GARDEN GROVE : Office Developer Granted Extension

The city redevelopment agency this week granted a one-year extension for the construction of a five-story office complex on a site that has been plagued by development problems for years.

Council members, acting as the Agency for Community Development, voted 3 to 1 Monday night to grant additional time to IDM Corp. of Long Beach, which plans to build the commercial project on 8.5 acres at Euclid Street and Garden Grove Boulevard. Mayor W.E. (Walt) Donovan was absent, and Councilman Robert F. Dinsen cast the no vote.

Plans call for a five-story office building similar to a structure owned by IDM on the east side of Euclid Street. The site of the proposal has been mostly vacant for more than a decade, and the city has struggled with a variety of development problems on the land.

IDM almost was deemed in default of its agreement with the redevelopment agency on Oct. 25 when it failed to deliver construction drawings and landscaping plans for the first phase of the project.

“I’m somewhat surprised that IDM finds itself in this situation,” said David L. Ball, president of IDM. “But we find ourselves in an environment we can’t control.”

Ball told the community development agency that financing for office buildings is difficult to obtain because of the downturn in the real estate industry. IDM office projects are stalled in Orange, Long Beach and other cities, he said, and vacancy rates among office buildings in central Orange County are about 26%.

The agency could have declared the developer in default, given the company 30 days to correct the situation and taken a $150,000 letter of credit posted by IDM, which is similar to a non-refundable deposit.

Instead, the agency granted the extension and will monitor the company’s performance quarterly during the year. A hearing to determine whether IDM is in default of its agreement with the city was set for Jan. 28.