The D.C. Court of Appeals, rejecting a plea from a historic preservation group, yesterday approved the demolition of Rhodes Tavern, the oldest commercial building in downtown Washington.

A three-judge panel of the city's highest court ruled that a District official acted properly last year when she approved the issuance of a permit to the Oliver T. Carr Co. to demolish the 181-year-old structure at 15th and F streets NW to make way for a $75-million office and retail complex called Metropolitan Square.

The court's action, the latest chapter in a three-year controversy, does not necessarily mean the forlorn and vacant three-story structure, the scene of many historic happenings in the earliest days of the nation's capital, will be torn down. City officials are working to find a new location, possibly on a parcel owened by the Pennsylvania Avenue Development Corp. (PADC) near Seventh Street and Pennsylvania Avenue NW -- a compromise rejected by the preservationist group that brought the lawsuit seeking to ban the demolition.

Rhodes Tavern was the meeting place of Washington's first civic association, a polling place in the first city election in 1802, the birthplace of the Riggs National Bank, the first home of the National Press Club and the place where British Rear Adm. George Cockburn ate a roast chicken dinner while watching his invading forces burn the White House on Aug. 24, 1814. It is the only remaining building that has been on the route of every inaugural parade from Jefferson's to Reagan's.

"We are not planning to demolish it tomorrow," said Betts Abell, speaking for the Carr company. Carr himself, voicing pleasure at the decision, said later that "we hope the PADC, which has promised a [new] site, will promptly deliver that site so that the tavern will not have to be demolished." He said the company still must apply to the city for the permit to demolish or move the structure.

Joseph N. Grano Jr., a leader of the Citizens Committee to Save Historic Rhodes Tavern, which filed the lawsuit opposing the demolition, said his group may petition the court for a rehearing by all nine of its members. If the hearing is granted, this would vacate yesterday's decision pending action by the full count. The deadline for filling is June 12.

Calling yesterday's ruling "a bad decision," Grano said his group is "going to confront him [Carr] with his responsibility [to preserve Rhodes Tavern on its present site] from now on until he does the right thing . . .We are going to pester him until he does."

Grano and James O. Gibson, assistant D.C. city administrator for planning and development, disputed the effect of yesterday's court decision on the city's strong 1978 historic land-mark preservation law.

"This guts the historic preservation law," Grano asserted. "If you can tear down Rhodes Tavern, you can tear down any historic building in the city."

The decision, Gibson said later, "has implications for no other case but this one," other than confirming the procedures permitting demolition as being proper.

Gibson praised two other citizen groups -- Don't Tear It Down and the Committee to Preserve Rhodes Tavern -- for helping reach a compromise under which the facades of the Keith-Albee and National Metropolitan Bank buildings on 15th Street will be incorporated into the Carr office and retail complex.

In yesterday's opinion, written by Judge Stanley S. Harris, the court panel held that Carol Thompson, the District official who approved the challenged demolition permit last year, was required only to decide whether Carr's project was of such special merti that it outweighed preservation of the tavern on historic grounds.

"We are satisfied that, in the course of doing, so, she weighed the historical considerations . . . against the special merit of the project, a balancing process which we now declare that the [landmark preservation act implicitly requires,]" the court said. The three-judge panel did not consider the actual merits of whether Thompson made the right decision in allowing the demolition.

Joining Harris in the decision were Judges Julia Cooper Mack and John M. Ferren.