Klaus Schuermann dashed across the curved roof of the Hyattsville Armory and waved a long arm at Rte. 1 and the row of radiator repair shops, car dealerships and small printing companies. "This town is really on the move," he declared. "I think the businessman who doesn't take the chance now will regret it later on."

Schuermann, a real estate developer from Corpus Christi, Tex., who recently moved to Washington, has shelled out $490,000 for the old armory, a partial replica of Windsor Castle built during World War I, and says he's going to turn it into a sophisticated entertainment and commercial center.

Three weeks ago, a large section of the town, including the armory, became the first Prince George's district to earn a place on the National Register of Historic Places. City officials, who last month adopted a major redevelopment plan, say they plan to use the armory and the city's new historical status to sell Hyattsville to a doubting public.

Can Hyattsville rival Old Town Alexandria or Georgetown? It's too soon to tell. But the city plans to give redevelopment a good Texas try and see where it takes them.

"One success attracts another," says Mayor Tom L. Bass. The city's place on the historic register will prove "a selling point for real estate," he believes, and make the city eligible for special renovation loans.

This week the city will receive a $10,000 state grant to help pay a development officer to oversee the new development plan. The plan was refined by a Gaithersburg consulting firm from a proposal drawn up by Maryland-National Capital Park and Planning Commission.

A Local Development Corp. made up of volunteers was formed last year, and two months ago established headquarters in a bare basement office opposite the armory with furniture donated by the American Legion and local businesses.

The plans, which center on the downtown area of the city between Farragut and Jefferson streets on the north side of Rte. 1, call for a winding mall behind the armory leading south to the domed County Service Building. The mall would be bordered by trees and town-house style professional offices.

City officials say the plan, which will be modified as development progresses, also includes a "lawyers' row" of offices with a shared law library, a multistory car park, and a motel-condominium complex. In the last few weeks, officials have begun discussing concrete plans with local businesses and exploring financing methods. Much of the land needed already is owned by the city.

Council members also are considering whether to impose design standards aimed at improving the appearance of businesses--especially those along Rte. 1.

It was Rte. 1, once the main thoroughfare from Maryland into the District, that gave birth to Hyattsville. Christopher Clarke Hyatt established his general store on the side of the road in 1845, and residents fleeing the Civil War population boom in the District built houses along the road.

Rte. 1 has decayed in recent years, and its aging businesses have hidden the quiet residential streets lined with turn-of-the-century houses that lie beyond. If Prince George's suffers from "the ugly sister image," says Jim Welbourne, president of the Local Development Corp., "people use Rte. 1 as a symbol of that image."

This image doesn't sit too well with a city whose official motto is "A Great Place To Live." Unfortunately, said Bass, "the perception is real when you drive down Rte. 1, and that's what most people see. . . . There are a lot of businesses along Rte. 1 that shouldn't be along Rte. 1. They're good businesses, well-run, but they should be in an industrial area."

But planners were daunted by the prospect of trying to change the facade of Rte. 1 in the forseeable future, and are seeking instead to have new buildings "turn their backs" on the thoroughfare and face inwards to the mall.

Although Hyattsville has suffered the decay and loss of population (dropping from 15,000 to under 14,000 between 1970 and 1980) experienced by most Prince George's inner-Beltway municipalities, it has remained the economic hub of the county. It is the headquarters of the Washington Suburban Sanitary Commission, C&P Telephone in Prince George's, and several county government offices and departments. It has a District Court, which has spawned many private law offices.

But large numbers of people who work in Hyattsville "don't see the city as a downtown place to take clients out," Welbourne complained. "They go other places. . . . We have been told that the absence of a quality restaurant on this strip is one of the main drawbacks."

Not only would the refurbished armory fill this need, Bass said, but it would provide a center for night-life.

"In Georgetown and Alexandria, there is no parking and the bars are crowded. . . . I just feel if the place is a good place, people don't care where it is. Plus, Hyattsville is right in the middle of northern Prince George's, which is the most heavily populated part of the county."

One supporter of the redevelopment project is the Citizens Bank & Trust Co. in Riverdale, which has four branches in Hyattsville.

"If the plans that have been proposed come about down there, it's going to be a nice place," said John A. Miller, the bank's executive vice-president and a member of the LDC. "I think as time goes by something is going to be done. It's going to take a lot of money and a lot of work on the part of a lot of people. We're hoping for the best."

And for Schuermann, the view from the ramparts is rosy.

"I like the whole project," he says of his plans for the armory. "I've done unusual buildings before, and it's always turned out that I made a nice amount on the building. I might get five to seven times return on my investment here."

He says his plans for the armory, which for the past six years has been used as a warehouse for a fireplace equipment company, was inspired by Georgetown Park in the District. He plans to call the armory "The Castle on The Hill," he says, pointing out that the District has an armory, but only Hyattsville has a castle.

Schuermann plans a "European-type cafe" on the roof and two restaurants, one in the basement and one on the second floor. In the basement, which is divided into several small rooms, he plans small shops, and antique and fashion stores--"really a fancy place." He said he hopes to get a license to reopen the armory's shooting gallery and set up a gun shop next to it. Also planned for the basement, he says, is a small country and western dance hall.

At the front entrance, upstairs, he plans a small museum (a suit of armor already guards the doorways) and two small bars: a wine bar "with mellow music" and "a beer bar with a little bit of hot music for the younger folks; not the mellow type. Perhaps an Irish pub, because there are a lot of Irish people in the area."

Schuermann says he is now negotiating with several Washington area restaurateurs, but will not reveal their names, although he says he's confident contracts will be signed.

Although much remains uncertain, Mayor Bass says the redevelopment plans are "not just somebody's dream." He adds that the "negative attitude" the city once had toward itself is vanishing, and its citizenry is enthusiastic: "Our citizens have told us they want to be progressive. They don't want to stand still."