The shops of Dixwell Plaza do not wear their age well. From the rusted blue awning to the cracked sidewalk, the small strip of retail has the air of having seen better days.

Plans exist to rehabilitate the Plaza, a mainstay of the Dixwell neighborhood since its construction in 1969. But the proposed renovation to the strip’s facade has been delayed due to a lawsuit filed by one of the plaza’s tenants over the right to develop in one of its vacant spaces.

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Though plaza tenants’ plans for a new facade are being put on hold, some are hopeful that the eventual renovation will turn the plaza into a more vibrant commercial center for the Dixwell neighborhood.

Gerald Clark, a member of a business association that was one of the first tenants of the plaza, said he is optimistic that the site will eventually be renovated and redeveloped.

“It looks very shabby,” he said. “It certainly used to look much better … [The upgrade] would raise pride and certainly provide needed products and services.”

Diane-Brown Petteway, the branch manager of Stetson Library, a Dixwell Plaza mainstay since 1968, said the plaza should evolve to respond more fully to the needs of the community.

“I guess I would just like to see [Dixwell Plaza] attract different types of vendors, more cultural types of things that answer to the needs of the community,” she said. “People in Fair Haven can walk down Grand Avenue … and it’s like their own little downtown. Everything should be directly what the community needs, not just what someone dreamt up on a drawing board.”

But nothing can change at Dixwell Plaza until legal issues are resolved. The lawsuit stalling renovation started over a proposal to open a new supermarket run by the Northeast chain C-Town, which is set to open in the plaza at the end of February. Karim Sidi, who owns Frances Beauty Salon, lost out on a bid to take over the space where C-Town will open, according to a Dixwell Plaza merchant who asked to remain anonymous.

“It has to do with who bidded out, who got the contract,” the merchant said. “The city owns the building … C-Town won the contract and Sidi and his group were obviously not pleased at the way things went.”

Sidi has filed the lawsuit against C-Town and New Haven, alleging that the bidding process violated rules set forth by the Dixwell Condominium Association, a group formed by tenants of the plaza, Sidi’s lawyer Max Brunswick said. According to the association’s rules, any Dixwell Plaza tenant has priority over outside bidders on a vacated plaza property if the tenant is willing to match the outside bid. Brunswick said if the rule had been properly applied in this situation, Sidi would have won the bid and done whatever he wanted with the space.

The city, Brunswick said, is claiming the association’s rule is not a binding law and therefore is meaningless. But Sidi will argue that the city’s knowledge of the rule makes it equivalent to law, Brunswick said.

Robert Solomon, a Yale Law School professor who advised the Condominium Association on the case, said Sidi has no case because the association was not formed according to proper city protocol. Because it was not, he said, Sidi’s claims carry no weight.

Even if the lawsuit were resolved tomorrow, the renovation could not proceed immediately because the plans are not yet complete. Clark said architectural firms have placed bids for the renovation but that none have been selected yet.

“The bids were put out,” he said. “And [after the decision] … well, it could take about a year and a half, two years … I wish I knew.”

He said the restoration would be completed with a combination of public and private funds.

But Elizabeth Hayes, owner of the Rite Way Laundry, one of the oldest stores in the plaza, said she did not think the renovation would take more than six months once it got off the ground.

Martin A. Benassi, an architect from Hamden, said he was asked to conceptualize a new look for the plaza many years ago, and he recommended a more uniformed and modern look for the plaza.

“Basically, [we said they should] clean it up,” he said. “Get rid of the old canopies out in front, upgrade the landscaping, have more consistent signage … they also had to take care of some infrastructure. The roofing systems are leaking bad.”

But Benassi said the plan was never used.

City departments did not return repeated requests for comment.

Despite the long delays and legal wrangling, the imminent arrival of C-Town in a sleek, shiny new building has some plaza merchants hopeful.

Hayes said the grocery store would provide jobs for the community and spur economic growth for the rest of the plaza. She also expressed enthusiasm for the impending renovation.

“The neighborhood was just revitalized three years ago,” she said. “This improves the quality of life in the community and is a win-win for everybody. The more we make, the more the city makes.”