The District of Columbia, hoping to get some movement on the long-delayed redevelopment project atop the Gallery Place subway station, has negotiated a package of financing concessions with the developers to help them buy the block of city-owned land on which the project would be built.

The proposal, which still must be approved by the D.C. Redevelopment Land Agency (RLA), maintains the original selling price of $17 million set two years ago, but it requires only a $2.3 million down payment and financing over 15 years at favorable rates. It also allows substantial changes in the design of the project at 7th and G streets NW.

The agreement marks the second time in the past month that the city, in an effort to get key projects going, has offered sweeteners to developers chosen to buy choice city-owned sites.

Until recently, the District has required cash up front whenever it sold city land, but several of its major renewal efforts have bogged down in a series of delays for several years. The lagging economy and a glut of downtown office space have been major factors in the most recent delays.

Last month, the RLA approved reduced price and financing concessions to developers Oliver T. Carr and Theodore R. Hagans on their project at Metro Center, above the Metro stop at G Street NW between 11th and 13th streets.

The Gallery Place project is seen by the city as the eastern anchor of renewal efforts in the old downtown area, which used to be the city's main shopping area but which has been run down and neglected since the 1968 riots. The development team, Capital Landmark Associates, is headed by William B. Fitzgerald of Independence Federal Savings and Loan and developer Melvin Lenkin.

Under the agreement, the developers would be expected to start work on a hotel and residential portion of the project right away but could postpone construction on an office building at the site for up to three years. If the land for the office portion of the project, about 45 percent of the site, is not purchased within a year, it would be reappraised and a new price set.

The original proposal was for one "mega-building" with below-ground parking, a hotel lobby and stores on the ground floor, six floors of office space, five floors of luxury hotel rooms and a top floor containing apartments. The revised plans would have a hotel and residential complex built on the western portion of the site and the office building to be constructed later on the eastern portion.

The new financing agreement was negotiated by Ivanhoe Donaldson, deputy mayor for economic development, and approved by Donaldson and Fitzgerald on Friday. It was presented at a meeting of the RLA board yesterday.

RLA Board Chairman Nira H. Long said after the meeting that the board members "gave a tacit nod that it the agreement is in the right direction," and plan to hold a public hearing at the end of July.

The board did not react favorably, however, to the latest proposal of the developer of a third major project, on the 10-acre Portal site at the foot of the 14th Street Bridge, Long said. Donaldson has been negotiating with Banneker Associates, the developer awarded the site, since February.

The RLA board yesterday also received a new plan for redeveloping the H Street NE corridor, which was severely damaged in the 1968 rioting and which has been the target of various renovation efforts since. Construction should begin within six months on the major parcels still owned by the RLA, and this will help spur redevelopment on privately-owned sites, the report said.