Amid fears of being perceived as giving preferential treatment, the Monrovia City Council this week failed to reach consensus on modifying a home loan made to their former city manager, Scott Ochoa, who left that city for the top job in Glendale.
In 2004, Monrovia offered the newly hired Ochoa $275,000 as part of a 30-year second mortgage. He’s paid about $100,000 in interest over the years and is supposed to pay off the entire loan when he sells his house.
But with his home upside-down — he bought it for $775,000 and plans to sell it for $739,000 — he offered to pay $200,000 of his debt through the home sale and asked the city to let him pay the remaining debt over the next three to four months with an escalating interest rate. That way he could move to a home in Northwest Glendale without waiting for the housing market to turn around.
Monrovia Mayor Mary Ann Lutz suggested Ochoa pay 6.75% on the $75,000 loan within 95 days. That made economic sense because in the end, it would bring more money to the city faster, she said.
Without the loan, Ochoa may wait to sell his house until December, paying off the full loan then.
“We need this money in this city,” Lutz said, adding that she’d prefer to get the money in October, rather than in December.
While two council members agreed with the terms of the restructuring, two disagreed, fearing the deal could be perceived as special treatment.
The two council members who balked at the deal, Joe Garcia and Tom Adams, said they’d prefer Ochoa use his own funds to cover the $75,000 gap.
“He’s got more than enough ways to sell his house and move on to Glendale without asking for Monrovia’s assistance,” Adams said in an interview Thursday.
With one council member not voting because she works for the real estate company representing Ochoa’s property, the deadlocked council vote means Ochoa may not be able to move to Glendale as soon as he’d like.
In an interview Thursday, Ochoa said he doesn’t expect the issue to come before the Monrovia City Council again.
He plans to either borrow money from family or pay a penalty to liquidate personal assets to pay the loan in full so he can move into a Glendale home that’s currently in escrow. Or he may wait until December to sell.
“We want to be [in Glendale] in earnest,” Ochoa said, referring to his family.
Lutz said Monrovia most likely will not make a home loan to a city manager again, and Ochoa said he doesn’t plan to get one from Glendale.
“I absolutely didn’t want to do housing assistance,” Ochoa said.