Mayor Anthony A. Williams and D.C. Council members yesterday resolved a dispute over the long-awaited Columbia Heights redevelopment plan by repositioning a proposed supermarket so that the historic Tivoli Theatre would have a greater chance of being preserved.

Under a previous plan endorsed by the city's Redevelopment Land Agency, a 50,000-square-foot Giant Food store and other retail shops would have replaced most of the interior of the abandoned and boarded-up Tivoli. Pigeons now nest in the building, at 14th Street and Park Road NW, a reminder of how Columbia Heights's dilapidated business district has never recovered from the looting and burning of the 1968 riots.

The RLA plan, while hailed by some residents, was disliked by others and by council members who wanted the Tivoli restored to its former glory, with glittery chandeliers and marble floors. Failing that, they at least wanted the Tivoli preserved as some sort of space for the performing arts.

The new plan to develop blighted parcels near the Columbia Heights Metro station came after the council passed legislation this month giving Williams (D) the power to review the work of the independent RLA. It was authority that Williams--who had tried to steer clear of direct involvement in the debate while the RLA chose developers for the project--did not want.

With the mayor threatening to veto the legislation that would have drawn him into the neighborhood conflict, he and council members began negotiating a way to alter the RLA's plan to increase the chance that the Tivoli would be preserved.

The mayor said yesterday that he met with Giant and Joseph Horning, the developer, and they agreed to move the location of the supermarket out of the Tivoli space and onto another part of a city-owned parcel on 14th Street NW. Horning and Giant are to present plans within 90 days on where the supermarket will be built and plans for the Tivoli.

Yesterday, Williams and council members Jim Graham (D-Ward 1) and David Catania (R-At Large) praised the compromise during a news conference at the theater.

"We want to put this on the fast track," Williams said. "We will maintain the much-needed grocery store and the Tivoli."

Catania said the mayor had taken the legislation "to heart, and accepted the challenge."

The redevelopment of the Tivoli has divided many residents. Preservationists--including Graham, who represents the area--want the theater to be used as performance space. Others don't see that as realistic or see such ideas as a barrier to the quick economic development they want to reverse the image of a neighborhood that was run down before construction of Metro's Green Line tore up its main streets for several years.

Some residents said yesterday that they were pleased with the compromise, but said the new plan still leaves the Tivoli's future uncertain.

"I have lots of questions," said Charles Cassell, vice president of the D.C. Preservation League. "I would like to hear the mayor say that this theater will be restored to its original purpose."

Eric Graye, president of Save the Tivoli, said he was worried about what the developers would decide to do with the theater.

"They can still do anything they want," Graye said. "The question mark is still what happens to the Tivoli."

Residents favoring quicker development also were at the news conference, decked out in yellow T-shirts that read: "Columbia Heights Development and Jobs Now."

They were worried that the new plan raised questions about where the supermarket would go, and whether the theater space would ever be redeveloped.

"The question for us is, what are they going to do with that building?" said LeRoy Hubbard, a member of the Development Corp. of Columbia Heights, a neighborhood group working in partnership with Horning's firm. "It's an eyesore the way it is now."

Graham said that despite such questions, the new plan gives developers time to consider other uses for the Tivoli.

"I'm not suggesting this is completely settled," he said. "But it's a major step."

CAPTION: Mayor Anthony A. Williams praised the deal with council members.

CAPTION: At the Tivoli, Mayor Williams announces the agreement. With him, from left, are council members Charlene Drew Jarvis, Jim Graham and David Catania.