Whom did Derek Johnson serve, San Luis Obispo or Adam Hill?

September 10, 2024

Editor’s note: This is the first 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.

By KAREN VELIE

The federal investigation into the bribery scandal surrounding San Luis Obispo County Supervisor Adam Hill, found former SLOs City Manager Derek Johnson changing his story a number of times about his relationship with Hill.

FBI agents interviewed Johnson in 2020, not long after they raided Hill’s home and county office. They interviewed him twice more in 2021 with Johnson playing down his involvement with Hill and denying knowledge of Hill’s pay-to-play scheme with Ryan Petetit-Wright and John Belsher’s PB Companies.

Federal prosecutors introduced Johnson’s interview as part of their effort to convince the judge not to grant Petetit-Wright bail in his multi-count case involving corruption, wire and bank fraud, obstruction of justice and falsifying records.

In the 2022 interview, an unnamed Justice Department official challenged Johnson’s prior  statements that he had met only once with Hill over PB Companies projects and had not known about Hill’s financial relationship with Belsher and Petetit-Wright.

“This may be something you want to clarify?” the Justice Department official asked Johnson during his 2022 interview. “The one report says you believed you had only one lunch meeting with Hill and Petetit and that that lunch would’ve been in Novo in SLO. So, it sounds like you might’ve had maybe other meetings, maybe just not lunch meetings with them?”

Johnson admitted to having multiple meetings with Hill and Petetit-Wright including at the old Giuseppe’s Restaurant, Novo Restaurant and Lounge, Hill’s home and at local events. From 2014 through 2017, Hill set meetings and called Johnson 10 to 20 times to promote Petetit-Wright and Belsher’s projects, Johnson said in the interview.

In 2015, Hill invited Johnson to join him and Petetit-Wright in an exclusive viewing tent at an Amgen Tour of California cycling race. Johnson said Petetit-Wright and Hill “relentlessly” pushed PB Companies’ projects during the event.

“And that didn’t seem unusual for him to invite me because I’m a bike racer so – I’m a bike fan. So, for me to go it’d be like anyone else going to the Super Bowl,” Johnson said.

The participants in the interview, Assistant U.S. Attorney Tom Rybarczyk, the unnamed Justice Department official, FBI Special Agent Dieter Wilkomm and City Attorney Christine Dietrick did not comment on Johnson’s comparison between being treated to attend the Amgen Tour and a Super Bowl.

In 2015, PB Companies was involved in more than a dozen projects they valued at over $300 million, with the bulk of the projects located in the City of San Luis Obispo.

Not long after Johnson was hired as San Luis Obispo’s Community Development Director in 2011, former SLO City Manager Katie Lichtig told him to meet with Hill to discuss specific development projects, he said in the interview.

“That was the direction from my boss, Katie, was to try to, you know, get out to remove some of the obstacles,” Johnson said.

Hill, Johnson said, introduced him to Belsher and Petetit-Wright. Hill then regularly promoted PB Companies’ projects at the city’s council, committee and commission meetings.

Later, Hill would complain to Johnson that it was taking too long to get PB Companies’ projects through the city approval process.

At a 2015 fundraiser Hill hosted at his home for then-U.S. House candidate Salud Carbajal in which he invited Petetit-Wright and Johnson, Hill complained that the city was taking too long to process variances the developers were seeking. For example, at the Bonetti Ranch, now known as San Luis Marketplace, Hill argued for 45 feet building heights while existing regulations were 35  feet.

“The conversation there centered around pushing PB development projects forward,” Johnson said during the interview.

As Petetit-Wright lobbied Johnson through Hill to speed the process to get city approval for his projects, he failed to get permits for a construction project on San Carlos Drive in San Luis Obispo, which neighbors eventually reported.

The city slapped Petetit-Wright with multiple notices of code violation. On Oct. 14, 2014, the city filed a claim for injunctive relief because of Petetit-Wright’s repeated code violations and because the property had become a public nuisance, according to court documents.

Petetit-Wright purchased the San Carlos Drive home in 2011 with monies from several sources including investors in PB Companies’ projects. When the investors learned Petetit-Wright demolished the home in 2014, investors filed three foreclosures on the property for approximately $200,000, according to property records.

In the 2022 interview, Johnson agreed with Assistant U.S. Attorney Rybarczyk that it was strange Hill was pushing large PB Companies projects at a time Petetit-Wright was having so much trouble finishing the home remodel. The city eventually turned the water off at the site because he had failed to pay his bill. Neighbors then caught him stealing their water, Johnson said.

“And then I recall in other issues that he stopped paying the bill on the fence, so the construction company pulled the fence down,” Johnson said. “So, we then had an open nuisance in the neighborhood with a kind of open construction, which was a hazard to the neighborhood. And then I specifically remember he stopped paying the bill for the Porta Potty. And so there was no Porta Potty, and so when the construction workers would go out there, they were urinating in the public.”

Read part-two on Wednesday.

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