An empty lot in an Alexandria neighborhood north of Old Town could become the home of a new, one-story, 8,000-square- foot building to house the Department of Motor Vehicles.

But neighbors of the two-acre site, at the end of Powhatan Street north of Bashford Lane, are "up in arms," said Jean Caldwell, president of the neighborhood citizens association, and have come together to fight construction of the proposed building.

Currently, the state agency leases a building at 930 N. Henry Street. The lease, which costs the state $79,000 a year, expires June 30, and DMV officials say they are eager to begin building a new office to avoid signing another long-term lease.

At a recent meeting between DMV Commissioner Donald Williams and residents of the neighborhood, Caldwell said she wanted to stop the impending construction because of the potential traffic that would be generated in the area by the new building.

"We are totally opposed to the building," Caldwell said.

"The site is terrible for the city. There is too much traffic in this area already, and they are planning to put in only one entrance. Access would be horrible."

Williams said that other DMV sites have only one entrance and they seem to function without extreme congestion.

DMV officials said that during 1989 there were 197,761 transactions at the North Henry Street site.

The proposed structure, which will cost about $800,000, would provide drive-in window service for such business as renewing registrations and picking up decals.

In addition, residents could walk in and get driver's licenses and vehicle registrations. Drunken driving courses also might be held there. Driver's tests will be given at this site.

The site would have 67 parking spaces. The current building has 50 spaces.

Area residents at the meeting said they want to help Williams find another location for the building.

Caldwell said she also is meeting with city officials to voice her concern and help find a new site.

Although Williams agreed to hear proposals from neighbors at a future meeting, he said that he looked for an alternative site last summer by placing an advertisement in a local newspaper to swap the land, but received no response.

He said he first heard about the Powhatan lot from city officials.

Larry Grossman, chief of comprehensive planning for the city, said: "We're interested in keeping the DMV in the city and finding a new site for it. The point here is that the city has plans to redevelop the space they are occupying now, and we really don't want the state to purchase a block in that area."

State-owned land in the city is not subject to city taxes.

Part of the Powhatan site, which is zoned for commercial use, is owned by the state and part by the city.

The deed for the state-owned part of the land, 61,747 square feet, was held by the Department of Transportation until the General Assembly voted to transfer the deed to the DMV.

Williams hopes that the city will donate its part of the site to keep the DMV office in Alexandria.

Williams emphasized that the site is a good choice for fiscal reasons.

By not having to buy land in the city, he said he saved the state nearly $1.5 million, the amount allocated to buy land for the new building.

He added: "I have to make some sort of decision whether to renew our lease for three or five years. But if I have a piece of land to build on, it's not very cost-effective to continue leasing. I'm in a {time} crunch."