San Luis Obispo manager bent over backwards for Adam Hill

September 11, 2024

Editor’s note: This is the second in a two-part series regarding former San Luis Obispo City Manager Derek Johnson and his role in the pay-to-play schemes of former SLO County Supervisor Adam Hill. CalCoastNews is referring to developer Ryan Petetit, who changed his name to Ryan Wright during the case, as Ryan Petetit-Wright. Read part-one, “Whom did Derek Johnson serve, San Luis Obispo or Adam Hill?”

By KAREN VELIE

Former San Luis Obispo City Manager Derek Johnson described SLO County Supervisor Adam Hill as a politically powerful man who lodged veiled threats to have him terminated or ruin his reputation if Johnson did not comply with demands to expedite PB Companies’ projects. Hill received about $100,000 in bribes and gifts from the company and its owners Ryan Petetit-Wright and John Belsher.

“He was a force,” Johnson said during a 2022 interview with Justice Department officials. “And if he was someone that if he felt like you crossed him or you got out of favor with him, he would make it known behind the scenes and at the dais.”

Johnson, who said he heard rumblings that Hill was upset with him, worried the supervisor’s close connections with San Luis Obispo officials could impact his job.

“If things weren’t moving fast enough, he would seem to insinuate people are unhappy and I know you’re just here and this is rough, people are having a negative experience with you and your job,” Johnson said. “He seemed to just suggest that there were conversations happening where people were unhappy with you and that your job might be in jeopardy.”

During a meeting with Johnson, Belsher and Petetit-Wright at Novo Restaurant and Lounge in June or July 2014, Hill pushed for exceptions to parking requirements for PB Companies’ projects, Johnson said.

“He wanted to see these projects move forward,” Johnson said. “He wanted to see them happen quickly. And if it wasn’t happening quick enough or we felt like we weren’t being reasonable, he would seem to inject some sort of doubt about my performance or his concern about the – about the department in general.”

During Johnson’s fourth interview with the feds, Assistant U.S. Attorney Tom Rybarczyk and an unnamed Justice Department official repeatedly noted that they had evidence that called into question Johnson’s prior statements to FBI agents about his dealings with Hill.

About halfway through Johnson’s 2022 interview, Rybarczyk told Johnson that federal prosecutors had “other evidence indicating” Johnson attended at least one other party at Hill’s home and also another lunch, this one at Buona Tavola restaurant in San Luis Obispo. Johnson said he remembered it was raining when he met Hill at Buona Tavola.

Rybarczyk then asked Johnson about a 2015 meeting he had with Hill at a Thai restaurant, a week before several commission meetings in which the agendas included making major changes to development requirements near the airport. Hill promoted changes that supported multiple developers in the area.

Because Johnson and his staff prepared the analyses for the projects, they had influence over the commissions, Johnson said, explaining the process.

“We were doing an analysis,” Johnson said. “So, our analysis is what’s the objective standards that are in the development and whether or not staff believes that those development standards were met. And then ultimately we tee that up for the Architectural Review Commission, or in the case of the Cultural Heritage Commission, you know, whether or not the project is meeting the design guidelines for a project that’s in that historic district.”

Johnson noted that, generally speaking, the commissioners followed his recommendations.

In July 2015, Hill met with both Johnson and then-City Manager Katie Lichtig and assured them PB Companies would deliver on their projects. Johnson was skeptical, he said.

“Yeah, you can’t deliver,” Johnson said. “I remember specifically thinking if you can’t deliver building a single family in-fill home in a neighborhood and have all these issues, how do we expect to have a high-profile project be built in our downtown that’s on two of our busiest streets, right?”

Johnson bent over backwards for Hill because, he said, Hill could push for county funding for city  infrastructure.

“And the county holds a lot of the purse strings,” Johnson said. “I mean, they hold funding on community development block grants. They are really the funders largely for homeless services. And at the time as well, they held a key role about Airport Land Use Commissioned items, and they had a couple seats.”

In addition to PB Companies, Johnson said Hill also advocated for changing density requirements for property in the airport flight path which helped several developers, including Gary Grossman and his San Luis Ranch mixed-use project.

During negotiations regarding San Luis Ranch, Johnson and Grossman would hit an impasse over development agreements, which would lead to Hill stepping in.

“And then sometimes, particularly on San Luis Ranch, we’d get a call later that day from Supervisor Hill asking the city to, you know, reconsider its position, be more reasonable, what about this, how about we work out this angle,” Johnson said.

Near the end of the interview, Rybarczyk again asked Johnson if knew Belsher and Petetit-Wright were paying Hill to promote their projects.

Johnson again claimed he was unaware PB Companies was paying Hill, and then admitted to reading CalCoastNews articles describing Hill’s work for PB Companies.

In 2015, CalCoastNews discovered PB Companies was paying Hill to promote their projects. Multiple articles described the illicit relationship. The City of San Luis Obispo requires anyone financially tied to a developer to register as a lobbyist.

“I read about it in the paper, or in the CalCoast, but I discounted it because CalCoast had just been held liable for misrepresenting,” Johnson said.

It appears Johnson was attempting to create doubt. While Johnson met with Hill to discuss land use issues on behalf of multiple developers from 2013 through 2017, the libel trial occurred afterwards. CalCoastNews’ first articles on the corrupt relationship were published in mid-2015.

Rybarczyk asked Johnson if his conversations with Hill predated the publication.

“Yeah. So up until that – up until reading that publication, I have no idea any sort of his relationship,” Johnson said.

While asking Johnson to reduce requirements and fast track PB Companies’ projects, Hill would also discuss providing county funding for city projects. Johnson told Rybarczyk he was unaware Hill was working as a private contractor.

“It’s blurring – it’s going all over the place. And I would say that one of the areas that I try to be mindful of is – it’s not my job to police the conflict of interest issues of elected officials. That’s their own job.”

Hill overdosed on Aug. 6, 2020, on a cocktail of cocaine and antidepressants. The county coroner ruled his death a suicide.

Johnson resigned his post in San Luis Obispo in April 2024, after accepting the chief executive officer position in Marin County.

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