City officials appear ready to spend $250,000 on a study of ways to turn Adams Morgan, where a large number of low- and middle-income Hispanos live, into a "Latin Quarter" modeled on the New Orleans French Quarter.

Proponents of the plan say the proposed Latin Quarter would tap some of the shopping and entertoinment dollars that 12 million tourists bring to the city each year. The objectives, they say, are to stimulate tourist traffic in the area and to "increase the economic base" of the neighborhood. They also hope to find ways to finance low- and moderate-income housing ownership for Adams Morgan residents who are in danger of being displaced by condominium conversions and rising rents.

The request for funds was submitted to the Department of Housing and Community Development in March by the housing committee of the Council of Hispanic Agencies, according to Alfredo Echeverria, an architect and the housing committee member who signed the proposal.

Robert Moore, director of the housing department, said that "the whole concept is worth looking into -- to capture the cultural diversity as an economic development project. There is tremendous business potential at 18th (street) and Columbia Road. This is just one opportunity.

"Columbia Road has never been included as a Community Development Block Grant area. It's never gotten anny money," Moore added.

Final action on funding of the study was postponed last week after the area's Advisory Neighborhood Commission protested that it was not given proper notice and a chance to comment on the proposal.

"We are not executing the contract until we receive comments," James Clay, deputy director of the housing department, said in a telephone interview. "We'er committed to working with the community on this."

Anita Bonds, an aide to Major Marion Barry, said that the major "would want to get public comment and take it seriously. Modifications could be made according to what the public wanted."

She said that "the understanding I have is that the project will be funded after comments from neighborhood residents are heard.

Clay said the ANC was given 30 days to give the city its comments and recommendations.

ANC members recently approved a resolution callinng for "all surveys, studies, and other needs assessment solicitation designed to plan for Adams Morgan ... to be stopped until such activities are legally presented to ANC-IC in its capacity as adviser for the area."

Ann Hughes Hargrove, the unit's chairman, said "the ANCS are supposed to get plans for all city development. We were never told about the proposal" for the Latin Quarter study.

She also protested that the plan "seems to favor one group over the others. It should focus on the diversity in the community and it seems to have the outcome determined before the study is done."

Frank Smith, an ANC member, said that, "As a resident and communtiy leader, I'm not interested in having the area turned into a tourist attraction. We'er zoned for residential use and commercial use that serves the residents."

Some community activists also have charged that Echeverria's role in the proposed study represents a conflict of interest because he was a staff member in the city Office of Planning and Development until June 30 and still works as a consultant for that office.

Echeverria, who live in Bethesda, said he "was advised to put my name on the proposal by the council" (of Hispanic Agencies). He said he does not believe a conflict of interest exists.

"The role that I have at OPD is to plan with the Environmental Protection Agency and (work on) sludge problems. I'm consulting in (environmental) planning," he said.

Housing director Moore said, "I don't believe there's any conflict. He (Echeverria) is not a city employe."

The Latin Quarter proposal is a redraft of a plan that was first submitted five years ago. Authored by Echeverria, that proposal also was submitted by the Council of Hispanic Agencies and was ignored by the adminstration of former Mayor Walter Washington according to an official of the council.

If the present plan is funded, the money, which would come from Community Development Block Grant funds, would be parceled out in two blocks: $125,000 this year and the remaining $125,000 in 1980, according to housing director Moore.

The funds would go to the D.C. Office of Latino Affairs, which in turn would contract with Echeverria to conduct the study, according to Aida Berio, director of the Latino affair office.

The proposal asked for $430,000. The city will decide whether to grant additional funds after officials see the findings of the first years of study, said a housing department spokesman.

The study plans call for the formation of a 21-member advisory committee of community, business, and Hispano leaders who would "organize, plan and hold seven Town Hall meetings and three public hearings on the purpose, scope, method and proposed activities of the Latin Quarter Plan."

"Basically, the intent (of the Latin Quarter proposal) is to avoid displacement of people." Echeverria said. "We have to increase the economic base to do that."

"Echeverria says that the types of businesses proposed will "depend on what the market will tolerate." He cited Boston's Quincy Market, New Orleans' French Quarter, and the canal area of San Antonia as examples of the type of development that will be considered.

"The idea is that in attracting tourists and providing ambiance they will spend money in these new businesses and help break the vicious circle of poverty," he said. "We've got to open up opportunities for the disenfranchised and make them small entrepreneurs."

Pedro Luhan, a local businessman and president of the Council of Hispanic Agencies, said that "the idea is to bring tourists here and create jobs and develop small businesses -- to make the area attractive to people. We want to preserve the area."

The proposal calls for the formation of a tourist investment corporation, which would provide capital and loans to tourist businesses, a small business investment company to assist the small entrepreneurs a community development credit union, and a housing development corporation.

Housing department assistant director Clay said the Latin Quarter proposal would be an expansion of an existing study, funded with $70,000. that Development Associates, a minority-owned government and management consulting firm, is conducting. Development Associates is surveying Hispano residents of Adams Morgan and Mount Pleasant to determine their socio-economic characteristics and needs in the areas of housing, transportation, and legal aid, according to a spokesman at the company. But Fernando De Baca, of Development Associates, says that the proposals are "totally unrelated." Still another spokesman for the company said that Echeverria was employed by them as a consultant.

The ANC has scheduled a public meeting for 8 p.m. Monday at the ANC office, 23ii 18th St. NW to discuss the Latin Quarter proposal. Representatives from the D.C. Commission on Latino Community Development, the Department of Housing and Community Development, Echeverria and representatives of Development Associates are expected to attend. CAPTION: Picture, Small stores line 2400 block of 18th Street NW in Adams-Morgan. By Craig Herndon -- The Washington Post; Illustration, "The Latin Quarter", By Dave Cook -- The Washington Post