Glendale city manager seeks to modify housing loan with former employer, Monrovia

City Manager Scott Ochoa wants his former employer, the city of Monrovia, to restructure a $275,000 home loan officials gave him in 2004 so he can speed up his move to Glendale.

The proposal, which is largely procedural in nature, has reportedly set off a political windstorm in Monrovia, even though officials there say the new agreement may pencil out better for everyone.

The loan dates back to when Ochoa was moving to Monrovia in 2004. At the time, city officials agreed to offer him a second mortgage loan of $275,000 with 5% interest. Other cities, such as La Cañada-Flintridge and Beverly Hills, had given similar loans to their city managers in the past, but some community members disagreed with what they considered a sweetheart deal.

Although the loan was set to last 30 years, the plan was for Ochoa to refinance in about five years and pay the city back, said Monrovia Mayor Mary Ann Lutz. But the housing bubble burst and that never happened.

Then in December, Ochoa left Monrovia for Glendale. According to his loan agreement, he must pay his outstanding debt upon the sale of his house at 214 Madeline Dr.

The 2,125-square-foot house is currently in escrow, but because it’s upside down — he bought it for $775,000 and plans to sell it for $739,000 — he would like to pay $200,000 of the loan from the sale and secure the remaining $75,000 with another asset, such as deferred compensation or $150,000 worth of real property.

Ochoa has paid about $100,000 in interest on the loan over the years.

“I want to really close that chapter and start new here,” Ochoa said, adding that he’d prefer to move to Glendale in the summer while his children aren’t in school.

He said he plans to pay the remaining $75,000 in about four months and has offered an escalating interest rate to show that he’s serious about paying it off quickly.

Although the deal seems like a good idea economically, it may not prove politically savvy for those on the dais because “most people are pretty livid” about it, Monrovia Councilman Tom Adams said.

“From what I’ve seen so far, this may be one of the first packed houses that we’ve seen for a long, long time,” he said, referring to the City Council meeting on Tuesday, during which the proposal will be reviewed.

He said the image of Ochoa leaving for a roughly $235,000 annual salary in Glendale — about $53,000 more than he made in Monrovia — and then asking the much smaller city for help doesn’t sit well with some.

But Ochoa said that image is based on a distortion of his proposal, which appears to have support from Lutz. On Monday, she said the deal is a reasonable compromise to resolve the debt quickly.

Ochoa is required to pay off the debt within 18 months of leaving Monrovia, regardless of whether the house sells.

“He’s not asking us to forgive it,” Lutz said.

If Monrovia officials don’t accept the proposal, Ochoa said he’d have to cancel the sale of his Monrovia home and wait until the housing market turns around — which would also likely stall plans to buy a home in Northwest Glendale. With a smaller loss, more of the loan could be covered.

“Monrovia’s been great to me,” Ochoa said. “I want to make sure that they’re happy.”