The Alexandria City Council yesterday unanimously approved setting up a city-funded, 65-bed shelter for the homeless at 2349 Mill Rd., despite uncertainty over whether a lease can be obtained.

Under the plan, the city would lease the site for 10 years from its owner, the Washington Metropolitan Area Transit Authority, and would place up to 10 modular units on the property.

City officials said that setting up the shelter would cost about $500,000 and that contracting with a nonprofit organization to operate the facility would cost $268,000 to $429,000 a year.

But start-up of the shelter is uncertain because of concerns raised by the U.S. Urban Mass Transit Administration, which oversees Metro. UMTA officials have said that if the Mill Road site is not used for transportation purposes, it must be sold.

If an agreement cannot be reached with UMTA, Alexandria officials will have to look for another site and consider another special use permit.

The council yesterday approved such a permit for the Mill Road site, which is near Telegraph Road and the Capital Beltway and is zoned industrial.

The council's decision came after representatives of support groups for the homeless said the problem of people needing shelter has reached proportions that warrant a greater role by the city.

The speakers emphasized that not only has the number of homeless people increased, but the types of people without housing have changed dramatically.

"We can assure you that they are not just bums, drunks and bag ladies," said Gus Hall, director of Christ House, a private shelter in Alexandria. Hall noted that many of the homeless are people who cannot afford to live in Alexandria.

"Alexandria needs a shelter for families and for single individuals," he said. "We are not now filling this need."

According to council staff reports, there are about 100 homeless people in Alexandria each night. Last year, the city spent $110,000 to house 1,363 homeless people in city motels, according to the reports.

The motel program supplements two privately operated, nonprofit shelters in the city, Alive and Christ House. Alive operates in Old Town and can accommodate 12 people, while Christ House can accommodate 16, according to Hall.

The new shelter could begin operation as early as January.

In other action, the council unanimously voted to deny approval of a special use permit for a 2.4-million-square-foot office complex proposed by LNT Associates.

The complex, proposed for a 22-acre site on Eisenhower Avenue between South Van Dorn Street and Clermont Avenue, could still be built if its height is reduced to 77 feet from the proposed 150.

Barbara Beach, attorney for LNT Associates, said the developer still plans to build at the site, located in the Eisenhower Valley, a 125-acre belt of land running east and west between the Beltway and Duke Street. City officials regard the area as an ideal location for high-density commercial development to increase the city's tax base.

The city has spent about $30 million in the Eisenhower Valley area to correct flood-plain problems and to improve roads, said Dayton Cook, director of transportation and environmental services.

Several speakers at yesterday's council session complained that the LNT project would significantly increase traffic in the area and would not meet certain provisions of the city code.

Another key point in the council's deliberation appears to have been a possible tenant at the site.

Beach said the Navy is a potential client for the project. Mayor James P. Moran Jr. expressed concern that if the federal government were to buy the site, the city would lose real estate tax revenue on what would be its largest office development.

Council member Redella S. (Dell) Pepper said that denying the special use permit will "very likely make the site a less appealing choice to the Navy and, in fact, an unacceptable choice."

In other action, the council: Interviewed six School Board candidates, including three incumbents. The council is expected to make selections for three board seets June 23.

Voted not to make Pendleton and Wythe streets a one-way pair between North West and North Fairfax streets. Deferred action on establishing parking controls in Old Town North. Approved a new height district for an area bounded by First Street to the north, North Pitt Street to the east, the Oronoco Street vicinity to the south, and Height District No. 1 to the west. The height limits in the new district are 60 and 84 feet.