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something to be exceptionally proud of and presented the Council with a packet of approval letters from Hacienda. Vice-Mayor Cook-Kallio asked his opinion on affordability levels, as proposed. Mr. Paxson said he is particularly sensitive to the need for housing that serves and important group of those who work at Hacienda. He said one thing that wasn't discussed tonight was an understanding of how exceptionally difficult it is to put together a project of this type in face of the collective requirements. If anything, he hoped the City would take the time to look at the costs involved in designing and actually providing a project this spectacular. Councilmember Brown said that at first glance, Hacienda appears to house mostly white collar jobs for well compensated employees. She asked Mr. Paxson to expand on the need he referenced. Mr. Paxson explained that Hacienda is home to nearly 100 restaurants in addition to a number of other service industry type places. He also noted that higher wage jobs require at least two tiers of employment beneath them to support those jobs. Hacienda houses the full spectrum of employment and affordability needs that a project like this can begin to address. Vice-Mayor Cook-Kallio interjected some perspective, noting that one has to teach at least 12 years before earning $79,000 and said there is a real disconnect in this community surrounding the reality of affordability. Mayor Thorne closed the public hearing. Councilmember Brown asked Mr. Inderbitzen to describe what the impact of increasing the school district fees would have on the very low income units. Mr. Inderbitzen could not say due to the number of variables. He said Pleasant Partners was challenged with the requirement to try to solve multiple public goals, those being the funds needed for improvements at Bernal Park, the desire by the school district to increase fees above the statutory requirement, and the affordable housing obligation. In each instance, he worked to achieve more than the minimum and to satisfy the expectations of the community. In the first affordability option proposed, they understood the City was challenged in securing 3 bedroom units so they increased that offering by sacrificing the 15% goal. The Housing Commission rejected that option so increased the total number of units and reduced the depth of the discount. He said they actually prefer the revised Option 2, or third option, because its meets the City's design standards precisely in term of the mix of units. He asked the Council to recognize that the developer needs to move forward with the approval in order to hopefully start construction this time next year. Vice-Mayor Cook-Kallio said she took Ms. Belding's and Ms. Dennis' comments very much to heart. However, one of the goals of the Housing Element was to actually provide affordable housing and her concern is that in delaying a decision, they may lose any opportunity for affordable housing. She asked and Mr. Fialho confirmed that under the current interpretation of the Palmer case, a project that complied with the design guidelines would not be obligated to provide any level of affordable housing unless there was a mutual agreement to do so. She noted a discrepancy betweer the interpretations of staff and Citizens for a Caring Community regarding the Palmer case and requested clarification from staff. Ms. Harryman explained that the Palmer case relates to a request that the developer provide a certain number of units or pay an in lieu fee. The court ruled that the Costa-Hawkins Rental Housing Act provides that only the landlord is able to set the initial rent on rental units and that they cannot be required to set a particular rent. The court also ruled that the in lieu fee imposed by the City of Los Angeles was inextricably intertwined and therefore also prohibited. Follow this decision, a number of City Council Minutes Page 19 of 23 April 16, 2013