IN THE MIDST of the city's financial crisis, and with the John A. Wilson Building (formerly known as the District Building) falling apart, a majority of the D.C. Council made a pact with a local developer in 1995 to effectively deliver the District's official seat of government to Uncle Sam. They agreed to let the federal government lease nearly two-thirds of the District's most important building for 20 years. In exchange, the smelly Wilson Building would be renovated at no D.C. taxpayer expense. Today a council majority believes its decision stinks.

It was a deal the city should have refused. The federal government does not belong in the same building where the District's legislative and executive branches meet, let alone as the dominant tenant. Under the arrangement, the city will occupy only 28 percent of the space in its now-restored, turn-of-the-century six-story structure. That's nonsense. The District should occupy the entire Wilson Building, though regaining control will be no easy feat.

City politicians cannot claim they were blindsided. They knowingly relegated themselves to second-class status when they agreed to lease most of their building to federal occupants. In fairness, the city faced a dilemma in 1995. It owned a decaying eyesore on Pennsylvania Avenue, the nation's main street. The deal made it possible for a once-blighted historical local landmark to be transformed into an asset. The city sacrificed an important home rule symbol for an improvement that benefits the nation's capital. The District now deserves an appropriate response from the White House.

City officials are now locked in a legal dispute with the developer over the amount of space that the council was to get. City leaders -- and the Clinton administration -- would do better to explore how the District might become the Wilson Building's sole tenant.