The Montgomery County Planning Board has recommended creation of a new cultural center zone in response to a development plan to upgrade and expand facilities at Olney Theatre, once the summer home of such Broadway lights as Helen Hayes, Tallulah Bankhead, Basil Rathbone, Olivia De Haviland and Nancy Davis Reagan.

The zoning category would be a "floating zone" that could be used throughout the county to enhance and preserve cultural facilities, according to planner Joseph Davis.

The category would permit various types of developments that would be compatible with cultural facilities, such as restaurants, small-scale hotels, country inns and other amenities. "We think the cultural center zone has a countywide application because there are areas in Germantown, Rockville and elsewhere where a concert hall or a museum complex might be desirable," he said.

The zoning category proposal now goes to the Montgomery County Council for its consideration.

Steven Kauffman, the attorney representing the Kapiloff Group, which is developing the 400-acre Hallowell tract adjacent to the Olney Theatre, said that "for a long while we were pursuing separate tracts from the theater group. We didn't know they were looking for a way to upgrade the facilities to a year-round theater and create an endowment." Kapiloff's plans include the construction of a 24-room, all-suite hotel and a first-class restaurant, Kauffman said.

"It's amazing that in a town of 30,000, there is no place for actors or visitors to stay and very few places to eat," he said.

The theater group will renovate and weatherize the present summer theater and the two-story actors' residence and, when revenue permits, build a second building with classroom space and a rehearsal and performance stage.

The Olney Theatre, built in 1942, is considered a "nonconforming use" under current zoning laws. Without the protection of the new cultural center zone, "if either the playhouse or the adjacent actors' residence burnt down, there is no guarantee they could be rebuilt," said project architect Walter Bucher.

Olney Theatre Managing Director Bill Graham Jr. says the number one question and complaint he has gotten ever since the landmark Olney Inn burned down in the late 1970s is, "Where can we stay and where can we eat?"

Graham said actors and patrons once came to Olney because of the theater, the inn and the area's reputation as a special artistic colony. He said the new cultural center zone would help "maintain this special cultural community within the suburban sprawl all around us."

Davis said the Kapiloff group considered putting a country inn on the land next to the theater. But because the Olney area over the past five years has changed from an area zoned largely rural to one that is suburban in character, that use would most likely no longer be allowed, Davis said.

Bill Graham Sr., who heads Catholic University's drama department and is vice president of the Olney Theatre board, said, "The cultural center zone would recognize and help guarantee the growth of another professional theater in the metropolitan area, and it wouldn't hurt Olney or the county either."

Graham said the Olney playhouse is the largest theater in Maryland outside Baltimore. "It was a summer stock theater for all the big stars and has operated continuously except for a time when gas rationing closed it down during World War II," he said.