Officials at IDM predict they will successfully survive current woes.

The future of IDM Corp., one of Los Angeles County's largest and fastest growing commercial developers, seems to be on hold since the company suspended monthly income distributions to 7,500 investors last summer.

None of the Long Beach-based company's many partnerships have filed for bankruptcy, as was rumored last August, and unpaid investors have not filed a lawsuit. But the developer may be in danger of losing government approvals to build two major projects, a commercial center at the Long Beach airport and a 10-acre development in Temecula, according to officials in both cities.

Meanwhile, IDM has reinstated monthly income distributions for 10 of the 43 partnerships, said Jim McMillan, company spokesman. In the last 18 months, staffing has been cut from about 200 employees to about 125 employees, and whole divisions not able to create new developments in depressed markets such as housing were disbanded, McMillan said.

But the commercial development company, which has built numerous apartment projects, retail centers and commercial office projects the likes of the Long Beach World Trade Center, hopes to survive the economic downturn without any of its partnerships declaring bankruptcy or having lenders on the projects foreclose, McMillan said.

IDM was able to pay the investors in 10 partnerships because "the cash flow on the properties warranted it," McMillan said. In some instances, IDM has been able to refinance construction and other loans with lenders since interest rates have dropped and that savings has been passed onto investors.

IDM has defaulted on a number of loans, McMillan said, but only because IDM customarily defaults on loans in order to get banks to renegotiate the interest rate, he said. "We come out of it (a default) with a lower interest rate to the benefit of investors," he said.

It is not known when or if investors in the 33 other partnerships, including six funds which are unsecured, meaning investors could lose their entire investment, will be paid, McMillan said.

In Long Beach, IDM is currently trying to sell its interest in a hotel-office project near the airport while simultaneously trying to negotiate with the city to extend the rights, which are about to expire.

Ken White, a financial analyst with IDM Corp., said the company had just begun marketing the IDM Airport Center, which consists of the development rights for a 10-story office building and a 350-room hotel. IDM either wants a joint venture partner for the project or will sell the property and development rights for $6.5 million, White said.

Vince Coglan, community development property service manager for the City of Long Beach, said city officials have been negotiating with IDM over extending the development agreement for the IDM Airport center, and were not aware that IDM was trying to sell the site.

IDM took a long-term lease on the 10 acres three years ago, with the understanding they would build the commercial complex in three to five years, Coglan said. Because there has been no construction on the project, the city is now negotiating the terms of a two-year extension with IDM, Coglan said.

"The original anticipation was that they were going to start (construction) by now," Coglan said. "Given the market conditions, we've decided to give them the extension."

If at the end of two years there is no construction, IDM would have to renegotiate a whole new development to keep the lease, Coglan said.

Meanwhile, in the City of Temecula, IDM has apparently abandoned a 10-acre apartment project on Rancho California Road, the city's main thoroughfare, after grading the land and pouring a few foundations, according to Anthony Elmo, chief building officer for the city.

"We issued building permits on two or three of the buildings in the complex and by the end of this month, they should have expired for lack of activity," Elmo said. "We have had very little contact with the company," Elmo added.

The project, a 344-unit apartment complex, was going to be financed by sales of units in a $100 million partnership, but the offering was halted last July after only $20 million in units were sold, according to IDM's McMillan. IDM has already put spent more than $1 million on the project and is currently negotiating with "a private company that invests in real estate" to provide financing to continue the work, McMillan said.

Asked if IDM plans to leave the partially developed apartment project the way it is, McMillan said, "of course not."

But in the City of Temecula, there is some concern about what is going to happen, Elmo said. As part of the development agreement the city was going to widen the road to accommodate the increased traffic the project is expected to bring, he said.

There is also a concern about visual blight if the project is abandoned, Elmo said. "When a project doesn't get completed, there are weeds that grow. We are concerned. But to the point of going after or instigating some type of litigation with the developer? That is not taking place yet," he said.

Although IDM has not begun construction on the two projects, the company is currently planning to buy more distressed property from the Resolution Trust Corp. and other sources, McMillan said.

A number of "sophisticated investors" have contacted IDM to buy the properties at cut-rate prices, he said. "There are a number of properties held by the RTC and people in bad situations. There are some people who would like to take advantage of that situation," he said.