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

September 10, 2024

San Luis Obispo City Councilwoman Jan Marx, SLO County Supervisor Adam Hill, City Manager Derek Johnson, and Mayor Heidi Harmon at a ribbon cutting for San Luis Ranch

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?”

San Luis Obispo City Manager Derek Johnson

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.

During construction at Petetit-Wright’s San Carlos Drive project

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, “San Luis Obispo manager bent over backwards for Adam Hill.”

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Didn’t Johnson end up in close quarters with other former SLO officials who made quick exits?


6

Look at the photo above. Not one of these individuals was untouched by corruption.


–Adam Hill’s legacy includes multiple development bribes.

–Former mayor Heidi Harmon, who resigned suddenly when the FBI began questioning Hill, reportedly hung out at and owned shares in felon Helios Dayspring’s (now sold) unopened dispensary in SLO.

–Former mayor and incumbent city council candidate Jan Marx manipulated the airport land use commission to build homes on the former Dalidio property and now owns at least one house in the development intended for low-income housing.

–Recently, in that same development, this time with Gary Grossman & Coastal Community Builders (also a friend of Adam Hill), it is coming out that under Johnson’s leadership, planning, code inspections, and permissions were slapdash at best.


Returning to Belsher, it is rumored that he was involved in the fraud perpetrated on Bethel Baptist Church on Newport Ave. in Grover Beach. I wonder if the FBI will be prosecuting that soon.


14

What about the Dirty Don, who is the democratic king maker in SLO county, when will the $$ trace back to Don?


13

Not surprised at all about Katie Lichtig’s involvement. John Ashbaugh should also be on the list of those with a cozy relationship with Adam Hill and John Belsher.


Belsher and company hoodwinked the Planning Commission and/or ARC to approve an oversized development on substandard lots at 323 & 353 Grand Avenue in SLO and some neighbors appealed. The city council heard that appeal on 6/2/2015 and overturned the decision which stopped the development from moving forward.


Katie Lichtig was visibly upset when the vote did not come down in John Belsher’s favor. Look at the archived video of the meeting. It’s clear that she was on John Belsher’s team. John Ashbaugh was also upset and called the neighbors who appealed NIMBYs.


There was a blog post about the development being denied, including Ashbaugh and Carlyn Christianson’s comments: https://timwaagblog.blogspot.com/2015/06/slo-city-council-denies-additional.html


30

I’m confused – so Johnson’s testimony helped keep Petetit-Wright behind bars, generally ignored Hill, and under Johnson the City they repeatedly slapped offending developments with legitimate code violations? This is…good, right? What is so damning? Why are you all saying the Emperor is wearing clothes?


-21

So you didn’t read the article? Or understand it?


26

A city manager/community development director, a major developer, and a board of supervisor member spokes on several occasions over many years. That they interacted seems benign and normal, and that the city frequently rebuked them seems to be a strong point in Johnson’s favor. The only thing which really seems wrong is the discrepancy between the 2021 and 2022 interviews, but that seems like a huge gulf between clarification needed and proof of corruption.


Let’s just go with don’t understand – explain what part is really indicting and not just speculation at best.


-10

You sound like a spokesperson for Johnson.


14

Good God no! I’m just a humble and skeptical consumer of news who saw a bold headline and is somewhat surprised to find it doesn’t match up with the content of the article.


Maybe all the damning evidence is in Part 2, but so far it seems that Johnson was more of a headache for Hill and Wright than a friend. If I’m wrong, please cite specifics.


-3

For one, he did not, in the first instance, come clean with the FBI (according to the FBI, a reliable source, I’d say) about the extent of the time spent with Hill, Belsher, & Wright. That’s usually construed as illegal.


3

Does it occur to you that it may be inappropriate for a public employee to regularly dine with people with multiple applications with the city (over which he has influence and authority) at expensive local restaurants on multiple occasions? Who is paying for those cushy luncheons? The citizens? The developers? The supervisor aka consultant for the developers? Should any of them be there and be paying for it?


5

If these were weekly lunches, or if they were purchasing expensive bottles of wine or whiskey paid for by either, I would wholeheartedly agree it’s inappropriate.


But it sounds like these lunches happened a couple times only and I’d be willing to bet that there were no ridiculous purchases and the bill was split – why? Because CCN would have happily reported on damning details if they existed.


If you think executive public employees should never be doing work lunches on taxpayer dime, id be willing to entertain that proposal… But it seems like a pretty mundane thing to worry about, it happens in the business world all the time.


0

As the instigator of the case against the San Carlos property I can tell you that all the code violations and fines were never enforced or collected. When Petetit did pay his checks bounced. When the city council and attorney had the opportunity to enforce the violations in a meeting that I testified in Jan Marx chose to side with the violators and the city attorney and let them off the hook after several years of blatant disrespect for the neighbors. The FBI should be investigating everyone involved with these two trump wannabes


10

Interesting but not all all surprising that the former slo city employee Katie Lichtig’s name comes up as closely associated with Adam Hill. And tying names together, Katie Lichtig is now running for a seat on the Port San Luis Harbor Commission to work with Bob Vessely spouse of Susan Devine who worked for Hill. It’s all tied together with this tribe of folks.


56

There’s no doubt that Katie Lichtig was closely associated with Adam Hill and PB development projects.


31

Isn’t it interesting that the excessively compensated and appointed city managers and attorneys in local government, whether competent or not terribly so, are all part and parcel with Belsher, Wright, Hill, and Gary Grossman? As law enforcement detectives say, “There are no coincidences.”


2

And don’t forget…Susan Devine worked for attorney Don Earnst for many years…then somehow became Adam Hill’s legislative aid…..and so did county counsel Ms. Rita Neal (worked for Don Earnst). Don Earnst is/was always at the center of these county issues with Adam Hill.


16

When will the dirty don get his??


7

I don’t imagine anyone sees a county-wide pattern developing here (sarcasm intended) … a little ignoring of civil wrongdoing here, a little dinner party there, all good buddies in what I like to call “country-club corruption” where “dirty deeds and done dirt free” is a motto.


47