One of the Village at Riverstone's most anticipated retail anchors, Barnes & Noble Inc., apparently has canceled its plans to open at the Coeur d'Alene mixed-use development.

A lawsuit, filed last month in U.S. District Court, in Spokane, by Riverstone's developers, alleges that the big New York-based bookstore chain backed out of its lease and asks the court to enforce the terms of the multiyear agreement.

The developers, Riverstone Center West LLC, Riverstone Center East LLC, and Riverstone Center LLC, all affiliates of SRM Development LLC, of Spokane, say in the suit that cancellation of the bookseller's lease at the Village at Riverstone would put lease agreements with other tenants in jeopardy.

Mike Craven, spokesman for SRM Development, says, "We are disappointed with Barnes & Noble's decision not to go forward with the lease after we constructed the building."

Craven declines to comment further on the pending litigation.

Calls to Barnes & Nobles' corporate headquarters were referred to its real estate division, but sources there couldn't be reached for comment.

Along with asking the court to order Barnes & Noble to comply with the lease agreement, the suit seeks unspecified monetary damages for alleged breach of contract, the developers' expenses for customizing the building to fit Barnes & Noble's needs, and compensation for loss of value at the Village at Riverstone resulting from the alleged breach of contract.

The suit claims that Barnes & Noble's alleged breach of the lease will interfere with other leases at the Village at Riverstone, the 25-acre centerpiece of the 160-acre Riverstone development along the Spokane River.

The developers "entered into various lease agreements with third-party tenants at the Village, a certain number of which are contingent upon Barnes & Noble's performance under the lease agreement," it says.

Barnes & Noble announced in October 2007 that it would lease 28,000 square feet of ground-floor space in a $9 million, three-story structure that was under construction at 2129 N. Main. The bookseller originally said it planned to occupy the space by July 2008, but later postponed the opening date to spring 2009.

The developers claim in the suit that they had to demolish and redesign part of the retail floor of the structure to meet Barnes & Noble's specifications.

"This additional work cost significant sums of money and rendered the premises useless to any tenant other than a Barnes & Noble outlet," the suit says.

It says the developers attempted to turn the premises over to Barnes & Noble on Nov. 14, but the retail chain refused to accept the space and three days later notified Riverstone's developers that it was terminating the lease agreement.

Barnes & Noble asserted that the developers had failed to meet certain conditions of the lease agreement, the suit says. Riverstone denies that allegation, though, and claims in the suit that other "agents" for Barnes & Noble "have stated that the national economy and (Barnes & Noble's) national performance is the true reason they determined not to comply with their obligations." Neither reason permits Barnes & Noble to terminate the lease agreement, the suit says.

Barnes & Noble's sales have declined during the current recession. The bookseller announced Jan. 14 that it would eliminate about 100 jobs in its headquarters due in part to a reduction in store openings and a consolidation.

On Nov. 20, Barnes & Noble reported a third-quarter loss of $18.4 million. For the three quarters ended Nov. 1, the company reported a loss of $5.2 million, compared with net income of $20.8 million in the year-earlier period.

Barnes & Noble's Web site says the company will report its fourth-quarter and full-year earnings on March 19, although the bookseller disclosed earlier this month that same-store sales for the nine-week holiday period between Nov. 2 and Jan. 3, were off by nearly 8 percent, compared with the year-earlier period.

As of Nov. 1, the company operated 728 Barnes & Noble stores and 71 B. Dalton stores. During the third quarter, it opened nine Barnes & Noble stores and closed four, its Web site says. It also closed two B. Dalton stores during the quarter.

The lawsuit has been assigned to U.S. District Court Judge Edward F. Shea, but no court dates have been scheduled.

Meantime, Riverstone's Web site and signs on the vacant building still say Barnes & Noble is coming soon.

Exterior construction at the Village at Riverstone, which was designed in three phases, appears to be nearly complete. It includes 210,000 square feet of retail space, 133 condominium units, a 14-screen cinema, a parking garage, and several restaurants. The Village has landed about 20 commercial tenants and more than half of it is vacant.