SLO tale of falsified documents, code violations and water theft

August 13, 2015
John Belsher and Ryan Petetit

John Belsher and Ryan Petetit

By KAREN VELIE

Editor’s note: This is the second in an exclusive series about developers Ryan Petetit and John Belsher, their development projects, their failures to abide by building requirements, legal troubles, and unpaid monies owed to subcontractors and investors. Read part one here.

Two San Luis Obispo-based developers find it easy to obtain building permits, as well as what appear to be special favors, from city staff and officials – despite falsifying contractor license numbers, disabling water meters and violating a variety of building codes.

John Belsher, 61, and Ryan Petetit, 28, principals of PB Companies, are involved in more than a dozen proposed projects that once completed, they say, will be be worth more than $300 million. Belsher and Petetit have worked together for more than three years, but PB Companies have yet to finish construction of any of its residential or commercial structures.

One example of development issues plaguing the pair is renovation of a single-family residence at 1179 San Carlos Drive in San Luis Obispo that turned into the demolition of the home and a plan to build a new house at the address.

In 2011, Petetit purchased the home with funds from multiple sources. Several investors said the developers claimed they were remodeling the home, with plans to sell it in about six months.

However, Rush Sheppel, a partner in several PB Company projects and an investor in the San Carlos Drive property, said the developers told him their plans were to construct a home for Petetit to occupy. After a new home would be constructed on the lot, Petetit would get a mortgage to pay back the investors, Sheppel said.

In mid-2011, Petetit began applying for permits for an extensive remodel under a contractor’s license number belonging to HJ Construction. After city inspectors became aware of multiple code violations, they contacted HJ Construction President Dominic Judge, who said he had never worked on, or even bid to work on, the project.

“I am not affiliated with or working on the remodel,” Judge said in a April 3, 2012, letter to the city.

After receiving multiple citations for violating water drainage requirements, in July 2012, the city suspended Petetit’s building permits. In Sept. 2013, Petetit paid his outstanding fees and fines, and his permit was reinstated.

In Jan. 2014, Petetit demolished the home. Following the demolition, the city slapped him with several notices of violation and an administrative citation, according to superior court records.

Several of the investors filed three foreclosures on the property for a total of approximately $200,000, according to property records.

On Oct. 14, 2014, the city of San Luis Obispo filed a claim for injunctive relief because of Petetit’s repeated code violations and because the property had become a public nuisance, according to court documents. The city’s claim referred to 17 notices of violation, two permit suspensions and eight field corrections.

On Nov. 18, 2014, the city entered into an agreement with Petetit in which the city agreed to lower his fines from $14,700 to $1,500, and Petetit agreed to diligently pursue construction of the residence, according to the contract.

Since then, the property has remained essentially untouched.

On June 23, Assistant City Attorney Jon Ansolabehere sent a letter to Belsher saying that Petetit had failed to comply with his part of the agreement to begin construction and that the city would no longer stand by its agreement.

In addition, Ansolabehere noted that Petetit tampered with a water meter in order to steal water.

“The city’s investigation revealed that the city water meter had been altered and water had been illegally consumed in violation of San Luis Obispo Municipal Code sections 13.04.070 and 13.04.150,” the letter says.

In May of this year, just days before a scheduled foreclosure sale, Petetit paid several disgruntled investors and was able to curtail the foreclosure, according to property records.

Even though planning documents are public records, planning staff reported that City Attorney Christine Dietrick has ordered them not to disclose Petetit’s notices of violations and agreements.

A neighbor who lives across the street from the project, Terry Mohan, said that he has been told that the city has negotiated another deal with Belsher to give Petetit another chance to build his home, though the city has refused to release the document.

“Now we find out some back room deal at city hall negotiated by John Belsher is giving Petetit yet another chance to torment the neighborhood,” Mohan said. “This smacks of political cronyism at least, and perhaps corruption and political payback at worst.”

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achillesheal

Getting investors to pony up funds to purchase and remodel a house for yourself? A fool and his money are soon parted.


slocalgal

John Belsher’s wife, Jodi, was a key member of Councilman John Ashbaugh’s election campaign, a fact he failed to disclose when voting on a development proposed by PB Companies.


