The Arlington County Board last night approved construction of the Olmsted Foundation Building near the Clarendon Metro station, which was opposed by federal officials as a "visual intrusion" on the nation's capital and by some citizens as too tall.

The board approved a 14-story, 200-foot height for the building, which will have two floors of shops, restaurants and other commercial uses topped by 12 of office space, as a compromise on the height issue. The building would be 31 feet over the county's building height limit. The developers originally proposed a 15-story, 221-foot structure.

"This is to be the commercial and retail hub of a new Clarendon," said board member John G. Milliken.

Last month the board resolved to maintain its height limit "except in clearly appropriate circumstances." Board members said the Olmsted building should serve as an Arlington landmark and therefore should be allowed to exceed the height limit.

Board members granted the height exception in exchange for a tunnel to the Clarendon Metro station, a plaza and a narrow park along Wilson Boulevard in front of the building.

The National Capital Planning Commission attacked the original proposal, saying the building would be a "significant adverse visual intrusion" on the view west from the Capitol Building. That agency also objected that the structure would mimic" the Washington Monument because of a pyramidal design feature at its top. The developers and the county staff disagreed with that assessment.

Area residents were split on the building proposals, with some opposing it as setting a "very dangerous precedent" by waiving the height limit on the building.

Robert Baker, Arlington site review coordinator, said it is believed the building on Fairfax Drive near Wilson Boulevard will encourage new construction and renovation at the center of Clarendon in the heart of Arlington County.

The Olmsted Foundation is an endowment established by retired Maj. Gen. George Olmsted to provide scholarships for outstanding military officers. Olmsted, an 81-year-old Arlington resident, is chairman of the board of the Washington-based International Bank that owns IB Realty Corp., developers of the building.

The board's vote for the project was 4 to 1, with Dorothy T. Grotos casting the dissenting vote.