After months of hearing about the difficulties of redeveloping the riot-scarred H Street corridor, Washington's urban renewal agency was cheered last week when developer Ozzie Clay said he wanted to build a $700,000 shopping center at Eighth and H streets NE, a community crossroads.

Agency officials were particularly impressed because Clay had invested his own money in the corner, buying most of the land, and he just wanted the city to sell him a small vacant lot it owned at the western end of his holdings.

Clay's actions were in contrast to the events of the last 18 months when the Redevelopment Land Agency reclaimed five city-owned parcels along H Street after developers failed to proceed with their plans. The agency is scheduled to decide next month whether to revoke the development rights of the developers who have the largest H Street site, as the RLA staff has recommended.

Clay plans to transform the four empty and vandalized two- and three-story buildings. A fast food restaurant, a variety store and a shoe store would occupy the first floor, and doctors' and lawyers' offices would be on the second and third floors. A 7-Eleven that closed earlier this year because of vandalism and thefts will reopen after the rehabilitation, the franchise's owners have assured Clay. He owns the building.

"I look at H Street differently from most developers," said Clay, sitting in a small office of his building at 1523 L St. NW. "Even though H Street has remained a blighted area, you go down there, especially on weekends, and it is littered with people, although there are few businesses there to attract them. So I think H Street deserves a serious look."

"We need this kind of aggressiveness on H Street," said housing director Robert L. Moore, who is also an RLA member, as he congratulated Clay.

James Kerr, head of the department's development administration, said after the meeting, "Clearly we are delighted with his development scheme and if it comes to fruition we feel comfortable that it will be a boon for the area."

Clay and RLA will now negotiate a sales price for the land. Clay said he plans to begin construction in 60 days because he has leased most of the space. "We're expecting great things," he said.

Clay, 39, a former Washington Redskins flanker in the mid-1960s who entered the real estate business in 1969, is a low-key businessman who owns three other small neighborhood shopping centers and builds luxury houses in McLean.

Before the 1968 riots, the 13 blocks along H Street between Third and 15th streets formed one of the city's major shopping corridors.

Many of the working class families who made up the bulk of Northeast's population from Union Station to the Anacostia River seldom shopped downtown because they could buy clothes, washing machines, shoes, hats, gloves, auto parts and sporting goods on H Street.

But the fires of the civil disturbances left half of the stores damaged and some in smoldering ruins. Some of the merchants came back, others sold out, others simply never reopened. The city tore down the ruins, bought up 15 of the parcels, built parks on the largest and tried to interest developers in rebuilding.

While the churches along Seventh Street, under the leadership of the Rev. Walter Fauntroy (now the city's congressional delegate) led the redevelopment of that riot corridor and the city poured millions into new housing along 14th Street, another riot victim, H Street, lanquished.

Besides the parks, the only other new developments have been about 550 subsidized apartments built mostly for the elderly and handicapped.

The biggest boost to H Street came last year when its eastern neighbor, John Hechinger, moved his lumber warehouse from Bladensburg and Benning roads and replaced it with a 30-store suburban-like mall that is dominated by a Hechinger store and the largest Safeway on the East Coast.

But there was no ripple effect on H Street. In May, when the city offered two H Street parcels for sale, they got no bidders for a large parcel between 12th and 13th streets and Clay's was the only show of interest in the second, because of its proximity to his own property.

At the same RLA meeting last week, developer Joseph Horning and Realtor Carlton Jones proposed building a fast-food restaurant three blocks west at the corner of Fifth and H streets NE. The two were supposed to build town houses on part of that site but told the RLA earlier this year that it was impossible because of high interest rates. The agency took back the housing portion and left the developers with the commercial site.

In March, the agency reclaimed a small parcel at 11th and H from real estate developer Jerry Lustine after three years of inaction. Last month it was returned to him, after he showed that he had signed a lease with High's for a store on the site.

The other large parcel, between Sixth and Seventh, recently received a needed zoning change, but the developer, H Street merchant Lorraine Alexander, has told city officials she plans to charge $60 a square foot for the office space planned there. The city's most expensive office space at Connecticut and K streets NW rents for less than half of that amount. Some city officials say privately the project looks financially unfeasible. CAPTION: Picture and illustration, Ozzie Clay plans to spend more than $700,000 to replace a long-absent business center at this corner in Northeast, along the lines of the sketch below. By Gerald Martineau -- The Washington Post