When its new state-of-the-art facility is finished, Covenant House Washington will move into a spacious 25,000-square-foot permanent site, complete with an in-house library, a recreation area and a computer learning lab for the young people of Southeast it serves. There will be a cafeteria in addition to comfy classrooms and enough space for a day-care center for clients, meeting rooms and free parking.

But the housewarming for the dreamy community service center at Southern and Mississippi avenues SE won't take place until early 2001, at best. So for now, Covenant House is just renting space.

And therein lies a problem.

A doubling of the nonprofit organization's rent is threatening some of its programs that target at-risk youth in one of the city's poorest areas, officials said.

For 3 1/2 years until the increase went into effect last month, Covenant House paid $11,000 a month for space at 3400 Martin Luther King Jr. Ave. SE owned by the National Children's Center, a nonprofit organization that assists developmentally disabled people in the District.

Center officials said they raised the rent in part because it is their right, because they desperately need the space and because they are losing several hundred thousand dollars a year as long as Covenant House remains there.

Executive Director Vincent Gray and other Covenant House officials said they don't mind a rent increase but that doubling the rent is unfair, "punitive" and ultimately harmful to their programs, which already have begun to feel the pinch. Covenant House has a $4.2 million annual budget.

H. Alan Young, general counsel for the National Children's Center, which has a $31 million annual budget, contended the organization has been more than understanding.

"We're the nice guys, and this is the kind of thanks we get for it. We want our own property back," Young said. "I don't think we're being unreasonable in that regard."

A child development and adult training program run by the center would take Covenant House's place should it move out, Young said. He added that the Children's Center has been forced to look for additional space in the interim.

"We were taking a shellacking for the first 3 1/2 years," Young said, referring to the $11,000 monthly rental rate. "We're not IBM. We're a not-for-profit as well."

On that, both sides agree. But Covenant House officials also insist they are getting a raw deal.

"There's never been any specificity to the programs and services they were developing to go in there," Gray said. "I don't buy the compelling program and services argument."

Covenant House began leasing space at the center in February 1996.

In March 1998, the National Children's Center hired Arthur Ginsberg as executive director, and he established a plan to use the space at the center "more effectively," Young said. Ginsberg declined to comment for this article and referred questions to Young.

In June 1998, the center sent Covenant House a letter instructing it to vacate the building by the beginning of August. It caught Gray by surprise and also spurred angry reaction from community activists who met in support of Covenant House. Eventually, the two organizations reached an agreement that allowed Covenant House to remain at the facility until June 30, 1999, with no increase in rent. But the agreement said Covenant House would be responsible for triple the rent as a penalty if it remained past that date.

"At that stage we had a gun to our head, so we signed an agreement that we were going to get out," Gray said.

Covenant House officials created an eight-member relocation committee last summer to find another temporary site. Its search focused primarily on space available east of the Anacostia River, where most of Covenant House clients live, but ultimately it had to extend its search to other D.C. neighborhoods.

By December, the search committee had identified at least 37 sites, but it found all to be in too bad a state of repair, too far from its targeted service community, too small or simply not available, spokeswoman Cheryl Head said.

In January, Gray contacted the Children's Center to determine whether Covenant House could continue leasing there until its new home was built. A few months later, Gray said, he and Ginsberg reached a tentative agreement, pending approval of the center's board, that would eliminate the triple rent penalty and allow Covenant House to remain at the facility for two years at a 10 percent rent increase. But the board rejected the proposal, deciding to double the rent, officials on both sides said.

In May, D.C. Council member Sandy Allen (D-Ward 8) sent a letter to the Children's Center urging it to find some compromise short of double rent, but to no avail.

"Covenant House Washington has been one of the few assets that I can brag about in my community," Allen said. "They send the kids to Europe [and provide] opportunities that our children would never have," including classes, life skills and mentoring. "And they want to stay in a community where the need is greatest."

A community meeting is planned for tonight at Covenant House to discuss the issue. But so far, the Children's Center remains adamant. "We not only bent over backwards, but we were contortionists to accommodate their needs," Young said.

Covenant House has paid the double rent for last month and this month. And officials have begun looking for program cuts while continuing to search for another site.