City Council heard an appeal two months ago 6/2/2015, regarding one of PB Companies’ proposed developments in a single-family neighborhood near Cal Poly on Grand Avenue. The appellant, Linda White, presented facts showing Mr. Belsher was able to gain approval by the Planning Commission to subdivide the property into “substandard” lots, smaller than allowed by the Municipal Code, then manipulated statistics to gain approval from ARC for the development of large 2-story homes on those small lots. The presentation made by the appellants illustrated the manipulative tactics of PB Companies AND the City, who told ARC that the surrounding lots in the neighborhood are 6,000-7,000 s.f. when they are actually over 10,000 s.f.


Community Development and Deputy Director Doug Davidson recommended that the City Council approve PB Companies development. However, after the appellant’s presentation, City Council voted 3-2 (with John Ashbaugh and Carlyn Christianson dissenting and siding with PB Companies) to send the development back to ARC and downsize the homes to be compatible with the character of the surrounding neighborhood, consistent with the Community Development Guidelines.


Later, John Ashbaugh commented on a public blog, “The neighborhood was very well-organized in their opposition to this project – and very misguided, in my opinion. I was sorry to see the Council majority caved in to their NIMBY-ism.”


Ironically, Mr. Ashbaugh was opposed to allowing any development in his own neighborhood on Los Cerros Drive when allowing secondary dwelling units or “granny units” was an issue. But the state of California passed legislation to allow them so all the City could do was limit their size and pass legislation that at least one unit on the property must be occupied by the owner.


hijinks

Ashbaugh’s a dweeb. Anybody who uses the n-word to describe his constituents isn’t fit to hold public office. This guy should go away, sit in a closet, and mutter to himself cause the rest of us are tired of hearing him. Thank goodness he’s termed out in another 16 months.


CentralcoastRN

Wow. That is some impressive law breaking and maneuvering.


Here’s the thing; I guess when you can get municipal codes broken and messed up houses APPROVED for building, you have people like Ashbaugh in your corner, then perhaps it seems a bit more clear why investors believed these men could make huge returns happen. I don’t know how many high rolling investors are out there reading Calcoast news right now, but if you want to take the risks to make the money, maybe they drank the Pettit-Belsher merlot Koolaid.


hijinks2

Yeah, Asbaugh is always willing and able to sell the community out for a couple bucks. He is either the most incompetent city council member or very corrupt?


barneyfife

I have had dealings with both…. And EVERYONE that comes in contact with Petetit says the same thing ” that kid is an idiot “…. But it is Belcher that is truly the fool. Why would a successful, smart lawyer be in “bed” with a transparent goof?…. Either Belcher’s greed or his “man love ” took over his brain and better judgement…

Stay tuned folks … We are about to find out . GO CCN !!!


LAH

Hey Barneyfife,

are you Mohan? the obnoxious neighbor? You sure sound like this is a Very personal issue to you.What happened? did your best friend live in this house in question, now this kid Petetit comes in to change it all? Tired of the noise? or just over bored and have to report what your new neighbor is doing? Whoever you are, you sound like the whiner of all this hoopla, $100 bucks says your the neighbor with nothing to do in life and a bug up his backside!!!


barneyfife

You’re wrong – You owe me 100 bucks. Never assume .

If you think this thing is about a house – then you are dumber than you sound…( If that’s possible)


barneyfife

The really good stuff is yet to come…

Corruption in SLO like we have NEVER seen ! This scandal will ” blow ” the doors off city hall .

Petetit isn’t the only one on his knees for Belcher … Stay tuned kids … Its about to get really juicy


IronHub

Once again, CCN sorties against the bad guys, alone, as the rest of the cowardly local media stands by hoping no one notices their indolence.


justbeware

Exactly what is the punishment for tampering with a water meter in SLO and stealing water?


kayaknut

It depends on who your are or who you know.


