The developer, locally based TRF Pacific, sued Whole Foods in September for breach of contract, alleging it terminated its 58,000-square-foot lease a week before the built-to-suit structure was shell complete. Whole Foods' agreement to open a smaller store at Interbay Urban Center and be responsible for subleasing the remainder is part of an out-of-court settlement that also includes restrictions on how it can fill the space. TRF was expected to file papers this week dismissing the lawsuit.

For the good of the center, TRF is expected to assist Whole Foods in securing tenants for the 20,000 square feet of excess space. TRF managing member Doug Exworthy tells GlobeSt.com that Whole Foods' excess space will not be broken up into small shop space spaces, which is what TRF did with the second structure on the property, a 20,000-square-foot building with 10 spaces, four of which have been leased to Peet's Coffee, Subway, Verizon Wireless and a dry cleaner.

"The last thing I want to do is have that competing with the shop space," Exworthy says. "There are restrictions about how small that space can be demised; there won't be more than two tenants."

While no asking lease rate was available yet for Whole Foods' excess space, triple-net asking lease rate for six remaining shop spaces in the second building at Interbay Urban Center is $55 per square foot per year, according to TRF's website. Exworthy says the current availability in the shop space is due to the fact that little leasing activity took place while Whole Foods lease was up in the air. Two of the four tenants already signed on have completed their tenant improvements but have not yet opened their stores. Exworthy says he will be speaking with the tenants soon to hammer out when they will open and begin paying rent.

TRF built Seattle's first Whole Foods Market in Seattle's University District 10 years ago. With regard to its Interurban leasehold, Whole Foods disclosed during the legal proceedings with TRF that updated sales projections were the reason behind the shrinking store, and that cash flow issues would cause the store's opening to be delayed by one year, according to news reports. The store was initially expected to open last month.