A new proposal to permit foreign chanceries in nearly 200 additional locations throughout the District has left many residents concerned about the spread of missions and the State Department upset that the plan is too restrictive.

The recommendation comes at a sensitive time, when the State Department is lobbying hard for approval of a Taiwanese chancery facility here outside of the proposed diplomatic boundaries. That action has angered numerous Dupont Circle residents, who claim that their neighborhood already is saturated with chanceries.

The District's new planning department proposal was drafted to comply with the 1982 Foreign Missions Act, which was designed partly to give foreign governments more latitude in choosing District sites for their chanceries.

Most provisions relating to chanceries already have been enacted into city zoning law, including sections that permit them, as a matter of right, to be situated in areas zoned for commercial, industrial, waterfront or mixed uses, as well as in special-purpose, diplomatic, medium-high or high-density residential zones pending "disapproval" by the city's Board of Zoning Adjustment.

As a result, since 1982 the amount of city land available for chancery locations increased in the "matter of right" category from 589 acres to 2,657 acres.

The current planning department proposal, which further refines recommendations made by the National Capital Planning Commission, identifies 26 "institutional areas" for chancery location, which include mostly university and hospital land holdings throughout the city.

The plan also identifies "other areas" for chancery locations that are specific sites scattered around the city, ranging in size from a portion of a city block to about four blocks. Most of the larger locations are in Ward 3 west of Rock Creek Park. If the Zoning Commission approves, the "institutional areas" and the "other areas" will be incorporated in the District's Comprehensive Plan, thereby affecting future zoning decisions.

Among the larger areas for possible chancery location, aside from the institutional sites, are the area northeast of the Naval Security Station off Nebraska Avenue NW, the section of Nebraska Avenue between Tindall and Sedgwick streets, the area off Tenley Circle between Albemarle and Yuma streets, and the area between Connecticut Avenue and the Holy Cross Academy, north of Van Ness Street.

Public hearings and BZA approval would be required if a chancery wants to locate in one of the new areas.

Nate Gross, the planning department's zoning services chief, said the agency hopes that its proposed chancery location map will be strictly interpreted. He said the proposal "tries to balance neighborhood concerns with the needs of chanceries."

Gross said chanceries seeking to locate outside of the prescribed boundary lines should be mandated to go first to the zoning commission for a zoning change and then to the BZA for final approval.

But critics, led by the State Department, charged that such a procedure would discriminate against foreign governments. State officials said that, because of high legal fees and the length of time it would take to appeal for the zoning change, chanceries essentially would be banned from many areas of the city.

"That's an undesirable and frustrating set of circumstances to deal with," said Ronald Mlotek, chief counsel for the State Department's Office of Foreign Missions, who criticized the District for being too rigid in its interpretation of the law passed by Congress.

"The District wants more control than the Foreign Missions Act calls for," he said, adding that the State Department doesn't oppose the proposed map, but rather the principle of prohibiting chanceries from locating on sites not included in the proposed zones.

Mlotek emphasized that while the State Department "supports the integrity of residential areas in the District," foreign governments should be allowed "to take a running college try to locate in any area of the city."

He added that the danger of the District's proposal "is patently clear: If you can't give a foreign government what they want in Washington, we won't get what we want in that country."

Mlotek suggested that another possible outcome of the proposal could be a change in the State Department's policy requiring chanceries to locate within the District.

He said "many" governments have sought to place their chanceries in the surrounding suburbs, mostly for economic reasons, but have been rejected because of State's longstanding policy.

There are 154 foreign missions, plus the Cuban and Iranian interest sections, in the District, according to the State Department's office of protocol, with more than 320 separate chancery facilities.

"The time might come that we might have to reconsider that city-only policy," Mlotek said.

Mlotek's warning "sounds like a developer: 'If we don't get what we want, we'll go to Montgomery County,' " said Gross, who stressed that the proposal attempts to end the debate on chancery locations by finally limiting areas to which they can apply.

The NCPC, which plotted the original areas for diplomatic development, also will testify at the zoning commission hearing, but has not yet decided how strictly the planning map should be interpreted, according to Ed Hromanik, NCPC's director of planning and programming.

While notices for the case's Feb. 27 public hearing were published only this week, at least one neighborhood organization already plans to protest the proposed map.

Residents of the Sheridan-Kalorama area, which is a few blocks north of Dupont Circle between Connecticut and Massachusetts avenues NW, are against further chancery development, according to J. Kirkwood White, the attorney representing the Sheridan Kalorama Neighborhood Council. White, who usually represents some of the city's major developers, said that additional chanceries, which have the effect of increasing property values, will "destabilize" the already threatened residential character of the neighborhood.

"A better planning policy would be to disperse them," White said.

A related and complicated case involving chancery location is an application by the Coordination Council for North American Affairs, the representative for the people of Taiwan, to place its Defense Procurement Division at 1701 18th St. NW. While the United States no longer formally recognizes Taiwan, the BZA accepted legal evidence from the State Department that the Taiwanese application should be treated as one for a chancery.

A public hearing will be held by the BZA on the issue Wednesday at the District Building.

The application has been opposed by four Dupont Circle area neighborhood organizations that want the 18th Street building converted back to residential property. Built around the turn of the century, the building has been used as an office for the last 40 years. City Council member John A. Wilson (D-Ward 2) also opposes the Taiwanese application.

Mlotek said the Taiwanese bid may prove to be a test case for the proposed diplomatic map locations. He accused the District "of playing the game as if the mapping proposal has been adopted."

One reason the planning department formally opposed the chancery application earlier this week involves the building's location: It is 75 feet outside of the proposed diplomatic zone. Gross acknowledged it would have been inconsistent for the department to accept the Taiwanese location while at the same time pushing to have its diplomatic location map enforced rigidly.

Gross disagreed that the planning department is interpreting the law prematurely, citing elements of the Comprehensive Plan that dictate chancery locations. "The Comprehensive Plan provides guidance to zoning, even if the whole pattern of regulations haven't been adopted," he said.

Cecil Tucker, acting executive director of the BZA, agreed, saying that the Taiwanese application "is trying to circumvent what will be illegal" once the zoning commission approves the diplomatic map zones. He added that the BZA could wait until after the zoning commission's hearings next month before deciding the Taiwanese case.

Whayne S. Quin, an attorney representing the Taiwanese group, said that, because of neighborhood opposition to the chancery application, he will ask the BZA next week to approve the application as an office use, not chancery use, despite the fact that the building will be occupied by the same Taiwanese organization.

"We've just changed our theory," he said.

Gross said that the planning department would consider the application change to "office use," but that "we would need the State Department and the Taiwanese to say that they don't consider the building a chancery." The State Department has maintained throughout the process that the building would be a chancery.

Quin said that the Taiwanese representatives, sensitive to neighborhood concerns, have offered to make a number of building improvements, limit the number of employes and turn the current chancery location at 2224 R St. NW into residential property.

Those proposals haven't satisfied neighborhood groups, however.

"They can go somewhere else," said Harriet Hubbard, chairman of the Residential Action Coalition's zoning committee. "We're trying to build the neighborhood back up."