Lobbying raises question: Who does Hill work for?

October 19, 2015

Editor’s Note: This is part two in a two-part exclusive series about San Luis Obispo County Supervisor Adam Hill’s consulting work for a company tied to a prominent developer. Part one, “Supervisor Hill’s 2 jobs raise conflict of interest,” includes several public documents in which Hill describes himself as a consultant.

By KAREN VELIE

PB Companies is working to get approval to build three four-story buildings at the corner of Nipomo and Marsh streets in San Luis Obispo with the assistance of County Supervisor Adam Hill, who has lobbied the city to approve the proposed project.

Dubbed San Luis Square, the proposal includes retail space, restaurants, 48 residential units, underground parking and a public plaza. The project spans four lots including the home of the former Foster Freeze Restaurant.

On its website, PB Companies says the project will help address a lack of available housing in the city.

“The lack of any mixed use, multifamily buildings in the area provide an unmatched opportunity to create something completely new and unique,” the PB Companies website says. “Moving forward, our plan is to develop not just another building, but create a synergy of space that residents and visitors can thrive in.”

At the same time, PB Companies principals John Belsher and Ryan Petetit are under fire for not paying subcontractors and lenders and for violating building codes. During the past few years, the partners have been in court over multiple financial controversies such as breach of contract and not paying fines to the city of San Luis Obispo for building violations.

Hill has testified in front of San Luis Obispo city bodies in favor of the city approving the San Luis Square proposal without disclosing he is a paid consultant for a company started by Belsher.

In 2014, Hill was paid at least $10,001 by San Luis Consulting, a firm tied to PB Companies, according to financial disclosure forms. But it’s unclear exactly what consulting jobs Hill has performed. He has not responded to questions from CalCoastNews about his consulting activities.

State records show Belsher was the only organizer of San Luis Consulting when he founded the company in July 2014 and that it uses the same San Luis Obispo address as PB Companies. A PB Companies internal document lists San Luis Consulting as one of its many holdings.

According to state conflict of interest rules, if public officials have received $500 or more (not including campaign donations) in the past 12 months from an entity, the officials cannot in any way attempt to use their official positions to influence a governmental decision that could impact that entity financially.

California Gov. Code 18704 says that officials with a conflict of interest cannot attempt to influence other government officials or agencies if their agency has authority or budgetary control of that body. These regulations are in place to stop public officials from approving funding for other government agencies and then lobbying those agencies to pass their favored projects.

As a county supervisor, Hill votes on distributing grant funds to local governments such as the city of San Luis Obispo. Hill has regularly lobbied San Luis Obispo City Council members and city boards to promote several development projects while also voting on whether the county will, or will not, award large grants to the city.

On July 13, Adam Hill testified in favor of PB Companies Marsh Street project at a joint meeting of the SLO City Architectural Review Committee and Cultural Heritage Committee.

In his speech, Hill repeated a presentation PB Companies staffers made to members of Save Our Downtown, a group with a mission to protect and promote the historical character, design, livability and economic success of San Luis Obispo’s downtown.

In their presentations, both PB Companies staffers and Hill said the project’s approval would help satisfy a need for workforce housing for employees of technology companies.

“Adam Hill, SLO, noted on state and county policies for the creation of a variety of housing in urban centers; commented on the importance of providing workforce housing for employees of technology-oriented companies,” the minutes of the July 13 meeting say.

Hill did not disclose his financial relationship with San Luis Consulting to the city before making his presentation.

In addition to state conflict of interest regulations, the city of San Luis Obispo passed an ordinance several decades ago making it a misdemeanor to speak in favor of a project without disclosing financial ties to the developer.

In 1994, San Luis Obispo passed an ordinance that requires “municipal advocates” to register with the city before attempting to influence decisions or actions of officials or staff in favor of a business in which they have financial ties. In addition, before speaking publicly, the ordinance requires the speaker to make an “oral disclosure of registration.”

“The city recognizes that municipal advocates do not have public authority, but they may have significant influence on the city, and the public has a right to know who is being paid to influence the decisions being made by the city, and any financial relationship between those who are being influenced and those who are trying to influence them,” according to the ordinance.

PB Companies is also attempting to get Coast National Bank Board members to lobby the city of San Luis Obispo to approve the project, according to a signed letter of intent between the bank and PB Companies uncovered by CCN.

According to the letter of intent, Coast National bank intends to be a co-applicant with PB Companies in one or more of the applications for the San Luis Square project. In the letter, the parties agree to multiple terms including the bank board’s support.

“The benefits for the parties are significant and include, increased circulation and parking,” and “potential public hearing and written support on behalf of Coast and its board members,” says the letter of intent which was signed by Belsher, Petetit and Coast National Bank CEO Anita Robinson.

Before being elected to office, Hill worked as a part-time lecturer for Cal Poly’s English department.

Hill first won a seat on the San Luis Obispo County Board of Supervisors in 2008 and has since developed close relationships with a string of prominent local developers including Belsher, Petetit and Gary Grossman.

In fall 2014, Hill aggressively attempted to persuade members of the San Luis Obispo City Council to vote in favor of a land use change needed by developer Grossman to develop large parcels near the airport.

Shortly after Grossman entered into an agreement to buy the Dalidio Ranch, Grossman began lobbying the city to override a ruling by the airport commission limiting residential density in the flight path because of safety concerns.

Several local developers interviewed by CCN said residential projects are currently making more money than commercial ones, so Grossman would stand to receive a higher return on his investment by building high-density housing in the flight path.

While Hill lobbied city council members for the override, Grossman made a $50,000 donation to the SLO Housing Connection, a nonprofit started and run by Hill’s wife. The council then voted 4-1 in favor of the airport land use change.

Public officials have an ethical duty to avoid even the appearance of a conflict of interest, said Hana Callaghan, the director of the government ethics program at the Markkula Center for Applied Ethics at Santa Clara University.

“Public officials have a fiduciary duty of loyalty to the public,” Callaghan said. “They have to put the public’s interests before their own.”

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