FORT COLLINS -- With Dillard's department store close to an agreement with Centerra in Loveland, Foothills Mall in Fort Collins would lose the linchpin of a proposed redevelopment that could lead to cancellation of the project, several informed sources told Business Report Daily this week.

Speculation that Dillard's would fill one of the anchor gaps at Foothills and draw other retail tenants into the center has been circulating for more than two years. The closure of the twin Dillard's stores at Greeley Mall, announced last month, indicated the retailer's decision to move to either Fort Collins or Loveland was at hand.

Several sources close to the Dillard's negotiations said the company would sign a lease with McWhinney for space in Grand Station, the retail, office, hotel and residential project scheduled to begin construction early next year. The developer expects Grand Station to open in 2011 at Centerra, the 3,000-acre commercial and residential development that spans both sides of Interstate 25 north of U.S. Highway 34.

The same sources said that without the Dillard's anchor, Foothills Mall owner Chicago-based General Growth Properties Inc. likely would pull the plug on plans to redevelop the aging shopping center. Sources of the information include members of the region's real estate development community and Northern Colorado municipal officials.

Fort Collins City Manager Darin Atteberry and Finance Director Mike Freeman were meeting with General Growth managers Wednesday morning and were not available for comment.

Chad McWhinney, founder and CEO of McWhinney, said he could not confirm an agreement with Dillard's, but said intent from retailers to locate in the Grand Station project was building.

"While interest from new retailers remains strong, McWhinney does not comment on potential tenants," he said. "We will officially announce additional confirmed tenants as soon as we are able."

Foothills had lost two key anchors in the past two years, with the relocation of JC Penney and the closure of the Mervyn's department store.