There are Levi's rye bread posters on the walls and red plastic flowers in the tiny vases that perch on a ledge inside the booths that line the narrow restaurant.

The atmosphere is rushed, the sandwiches are fresh and thick and the patrons are content that they have discovered that rare find in Washington - a New York style deli.

But Loeb's Restaurant, for 20 years a fixture at 617 15th St. NW, is on its way out.

Walter Loeb was rudely greeted with that news on a Saturday last November when he got out of bed and picked up his morning newspaper. A major Washington developer, Oliver T. Carr Jr., had announced plans to build a $40 million mall, hotel and office complex on the block where Loeb's is located.

There was some talk that Loeb's could relocate in one of the new buildings but that would be five years off. In the meantime, Walter and Sigrid Loeb said, they have three children to feed.

Walter Loeb said yesterday that he looked around for a new place in the city, but could not afford the rent. The prices, Loeb said, were reasonable of a "fancy white tablecloth, $8 luncheon restaurant" but not for Loeb's, which is more of a "tuna fish half-dollar place."

So the Loebs plan to relocate on East-West Highway in Bethesda, they said during an interview yesterday, and will be more of a "gourmet deli, fast food" restaurant, decorated with plates that Sigrid Loeb has collected over the years, instead of blue mirrors and bread posters.

"If you go, you got to go with the times," Sigird Loeb said. But still, the Loebs are not ready to leave 15th Street, not yet.

Yesterday, they went to D.C. Superior Court to contest a notice they received from Oliver T. Carr management to be out of the Albee Building - where the restaurant is located - by Aug. 1.

Basically, the Loebs say that under the terms of their lease, they are owed another 142 days of occupancy. So the Loebs, and their lawyers, John W. Karr and Mona Lyons, went to landlord and tenant court to ask Judge Gladys Kessler to grant them the extension.

At the request of an attorney for the management company, Kessler agreed to hold a hearing Aug. 25.

"I don't really have a beef against him," said Walter Loeb of Oliver Carr, "except I want to stay here a little longer.

"It's a little like leaving home," said Loeb, who was back at the restaurant making sandwiches 30 minutes after he left the courthouse.

The Loebes' customers registered their discontent with the impending close of the restaurant with 600 signatures on the petitions forwarded to Carr and various city agencies, which described the Loebs' "first-class bill of fare" as a public service to both tourists and people who work in the area.

"I love the sandwiches, they're terrific," said political campaign consultant Wally Clinton, who was eating a "Walter's Special" of pastrami and cheese, cole slaw and Russian dressing on pumpernickel bread.

"I also like the ambiance," said Clinton. "It's not plastic and the sandwiches don't come wrapped in cellophane.