Whole Foods Market wants to cancel its planned store at Ward Centers after repeated delays by the owner of the Kaka'ako retail complex to finish an expansion project housing the store.

The natural and organic foods retailer recently notified Ward Centers owner General Growth Properties of its intent to terminate a lease for the store once envisioned as the flagship Hawai'i location for Whole Foods.

Texas-based Whole Foods, in a statement yesterday, said it will seek a new location to serve the Downtown area of Honolulu.

Because General Growth is in bankruptcy, Whole Foods needs court approval to terminate its Ward Centers lease. A hearing is set for Dec. 18 in U.S. Bankruptcy Court in New York.

In its termination notice filed with the court, Whole Foods said General Growth failed to meet a Nov. 1 deadline to complete the building for Whole Foods, and has given no indication when construction would resume and be finished.

Whole Foods in September said it was committed to the Ward store plan and that it expected the store to open late next year.

But the company, in its termination notice, said it was unwilling to agree to a proposal from General Growth, presented in July, that called for extending the Nov. 1 store space delivery deadline to an unspecified date that would be determined within six months.

General Growth in its proposal said the delivery date would be 10 months after obtaining approvals necessary to finish construction, including resolution of construction liens against the project, but did not estimate when such approvals would be obtained.

"The debtor has given no assurances to (Whole Foods) that it will complete (construction) at any time in the future," Whole Foods said in its termination notice.

Whole Foods, in its notice, said it will seek $409,000 from General Growth to recover costs the retailer incurred planning the store.

Chicago-based General Growth, the nation's second-largest mall owner and operator, did not immediately respond to a request for comment yesterday.

If Whole Foods is allowed to terminate its lease, it would end a project announced in early 2006.

Initially, the nation's largest natural and organic grocery chain expected the store to open in early 2008 with 67,000 square feet of space on two levels anchoring a larger retail complex connected to an 1,100-stall parking garage. A luxury apartment building also was part of the development plan.

Then a year ago, Whole Foods said concerns about a weakened U.S. economy and reduced consumer spending led it to downsize planned new stores, and the Ward store was cut to 35,000 square feet on one level. A projected opening date was pushed back to early 2010 because of a slower-than-expected construction pace that may have been due in part to repeated finds of iwi, or human bones, on the site.

The first Whole Foods in Hawai'i opened in September 2008 at Kahala Mall, and the company said it received a warm welcome from local shoppers at the 28,000-square-foot store.

A 26,366-square-foot store is on track to open on Maui in February, while a 40,000-square-foot store in Kailua is expected to open in fall 2011 after a different landlord encountered construction delays related to iwi.

At Ward Centers, General Growth had until Nov. 1 to complete the building for Whole Foods under an amended lease.

Construction on the retail complex and parking garage was halted about 12 months ago, and General Growth filed for Chapter 11 bankruptcy in April.

General Growth in September said it has spent $112 million on the project called Ward Village Shops adjacent to Pier 1 Imports, and would need to spend another $49 million to complete the work.

Contractors have filed liens valued at $18 million against the property related to work they claim they weren't paid for. General Growth has been working to resolve liens on numerous construction projects at malls around the country.