Mayor Marion Barry and City Council member Nadine P. Winter disagreed yesterday before the Pennsylvania Avenue Development Corporation on whether the old Lansburgh department store should be used as temporary office space for city agencies or as a downtown site for small, displaced or minority-run businesses.

The difference is opinion emerged during discussion of a proposal by Barry to use part of the building as temporary office space for District of Columbia agencies and the rest as work and display space for arts groups under the supervision of the Washington Humanities and Arts Center.

Winter (D-Ward 6) the Council's representative on the PADC board, refused to vote on the proposal because, she said, the Council had not been consulted on it in advace. The measure was approved, anyway.

Later, Winter told a reporter that she felt the action nullified assurances the corporation had given earlier in the year to another group planning to use the facilities to house displaced, small and minority-run businesses. That group was told it would have an opportunity to bid to develop the facility before any other plan was adopted.

"Here the city has gone ahead and negotiated a short term lease and there's no respect for what has been said before," Winter said. "My concern is one of fairness. Before they come in with the 'city's' position, they ought to be in touch with us."

The disagreement underscored the often intense rivalry among various interest groups for precious space in the heart of the old downtown area at a time when the presidentially-appointed commission is coordinating a major change along the main street of the nation's capital.

During yesterday's meeting in the East Building of the National Portrait Gallery, Vernard Gray, director of the Miya Gallery, 720 11th St. NW, made an impassioned plea for the corporation to approve the mayor's plan, which would allow some of the arts groups to move in for as long as six years.

Gray said several artists in the area around the building at 8th and E streets NW have lived an uncertain life "from month to month" as "pawns in a political game" not knowing when they might be displaced by redevelopment plans that call for demolition of the aging buildings they now occupy.

"We feel that the city is backing us," Gray said, his voice sometimes breaking with emotion. "We want to know if the Pennsylvania Avenue Development Corporation is willing to back us to be in a place for five years where we can go in and know that the lights are gonna go on, the heat's gonna be there and the rats won't be running through.

Winter said after the meeting that she was not opposed to having the arts groups in the building. She noted that at an Aug. 20 meeting the corporation had agreed to allow the Urban Business and Economic Development Association one more opportunity to bid for a contract to lease the building not only to arts groups, but also to small and minority-run businesses.

Nathaniel Landry, vice president of the development association, complained that the Barr plan had eliminated his group from a chance to bid for the building. Barry told Landry after the meeting that he would be willing to consider a proposal from Landry's group to use some space in the building. Landry said he did not believe his organization, which gets its funds from the federal government, would be able to get money to do so because the Barry plan calls for leases of no longer than six years.

The mayor said yesterday that he did not know how much it would cost the city to renovate the facility. Two floors already have been rehabilitated and are being used by city agencies through a temporary lease that expires next January.

The arts group would have to raise its own money to pay for rehabilitation in the areas it would occupy. The group already has $250,000.