In 1883, Washington Realtor Benjamin F. Gilbert saw a need for a retreat where Washington residents could escape steamy summers in the dirty and crowded post-Civil War capital.

Gilbert bought 100 acres near a Victorian train station on the Maryland-District line for $65,000. His idea was successful; houses and hotels sprung up and shops soon lined the streets of the thriving residential community known as Takoma Park.

Today the Baltimore and Ohio Railroad no longer serves Takoma Park, but a Metrorail line has replaced it. Although the older part of the city is no longer a resort, the quaint stores and houses remain, some in various stages of deterioration.

For years there has been talk of restoring the five-block section known as Takoma Old Town, and soon there may be action. The City Council has before it the Takoma Old Town Commercial Revitalization Plan, an extensive proposal to develop an Old Town district similar to those in Alexandria, Bowie and Kensington.

The project, expected to take two to five years, would involve new construction as well as restoration of the old buildings. New offices, commercial businesses and housing in the district would be designed to preserve its Victorian flavor, and the plans include landscaping, open spaces and accommodations for increased traffic.

"We are ready to begin as soon as the council approves a plan and we get the funding," said Alvin Nichols, chairman of the coordinating committee that prepared the proposal. "We are ready and excited about it."

Planners say they can't estimate the project's cost, but Nichols said it will take at least $500,000 just to make the necessary public improvements: sidewalks, utility lines, curbs and gutters, street resurfacing, benches and bicycle tracks.

Alan F. Shaffer, a committee member and city assistant administrator, said more than $200,000 of a Community Development Block Grant has been committed to the Old Town project and he expects further federal funds to be added, although he would not predict the amount.

Shaffer said whatever plan is adopted for the area must be exciting enough to attract the private investment that is critical to the project's success.

The committee's plan states an intention to "unite business, lending institutions, local government, and the citizens, in the . . . commercial revitalization of Takoma Old Town."

The planners are asking a lot. They are depending on cooperation from businesses in the old sector, some of which may have to spend as much as $9,000 to conform with the plan's design and improvement standards.

John Murphy of Murphy's Auto Parts on Carroll Avenue said most of the Takoma Park businessmen he has spoken to are taking a "wait-and-see attitude."

"Many want to see the final plan the council chooses before they make any sort of commitment," said Murphy, a business member of the coordinating committee. "Although no one is totally negative, some are not sure that the return in business will be worth their investment."

The planners also have to look to the city's residents, some of whom have opposed such a development for two decades because they feared it would deface their neighborhood.

More concrete reactions from the business and residential communities will likely come at the first public hearing on the plan Tuesday.

Mayor Sam A. Abbott, who has opposed other revitalization schemes in the past, likes the present plan. Citing both citizen and business participation on the committee that prepared the proposal, he said he is optimistic that some form of the plan will win community approval. The mayor, however, was not willing to predict whether the council will approve.

"I myself was very active in fighting commercial development and higher density, but the plan calls for only one area where a high density of business, residents and offices will be located," he said. "And this area will be under local control. Everything will be explained at the public hearings, and the plan is open to changes."

The committee has suggested taking advantage of a zoning status called Transit Station Mixed. It allows a high-density combination of commercial, office and residential uses within a small area, if the property is not far from a transit station. Takoma Old Town is only a few miles from the Takoma Park Metro stop.

A commercial-office-residential complex would be the centerpiece of the development. The suggested structure, about 40,000 square feet, would be built on Laurel Avenue property now owned by the Citizens Bank of Maryland.