Commercial Strip Owner Sues W. Covina : Redevelopment: Five years of uncertainty over the planned expansion of the West Covina Fashion Plaza has left neighboring businesses out on a limb.

WEST COVINA —  Marshall Litchmann used to be a big supporter of West Covina Fashion Plaza.

When the 62-acre regional shopping center opened in 1975 with Bullock’s, The Broadway and JC Penney as its anchors, he saw it as a welcome boost to the value of property he owned in the nearby business district.

Today, he’s not so thrilled. The city’s planned expansion of the mall will involve razing some of Litchmann’s property in a commercial strip outside the complex. Worse, he says, tenants have been deserting him--or expecting lower rents--because of long-running uncertainty over the demolition.

The Westwood real estate investor last month filed a suit against the city in Los Angeles Superior Court seeking damages for financial losses caused by tenants’ fears of condemnation.

Litchmann claims the city has spooked his tenants by conducting at least three appraisals of his property since 1986. The city-approved developer for the expansion, the Sylvan Shulman Co., last year made an offer on the property that was way below market value, Litchmann said, declining to specify the figure.

As a result of the uncertainty, he said, he is losing $40,000 a month in income from tenants who have moved out. And, he said, he has been charging remaining tenants only about 40% of the usual rent because “we’re just happy to keep them.”

“This is valuable property,” he said, gesturing toward his 19,000 square feet of retail space east of the mall. “Where can you find property in the middle of a parking lot near Bullock’s?”

But more than 10,000 square feet of the space remains vacant because tenants, such as Fayva Shoes, have left for more secure locations, Litchmann said. Interested potential tenants back off when he tells them of the city’s plans for the area, he said.

“(The city) just kept us on a string,” Litchmann said. “We never knew what they were going to do.”

Litchmann’s attorney, Kevin Brogan, did not specify the amount of damages sought from the city.

Redevelopment Agency officials maintain that appraisals are crucial for planning purposes. “It’s all necessary for the pre-planning, which we have to do in any development,” said Mac Winters, the Redevelopment Agency’s principal engineer for the project. “We have to anticipate costs and come up with budgets.”

Redevelopment Manager Chet Yoshizaki said his agency came up with a conceptual design for the expansion in 1985, but has had to wait until this week--when $45 million in bonds are expected to be sold--to begin buying up 11 parcels for the expansion. The project will add a May Co. department store as a fourth anchor to the mall. Expansion also includes building 100,000 square feet of additional store space in the mall, and creating a separate 80,000-square-foot retail structure next to the shopping plaza. The City Council approved the plan last June.

Winters said the demolition of properties acquired to make room for the expansion should begin by early summer, although some stores may be able to stay open into early 1991. He said the area should be completely cleared by February, 1991, for the developers, Sylvan Shulman Co. and May Centers, Inc.

Whatever happens, Litchmann said the city owes him compensation for income he has lost during the years of uncertainty.

“Over four years, it’s been slow death,” said his son, John Litchmann, who works in his father’s business. “And this isn’t even going to be low-income housing.”

Litchmann’s remaining tenants have some complaints, too.

Amir Kojoory, owner of Plaza Studio Photography, acknowledged that he is paying half rent for his store, which sits in the shadow of the planned redevelopment. But his business is suffering too, he said.

“We haven’t been booking weddings because of this thing,” he said, because customers aren’t sure whether he’ll be around in a year to provide reprints.

The owner of the Sakura of Tokyo restaurant just hopes to get a space in the expanded area.

“I’ve put in a lot of energy here,” said the owner, asking not to be named. “People understand that I make good food, but if they (demolish) the restaurant I will lose customers.”