Some may say it looks ridiculous . . . and while it does look funny from the street, it's not a joke," said Karen Gordon of Don't Tear It Down, the preservation group that won a five-year battle to preserve Red Lion Row in the 200 block of I Street NW.

The remains of Red Lion Row, the 19th century block of buildings that soon will become the Victorian front for a $40 million office-retail complex, resemble a Hollywood set--almost everything behind the propped-up brick facades is demolished.

It is no joke to George Washington University, which is spending about $5 million of the $40 million to preserve and reconstruct Red Lion Row, named after a tavern in one of the buildings. The university agreed to incorporate portions of the historic buildings into a 10-story office building and glass-roofed shopping arcade that soon will be the university's fifth major downtown investment building.

The university, which had a 1981 endowment of $21.8 million, has become a major developer in its Foggy Bottom neighborhood in order to help pay school operating expenses. "Our land is our endowment," Assistant Treasurer Robert Dickman and other GW officials have said in response to preservationists and Foggy Bottom residents who have criticized the university for replacing small residences with high-rise offices and school buildings.

Red Lion Row is the last investment building planned within GW's 19-block campus area, Dickman said last week. GW already owns and leases three nearby office buildings: the annex to the World Bank near 19th and F streets NW, and the Henry and Edison buildings on Pennsylvania Avenue, leased by the National Academy of Sciences and the Potomac Electric Power Co., respectively. The university's old medical school building at 14th and H streets NW has been demolished and another GW office building is under construction there.

The university will not disclose revenues expected from these rental properties, although the three existing investment buildings produced about $750,000, according to the 1980 school budget.

The Red Lion complex, which faces Pennsylvania Avenue across a small park, is expected to be completed by the end of 1983, according to Dickman.

Don't Tear It Down, which went to court twice in the mid-1970s to block demolition of the buildings, initially opposed the GW plan but later agreed that major portions of the buildings should be demolished.

"The university is preserving exactly what it agreed to preserve in its agreement with Don't Tear It Down and the Joint Committee (on Historic Landmarks)," said Dickman.

Don't Tear it Down's Gordon said last week "the Red Lion Row buildings were not in great shape, with rotten wood and disintegrating brick, and we were finally convinced" that much of the buildings would have to be demolished. "But they will be built back on the original footprints and to the same height, preserving their small scale," the streetscape and the Victorian feeling of the block, said Gordon.

In its agreement, GW lowered by 17 feet the height of the 11-story office building it initially proposed, and eliminated the controversial mirrored-glass roof for the shopping arcade that would have been visible from Pennsylvania Avenue.

The battle over Red Lion Row, the last 19th century block of buildings facing Pennsylvania Avenue west of the White House, began in 1976 when the previous owner of several of the buildings began demolishing them. The city was considering declaring the block an historic landmark at the time and Don't Tear It Down sued to halt the demolition.

Gordon said last week that the fight over Red Lion Row, while it managed to preserve only the facades of the old buildings, was important "because it forced the city to pass a much stricter historic preservation law. The old law wasn't working and Red Lion Row provided the impetus for the new law."

Prior to 1978, city officials could delay, but not prevent, the demolition of historic buildings here. The new law, the Historic Landmark and Historic Preservation Act, is one of the toughest in the nation and now protects nearly 15,000 buildings in historic districts as well as individually listed city landmarks.

The old Red Lion Row buildings are being incorporated into the office complex in the same manner that the New Executive Office Building was built behind a row of 18th and 19th century buildings facing Lafayette Square. There, however, the old buildings were preserved in their entirety. John Carl Warnecke is the architect of both projects.

No tenants have been approved yet for the office space and two dozen shops in the arcade, Dickman said last week. CAPTION: Picture 1, The 19th century Vitorian character of Red Lion Row, at 20th and I Streets NW, will be retained as the front of a $40 million office-retail complex.; Picture 2, Only the fronts of 19th century buildings remain as the rest of the block is cleared to make way for retail-office complex. By Paul Bernstein for The Washington Post