THE Land Development Corporation (LDC) has for the first time introduced a profit-sharing option for owners affected by its projects. Critics said the option provided small owners with the chance to exercise their rights proportional to their ownership but warned of the investment risks involved. The first owners to be given the option are those coming from the Queen Street area which is bounded by Queen's Road West, Pan Kwai Lane, Ko Shing Street and Bonham Strand West. The 9,500-square-metre site is to be redeveloped at a cost of more than $2.3 billion. The corporation chairman, Mr Steven Poon Kwok-lim, said flat owners could choose from three options of compensation within three months. Upon surrendering their existing units, they can have cash compensation which amounts to $4,750 per square foot plus a lump sum $100,000 allowance. Owners can also choose to have a unit in the redevelopment upon completion or a domestic unit in the LDC's existing property in Third Street or Kui Yan Lane. They will receive a rental subsidy of not less than $200,000 during the redevelopment period. Lastly, they can opt to join the profit-sharing Owners' Participation Scheme. On the sale of the redeveloped property, a participant will receive an amount equal to the value of his original flat plus interest, and his share of the profits or loss from his ''investment''. Mr Poon said once people joined the scheme, they would not be allowed to withdraw. Non-residential unit owners can choose between cash compensation and the participation scheme. The compensation is $4,000 per square foot based on the usable area. There are 158 owners affected by the Queen Street redevelopment, 34 of whom are domestic owners. Mr Poon said owners' participation schemes in other places were not very successful but the LDC introduced it to give the owners the opportunity to profit from their investment. He said they would decide whether owners' participation should be included in other projects after assessing the Queen Street redevelopment. Legislative Councillor Mr Frederick Fung Kin-kee said the participation scheme broadened the rights of small owners. ''Depending on their judgement, they can put their ownership right to investment and earn profits. But of course, they have to bear in mind the kind of risk involved.'' Housing Authority member the Reverend Sean Burke agreed there was value to the scheme as it provided more choice for people. But he said the option could amount to gambling. ''If people can afford to gamble, then go ahead,'' Mr Burke said. ''If they are dealing with necessity, then they should be more careful.'' The redevelopment proposal for the Queen Street area includes building three residential towers on a commercial podium and an office tower. Construction is scheduled to begin in 1995 and end in late 1997.