Newport Beach City Manager Dave Kiff is selling his Upper Newport Bay home and says he will repay the $470,000 the city lent him for the house.

Kiff plans to move back to Laguna Beach, where he lived for about 15 years. He still owns a home there.

His original contract offered an incentive to help him move to Newport, where City Council members thought he would be more in-touch with city happenings.

But Kiff said it has been difficult to escape city business, and he wants to move back south for family reasons. Voters in 2010 removed the city charter requirement that the city manager live in town.

"I guess I need a little more downtime than I thought I would," Kiff said.

He and his partner remodeled the house to luxury standards, and Kiff said they may not sell it for enough to recoup their investment. He bought it for $935,000 in October 2009, with the city lending him about half that amount. It was listed last month for $989,000.

Based on the city's housing agreement, Kiff only has to give the city 50.4% of the property's value, less the improvement costs, whether the home appreciated or depreciated.

Kiff said he did not know the exact amount they paid for the remodel.

"I might take a little loss, but [otherwise] it wouldn't be fair to the city," Kiff said.

The remodel project took longer than expected, dragging out the move-in date past the city's one-year deadline for him to live in the city, but the council granted him an extension.

Councilman Keith Curry is fine with Kiff's decision, although in 2010 he said it was important for Kiff to be "part of the fabric of the community" and thought he should live within city limits.

On Monday, Curry said, "He's been part of the community for decades. Whether he lives in Newport Beach or Laguna Beach, I don't think it makes a difference."

Kiff had been assistant city manager for 11 years prior to his promotion in 2009. Before that, he worked for Marian Bergeson, a former state senator from Newport Beach.

When he drives around town, Kiff said, he can't help but think of code enforcement issues, potholes and other city issues.

"It's stressful living in the town you work in," Kiff said. "It's very hard to turn things off."

A description of Kiff's Newport home on Zillow.com, a real estate sales website, says it has French limestone countertops, fine cabinetry, a built-in refrigerator, a vintage stove and Bosch dishwasher.

The one-story house is on a tree-lined street off Irvine Avenue. It was built in 1954.

mike.reicher@latimes.com

Twitter: @mreicher