The NAACP, after negotiating with District officials for nearly a year, has decided not to move its national headquarters from New York City to a city-owned building on 14th Street NW.

NAACP public relations director Denton Watson said the building, the former Hines funeral home, was rejected because it was too small to house the organization's staff of more than 100. The NAACP is continuing to look for space in both Washington and New York, he said.

City officials offered the NAACP the former Hines Funeral home building at 2901 14th St. NW for a new headquarters last April after the organization, squeezed by escalating rents in New York City, let it be known that it was considering moving its headquarters. The NAACP received exclusive rights to purchase the building six months ago.

Yesterday Watson said that not only was the building too small, but "we weren't in love with the area." He would not explain what he meant but added, "The area was not the attraction, but the building."

That part of 14th Street, in the heart of an area that still bears the scars of the 1968 riots, is a favorite haunt for drug dealers.

The NAACP's decision was revealed yesterday at a meeting of the city's urban renewal agency, the Redevelopment Land Agency.

At that same meeting, the RLA for the third time granted the developers of the Portal site in Southwest an extension of the deadline for reaching agreement with city officials on a sale price for the 10-acre tract.

But the RLA board, over the objections of the development team's attorney, also adopted a resolution requiring a sales agreement be reached by April 1, or the developers would lose their rights to the project. When the project was initially awarded a year ago, the RLA set last September as a deadline for agreeing on a sales price.

The RLA board yesterday also adopted a resolution requiring the development team pay at least $45 million for the parcel. Sources close to the negotiation between city officials and the developers said the development team has so far offered to pay the District much less.

Lee Narrow, the team's attorney and a partner in the project, unsuccessfully objected to the $45 million price tag for the land, arguing that setting the price was part of the negotiations.

In addition to Portal, the RLA in the last four years has awarded rights to redevelop three other major tracts of downtown, city-owned land. No winning developer has actually purchased his land, and none of the developments is underway.

In December the city and developers Oliver T. Carr and Theodore R. Carr reached an agreement to settle their dispute over Metro Center, in the middle of downtown. But that agreement, which calls for the city to share in the profits of the project in return for sharply reducing the amount of cash that the developers must initially pay for the land, has never been made public.

Across the street from Metro Center, a group of developers led by Nathan Landow have been prevented from constructing a new office building at the southwest corner of 12th and G streets because of lawsuits filed by owners of small businesses at that location.

Five blocks from Metro Center, another city project, Gallery Place, at Seventh and F streets NW, has been at a standstill for more than two years because the city's slumping market for office space has created difficulties in financing the project.