At a time when most malls are bustling with crowds of holiday shoppers, it’s business as usual in the Sherman Oaks Galleria.

And that’s not good.

All but a handful of the stores are shuttered and vacant, their windows dark. The floors are empty save for a few stragglers. There is no Christmas music, no din of shoppers, no Santa Claus.

Mall owner Douglas, Emmett & Co. is planning a major overhaul, but all the stores must vacate for the project to begin. And the Galleria’s anchor tenant, Robinsons-May, won’t go.

With the matter in litigation, and a court date now delayed until mid-February, the Sherman Oaks Galleria is in limbo. Some might say the Grinch has stolen its Christmas.

“We hope we’ll get some business,” Ramhad Hadel said wistfully, sitting behind the counter of his empty store, Bayside Watch.

It is one of only about 13 stores that have opted to stay, at least through the holiday season. Most owners, including Pacific Theatres, will leave after the first of the year.

The Sherman Oaks Galleria once housed as many as 80 specialty stores and helped make the “Valley girl” a national icon. Today, nary a Valley girl can be found.

Instead, the shoppers on a recent afternoon included a white-haired Ruth Lindeman and her two friends. They had come from North Hollywood, because the Robinsons-May in their neighborhood was out of stock of the items they wanted.

“It’s very nice. They had what I wanted and you get waited on right away. I got in and out in two minutes,” said Lindeman, sitting on a bench outside the department store with her purchase draped over her walker.

With the exception of Robinsons-May, retailers have remained only because their business is not dependent on general mall traffic and because rent is cheap.

“For us, the biggest reason why we’re here is we do specialty toys that you can’t find anywhere else, said K.C. Dhiraj, manager of Collector’s Guide, a shop that sells collectibles like Star Trek action figures. “We get a lot of regulars.”

But wouldn’t a location at a mall bustling with traffic be better?

A big smile comes over Dhiraj’s face. “The partners have other stores and they pay 10 times more rent there,” he said.

Fuat Sucu, proprietor of Howick’s Fine Gifts, stops just short of saying how low the rent is. “Let’s put it this way. You wouldn’t give me your garage for the price I pay,” he says.

Sucu, who sells objets d’art, also has regular customers who visit the store specifically for certain items. The store also serves as inexpensive office space for his wholesale business, and Sucu says he doesn’t have to worry about keeping mall hours.

“I come in at 10 and I leave at 5,” he says. “We’re taking our time in finding a new location.”

Most retailers say it has been years since the Galleria drew any real traffic. Earlier in the decade, as movie theaters began replacing department stores as the preferred anchor for malls, the center found itself at a severe disadvantage. It had only five movie screens while newer shopping centers were going up with 10 screens and more. Customers abandoned the mall, and retailers followed.

After years of contentious battles with local residents, the previous owners, Dai-Ichi Life Insurance Co. and Prudential Insurance Co., secured entitlements to expand the number of movie screens and restaurants. But by then the exodus of retail tenants had already begun.

When Douglas, Emmett acquired the Galleria last year, the company decided to downsize the retail portion and drew up a plan to create an entertainment and office center. The plan also calls for replacing some of the Galleria’s current exterior a fortress of walls that hide the mall from the view of passersby with glass so that restaurants and some of the shops would be visible from the busy intersection of Sepulveda and Ventura boulevards. A pedestrian plaza is also planned.

Inside the 880,000-square-foot mall, an 18-screen theater and as many as eight restaurants would be the main attraction. Retail space would be cut by more than half, to about 200,000 square feet, and office space would be doubled to about 600,000 square feet.

Mall officials said they are currently in negotiations with restaurant owners and would not disclose any names until deals are finalized. The types of shops that might be included have not yet been determined, but they are not likely to be the kinds of large apparel and home furnishings chains found at most major malls.

“It’s really geared to the people in the surrounding area,” said Mee Lee, a consultant working with Douglas, Emmett on the renovation. “There’s a lack of theaters. There’s a lack of restaurants. It’s not intended as a huge mall where people would come from everywhere to shop.”

With a downsized retail center that poses fewer traffic problems, the community threw its support behind the renovation. And earlier this month, the Los Angeles City Council gave the project a green light. Everything was set to go.

Everything, that is, but the cooperation of Robinsons-May.

This summer, Douglas, Emmett filed a lawsuit as part of its efforts to evict the retailer. “We’re moving forward to get them out,” said Patricia Glaser, a partner with Christensen, Miller, Fink Jacobs, Glaser, Weil & Shapiro. “They breached their lease.”

Glaser claims that Robinsons-May has not honored its obligation to maintain the same quality and quantity of merchandise at the Galleria that it stocks at its other Southern California stores. “We believe we can establish figures,” she said.

A spokeswoman for Robinsons-May would say only that the company does not comment on matters in litigation.

A court date, originally scheduled for Dec. 7, was recently postponed until mid-February at the retailer’s request, delaying the renovation for at least several more months.

Lee at Douglas, Emmett said the mall owner is not worried about the loss of potential rent due to the delay because the potential for profit on the backend is substantial. “We’re hoping to start construction in spring of ’99,” Lee said. “And we anticipate completing the project within two years.”

Others are not so optimistic. “It’s in the hands of the courts,” said Richard Close, president of the Sherman Oaks Homeowners Association. “As a lawyer, I know these legal battles can go on for years.”

Meanwhile the mall sits virtually empty.

Close and his wife decided to visit the mall on a recent Sunday afternoon, to catch a movie. The theater was empty and they had no trouble finding a parking space. But the experience was disquieting nonetheless.

“It was once one of the finest, the most popular malls in L.A., and now look at it,” said Close. “White elephants are bad for the owners as well as the community.”