Ok After doing this again here is what i can confirm during the mission "Drive-by" after taking out the gang members and heading back to grove street, going into the Pay n Spray during the mission did remove my wanted level but did not unlock the achievement.
After finishing the mission and saving as i usually do i ran over a few people on my way to Pay n Spray in a car until you get a wanted star drove into the Pay n Spray and drive out. The star starts flashing and the achievement popped for me. Confirming what GLASS GHOST 0 and Groudon199 have pointed out and the same as happened on my other account.
For those who have never played GTA before the star must be solid, not flashing when you go into the Pay n Spray as pointed out by Your Fav Ogre.
All of this said there is plenty of opportunity to get this achievement through out the game as others have pointed out (JustinWockeeZ "you will unlock the achievement during the mission "catalyst", if you haven't unlocked it by then") i only needed one wanted star but get 2 instead if you think this may help.
Pay n Spray location - Check the map you will see, to the left of cj's house, There is a Pay n Spray (spray can icon), well stacked pizza and a tattoo shop.
Edit 11-Mar-18 Octobot super has pointed out that now it seams that this can be done at the start of a new game.
"I started a new game and this was the first thing I did before any missions (although you won't get an icon on your map).
Hope i've made this clearer, Good Luck!