Office Tower Plan Scuttled by Credit Crunch : Real estate: TRW had agreed to an $80-million, 10-year lease of 385,000 square feet in IDM’s building, one of the county’s largest such deals ever.

The infamous credit crunch buffeting the county’s commercial real estate industry has claimed another victim.

Even with a primary tenant already signed up, IDM Corp. announced Wednesday that it could not secure a loan for a 10-story tower it had hoped to build on the site of the former Orange Drive-In. Instead, the firm now plans a retail center there.

In August, TRW Inc. agreed to an $80-million, 10-year office lease of 385,000 square feet in the proposed tower. Had it panned out, the lease would have been one of the largest ever in the county.

Cleveland-based TRW planned to move its 1,200-employee information-services operation out of The City office complex, which is directly across the Santa Ana Freeway from the defunct drive-in theater.

But for now, the company will stay put, TRW spokeswoman Susan Murdy said, adding: “We are in the process of discussing with our landlord, Tishman West, an extension of our arrangements here.”

IDM and TRW mutually agreed to terminate the deal, Murdy said.

“It’s unfortunate that they couldn’t get financing but understandable given the current economic conditions,” she said. “This doesn’t come as a complete surprise.”

Eventually, IDM planned to build another four office buildings on the 19-acre site--a goal that blocked its chances of obtaining financing, IDM spokesman Jim McMillan said. Although TRW had agreed to lease nine of the initial tower’s 10 stories, IDM’s ability to fill other buildings in the complex--estimated to cost $650 million--was not such a certainty.

“We were still faced with the burden of carrying a 77% balance of (unleased) property,” McMillan said. “We talked to just about everyone we could who would have been a valid lender. We found people interested in the site, but not for office development.”

As part of the deal, TRW requested that the complex be devoted solely to office buildings, McMillan said. Although that demand was “entirely reasonable,” he added, it locked IDM and potential lenders into a high-risk situation because of the current glut of office space.

So IDM now aims to put a retail center on the property--for which the developer signed in 1989 a 55-year ground lease, with an option to buy the land.

Major retailers “have expressed a lot of interest in the area,” McMillan said. “It’s one of the best locations in all of Orange County, with the 5 Freeway wrapping around it.”

McMillan said the company is nearing agreements with several retail chains, but he declined to discuss specifics regarding the complex. IDM is building a 436,000-square-foot retail center in Westminster.

“IDM has a lot of experience in retail,” said Tim McMahon, senior vice president of retail properties in the Newport Beach office of Grubb & Ellis, a commercial real estate brokerage. “They’re not just shooting from the hip.”

McMahon said financing is much easier to come by in the retail arena than it is for office buildings.

“In Orange County, there are still major retail tenants looking for space,” he said.