With its chairman pronouncing the proposed project "just too darned expensive," the Senate District Appropriations Subcommittee yesterday cut out all the funds the District of Columbia had budgeted to build a downtown convention center.

The Senate subcommittee's action came just a day after the full House Appropriations Committee approved the convention center project and the $110 million included in the city's fiscal year 19778 budget request to pay for it.

Mayor Walter E. Washington, a majority of the City Council and much of the city's business community have long urged approval of construction funds for the project. They have argued it would bring increased convention business to the District and help revitalize the downtown area around Mount Vernon Square, where the center would be built.

Mayor Washington, Council Chairman Sterling Tucker and the executive vice president to the Metropolitan Washington Board of Trade, Clarence A. Arata, all vowed yesterday to try to have the convention center restored by the full Senate, or in an expected House-Senate budget conference.

Proponents of the convention center had lobbied heavily for it approval among staff members and senators on the District Appropriations Subcommittee. But the chairman, Sen. Patrick J.Leahy (D-Vt.), has taken what an aide termed "a skeptical stand" on the project from the very beginning.

Leahy, anticipating criticism from city officials, held a news conference in his office yesterday to explain his and the subcommittee's opposition to its construction.

"I just really have not been convinced of a need for a convention center," he said. "It's just too darned expensive and it won't pay for itself."

Leahy estimated the project could result in a tax loss to the city of between $6 million to $9 million a year.

He noted that a coalition of civic associations in town "raised some very serious questions" about the center's construction and signed a petition requesting a referendum on the controversial issue.

"My responsibility is not only to the taxpayers in the District of Columbia but also in the rest of the country," said Leahy. He explained that sub-committee members had taken a special roll-call vote on the convention center budget after studying numerous materials, pro and con, on the subject.

The subcommittee vote was 3 to 1 against the center. Sen. Charles McC. Mathias (R-Md.) was absent for the vote, but reserved his right to seek restoration of the money by the full Senate Appropriations Committee.

A key aide to the subcommittee said the major reason for cutting the convention center from the budget was the belief that the project "is not economically feasible. It looks like this is going to be a drain and not the cure-all its advocates say it is going to be."

Prior to the vote, according to the aide, the staff prepared a position paper listing the various estimates given for the project and the arguments for and against its construction.

That report showed the mayor's office estimating the center would bring a $12 million annual tax profit. The prediction of the D.C. city auditor, the Council's financial investigator, ranged from a net profit of $1.9 million to a net tax loss of $2.2 million. The Capitol Hill Restoration Society, in an analysis prepared by econimist Dr.Jack Phelan, estimated tax losses of between $6 million to $9 million. The Government Accounting Office did not make an estimate of its own, but said the city's estimate probably was inflated.

Included in the staff's report was the notation that the city's consultants on the project, Gladstone Associates, is owned by Quadrangle Development Corp. It said that both firms have "substantial property holding in the District and are developing property three blocks from the proposed convention site."

Arata, speaking for the Board of Trade, said he was disappointed with the subcommittees' action. He said he could not understand "why such little credence was given to the study by Gladstone Associates and our own studies on what the potential is here for a convention center.

He said the consulting firm, to his knowledge, owns no property in the vicinity of the proposed convention center site. He called the subcommittee's notation on this matter unconscionable attack on a reputable firm."

Arata reiterated city government and business predictions that a convention center here would attract "well over 400,000 a year in additional convention delegates.

The staff report, however, questioned the need for the center, saying the District already is the third largest convention city in the nation.

Another factor in the decision to cut convention center funds, according to a staff aide, was a recent Library of Congress study showing that Washington has the highest per capita expenditure level of any of the 19 cities with populations of 500,000 to 1 million.

Rep. William H. Natcher (D-Ky.), the powerful and long-time chairman of the House District Appropriations Subcommittee, is expected to lead the fight to get the convention center funds restored.

Although Natcher generally gets his way on city budget cecisions, a staff aide on the Senates subcommittee said Natcher's position might erode in the face of extended conference committee debate "because nobody in Natcher's subcommittee really wants the center."

Two congressmen on Natcher's subcommittee already have objected publicly to the convention center, the aide said.

The city budgets approved by the two subcommittees differ on 30 different items. An aide to Leahy said the convention center appropriation is the one the senator opposes most strongly.

"But he doesn't have any heartburn over this thing . . . he's not going to lose any sleep over it," the aide said. "It's just his best judgment that the convention center is not needed, and he can't bring himself to approve it."

Mayor Washington, who heard of the subcommittee vote shortly before he was to attend an awards ceremony for former Redskin quarterback Sonny Jurgensen, said he was "very disappointed" by the action.

He called the project "the singel most important proposal to assure the economic health of the District ad to revitalize its downtown core" and hepromised "to continue to fight" for the convention center.