Owners of the Annapolis Harbour Center filed a multi-million dollar lawsuit July 2 to stop the grocery store from relocating to the new $400 million Annapolis Towne Centre complex under construction less than a mile away.

Currently, Whole Foods leases 25,000 square feet from Annapolis Harbour Center.

But Annapolis Towne Centre officials announced Whole Foods to be a major anchor for their project as early as 2005.

In the lawsuit, Annapolis Harbour Center claims Whole Foods signed a five-year lease extension last summer that expressly prevents it from operating another store within three miles of its current location until 2013.

The lawsuit, which is on file at the Anne Arundel County Circuit Courthouse in Annapolis, seeks an injunction to stop Whole Foods from opening a new store at the Annapolis Towne Centre until May 2013. It also seeks $10 million from Whole Foods and $35 million from Annapolis Towne Centre and Greenberg Gibbons Commercial, developer of the centre.

But this morning, officials from the two shopping centers said there could be a settlement in the works.

Jeff Guelcher, general counsel for Lerner Corp., manager of the Harbour Center, declined to comment on terms, but said "we're in the process of finalizing the paperwork relative to that."

Brian Gibbons, president and chief executive officer of Greenberg Gibbons, declined to comment about the suit.

"Obviously it's nice to have this thing behind us, but it really had no significant impact to anything that's going on (at Parole Towne Centre)," Mr. Gibbons said.

Harbour Center officials have reason to be worried.

Bed Bath and Beyond, Eastern Mountain Sports and Whole Foods are jumping to the new shopping center.

The Harbour Center will remain home to such tenants Old Navy, South Moon Under and White House Black Market.

Whole Foods originally was slated to open this fall before the rest of the Annapolis Towne Centre complex.

But its opening has been delayed until next spring because construction crews are rearranging the Whole Foods building to accommodate a 24-hour fitness center, Mr. Gibbons said.

"We had to basically tear down half the building," he said, explaining the fitness center didn't sign its lease until earlier this year. "They are in the same building as Whole Foods."

Tracie Reynolds, county spokesman, said Whole Foods applied for its building permit yesterday. If approved, the grocer expects to begin construction in January, she said.

Michelle Guerrero, a spokesman for Whole Foods Mid Atlantic, said she was unaware of the lawsuit yesterday, but stressed the construction was moving ahead.

"We are definitely opening the new location," she said.

Mr. Gibbons said the rearrangement of the Whole Foods building also will delay the opening of Bed Bath and Beyond, which will be housed in the same building.

However, Annapolis Towne Centre will open several new stores in the October-November time frame, including Target, P.F. Chang's China Bistro, Talbots and Coldwater Creek.

Competition

According to the lawsuit, Annapolis Harbour Center is expecting competition from Annapolis Towne Centre.

"Among other things, the customer traffic at Annapolis Harbour Center will be disrupted as regular Annapolis Harbour Center customers are lured to Annapolis Towne Centre - with resulting damages to Plaintiff and to other stores at Annapolis Harbour Center," states the lawsuit, which names Whole Foods Market Group, Inc., Annapolis Towne Centre at Parole LLC, and Greenberg Gibbons Commercial Corp.

According to the lawsuit, Fresh Fields Markets signed the first, 15-year lease with Annapolis Harbour Center in September 1992. Fresh Fields subsequently merged with Whole Foods and Whole Foods took over the property.

The original lease ended May 31 of this year, but Whole Foods exercised its first of three five-year lease extensions in July 2007.

The lawsuit states Whole Foods attempted to negotiate a shorter lease with Annapolis Harbour Center, but the shopping center refused. Whole Foods then acted in "bad faith" and signed a lease it had no intention of following, the lawsuit said.

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