Mayor Marion Barry has decided to locate the city's long-planned new municipal office center at 14th and U streets NW as part of a major effort to revitalize the neighborhood, which was devastated in the 1968 riots and has since become a notorious center for illegal drug trafficking.

The Barry administration hopes the center--planned for the northeast corner of the intersection--can become an anchor for additional public and commercial development in the long-neglected area, but details on the size of the building, possible satellite structures, and which city agencies would occupy them are still being worked out.

"The corner is finalized but what will ultimately be there is not finalized," Barry's press secretary, Annette Samuels, said last night. "What we're doing is evaluating and looking at what could be there," she said.

Samuels, attending a political reception for Barry at the Hyatt Regency Hotel near Capitol Hill, answered "yes" when asked by a reporter if the project specifically would include the new office center along with other possible developments.

Barry declined to discuss plans for the project at the reception, but said he would be making a "big announcement" for the 14th and U streets area soon. Samuels said the city hoped to make a formal announcement on the project by June 15.

Last Friday, Barry told a crowd attending a mayoral candidates forum sponsored by the 14th and U Street Coalition that he had "a big announcement to make, and it will be a spur to economic development. It's a big announcement, but I can't make it yet because all the details haven't been worked out yet. But it will help you for all the support you've given me."

Barry, who asked the City Council yesterday to approve a plan to borrow $145 million for this fiscal year's capital spending projects, included a request for $1.2 million in design funds for the new office center.

The city has targeted $41.7 million for the project, which until last year was to have been built at Third and D streets NW, in the same area as the city's new Superior Court Building and the combined police headquarters and present municipal office center at 300 C St. NW.

In April of last year, however, District officials decided that the federal government's asking price of $13 million for the site was more than the city could afford. The city had approval to spend only $8.5 million to acquire the land and announced it was looking for other locations.

The 14th and U property is partly owned by the Redevelopment Land Agency (RLA), the city's urban renewal organization, which could make the property available at a lower cost, city officials said.

The 14th and U street area has become infamous in recent years as a center for illicit drug dealing. Since the 1968 riots, dilapidated apartment buildings, bars and corner stores are what remain of a once-thriving entertainment and commercial center.

Many of the bars and stores are covered with iron gates as protection against vandals and looters, a grim reminder of the fear remaining from the riots 14 years ago.

Despite the drug trafficking, redeveloped private housing has been creeping toward the area from adjacent neighborhoods--Adams-Morgan to the north, Dupont Circle to the south and Logan Circle to the east. But the 14th Street strip itself has changed little since the riots.

The last major development in the area was in November 1977 when the C&P Telephone Company leased retail office space for a telephone center on the ground floor of the Columbia Heights Village housing project in the 2900 block of 14th Street.

The NAACP and the District government announced in April that they are negotiating the sale of a city-owned building on 14th Street just north of the U Street intersection. The civil rights group said if an agreement is reached it will move its national headquarters here from New York.

Other developments in various planning stages are scheduled along the 14th Street corridor in the next few years, including a 13-acre RLA-financed shopping center at 14th Street and Park Road, and a new fire station at 14th and Newton streets NW.

In addition, a subway station on the Metro Green Line will be located at 14th and U, but continued construction delays on that route will probably prevent its opening before the 1990s.