The five-member board of the District of Columbia's urban renewal agency threatened to resign yesterday if the City Council passes legislation allowing it to veto the board's selection of developers to receive lucrative redevelopment sites.

The agency's chairman, Nira Long, speaking at a hearing on a bill that would give the council the right to review and possibly reject the board's selections, said, "If the council should pass this bill, the present board would feel it would no longer be necessary to serve."

She was told by council member Charlene D. Jarvis (D--Ward 4), chairman of the council's housing and economic development committee and the bill's author, that if the members of the Redevelopment Land Agency board resigned they simply would be replaced.

"This council really intends that the council be involved in this process" of picking developers because the decisions involve millions of dollars in potential revenues to the city and the developers, Jarvis said.

Council members who favor the proposal sparred over the bill with Long and city housing director Robert L. Moore, another RLA board member who opposes the measure. It is the first time in the 35-year history of the city's urban renewal program that the agency is being asked to share some of its power in the selection of developers. The bill comes at a time when the urban renewal agency only has one major site left to sell -- the Portal Site in Southwest Washington at the foot of the 14th Street Bridge.

Most of the city's urban renewal parcels have been sold, including six prized parcels in downtown that would not be affected by the bill, if it is approved. Aside from the Portal Site, the only other city holdings still to be sold are small parcels along 7th and 14th streets NW and H Street NE, Moore said.

Council member John A. Wilson (D-Ward 2) said the debate actually concerned "who will have the authority to give away large tracts of land to people with large amounts of money. If the mayor and his staff can deal with all these developers, let the council deal with the developers, too."

Both Long and Moore said that council review "would open a Pandora's box and get it the selection of a developer into the realm of politics."

Council member Nadine Winter retorted, "The RLA board is one of the most political agencies in the city."

The other RLA board members are the Rev. Ernest R. Gibson, a Baptist minister; Stephen Klein of the Agency for International Development and consultant Judith Jenkins, all of whom oppose Jarvis' proposal.