The Arlington County Board last night unanimously selected a partnership headed by the Charles E. Smith Co. as the developer for the massive Courthouse Metro-stop project, taking the first step toward entering a joint development project with the private entrepreneur.

County officials hope that the decision, reached after a two-week delay to allow citizens time to study three competing plans, will point the way toward rejuvenating the aging Wilson Boulevard corridor and set what they call a "standard of excellence" for development around other Metro stops in the county.

"I think this will give the county an identity," said Robert H. Smith, president of the Smith Co. "Arlington County will now have a special signature."

The $150 million development, which will include a 23-story hotel and 40,550 feet of retail space, also will help Arlington cash in on government-owned land values that have been vastly increased by the arrival of the Metro subway system.

Under the terms of last night's decision, the Smith Co. has the right to lease or buy 6.4 acres of prime county land across the street from the new Courthouse Metro stop. The site, owned by the county, currently is being used as a gravel-topped parking lot for county staff.

Calling the decision a "very significant event", County Board Chairman Stephen H. Detwiler (R) said that the board's decision graphically will demonstrate to other developers the county's wishes for open space, a broad range of retail facilities, and high-quality construction.

Detwiler said proposals by the two other finalists, the Cavalier Development Co. and the Court House Plaza Development Group, also met the county's criteria, but that in the end the board members sided with the group endorsed by a county selection panel.

With last night's decision, the county committed itself to negotiating with the partnership of the Smith Co. and the Artery organization, a Chevy Chase-based developer, over the financial arrangements with the county along with specific details of the development plan. Preliminary proposals submitted by Smith-Artery to the county call for three public squares connected by meandering sidewalks, as well as two 12-story office buildings and a 30,000-square-foot addition to the county courthouse.

But the board members made it clear last night that the Smith-Artery proposal still is open to substantial revision in the coming months of negotiations.

Completion of the first phase of the project is not expected for two to three years.

Representatives of the Arlington Civic Federation, an umbrella organization for various civic groups, had complained that a selection panel appointed by the board had failed to solicit enough local input in choosing between the three finalists. Last night, N. Edwin Demoney Jr., the group's president, retracted the group's objections. Saying that county officials had made a full accounting to the federation, Demoney said that, "we now have a much better appreciation for why the selection panel made the decision it did. We have become much more comfortable with the process." CAPTION: Picture, The winning developer's design for the $150 million Arlington Courthouse Metro station complex. By Charles E. Smith