Bluebird

Not a bad deal for Pettit. He gets investors to invest in a house he plans to live in or to sell as an investment property. He uses non licensed persons to do the work but gives the name of licensed contractor. The work is not done to code — more $$ down the drain. He is charged with code violations and gets them mostly dismissed. Belcher repeatedly bails out his protégée. It also appears that Belcher has some connections in SLO town.


I think we are all wondering what the relationship is between Petiit and Belcher.


justbeware

Can’t wait to hear the rest of the story, I’m sure there’s much more to come.

Sounds like Gearhart all over again.


Rich in MB

How much did they donate to Adam Hill?


abigchocoholic

Two San Luis Obispo-based developers find it easy to obtain building permits, as well as what appear to be special favors, from city staff and officials – despite falsifying contractor license numbers, disabling water meters and violating a variety of building codes.


John Belsher, 61, and Ryan Petetit, 28, principals of PB Companies, are involved in more than a dozen proposed projects that once completed, they say, will be be worth more than $300 million.

—————–

The article starts off with allegations about 300 million in projects and then never ever address the 300 million in projects.


Instead, the article immediately abandons the initial premises and go after Petitit’s $200,000 private residence construction. How much of 300 million is 200 thousand?


.006


Less than 1%


On Nov. 18, 2014, the city entered into an agreement with Petetit in which the city agreed to lower his fines from $14,700 to $1,500, and Petetit agreed to diligently pursue construction of the residence, according to the contract.

———————–

Good thing we got to the bottom of that $1,500 issue. The county was on the verge of shut down over that one.


kayaknut

You kind of forgot about all the city’s cost to continue the mess created by these two. The countless hours of time, visits by personnel, and such, but then again that helps to feed the never ending government monster from a never ending supply of taxpayer funds, but hey that’s small potatoes, too, right?


BigRed

What? I’m not sure of what the significance of your math problem is. This is about cronyism in our County. If you have ever run a business or tried to build anything in this county then you would understand why those of us who have to deal with these agencies are interested in whats going on here.


You’re also doing the same thing you did when the last article was posted; taking that $300 million dollar value of “completed projects” as something more than what it is. HYPOTHETICAL


The author also should’ve reminded us all that Petetit is a crook who’s been passing bad checks and has convictions.


CCN is dealing with a bulldog lawyer in Belsher. I’m convinced there’s fire beneath all this smoke or they wouldn’t dare tangle with him. I’m also sure they’re being “careful” and there’s more that will come out.


BigRed

I’ll correct myself before somebody else: Petetit has “arrests” not “convictions.” Charges were dismissed when he entered the conty bad check program.


abigchocoholic

You’re also doing the same thing you did when the last article was posted; taking that $300 million dollar value of “completed projects” as something more than what it is. HYPOTHETICAL

————–

Author’s numbers not mine. Take if up with the author. And I also used the 200k number the author used in the article for the foreclosure which is not the money lost but just the amount that was being foreclosed on. There may actually be no money lost as most lots in SLO sell for a lot more than 200k. The investors will probably get every penny of their principle plus 10% interest. Try to get that return at a bank.


So it’s very likely that this investigation uncovered $1,500 in a fines on a personal residence. Starts off with 300m in projects and the bottom line is $1,500 in fines on a personal residence. Talk about trying to make a mole hill into a mountain.


BigRed

Oh boy… The city has withdrawn from the agreement of lowering fines since Ryan has not complied with the agreement. Not that it matters. The point is the investors he made promises to and borrowed the 200k from have filed on the property in an attempt to cut their losses.


Working people, regular people, teachers and cops, are able to pull off single residence construction and remodels all the time. Isn’t it weird that this brilliant and ambitious “developer” is now moving into his 4th year on the project while his investors go legal? Some might see this as foreshadowing as they continue to solicit investors for even more unfinished projects. You gotta admit some hinkyness! Right, Choco. You know these guys, right?


abigchocoholic

Working people, regular people, teachers and cops, are able to pull off single residence construction and remodels all the time.

