Even with a $30 million lawsuit hanging over both shopping hubs, Harbour Center officials said they've signed a deal with a grocery store called Fresh Market that will take over the roughly 25,000-square-foot space occupied by Whole Foods.

Fresh Market, a North Carolina-based company that operates 81 stores, including a location in Baltimore, offers fresh produce and an open-air European market atmosphere, according to a company spokesman.

Harbour Center officials also said they are close to completing paperwork on a replacement tenant for the 25,800 square feet currently occupied by Bed Bath and Beyond. They wouldn't reveal the name of the business, but said it will offer a high-end product.

The changes come as Whole Foods and Bed Bath and Beyond move to the new $400 million Annapolis Towne Centre at Parole just down the road. The stores will open next year in spaces larger than their current Solomons Island Road locations at Harbour Center.

Eastern Mountain Sports also is moving from Harbour Center to Towne Centre.

The move-outs strike a major blow to the Harbour Center as tenants like Whole Foods vacate. Whole Foods took over the lease of Fresh Fields, which had been housed at Harbour Center since 1992.

Despite the shuffling, the 290,000-square foot Harbour Center still holds a strong mix of national and local tenants that continue to generate demand from prospective businesses, said Janet McCarthy, senior leasing manager for Lerner Corp., which manages the Harbour Center.

She said the center's Bed Bath and Beyond spot has attracted "five different good prospects."

To fill the space left behind by Eastern Mountain Sports, the center's specialty toy store, Jack in the Box Toys, is scheduled to move in by April 1. Ms. McCarthy said she couldn't reveal who will take over the space left empty by Jack in the Box.

Meanwhile, Ulta Beauty, a beauty retailer selling brand name cosmetics, made its debut in Annapolis this summer in Harbour Center, opening up in a 10,800-square-foot space formerly home to the Storehouse furniture store, Ms. McCarthy said.

"We always have a list of tenants who want to be in the Annapolis Harbour Center," she said.

But Whole Foods' plans to move raise new questions about what impact Towne Center may have on the Annapolis Harbour Center.

The issue took on extra significance this summer when Annapolis Harbour Center filed a multi-million dollar lawsuit against Whole Foods and the Towne Centre in an effort to keep the upscale grocery store.

Harbor Center and Towne Centre officials said last week they have reached an agreement and will drop the lawsuit, but wouldn't discuss details of that deal.

Whole Foods still will move forward with its plans to relocate to a more than 70,000-square-spot at the Towne Centre next year, officials said.

They say Whole Foods' opening has been delayed because they are rearranging its building to accommodate a 24-hour fitness center.

Michelle Guerrero, a spokesman for Whole Foods Mid-Atlantic, said the new store should open before June. That's more than six months after Whole Foods originally was slated to open.

Meanwhile, Bed Bath and Beyond will relocate to its new 42,446-square-foot home in the Towne Centre. Its opening also will also be delayed because of the rearranged building, according to Towne Centre officials.

Direct competition

Some observers said the move of Whole Foods and Bed Bath and Beyond is a symbol of impending competition.

"The Harbour Center does have a challenge ahead," said Bob Burdon, president and chief executive officer of the Annapolis and Anne Arundel County Chamber of Commerce.

Some consumers already are planning to spend some of their dollars at the Towne Centre.

"To be quite honest, I'll probably just shop over there," said Joe Scabis, who had just visited Bed Bath and Beyond and picked up a cookie at Whole Foods.

He said there will be a greater selection of goods at the Towne Centre Whole Foods and Bed Bath and Beyond because the stores will be larger.

Erin Hershkowitz, spokesman for the International Council of Shopping Centers in New York, said she doesn't expect much of an impact. She said the new Parole center should create a "little bit more excitement for those tenants in the beginning."

But the Harbour Center should create some buzz of its own, adding that Ulta Beauty is a "great draw."

"I think it may work out to be a win-win for both of them," she said.

Located at 2512 Solomons Island Road, the Annapolis Harbour Center has long been a fixture in the community.

Easily recognizable with its red-and-white lighthouse visible from Route 2, the center is home to a variety of national and local stores from Barnes & Noble and South Moon Under to Ann Taylor Loft and Pink Beach, a local store that sells accessories, home decor, jewelry and other merchandise. It's also home to the Pennsylvania Dutch Farmers Market.

The 290,000-square-foot store regularly draws local residents to its summer concert series on its wooden deck and movies at the Bowtie Cinemas movie theater, as well as places to eat such as T.G.I. Friday's, Lebanese Taverna and Baja Fresh.

Ken Chamberlain, owner of Jack in the Box Toys, said his store isn't going anywhere. The store, which moved to the Harbour Center from Edgewater in mid-March and once considered the Towne Centre as a possible location, is looking forward to moving into the 5,800-square-foot Eastern Mountain Sports space, he said. He said Harbour Center has excellent landlords, adding that they have sent out advertisements to promote the store twice since it has opened.

"Lerner has a solid reputation they are very good to deal with; they have a property manager on site everyday," Mr. Chamberlain said. "They respond right away."

Mr. Chamberlain said he finds the Harbour Center's layout very appealing.

"It's family-friendly, you can pull in and get a parking space, you can go to the movies, you can go to T.G.I. Friday's," he said. "It's quaint."

Annapolis resident Jennifer Kirby said she enjoys the Harbour shopping center because it's convenient, easy enough to find parking and provides a number of shopping needs, from Whole Foods to a store called Matava Shoes.

"To me this is easy, quick, in and out," she said.

Although she said she plans to check out some of the new restaurant options once the Parole center opens, Ms. Kirby said she'll still be a faithful Harbour Center shopper.

"There are a lot of things here that I really enjoy," she said.