Apartment owners in Fairfax County's dilapidated Willston area have reached a compromise on the proposed renovation of the nearby Seven Corners Apartments, clearing the way for plans to rehabilitate the 40-year-old apartment complex with money raised through Fairfax County Redevelopment and Housing Authority bonds.

Norris Mitchell and Betty S. Gardner, part-owners of the Willston South and Willston Garden Apartments, filed suit three weeks ago to block a proposal to renovate the Seven Corners Apartments with funds from tax-exempt, low-interest bonds issued by the housing authority.

The housing authority board voted last week to proceed with plans to issue the bonds, after news of the compromise over the suit was made public.

Mitchell and Gardner claimed in their suit that use of low-interest financing to renovate the Seven Corners Apartments--which would decrease rents and improve the quality of the apartments--would make it difficult for them to find tenants for their apartments, which are not renovated and more expensive to rent.

Under the terms of the agreement, Mitchell and Gardner abandoned their suit and agreed not to bring any future action against the proposed Seven Corners project. They declined to comment on the agreement.

In return for dropping the suit, Mitchell and Gardner won an option to purchase the Seven Corners Apartments within seven to nine years under a set formula that will determine a price at the time of purchase. The agreement also stipulates that the apartments will be maintained as rental properties for 10 years before being converted to condominiums.

Under the agreement, 61 of the project's 284 units will be available to people receiving housing subsidies for the next 10 years, starting from the time the renovations are finished.

The plan for renovating the Seven Corners Apartments with funds from tax-exempt housing authority bonds was put together by the church-supported Wesley Housing Development Corp. and Edmondson and Gallagher, a Washington development firm.

Wesley officials said that their original plans were to use funds from the housing authority bonds to finance the rehabilitation, which is projected to cost between $12,000 and $15,000 a unit, and then maintain the apartments as rental units for 15 years.

Fairfax County Supervisor Thomas M. Davis (R-Mason) said he was pleased the two parties reached an agreement, because he said the suit could have derailed efforts in the Willston area to upgrade housing conditions and preserve some of the 1,500 units in the area as rental apartments. Almost 40 percent of the units are scheduled for condominium conversion.

"We have an agreement in the Willston area that we work everything out together--tenants, landlords, developers and business people," said Davis. "A couple of people went off the track on this thing and we got them back on the track."

Davis said he believes that, ultimately, the Willston area will be predominantly condominium. He said the county is hoping to see 350 units in the area renovated and preserved as rental properties, with 100 new units of subsidized housing for the elderly. There are already 150 units of county-owned housing in the area in a development called Greenwood.