Mayor Anthony A. Williams and the D.C. Council agreed to a compromise plan yesterday for developing the campus of D.C. General Hospital into a riverfront community featuring housing, offices and possibly a new health care facility.

Officials applauded the plan as the best way to direct millions of dollars to build the roads and sewers needed to bring new life to a 67-acre section of Southeast Washington long relegated to institutional uses such as the D.C. jail and the hospital.

City planners envision extending the city's street grid into the area, with Massachusetts Avenue reaching a park along the Anacostia River. They say private developers are eager to invest in the area.

The master plan envisions 800 units of housing, 35,000 square feet of retail space and 3.2 million square feet of space for other commercial or institutional uses.

"Far too long, this area of the city has been vacant, has not been part of the city," said D.C. Council member Sharon Ambrose (D), whose Ward 6 includes the area, known officially by the federal government designation of Reservation 13. "We should not ignore an opportunity to develop this large parcel."

Yesterday's meeting was the first of the year for the D.C. Council and also featured the introduction of bills by members, including one by Chairman Linda W. Cropp (D) to reopen Klingle Road in Northwest Washington to vehicular traffic.

The bill calling for redevelopment of the D.C. General campus nearly foundered on the emotionally charged issue of public health care in the city. Williams closed the hospital to inpatient care in 2001 over the objections of the council, and the issue has been contentious since.

Council member David A. Catania (R-At Large), one of the most persistent critics of the mayor's handling of D.C. General, successfully pushed an amendment last year requiring that taxes and other revenue generated by development of the campus be devoted to paying for a new hospital or health care for the city's uninsured.

That prompted Williams last month to veto the redevelopment plan and lobby council members to allow revenue from the site to be used instead for building roads and sewers. Without initial investments in infrastructure, the mayor argued, no hospital or any other development is likely to happen.

The council unanimously overrode that veto yesterday but also unanimously accepted a compromise plan crafted by Williams. It designated revenue first to roads and sewers but also allows remaining funds to pay for health care.

Catania praised the deal as a practical way to bring both development and new funding for health care. For decades, D.C. General, a public hospital, provided health care to the city's poor.

"I'm thrilled," Catania said after the vote. "It's a way of honoring for generations of Washingtonians what that site represented."

In addition to housing and commercial development, the master plan reserves four acres at the Stadium/Armory Metro station for a new campus for St. Coletta's, an Alexandria special education school that serves many severely disabled District students. Community activists on Capitol Hill have said they would rather see the land put out for bid to private developers, in hopes of attracting a specialty grocer or other retail.

Eight acres along Independence Avenue are reserved for municipal facilities, possibly including a new hospital. The housing envisioned in the plan would be separated from the campus of D.C. jail by an extension of Massachusetts Aveneue SE from 19th Street to the Anacostia River.

Administration officials say it will take several years to see the development, but they called yesterday's compromise an important first step.

"We're moving forward," said city Planning Director Andrew Altman. "We know the plan that we proposed is essentially intact."

In other action, Cropp predicted that she has the votes to pass her bill to reopen Klingle Road, but she said she would face trouble overriding a veto from Williams, who has proposed rebuilding the road but limiting it to pedestrian and emergency traffic. A vote is several months away.

Other council members introduced bills that would cap capacity at the city jail, ban use of hand-held cellphones by motorists, make a crime of identity theft, offer universal access to preschool for 3-year-olds and to allow domestic partners to make medical decisions.