A group of Northwest community activists and businessmen announced yesterday that they will move foward with plans to hold an Adams-Morgan Day festival this year, reversing an earlier decision to discontinue the annual event.

The 10th annual festival, scheduled for Sept. 13, will be modified, with fewer vendors and a new location, in response to complaints from some area residents and business owners that it had grown too disruptive, drawing more visitors than the area could safely handle.

"This event has become an institution in this city," said D.C. Council member Frank Smith (D-Ward 1), who played a key role in reorganizing the festival after previous organizers announced they were pulling out. "It is too important for us to let it just fall by the wayside."

Beginning as a community block party, Adams-Morgan Day has become a popular showcase for the ethnic diversity surrounding Columbia Road NW and features a distinct Hispanic and Caribbean flavor. The event is recent years has drawn crowds of 100,000 or more, with visitors competing for elbow room.

But longtime organizers, faced with growing opposition to the crowds, noise and occasional rowdiness, and beset with mounting logistical problems, recently decided against another festival this year.

Smith, joined by a new group of organizers at the group's office yesterday, said this year's event will be moved away from residential blocks on Columbia Road to the area's business section on 18th Street.

Organizers also hope to reduce crowding by cutting by a third -- from 450 to 300 -- the number of vendors participating. And in response to complaints that the festival did not adequately represent the area's majority black population, Smith said there will be more emphasis this year on black entertainment.