Former City Manager Can't Repay Loan, Asks To Change Terms

When former Park Ridge City Manager Jim Hock was hired in July 2008, property values in the suburbs were still enjoying a historic boom. So when Hock went looking for a home in the city – a requirement of his contract – he ended up borrowing money interest-free from the city as well as from a bank.

Less than four years later, the high real estate prices of that period are gone. The City Council fired Hock in May after a new mayor and city council said he had not performed up to expectations, and the real estate market which tanked in the crash of October 2008 has yet to recover.

Now Hock, who borrowed $350,000 interest-free from the city to purchase his $550,000 Summit Avenue townhome, is contractually obligated to pay it back Nov. 4, six months after leaving the city’s employment, according to the Park Ridge Herald-Advocate. 

Earlier: Park Ridge considers scrapping residency requirement for city manager

But Hock, who also took out a mortgage from a bank, is still unemployed and hasn’t been able to sell the house for what he owes on it, according to an email he sent to the city council before their Oct. 22 committee-of-the-whole meeting.

Hock did not return telephone calls seeking comment.

He asked that his remaining three months of severance payments be applied to the loan, and for an extended schedule to repay the rest of it.

Park Ridge City Council members, while not seeming happy with the situation, indicated a willingness to work out the situation. They directed city attorney Everett “Buzz” Hill to draft a proposal to extend Hock’s payments, and agreed not to take action against Hock before the next city council meeting, which is set for Nov. 7.

“Our next step would be what we are doing now, analyzing cost-benefit and responding to an initial attempt to try to work something out,” Hill said, adding that any new agreement he drafts would be “advantageous” to the city and likely include interest payments.

Second Ward Ald. Richard DiPietro said it would make sense to avoid litigation if possible.

“What is being offered is where you would end up, much quicker at less cost,” DiPietro said. “The motion before us moves this matter along quickly. As soon as this home sells, I would anticipate that we would be paid in full.”

That wouldn’t necessarily happen if the city foreclosed on the townhouse, said Third Ward Ald. Jim Smith. Because the city’s loan comes second to the bank’s, the city would lose money if it foreclosed and the townhouse could not be sold for at least as much as Hock still owes.

Council members also asked the finance department to clear up the figures, including how much Hock is still owed in severance and how much he owes on both loans. According to his email, the city owes him $41,250 in severance payments and he owes the city $247,083 on the loan.

Park Ridge Finance Director Allison Stutts said he still owes $289,000 on the loan, and the severance payments he could apply to it would be somewhat less than he stated, because she believes he is using gross payment numbers, not net payment numbers.

Finance committee chairman and Fifth Ward Ald. Daniel Knight said there is more council doesn’t know. “He says he can’t meet the obligation. Who knows if that’s true or not?” Knight said.

Sixth Ward Ald. Marc Mazzuca questioned whether the council should have held its discussion in open session, since the matter is a possible topic of litigation and is personnel matter.

“I would think we should be discussing our legal options, and that would be more appropriate in closed session than in open session,” he said. “This is also a personnel matter, but I guess this is kind of past that.”

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