The D.C. government held a well-orchestrated, upbeat public hearing last night on a proposal to build housing and retail space on the former Children's Hospital site and nearby property in the depressed Shaw area that the city acquired from Jeffrey N. Cohen in a controversial $12.5 million deal.

The list of speakers was stacked with representatives of a nonprofit group taking part in the project, businessmen, activists and residents who praised the proposed development nonstop for nearly 2 1/2 hours.

"It is an important step toward the needed revitalization of this community," said the Rev. Henry C. Gregory III, pastor of the Shiloh Baptist Church.

Percy Ellis, principal of the Shaw Junior High School, declared: "In 17 years, Mr. Cohen is the only one who has come to this community with money. Everyone else has come here with lip service."

Only after the crowd of several hundred at the Walker Memorial Church, 2020 13th Street NW, had begun to thin were opponents or critics allowed to speak.

"I'm happy to say I'm the first person to come to raise some serious questions about what we're doing here," said Gene Bradford, representing the Coalition of Black Developers.

Bradford complained that blacks continue to be the "economic slaves" to white businessmen, and warned that "grandiose" redevelopment plans organized by white investors and nonprofit community groups are not necessarily the answer to revitalizing the area.

"Black folks have got to learn that nonprofit strategies are not right for black folks," he said.

Robin J. Hailstorks, chairwoman of the 14th and U Streets Coalition, complained that her group has been provided with inadequate information about the project and intends to remain neutral until the city and the developers respond to her group's concerns.

David Parker, chairman of Advisory Neighborhood Commission 1B which includes the 14th and U Street area, also criticized the secrecy of the planning for the project and protested that critics were relegated to the bottom of the list of speakers. "We're objecting to the manner in which you're handling this," Parker told William C. Jameson, a city official who served as hearing officer.

District officials, Cohen, leaders of the Shaw Coalition Redevelopment Corporation, a nonprofit community group, and local bankers negotiated an agreement under which the city acquired the Children's Hospital site and five nearby properties from Cohen on Feb. 1.

It was an interim step in helping Cohen and the nonprofit group either to lease back or purchase the land for the development of retail and office space and 1,000 units of low cost housing on the sites.

A consortium of banks provided short-term financing, with the city agreeing to repay the loan in a year and being assured of recovering at least half its investment with revenues from the proposed redevelopment, or from Cohen.

Ibrahim Mumin, a leader of the nonprofit group, said the proposal would be a major step toward reviving the depressed Shaw area to its former prominence as a center of black activity and entertainment.