The District is close to completing a real estate deal that would bring the new headquarters of the Bureau of Alcohol, Tobacco and Firearms to the corner of New York and Florida avenues NE, providing a major boost to a neighborhood where the city has been trying to lure economic development for years.

The bureau wants to locate its high-security $120 million building and 1,000 jobs on a five-acre industrial site currently used by the city's Deparment of Public Works to store equipment. The project provides a powerful new incentive to construct a Red Line Metro station between Union Station and Rhode Island Avenue.

The likely deal concludes a two-year process in which Virginia developers at one point tried to woo the agency from the city.

"I'm elated because it keeps valuable jobs in D.C.," said Del. Eleanor Holmes Norton (D-D.C.). "That is a major midtown underused blighted area that should be considered a prime area for development of the city."

Eric Price, the deputy mayor for economic development, said the city and the General Services Administration should be able to sign a letter of intent for the land sale in the next week or so.

"It's important because that's really one of the gateways to the city," Price said.

Tony Costa, assistant regional administrator of the GSA, which is negotiating for the federal government to buy the land from the city, confirmed that an agreement is near.

The Treasury Department's budget for the current fiscal year includes $15 million to acquire the land from the District, but no one involved in the negotiations would say exactly how much the city is asking for the land. Price said terms will be adjusted to reflect the city's offer to clean up the site, which includes underground fuel tanks and other pollution.

All the employees working in the ATF's current headquarters at 650 Massachusetts Ave. NW would move to the new location, plus an unspecified number to fill a total of 1,000 to 1,100 existing and new jobs. The agency declined to say how many people now work in its headquarters.

The ATF's top priority is a building that would provide better security for its employees, said Mignon Anthony, director for the AFT headquarters project, who said the schedule calls for construction to begin in 2001 and for the employees to relocate in 2004.

Before that happens, the GSA probably will have to conduct an environmental impact study of the project, which would involve public hearings. The D.C. Council also would have to be consulted on certain aspects of the project, including closing alleys on the site.

The city also is negotiating to have a say in what the building looks like, since it is on such an important gateway corridor.

The land is a few blocks north of Union Station and gained attention last year as part of an alternative site favored by many who opposed building the new Washington Convention Center at Mount Vernon Square. The ATF building would go at the southern side of the intersection.

The parcel is also near a cluster of recent or planned projects that together are fueling visions among neighborhood boosters of the transformation of the run-down, warehouse-filled avenue into a vibrant, high-tech office corridor.

Nearby projects include the renovation of an old printing company warehouse on Eckington Place into a center for telecommunications companies. A Denver company has agreed to lease half the space, attracted by the proximity of fiber-optic lines that run along the railroad right of way.

Developer Douglas Jemal is renovating the former Peoples drugstore warehouse on nearby P Street NE, with enough land for a million square feet of office and retail space. BET Holdings Inc., parent of Black Entertainment Television, wants to add two technology-oriented buildings to its three-building headquarters campus in the neighborhood.

The ATF headquarters--bringing 1,000 people looking for lunch and places to run quick errands--will add to the critical mass and spark more development, officials hope.

"I expect the ATF will in fact draw related and other businesses into this section that wouldn't consider coming without a high-prestige agency like this," Norton said. The neighborhood "needed a linchpin to bring it forward, to make it live again."

Planners' dreams for the neighborhood have long been pinned to putting a Metro station in the area. The ATF makes the case for a station much stronger.

"This is great news," said Metro spokesman Ray Feldmann. "This is another reason for us to keep [a new station] moving on the fast track."

About a third of ATF headquarters employees ride Metro. "We would be very excited for a Metro station to be that close to our development," Anthony said.

A new station would cost $75 million to $80 million. Metro is examining potential sites near the intersection of Florida and New York avenues. The city has offered $5 million to begin planning for a new station. No other money has been budgeted, but under a tentative funding plan, one-third of the total cost would be borne by the city, one-third by the federal government and one-third by developers in the area, Feldmann said.

Norton said she would use the ATF project as leverage next year to lobby for federal money for a new station.

The ATF has wanted to build a new headquarters ever since it moved out of Federal Triangle into temporary offices on Massachusetts Avenue a few years ago. At first, Norton pushed to get the agency to build at the Southeast Federal Center, but federal planners balked at the idea, Norton said.

Then some developers from Virginia approached the ATF, according to Norton, who insisted the agency remain in the city.

"The ATF is very well attached to the District," Anthony said. "We're very, very pleased we can find enough land to stay relatively close to where our employees are used to coming."