture 1, Archivist Carmelita Ryan inspects a document stored in "hazardous" area; Picture 2, Wall-to-wall documents are stored in three floors of former department store. Photo by Gerald Martineau- The Washington Post