The U.S. Armed Forces Retirement Home wants to sell 49 acres of mostly vacant land, long coveted by neighboring Catholic University, to a development team that would create a neighborhood of hundreds of townhouses and condominiums just east of North Capitol Street in the District.

The number and types of dwellings would be negotiated with community organizations, city planners and the D.C. Zoning Commission, developer G. Neel Teague said. The project would feature "significant open space" and could include single-family houses, stores, businesses and even university facilities, depending on the community's input, he said.

Under federal law, Catholic University has 60 days to match the $32.7 million bid for the property made by McLean-based developer Stout & Teague Co., in partnership with Pulte Homes of Bloomfield, Mich., one of the nation's largest home builders.

University spokesman Victor Nakas said officials will study the offer, adding, "It's much too early for us to be saying what action we'll take."

The retirement home, which recently changed its name from the U.S. Soldiers' and Airmen's Home and still is informally known as the Soldiers' Home, operates at an annual deficit of $10 million to $12 million and desperately needs the cash it would get from the sale of the land, across North Capitol Street from the home itself.

"This is a major milestone in our effort to improve the financial picture of the Armed Forces Retirement Home," said Tim Cox, chief operating officer for the 151-year-old institution, which receives no taxpayer money and houses more than 1,000 elderly men and women who served in the military.

Catholic University, which is south of the parcel, wanted to build a biomedical research facility and dormitories and create some retail uses there. The Washington Archdiocese also liked the idea of the university purchasing the land, because several other Catholic organizations and institutions located nearby could potentially use the space for expansion.

But the Soldiers' Home sought to generate the highest possible price for the parcel.

The future of the site has been debated for years and became the subject of a court fight between the home and Catholic University. A federal judge ruled last year that the home could proceed with plans to seek bids for land, but he gave the university the right to match the purchase price.

Teague said Pulte Homes has been searching for years for a large tract in the District that could support several hundred homes. The development team was one of five to bid on the property.

The developers envision a community of 200 to 600 residences, mostly townhouses and low-rise apartments, Teague said. They would be more modestly priced than the high-end apartments and half-million-dollar townhouses being built in much of downtown and upper Northwest Washington.

The District has been strongly encouraging new residential projects, in an effort to rebuild the city's depleted population. New, moderately priced homes are especially scarce.

Teague said formal planning will begin with community meetings after the 60-day match period expires in late December.

"Rather than second-guess what the community is going to want, we're going to work with the community and with the city," Teague said.

That process, he added, will include input from the university -- assuming it doesn't buy the parcel.

"Catholic University is part of the community," Teague said. "If they have needs, we'd certainly talk to them, and see if there's a way to accommodate them. It's a big site."

The U.S. Armed Forces Retirement Home runs an annual deficit of about $10 million. The acreage is across North Capitol Street from the home.