TRAILBLAZING DEVELOPER JAMES W. ROUSE DIES

James W. Rouse, the visionary developer who introduced the shopping mall, the term "urban renewal" and the festival marketplace to America, died yesterday morning at his home in Columbia of complications from amyotrophic lateral sclerosis, commonly known as Lou Gehrig's disease. He was 81.

Rouse's visions transformed the landscape of the Washington-Baltimore region and the nation. He built the first indoor shopping mall, the planned community of Columbia, and Harborplace in Baltimore, Faneuil Hall in Boston and the South Street Seaport in New York City -- so-called festival marketplaces that combine specialty shops, restaurants and street entertainment in urban settings. Last fall, he was awarded the nation's highest civilian honor, the Presidential Medal of Freedom.

He retired from Rouse Co. as chief executive in 1981 and launched the Enterprise Foundation to focus on affordable housing for the poor. The foundation has concentrated its efforts in Sandtown, one of the most desperate neighborhoods in inner-city Baltimore.

Rouse said in a recent interview that he hoped to show that revitalization of slums could turn a profit. He made it a habit to create models that others could copy, and he wanted his plan to be as widely copied as the mall.

He revealed himself as a deeply spiritual man, and friends and acquaintances consistently referred to his joyous and gracious manner of living. Rouse said he saw his task in this life as one of co-creator with God, a philosophy that he had come to in the late 1960s after taking an intensive class in Christian living at Church of the Saviour in Adams-Morgan.

In awarding the Presidential Medal of Freedom, President Clinton praised Rouse for helping to "heal the torn-out heart" of America's cities.

"Every time I see James Rouse, I think if every American developer had done what James Rouse has done with his life, we would have lower crime rates, fewer gangs, less drugs," he said. "Our children would have a better future. Our cities would be delightful to live in. We would not walk in fear. We would walk in pride down the streets of our cities, just as we still can in the small towns of America."

Rouse grew up on an estate in the Eastern Shore town of Easton, the son of a canned foods broker and a homemaker. After both of his parents died after long illnesses in 1930, when he was 16, Rouse attended the University of Hawaii for a year before returning to the Baltimore area and graduating from the University of Baltimore Law School during the depths of the Depression.

He worked briefly for the Federal Housing Administration while in law school and was manager of the mortgage department at Baltimore Title Guarantee Co. by the time he graduated in 1937. He and another young mortgage banker named Hunter Moss founded Moss-Rouse Co. in 1939 with $20,000 in borrowed money. Their efforts to establish a new business were temporarily sidetracked by World War II, during which Rouse served in the Pacific as a lieutenant commander in the Navy.

He returned to Baltimore, and the young firm thrived during the boom years after the war by representing banks and providing home loans to returning GIs. Rouse soon entered the shopping center business by building an L-shaped development called Talbottown in his home town of Easton. By the mid-1950s, Moss had left the company, now called Rouse Co., and Rouse saw the need for a new Main Street in the suburbs that would provide protection against the often disagreeable weather of the Atlantic Seaboard. His solution, he suggested, should be called the HASS -- Heated and Air-Conditioned Shopping Street. Advisers protested, and Rouse agreed to call his new indoor shopping center in Harundale, Md., a "mall."

The first mall was quite tiny by today's standards. Rouse, however, soon built a larger, multilevel mall in Cherry Hill, N.J., complete with indoor landscaping and skylights, design elements that suggested malls to come. His company pioneered the food court that is a staple of shopping centers everywhere and pushcarts that sell specialty items.

As Rouse was establishing himself as one of America's leading developers, he also was focusing on urban issues, first in Baltimore and then in Washington. In the early 1950s, he became involved in a pilot project in East Baltimore that tried to revitalize one neighborhood. When Baltimore's mayor refused to provide full funding for the project, Rouse resigned in protest from a citizens commission, attracting national media attention to the issue of slum conditions.

