In 1901, before anyone in Washington had ever heard of zoning, Sidney I. Margolis' grandfather came to 22d and G Street NW and set to work making suits.

He was very small man with thinning hair, a Latvian jew named Philip Greenberg who stitched his suits by hand and hefted up 20-pound steam irons when the wool needed pressing. His wife took in cleaning and spent all day before the Sabbath cutting liebchen, homemade noodles. The American-born Sidney read to her from the Yiddish newspaper.

Today, with a slightly bigger showroom and ready-made suits, the Latvian tailor's shop still stands at the corner of 22d and G streets. It is called Dave Margolis Clothing Store, after the man who married Phillip Greenberg's daughter and took over the business. The boy Sideny grew up and took the store from his father, too, but now Sidney Margolis is 62 years old and says it's time to quit.

"We have doctors, lawyers, merchants and chiefs." Margolis said with resigned pride, speaking of the new generation of Margolises. "You'd think we'd get somebody who'd be in this business, but no."

So Margolis wants to lease his store to a restaurant - but, like George Washington University, which is trying to sell a block nearby for commercial development, Margolis cannot clear out without a zoning fight.

His business, officially described as Retail Men's Clothing, Haberdashery, Tailoring, Cleaning and Processing Uniforms, is what zoning regulations call a "nonconforming use." Generally, that means a building that has received permission to deviate from zoning laws. In Margolis' case, it means the store was there long before the neighborhood was zoned for residential and university use so officials let it stay.

Margolis thinks a 60-seat restaurant would be a good idea. The Ponderosa Steak House made him an offer of occupancy, although he says there is no certainly it would open a restaurant there. He has taken his case to the Board of Zoning Adjustments, which must approve any new nonconforming uses at the G Street shop, and at a public hearing on Feb. 22 Margolis heard eight persons calling themselves community representatives say the restaurant, especially a chain restaurant, would shatter their neighborhood peace.

They said it would bring in traffic and litter. They said it would smell bad and attract outsiders. A signed petition said the restaurant would prove a "noise and nuisance threat at night," and would threaten "the residential character of this neighborhood." Two weeks later, the board denied permission to open the restaurant.

For Margolis, who was born on the shop's second floor and grew up around the trolley cars on G Street, there is a certain irony in all this. He is one of the few remaining neighborhood businessmen, carrying on a G Street tradition set in his childhood by Kaplowitz the grocer, Ma Travers the rooming house manger, Angelo Carta the shoe repair man.

Business has dropped off some. People frequent shopping centers now, or streets less dominated by a college campus. Neither Margolis nor his sister Rhoda Smith, who also works at the store, still lives around G Street; they both moved away long ago, to houses bigger and more open than the old apartment where they grew up.

So Sidney Margolis, who can still remember his grandfather sitting crosslegged downstairs with the heavy wool of an unfinished suit draped over his knees, is trying to adjust to the times. He will appeal the zoning decision, he said, and if his appeal loses he will close up shop anyway and sell the building. "It is not like it was," he said slowly last week, looking out the window of his shop, "and won't ever be again, I don't think."