Aug. 4--WEST COVINA -- The owner of The Heights at West Covina Shopping Center is nearing default on its $25 million loan and is on the verge of losing part of the retail center, officials said Monday.

The center is owned by the West Covina Retail Development Partnership and Eclipse Development Group, according to city records.

Eclipse President Douglas Gray is the developer of the 45-acre center at 2730 Azusa Avenue next to Big League Dreams.

Calls to Gray were not immediately returned Friday or Monday.

City Manager Andy Pasmant believes the debt is a result of a construction loan and said Gray is trying to find investors for the property.

"I think he is handling it," Pasmant said. "It's just difficult in these economic times trying to find that kind of money from lenders."

No public or redevelopment funds are tied up in the center, Pasmant added.

Gray has until Aug. 12 to come up with the finances or the retail center will be taken over by Wells Fargo, the lender of the loan, according to a July 30 public notice filed by the bank.

Wells Fargo Spokeswoman Elise Wilkinson declined to comment, saying corporate policy prohibits discussing specific properties or client relationships.

The 330,000-square-foot shopping center is anchored by Target and Home Depot and held its grand opening a year ago.

The center also includes PetSmart, Staples, Fresh & Easy Neighborhood Market, several

restaurants and a Wells Fargo branch, which opened about a month ago.

Councilman Mike Touhey said the center's financial issues will start to become more of a trend.

"This is the first one I heard of and there will be many more to come," Touhey said. "Businesses will have difficulty getting a permanent loan so they will sell some of the parcels to get more equity."

Touhey believes Gray is trying to get permanent financing for Quiznos, Jamba Juice and Starbucks among others.

The retail spot has been a center of controversy in the past.

In 2004 the shopping center was originally meant to have Wal-Mart as its anchor store, but the proposal was struck down by the City Council on a 3-2 vote. Several community members were opposed to having a Wal-Mart in the city.

The project was then thought to be dead but Gray returned a year later proposing Target as the anchor store. Construction began in 2006.

Meanwhile, Pasmant said the city and the center should not be affected by the owner's financial woes.

"You and I will not see a difference," Pasmant said. "The title will be under a different name; it's like selling a house, there is a different owner from time to time."

Calls to Council Members Shelley Sanderson and Steve Herfert were not immediately returned Monday.

amanda.baumfeld@sgvn.com

(626) 962-8811 ext. 2108

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