Plans for an expensive housing subdivision next to Loudoun Countty's largest black community, just outside Middleburg, have been dropped "because of the bad publicity," according toAlejandro Orfila, secretary-general of the Organization of American States (OAS) and owner of the land.

The Wilna Woods subdivision of 43 homes, which would have commanded prices of up to $200,000, was to have been built on 44 acres of the 410-acre horse farm, International Horse and Land Co., owned by Orfila and Turner Reuter Jr., proprietor of Middleburg's Red Fox Tavern.

But the Loudoun County Planning Commission disapproved preliminary plans for Wilna Woods last week for the second time in four months, citing water and sewer problems it might pose.

The site is across the road from the village of St. Louis, a black community that developed west of Middleburg after the Civil War. It also is adjacent to a new, but virtually unused, $1.9 million sewage treatment plant built to end sewage problems in St. Louis.

"I'm not a developer, and I'm not going to do a project that creates such a commotion and gets the neighbors in an upheaval," Orfila said this week. "I was going to do something beautiful -- nice houses with a lake . . . in an area where there are mobile homes and derelict houses and a sewage treatment plant. I'm not nuts or masochistic. I wasn't going to do something that would ruin my land," which largely surrounds the 44-acre site.

Though Orfila said the proposal for a 43-house subdivision is dead, he said he may allow eight to 10 houses to be built eventually on that part of the site that is within the service area of the sewage plant.

"But as far as the (Wilna Woods) project is concerned, forget it," he said. "I don't want to be seen as a villain, the stranger from Chicago or some place coming in to destroy beautiful Middleburg."

The other nine-tenths of the Orfila-Reuter property could never become subdivisions, Orfila said, because restrictions in the deeds prohibit the sale of parcels of less than 50 acres.

The battle over the subdivision raged primarily over the water and sewage problems such a large development could cause for the adjacent 100-year-old black community and nearby farms. Homes in the development would have been built on small lots, all with wells and many with septic tanks.

But St. Louis residents also were worried that an expensive development next door would increase the value of their land, raise taxes and force them out. "My tax bill just doubled this year," said Irene Trammel, a widow who has lived in St. Louis 25 years, after last week's planning commission meeting.

Many of the 72 houses in St. Louis have no water because their wells have dried up, forcing residents to carry water from neighbors' wells. Residents worried that dozens of new homes and wells a few hundred yards away could endanger the remaining St. Louis wells.

Their fear was echoed at the meeting by geologists and hydrologists from a Rockville firm hired by the St. Louis Area Protective Committee, an alliance of St. Louis residents and the owners of surrounding estates who opposed Wilna Woods.

"There is a serious question of whether you can develop a well for each of these (new) houses . . . and whether they in fact would interact with the existing wells in the St. Louis community," Ronald Smith, of Woodward-Clyde Consultants, told the commission.

Smith said a detailed study of the land, looking at both the water and the sewer problems, should be done before any development is approved. He questioned whether "imposing on half-acre lots both wells and septic tanks" was desirable or possible on the hilly terrain and concluded that "this is not an ideal site" for a housing development.

As St. Louis resident Roland Baltimore told the commission: "I've lived here for 27 years and have had to put in three wells because the water just disappears. The first well was 160 feet, then 200 feet and the latest one's 280 feet. So we got a water problem." Baltimore presented a petition from 168 St. Louis residents opposed to the development.

For decades, the sewage problem in St. Louis was as bad or worse than the water problem. But the county government stepped in, with major assistance from the Environmental Protection Agency, and built the $1.9 million sewage treatment plant that opened two months ago.

So far, however, only the elementary school and one St. Louis resident have requested a hookup -- which costs $800 a house -- according to Kenneth Shelton, general manager of the county sanitation authority.

A consultant's report had urged the county to put in a public water system, fed by one or more large wells, as well as a sewage system. But the water system would have cost $425,000 two years ago, Shelton said, and there were no federal or state grants available to help the county build it.

The county's share of the St. Louis sewage system was $550,000. It is built on 13 acres of the Orfila-Reuter property, condemned at a cost of $92,000, Shelton said. "That was $42,000 more than we expected to pay," he added.

The condemnation cost was unbudgeted and is the reason St. Louis residents are being required to pay an $800 hookup charge, Shelton said.

"There was almost unanimous support in St. Louis for this, and I thought they'd be beating on my door to hook up," Shelton said. He is worried that the plant, which is expected to cost more than $10,000 a year to operate, may sit virtually unused because the hookup charge may be too expensive for most St. Louis residents.

The initial Wilna Woods proposal was for a cluster development that would have put houses on half-acre lots and would have left the rest of the 44-acre site as open space, with a lake and woods to screen the sewage plant. The planning commission voted against a cluster development because of concern about the water supply in the area and because county regulations require that cluster developments have "an approved general water supply and sewerage system."

Orfila and Reuter still could build 43 houses on one-acre lots, subject only to health department approval of the drainage fields for those lots that had septic tanks since there are no county restrictions on well drilling. But Orfila says that plans for a major subdivision are dead for now.