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Whistleblower suit accuses San Luis Obispo officials of unlawful conduct

June 15, 2026

San Luis Obispo City Manager Whitney McDonald

By KAREN VELIE

San Luis Obispo’s former chief building official filed a whistleblower lawsuit against the city on Friday. Michael Loew’s  suit describes a “sustained campaign to silence, punish, and ultimately force him out” after he refused to “participate in unlawful conduct.”

From March 2022 through June 19, 2025, as chief building official Loew was responsible for enforcing state and local building codes, overseeing the building and safety division, managing fee-supported regulatory programs and enforcing building codes.

Loew’s lawsuit alleges city administrators directed him to doctor financial records.

While California law only allows city’s to charge applicants the actual cost of permit processing and inspections, Loew’s lawsuit describes city administrators knowingly overcharging through fees and then “diverting fee revenues.”

A 2024 fee study by an outside consultant recommended a 35% reduction in fee rates. That recommendation would have reduced building and safety fee revenues by approximately $1 million annually, according to the lawsuit.

At the direction of city administrators, Loew developed an entirely new cost-justification methodology fees, one based not on actual historical expenditures, but on an estimate of what it “should” cost to operate at the level its services warranted.

The forward-looking cost model justified maintaining existing fee revenues rather than reducing them to comply with the consultant’s findings.

Another bone of contention was over the safety of a building at 1150 Laurel Lane that housed multiple businesses, including the popular Bang the Drum Brewery.

In Nov. 2024, Loew determined the building was being used and occupied without valid occupancy. In addition, he determined that the “building posed a serious and unreasonable risk to the life safety of occupants and the public.”

“The law says the chief building official ‘shall’ condemn unsafe buildings, ‘shall’ post condemned placards, and ‘shall’ take immediate action following a board of appeals determination,” according to the lawsuit.

While Loew wanted to shutter the building, city leadership directed him to stop the condemnation, leading to another six months of occupancy.

On May 1, 2025, Mayor Erica Stewart promoted a social event at the building, “thereby exposing members of the public to known life-safety hazards,” according to the lawsuit.

Throughout this period, city leadership, including City Manager Whitney McDonald, Assistant City Manager Scott Collins, and Community Development Director Timothea Tway directed Loew to refrain from condemning the building, according to the lawsuit.

At an administrative hearing on May 5, 2025, “Fire Chief Todd Tuggle stated on the record that the building was too dangerous for firefighters to enter in the event of an emergency, confirming the severity of the life-safety risks Lowe had identified and reported.”

The city then condemned portions of the building leading to the closure of multiple businesses. The city continues to permit Ernest Packaging Solutions and Empire Electrical to continue operating in the building.

The suit accuses the City of San Luis Obispo, City Attorney Christine Dietrick, McDonald, Collins and Tway of retaliation and infliction of emotional distress.

After Loew disclosed his concerns, he was stripped of enforcement authority, directed to refrain from exercising his mandatory enforcement duties, sent hostile and threatening communications and questioned in meetings.

City management staff “collectively creating working conditions so intolerable, hostile, and humiliating that a reasonable person in Loew’s’s position — a senior public safety professional directed to violate mandatory legal duties, denied resources proven necessary, and accused of immorality for attempting to enforce the law — would have had no reasonable alternative but to resign,” according to the lawsuit.

The retaliatory conduct allegedly continued until Loew resigned on June 19, 2025.

The suit seeks general, compensatory and punitive damages along with attorney fees and costs.

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16 Comments

Scott Collins was director of HASLO, a tenant at Laurel Lane. And he is now the Assistant City Manager at the City of San Luis Obispo. One wonders if he was pressuring the City not to condemn the building, at least until he moved on to his employment with the City, because HASLO’s office was there.


12

I just filed a complaint with the Public Integrity unit in the SLO County DA’s office and so can you: https://www.slocounty.ca.gov/departments/district-attorney/special-prosecutions/public-integrity-unit


11

Doesn’t surprise me one bit, given the abuse and persecution suffered at the hands of city staff and elected officials by citizens who questioned the City’s failure to properly inspect Avila Ranch properties.


17

If you remember, Karen also revealed a retaliation effort against this whistleblower by attempting to remove the parking space in front of his house that he used for his vehicle. This isn’t the only pending lawsuit against the city about their unethical and illegal operations. These lawsuits may reveal a lot of dirty secrets–stay tuned.


56

Refreshing to see a City Official stand up to and blow the whistle on the chronic wrong-doing. Truth to power seems to be in play.


Hopefully Dow will take a serious look into this insiders initial disclosure of how the City operates. The lawsuit seems to be just a taste of who and what’s to be disclosed and Dietrich’s role should be maybe be thoroughlyinvestigated..


50

In decades, this is the first local government staffer I have seen who has dared to publicly question the regime.


14

On reflection, while I welcome investigation by the Public Integrity Unit, the level of corruption countywide, while not at all coming from the DA’s office, may be of such a volume that it has to go up the line to the FBI or the Justice Department, rather than being handled by an agency from within.


0

The corruption in this town, this county, is never-ending.


63

I was a subcontractor on the Bang The Drum remodel work there, and well remember the building and site. It has never made sense to me until now why they condemned it. Chief Tuggle and the fire dept…

It is a modern building that was built to code. It has plenty of egress in case of emergency.

Rumor had it that someone had a ‘ vision’ of condemning the buildings on the property and paving the way for more residential development.

I wish someone would shine more light on this.

Seems very strange. Feels like other forces at work under the surface.


51

Tuggle’s favoring the condemnation left me wondering, too. The Whistleblower, based on known information, is trustworthy. Former SLO fire chief Tuggle, based on known information, is not. I suspect he got thrown under the bus when it got too hot in the kitchen and someone’s head had to roll. Of course, it didn’t roll far because after having to resign, Tuggle was given a lucrative city consulting role. Tuggle’s wife, Jules, a Grover Beach City Councilwoman, supports the same lame builder who is erecting eight high condo blocks in Grover, whose handiwork at Avila Ranch her husband refused to inspect for fire safety.


8

And if you believe this only goes on in the city of SLO, I also have a bridge to sell you.


40

Would that bridge be the Grand Canyon West in Grover Beach?


4

First I really wish that CCN would post the primary source for articles, in this case including a link to the lawsuit in question. Many readers are surely interested in reading the whole thing and would appreciate the transparency.


Second the allegation that the city is overcharging developers is concerning – if true it goes against and undermines the stated policy to build more housing in SLO. Looking forward to updates on this case.


38

You have to register with the court records vendor by giving your address and phone number, and do an email confirmation to see SLO Superior Court cases. It’s case 26CV-0365. https://researchca.tylerhost.net/CourtRecordsSearch/ui/Home


9

Thanks, LeroyMoo, for setting Jefferies straight as to why the lawsuit cannot be linked and how she and others can access court cases, and for providing the case number. Once into the app, cases can also be searched by party names.


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