Two of the Washington area's biggest developers regained control of the Metro Center redevelopment project yesterday in a settlement with D.C. officials that ends eight months of wrangling over the project's future.

Once the settlement is approved by Washington's urban renewal agency, the way will be cleared for work to resume on the $300 million project, regarded as the key to the city's effort to revitalize the old downtown between Seventh and 15th streets NW.

Metro Center has been stalled since the city tried last March to remove developers Oliver Carr and Theodore Hagans from the project because no agreement could be reached on a price for the land on which it will be built.

That tract comprises 3.7 acres of city-owned property atop one of Washington's busiest subway stations, including three blocks on the north side of G Street NW between 11th and 13th streets.

Carr said yesterday he hoped to begin construction late next year of a new Hecht's department store as the first phase of the project. The right to build Metro Center in phases was a concession won by the developers, who had expressed concern about the glut of downtown office space that is making it difficult to fill many new buildings. Most of the proposed Metro Center complex would be office space.

Under yesterday's settlement, city officials agreed to return Metro Center to Carr and Hagans, and the two developers in return agreed to drop their court suit challenging the agency's original attempt to remove them from the project.

Trial in that suit had been scheduled to start yesterday morning, after a week of negotiations under the prodding of D.C. Superior Court Judge Leonard Braman failed to resolve the dispute.

But yesterday morning lawyers for the two sides, after several hours of shuttling between a series of third-floor courthouse conference rooms, resolved the last sticking point, which had to do with one portion of the legal proceedings connected with the suit.

"We're delighted that we have reached an amicable agreement," said Carr after he and his staff exchanged handshakes and congratulations with acting housing director Madeline Petty; former housing director Robert L. Moore, who is now acting as a consultant to the mayor, and city planning director James O. Gibson.

The last issue settled yesterday involved an appeal of a ruling issued by another judge at an earlier point in the Metro Center case.

The city had wanted to pursue the appeal even if the suit itself were settled, officials said, because they believed one portion of the ruling could have the effect of lowering the price of urban renewal land. Carr and Hagans wanted it dropped, according to sources close to the negotiations, because they feared a later victory by the city could jeopardize their work.

Yesterday Carr and Hagans agreed that if any future dispute arises with the city, they would not use that earlier ruling in any new court case.

Both sides refused to release other details of the agreement. However, it is understood that it includes a provision for the city government to share in the income generated by the proposed complex, the first time the District has entered into such an arrangement on any urban renewal project.

In addition, according to the same sources, the city has agreed to forgo receiving the still-undisclosed sales price in one lump sum and instead will receive a portion in cash and take back a second mortgage for the remainder. Green Line Route Choice Fails to Halt Infighting By MICHEL McQUEEN Washington Post Staff Writer

Pontiac dealer Bill Cairns wanted the Green Line Metro station near his dealership on Branch Avenue so that service customers could drop off their cars without having to depend on cabs to get home.

Homeowner Joseph Burton wanted the Green Line near the Rosecroft Raceway to shorten commuting time for his south Prince George's County neighbors and to encourage quality development in one of the county's uncongested but fast-growing areas.

Last week, the Metro board tried to end what has become a 14-year wait for the area's last major unchartered rapid rail route and voted unanimously to reaffirm plans to build the line to Rosecroft. But if past is any indicator in the long and increasingly bitter controversy, the fight will not be over for some time to come.

"I'm just going to fight to the bitter end because we've come this far," said Democratic Del. Lorraine Sheehan, a leader of the effort to force construction of the Branch Avenue route.

The argument has become so intense over the last few years that each side has at times resorted to charging the other with racism, back room political manipulation, and attacks on the integrity of each others' political leaders. Many Rosecroft supporters say that they have been taken aback by the way merits of the issue have been overshadowed by strong emotions.

The attacks reached a crescendo over this year's summer-long election campaign, when Sheehan announced that she had been dropped from the incumbent's slate -- despite her two terms in office -- through the influence of Peter F. O'Malley, a longtime Democratic strategist and attorney for the Rosecroft Raceway. Friends of both O'Malley and Sheehan said that the former became embittered over what he considered the increasingly personal nature of Sheehan's campaign, and that Sheehan resented what she perceived as O'Malley's unfair effort to influence the outcome of the dispute through his role as mentor to many Democratic officeholders.

After Sheehan was overwhelmingly reelected to her third term in November, however, she said she intended "not to have any more shouting matches over the Metro controversy . . . and to continue to argue the issue on its merits." Nevertheless, it is clear that deep divisions remain over the issue. As recently as last week, noisy spectators led by Sheehan and other officials watched the board uphold the Rosecroft line, with some of them loudly pronouncing the county's representative "a crook."

Sheehan and others have been arguing that the Branch Avenue alignment is the only route Metro should be allowed to build since it was the line designated when county voters approved an $88 million bond for Metro construction in 1968.

They argue that businessmen such as Cairns, owner of Bill Cairns Pontiac Inc. -- and many residents -- have been counting on the rapid rail line to enhance businesses along the line and make it easier for residents to get to work. They say the County Council's 1978 decision to move the line several miles south to Rosecroft was politically motivated and fiscally unsound. Branch supporters have paid for their own studies to prove, among other things, that Branch Avenue would attract more riders, displace fewer people, and better serve existing employment centers.

Two years ago, a group of business owners led by Cairns also went to court to try to stop construction on any but the Branch Avenue route and last March, they got a court order holding up construction until new hearings could be held. Metro officials at the time said the delay could jeopardize the future of the entire line. As a result of last week's decision, attorneys for the business owners said they would continue their legal effort to block Rosecroft indefinitely.

"It was meant to go here, it was written here on the master plan and as far as I'm concerned, it will go here," said Cairns, who located his dealership at Branch Avenue and Auth Way in part because the site was about 600 feet from the proposed Branch Avenue station.

"I'm only bitter because my customers need it," he said. "There's no other way to get out here . . . . Any outsider coming in can see that."

But Rosecroft supporters, though less vocal, are equally convinced that the more southern route better serves the needs of the county. They say the Rosecroft line would cost less to build, would carry more riders and is essential to the orderly growth of one of the county's developing areas.

Irene Robb, a former Tantallon Civic Association president who participated in a seven-year study of the south county's needs, said, "I'm talking about a lot of people. If you look at the latest census figures, the Oxon Hill area is one of the fastest growing in the county . . . . You have to plan for the future."

"What it really boils down to," said Burton, an engineer who participated in a seven-year study of the south county's growth needs, "is that it serves more people in south county and better complements our road network. Our road network without Metro is totally inadequate."

Some influential landowners and developers own property near Rosecroft and others have holdings close to Branch Avenue, so strong political forces exist on both sides. Burton said these are among the considerations that have made this such a bitter battle.

"I've fought a lot of battles and civic issues and so forth, but it's never really reached the point of bad feelings engendered by this ," he said.