The Post's editorial "Federal Triangle: A New Look" {Sept. 26} seems to advocate building the proposed International Cultural and Trade Center/Federal Office Building on Pennsylvania Avenue simply for the sake of putting something there. The Post complains that the parking lot on the site is an "eyesore." That may be true, but the parking lot is a far better use for the time being than the huge project the federal government is forcing on taxpayers and the District.

First, the proposed use is both inappropriate and overwhelming. This will be a 3.1-million-square-foot office building, the second largest federal office building after the Pentagon. This is not what Pennsylvania Avenue needs more of.

In keeping with other Pennsylvania Avenue Development Corp. projects, this site should have a residential component and a substantial one at that. Residents would help enliven the southern and western ends of the boulevard, complement the theaters and hotels across from the site and reinforce the fact that the newly completed residential buildings known as Pennsylvania Quarter are intended to be a neighborhood. The office market is flat -- commercial space in both the city and region is overbuilt. PADC's residential marketing is moving well. Let's keep going with it. If more federal office space is needed, it can easily be leased at very good rates from private sources.

Second, the project very likely will be a monstrous economic boondoggle. Since first proposed, the estimated costs have done nothing but spiral upward. In '88 federal officials pegged the cost at $362 million; when soliciting developers to compete for the project the guideline was up to between $460 million and $500 million. Last fall, PADC accepted a bid of $738 million. The General Services Administration, balking at projected office rents of $90 per square foot for space in the building when it opens in 1995, has succeeded in paring $82 million off the projected cost, getting it to $656 million. How many of us realistically expect it to stay at that amount? The architectural merit may also be compromised by the proposed reductions.

Moreover, as the GSA administrator himself has conceded, revenue projections from the international trade center portion "are all very speculative." Why should this project succeed when the Far East Center has never materialized? It's been noted by GSA that the international center can more easily be converted to more government offices if it does not succeed -- again, just what the avenue does not need. The community amenity portions of the project -- theater, exhibition space, shops, and trade space -- all seem destined for further reductions. In short, taxpayers will likely pay more for both building costs and federal office rents, while the desirable aspects of the building shrink away.

Perhaps worst of all, this mega-project is a potential disaster to District coffers and a further insult to home rule. The House passed H.R. 5071, the "Federal Triangle Development Act Amendments of 1990." Currently, the developer would own the building for 30 years, collect rents from the federal offices and other uses, then ownership would pass to the federal government. Yet this resolution would exempt the developer from paying any local property taxes for those 30 years, mounting to hundreds of millions in lost revenues to the District! The resolution goes even further to exempt the project from any transfer taxes and from D.C. building permit and building inspection laws, which is a very serious safety threat. The bill would also exempt the project from federal procurement laws, which likely would reduce minority participation.

The financially strapped District will of course be expected to provide needed support -- road maintenance, police and fire protection. As we all know, the District is broke and may be for some time. It simply cannot afford this huge project nor can it afford to give up its potential revenues. Bills like this, coming from a body that already takes our taxes and gives us no say, further strain District-federal relations.

In summary, who needs or wants the International Cultural and Trade Center/Federal Office Building? Pennsylvania Avenue will not be enhanced by it, taxpayers will bear a heavy burden for it and the District will be further put upon by it. The only winners seem to be federal bureaucrats and the developer. It seems the parking lot will do just fine, given the Trojan horse the federal government is offering. -- Terrance Lynch is executive director of the Downtown Cluster of Congregations.