The Fairfax Community Theatre Inc., rebuffed in its efforts to purchase a vacant Fairfax City house to build a permanent home for its performances, has rejected a proposed lease offered by the Fairfax City Council last week.

Meyer (Mike) Cohen, president of the 18-year-old theater company, said the troupe now plans to look for another site, probably in Fairfax County, to build its long-awaited 400-seat theater.

Last month, the Fairfax City Council voted 5-to-2 to sell the vacant Kutner House and its surrounding 10 acres off Rte. 50 to the theater company. The theater group has planned to renovate the house, which has been slated for demolition, spruce up the grounds and build a new theater adjacent to it. The project was estimated to cost $1.5 million.

But the deal fell through after it was learned that state law requires 5 1/4 votes, instead of 5, to sell public land to private interests.

The council then offered to lease the property to the troupe for $1 a year for five years, the longest possible lease state law allows without public bidding. Cohen had said last week that a longer lease, preferably 40 years, would be needed before banks or contributors could be convinced to help underwrite the $1.5 million renovation project.

And a longer lease, he noted, could have forced the theater group to compete with more wealthy organizations in the bidding.

In addition, the group, Cohen said, was unhappy with other lease provisions, including one that required substantional renovations to Kutner House.

Last week, the City Council unanimously amended the lease to require substantial renovations only if the house were converted to a theater. If used primarily for such things as meetings, storage or set construction, the lease required only that the house be kept in similar and safe condition. Other amendments would have assured public access to the grounds and given the tenants a 90-day escape clause, provided the terms of the lease, including "proper maintenance" of the property, were kept.

But, Cohen said, definitions of what consitutes default were too vague and the company's board of directors unanimously rejected the lease offer.

"It says 'proper maintenance' and if we're not properly maintaining anything, then we're in default," he said. "We saw fights coming . . . over what constitutes mowing -- is it one inch off the ground or three inches? The building needs to be painted and if we don't, we're technically in default and we don't want to paint the building."

For now, the company is still in production and still looking for a home.

And Cohen invited the City Council to be the troupe's guests at opening night of "Side by Side by Sondheim" May 16 at the Archer Elementary School in Vienna.