An 85-year-old, fortress-like trolley car barn on Capitol Hill, virtually unused for 20 years, is being transformed into a housing complex with prices considered "moderate" for that area -- $75,990 to $137,500.

Called the Car Barn, the complex will have 196 new units and 52 built in the landmark structure on East Capitol Street NE between 14th and 15 streets. The block-square site now is the scene of near-frenetic construction as Richmarr Construction Corp. puts brick and mortar together for the first section of dwellings on the back (A Street) side of the site. The first tenants are expected to move in July.

The Car Barn project is another step in the extension of a rejuvenated Capitol Hill, Ross Arnett, chairman of the historic preservation committee of Capitol Hill Restoration Society, said that the group had "negotiated proposals and changes" in the Car Barn plan as it was developed.

The project, which won approval two years ago from the joint Committee on Landmarks of the National Capitol, now is regarded as "excellent" by Arnett. He said that changes made by architectural firm Martin & Jones are "compatible" with the old building, as are the new four-story brick structures. There will be one-level apartments on the lower and second floors and two-story apartment/town houses on the third and fourth levels.

"The long process was rewarding, and we are pleased that the prices are reasonable ," Arnett said. He noted that the complex will have electronically controlled gates and court entrances.

Appraiser Judith Reynolds, whose office and home are several blocks away, said that the Car Barn should be a "plus" for the Hill and will put to needed housing use a site that was dormant for two decades.

William F. Creagerr, a partner in the Houses on the Hill brokerage firm, said that real estate development has pushed farther east from Lincoln Park, to areas near the Metro station on the west side of the RFK Stadium-Starplex site near the Anacostia River. Creager, whose office and home both are on Lincoln Park, said that some houses in the area are priced at more than $200,000.

David Jones, a partnerr in the architectural firm that did the exterior designs and brought the Car Barn project through the approval maze, said that preservation of the old walls along 14th and 15 streets ties the unusual project together worthy of a landmark site. He said that the preserved neo-Victorian buildings along East Capitol will be redone in the interior to provide dwellings with high ceilings and skylights and some larger than usual windows.

Edmund W. Dreyfuss & associates designed the interiors. The one- and two-bedroom duplexes range in price from $75,990 to $137,500. Shannon & Luchs has opened a sales office in a redone section of the old trolley building at the corner of 14th and East Capitol. Sales agent Linda Connolly said that more than 350 persons visited the Car Barn last weekend and that three contracts have been signed.

Roger Gerstenfeld, who has a Capitol Hill development corporation, bought the Car Barn site two years ago from D.C.Transit Systems Inc. for $2.5 million. He subsequently bought out original partner Robert Hess, another Capitol Hill builder, and then brought in Richard Kirstein, Marvin Kay and Leonard Abel -- top offices of Richmarr, a firm that has been a force in areawide development for 28 years.

The four individuals and their families make up the development group for the Car Barn project that would have a current sell-out value of more than $18 million, Gerstenfeld said. He emphasized that initial prices deliberately were set low to establish a track record. Increases are already scheduled, he said, "because we have the cheapest prices in the city for new condominium residential construction."

The average one-bedroom unit is being sold at a price of approximately $105 per square foot of living area. Larger units have square foot prices slightly below $100.

In addition to the 196 dwellings, the Car Barn project will include 120 interior parking spaces that will be sold separately to apartment owners.There also will be a swimming pool with a deck inside the courtyard formed by the houses, most of which will face inward from perimeter streets. Walkways and extensive landscaping will enhance the living said developer-partner Kay.

Gertenfeld pointed out that most of the large site is zoned residential but that there is light commercial zoing for sections along East Capitol and 15th. He speculated that some of the living units on those streets might be purchased by persons who would use them for architectural, real estate or medical offices.

The imposing trolley car barn administration building along East Capitol Street is impressive, with its massive dark red brick facade, looming 35 feet into the sky at some points. The main building's turrets will be echoed in the new buildings on A Street.