D.C. Mayor Marion Barry's nominee to oversee construction of a new downtown convention center withdrew his name from consideration yesterday after a key D.C. Council member voiced concern about his financial dealings, including links to a businessman who helped renovate Barry's home.

Phinis Jones, 47, a Southeast Washington businessman and political activist, sent Barry a letter late yesterday afternoon withdrawing his nomination as chairman of the Washington Convention Center Authority "with much regret" in the face of "recent allegations that have been made about me" that "are without merit and unsubstantiated."

Council member Charlene Drew Jarvis (D-Ward 4) said earlier in the day that she had informed Barry that Jones's nomination would not be confirmed by the Economic Development Committee, of which she is chairwoman, "because there is controversy, and I do not want the new, expanded convention center to begin with any controversy."

The controversy, Jarvis said, centers on "as-yet-unsubstantiated allegations" concerning Jones's role in helping Washington businessman Yong Yun secure a $17.6 million city lease for a building Yun has constructed on Martin Luther King Jr. Avenue SE. The city began paying Yun in February even though the building is still empty. Yun's ties to Barry have become the focus of a federal investigation.

In an interview with The Washington Post shortly before Jones withdrew yesterday, his attorney, Wayne R. Cohen, confirmed that Jones has several links to Yun. Jones worked as a paid consultant to Yun to help him obtain the lease. Later, Jones recommended that Yun pay $100,000 to a taxpayer-funded organization, East of the River Community Development, for its help in obtaining the lease. Three years later, Jones became the group's chairman.

Cohen also acknowledged that Jones is selling a building he owns to the organization for $179,900.

Court records show that Jones and his largest business have failed to pay more than $200,000 in federal taxes. Federal tax liens on file with the D.C. Recorder of Deeds show that the business, Capitol Services Management Inc., failed to pay about $190,000 in income and Social Security taxes withheld from its employees over the last seven years. Another lien shows that Jones failed to pay almost $16,000 in personal income taxes in 1986, 1989 and 1990.

Cohen said yesterday that all of Jones's dealings with Yun have been proper and that Jones has never had any conflicts of interest in his capacity as chairman of East of the River Community Development.

The job Jones had been seeking, head of the District's convention center, will be especially sensitive in the near future because city officials desperately want to build a new facility that can bring larger conventions to the city. D.C. civic and business leaders have said a new convention center could boost the city's economy significantly.

Jones owns a number of businesses that in recent years have done more than $2 million in business with city government.

Capitol Services Management, which provides job training and consulting services, has been paid $1.4 million by the city over the last three years, according to D.C. Auditor Russell Smith. Jones also has told the D.C. Council that Capitol Management has three city contracts worth about $560,000.

Another company Jones heads, Jones Construction and Maintenance Co., has been paid $137,000. And a third Jones entity, the Congress Heights Training Center, has received $138,000 in city money over the same three years.

Jones began doing business with Yun in 1988 and helped him obtain the lease, now worth $17.6 million, for his office building in 1991. In 1994, Jones was appointed to head East of the River Community Development, which Yun paid for its help in getting the lease. Jones's construction company helped build Yun's building.

Several current and former members of the East of the River board of directors said Jones's business interests have posed a conflict of interest with his duties as chairman of East of the River several times.

Two former board members alleged that Jones continued to represent Yun before East of the River even after he became the group's chairman. They said that Yun initially agreed to pay the organization $100,000 and that Yun tried to have the amount reduced to $30,000. To date, Yun has paid the group $30,000.

A current board member, James E. Bunn, said yesterday that Jones's efforts to sell an office building in the 3100 block of Martin Luther King Jr. Avenue SE to East of the River also posed a conflict.

Cohen, Jones's attorney, denied that Jones worked on Yun's behalf to reduce the $100,000 Yun agreed to pay East of the River.

"To the contrary, {Jones} has encouraged full collection of that," Cohen said.

Both Cohen and East of the River's executive director, Peter Clare, said Jones's effort to sell the organization an office building is proper. They said that Jones recused himself from any discussion of the sale and that an independent appraiser is to determine the eventual price.

Cohen said Jones is paying off all the federal tax liens on file. "There was an agreement that was reached with the IRS to pay them down," Cohen said.

Cohen also said neither Jones nor any of his corporations had paid for any of the renovations to Barry's home. Cohen said Jones "may have gotten a request for a recommendation of somebody to do work over there. . . . Whether that individual charged Barry, {Jones} has no idea."

Last week, after he appeared before the D.C. Council to discuss his nomination to head the convention center authority, Jones said in an interview that he had told Yun that to obtain a city lease, he needed to "give something back to the community."

Jones said the gift should take the form of a payment to East of the River.

"I said to Mr. Yun that in order for me to adequately represent him, I believed that he needed to do something for the community," Jones said. "I was of the opinion that he could not get a government lease on a free-standing building that he owned solely -- that he had to give something back to the community."