Baltimore police are investigating a possible arson at the home of a South Baltimore community activist who has been embroiled in a bitter neighborhood dispute over bars.

Theresa Hynes, an officer of the South Baltimore Improvement Committee, the peninsula's largest community organization, was asleep in a second-story bedroom at about 9 p.m. Monday when someone set fire to the rear of her rowhouse at 1509 S. Charles St. Hynes was not injured. The home sustained at least $5,000 in damage.

Yesterday, residents expressed concern that the fire might indicate a dispute over local bar expansion is out of control. Police said they are investigating any connection between Hynes' community work and the fire, but they have no evidence of a link.

Nevertheless, Hynes, 40, a first-year University of Maryland nursing student who moved to the community 10 years ago, acknowledges she has made several enemies. She moved out of her house and into a hotel last night.

"When the fire and police people told me it was arson, I wasn't surprised," said Hynes. "The bot- tom line is: Someone set my home on fire. And there are people who don't like what I've been doing."

Cynthia Griffin, the new SBIC president and a friend of Hynes, said that because of the fire, she is receiving police protection. The improvement committee might establish a reward for information relating to an arrest in the fire, Griffin said. As of late yesterday, no witnesses had emerged, said police and neighbors.

"We're not pointing the finger at anyone in particular," said Griffin. "But we've got to stop all of this fighting now. It's gotten out of hand."

Hynes came to community prominence after arguing the Fort Charles Pub, about 100 feet from her front door, was too noisy and employed a disc jockey in violation of city rules.

This year, Hynes helped force the resignation of Bill Prohaska, a community association president who was seen as too close to local bar owners. Residents more sympathetic to taverns responded by trying to impeach Hynes and other improvement committee officers at a meeting March 9. The impeachment bid failed.

"She was not the most popular person in the neighborhood," said Ethel Cooper, who lives in a rowhouse across the alley from Hynes' back door. Cooper said she threatened Hynes two weeks ago in a dispute over cats, but meant nothing by it.

"You know, as soon as she got in the neighborhood, she started picking on the bars," said Cooper, who has lived in her house for 55 years. "You don't do that when you're new in the neighborhood."

Yesterday, Jim Whittman, a Fort Charles Pub owner, said "I hold Terri no grudges. I think it must have been an accident."

Police said yesterday it will take the laboratory at least a week to pinpoint how the blaze was set. The fire destroyed a covered patio and caused limited damage to a first-floor room and smoke damage throughout the house. It spilled over onto a neighboring property and damaged a door, a few windows and part of a fence.

Pub Date: 3/24/99