In 1953, President Dwight D. Eisenhower appointed Rouse to his national housing task force. Among other initiatives, Rouse is credited with coining the term "urban renewal." By 1955, he had co-written a report for the District called "No More Slums in Ten Years." He later said the plan failed because the city lacked political leadership with the will to change things.

By the early 1960s, Rouse and his business colleagues secretly had started buying up thousands of acres in rural Howard County, and Rouse soon announced his plans for the new town of Columbia, describing it as an antidote to haphazard suburban sprawl. He gathered behavioral scientists together and set about building what he described as a city that would encourage people to love one another. It was exceptional in its pledge to be an open community that would include residents of all races and economic groups. Many of the initial plans for Columbia, however, were never fully realized after the Nixon administration cut funding for transportation, low-income housing and other efforts. In the 1970s, Rouse turned his development efforts back to the city, doing what almost nobody else thought could be done by resurrecting Faneuil Hall in Boston as a festival marketplace. Soon to follow were Harborplace in Baltimore, the Gallery in Philadelphia and the South Street Seaport in New York.

And then, in 1981, he started the Enterprise Foundation, as well as Enterprise Development Co. He hoped to build festival marketplaces in smaller cities and use the profits to build affordable housing for the poor, a tactic that did not work. He then relied on more traditional forms of corporate fund-raising and became a missionary of sorts in his efforts to attract attention to the problems of urban America.

Rouse was an outspoken critic of America's shift away from government-sponsored programs for the poor in the 1980s. Still, in 1982, he served on President Ronald Reagan's Task Force on Private Sector Initiatives and in 1987 was chairman of the National Housing Task Force, which issued a report that became the basis for comprehensive housing legislation signed into law by President George Bush.

In the last few years, Rouse had focused his efforts on Sandtown, saying he wanted to show that attacking all of the broken urban systems at once -- housing, education, health care, public safety and employment -- could transform Sandtown and cost less than the current Band-Aid approach. He retired in 1993 from his unpaid role as chairman of the Enterprise Foundation but kept his corner office and worked almost exclusively on the Sandtown project until recently.

Some critics said he had a late-life conversion and returned to the city as a way to make amends for his work in the suburbs. Rouse denied that, saying he simply tried to solve the problems he saw around him in America during each decade of the last half of the 20th century. The mall, he argued in a recent interview, has been a centralizing force in American suburban life. Columbia is a living example, he added, of a community that is imperfect but better than most.

Rouse made most of his money in the suburbs, but he said the exodus to the suburbs "sucked the blood out of the central cities and left some of the urban basket cases we see today."

Andrew Heiskell, the retired chairman of Time Inc. and a longtime friend who worked with Rouse on urban issues in the 1950s, said in a recent interview that some things were beyond the perception of even a visionary such as Rouse, including the impact of race, highways and mortgage deductions -- which combined to fuel the growth of suburbia.

"In those days, nobody understood that if you built a state highway system it would merely serve the purpose of emptying the city," Heiskell said. "This is why progress is very difficult in these areas. All the time you make progress, other decisions are being made that have unintended consequences."

Rouse lived in a simple ranch-style house on the shoreline of Wilde Lake in Columbia's first village and would take long walks around the lake with his second wife, Patty.

He died there yesterday about 10:30 a.m., with his wife at his side. Rouse, who had undergone chemotherapy for lymphoma, had not previously revealed that he had Lou Gehrig's disease, which affects the spinal cord and lower brain stem and leads to degeneration of motor function.

Rouse left behind detailed handwritten instructions to his survivors. He said funerals should be joyous events and said the following should be read at his memorial service: "I have just left on my trip to my next life." Rouse's first marriage, to the former Elizabeth Winstead, ended in divorce. He is survived by his wife, Patty Rouse of Columbia; three children from his first marriage, Robin Norton of Columbia, James Rouse of Baltimore and Ted Rouse of Baltimore; three stepchildren, Maria Gamper of Baltimore, John Rixey Jr. of Annapolis and Barbour Rixey of Virginia Beach; and seven grandchildren. CAPTION: James W. Rouse devoted his later years to saving poor inner cities.