——————–

Are you people coming or going? Out of one side of your mouths you argue these guys are in bed with the powers that be and get all kinds of sweetheart deals. Then, out of the other side of your mouth, you claim these developers can’t accomplish in the construction business what ordinary people can. Which is it?


The point is the investors he made promises to and borrowed the 200k from have filed on the property in an attempt to cut their losses.

——————–

One more and last time. Nobody lost any money. There is no lot in SLO selling for 200k. Cheapest lot is probably 250k. Many lots go for 3,4 or 500k. If there’s 200k in mortgages on a lot, the investors are fully protected. It’s just that simple, so no reason to say anyone is cutting their losses except possibly Petitit. So before you say the investors are cutting their losses, understand their principle is covered by the property and there’s enough equity to recover 10% interest and foreclosure costs. It’s a seller’s market right now in SLO again. Almost as good as in 2007.


BigRed

Do you know what a lien is? An attached title? Maybe you should sit this one out.


catsdad

While Karen quoted $200k in foreclosure costs it is actually in the $230k area according to county records. Petetit already has around $100k more into the property over the past four years with slab leveling, fines, injury to one none contracted worker, removal of debris, more fines, demolition of the residence, more fines, removal of dirt after digging enormously large footing trenches, having to fill the trenches to normal depth with concrete slurry, having the job shut down due to need for repositioning of one of the support walls, then being allowed by the city to bring in a special inspector, one of PB’s I suspect, to ok the slurry of the helical piers that lost their integrity due to incompetent machines operator who dug the enormous trenches, now more fines of $13,200 to build a two story house in a tract that has CCR’s restricting two story houses. So by the time he and Belscher finish fighting that lawsuit and build a house which will cost around $300k in today’s prices they will be under water as Karen stated when they valued their completed holdings at $300 million and will lucky to be worth $200 million if they can get them built.

The point of this series is the corruption and political cronyism in this city and county allowing these con-artist to proliferate. If you think they are on the up and up tell your mother to invest with them.


abigchocoholic

Petetit already has around $100k more into the property over the past four years with slab leveling, fines, injury to one none contracted worker, removal of debris, more fines, demolition of the residence, more fines, removal of dirt after digging enormously large footing trenches, having to fill the trenches to normal depth with concrete slurry, having the job shut down due to need for repositioning of one of the support walls, then being allowed by the city to bring in a special inspector, one of PB’s I suspect, to ok the slurry of the helical piers that lost their integrity due to incompetent machines operator who dug the enormous trenches, now more fines of $13,200 to build a two story house in a tract that has CCR’s restricting two story houses.

—————

So your point is there’s 230k in foreclosure loans but the property, with Petitt’s improvements of 100k, is worth something in the neighborhood of 350-400k?


So you just argued no investor has lost any money and has no chance of losing any money.


Hmmmm. Half the comments here start off with a conclusion and then put up an argument that cuts directly against their conclusion. It’s pretty entertaining. .


BigRed

You have a child’s understanding of how real estate transactions work.


catsdad

Very simple follow my words, Petetit was allowed to carry the property on other peoples dime until he stopped paying the monthly payment to the principal whom he purchased the property from for $289k. The principal foreclosed and Petetit came up with $183k to pay him off. The investor found out and foreclosed for $60k. So now Petetit or whoever gave him the money to pay the foreclosures owns the property for $349k. Then there is the $100k worth of useless work and fines added on. In reality there is about $450k in that lot and if you’ve seen it it’s not worth half that amount. So now he wants to build a house for the estimate on the plans of $360k. Well if you think he can sell a house in that area for $810k plus 10% = $891K, put your money where your mouth is and let’s get your mother in on this deal!


CentralcoastRN

I think we are supposed to infer that these two cannot remodel ONE single family residence in SLO, so they probably won’t have the rest done any time soon.


Taxpayers pay the price for this in a multitude of ways. Neighboring property values go down. Taxes go up because when white collar crime happens, we pay a hefty fee in sales and property taxes to cover overhead for police, utilities, etc.


I don’t care if it was ONE dollar the city council got negotiated. They City Council is there and “working for taxpayers” anyway right? Why not have them do some work!!