that they were not aware of costa-hawkins. i want to talk of the embassy kids, which they raise. embassy is not applicable here. it is not a case that has to do with a conditional use. and it was a challenge under our contract and of the notice of intent to withdraw under the ellis act. so that case does not apply here. another case which she mentioned for the first time tonight is also -- i did not read this case for this particular matter, but that case would not apply here, as well. there are many cases that state it, whatever your claim, constitutional violation, pre- emption, 650, shorter statute of limitation, and moore's

kazakhstan to a limitation applies, said thank you, and if you have questions related to the legal issues, i am happy to respond, and we a staff from the mayor's office on housing and planning. vice president garcia: is it the palmer case? >> yes, sir. vice president garcia: it would seem that going forward that the planning department would absolutely have a problem causing someone who has a project such as this one in the future to have to comply with 415. why am i wrong? >> the inclusionary housing ordinance as it stands today requires all project sponsors to pay a fee. that is amply supported by a nexus study and by fighting since section 415. if you want to provide on-site or off-site units, you need to meet certain requirements. vice president garcia: so you

are saying that it is like an impact be? >> yes, it is an impact fee. vice president garcia: i thought they determined in part that it could not be an impact fee? they had agreed to do and in lieu of the instead of doing an on-site. >> yes, it was a fee in lieu of the on-site requirement. the planning code requires just a feed -- the fee. that is the primary requirement. vice president garcia: you are confusing me, or maybe i am asking my question poorly or and exhibiting a lack of understanding as to what the issue is, but it had been raised by whatever jurisdiction that was -- was that los angeles? >> los angeles. vice president garcia: and it is

an impact fee, so we can cause the developer, in this case, palmer, to pay it, and i thought the court had decided that it was not an impact fee. >> the court in palmer found the fee objectionable on the basis that it was a fee in lieu of an on-site requirement on a rental project. the fees in san francisco are no longer in new -- lieu. they are the primary requirement, and they are fully justified by the required nexus study and findings in the ordinance. vice president garcia: so we do not have to give a density bonus or something else in order to be exempt from consideration for costa-hawkins? >> that is correct. if you want to provide your unit on side, and if you are a rental

project, the current requirement is that you enter into an agreement with the city. vice president garcia: ok, i am still confused as to why that is not a violation of costa- hawkins. because of the fee? >> it is justified. vice president garcia: there is no more inclusionary housing? >> fifi goes to the mayor's office on housing to build affordable housing -- the fee goes to the mayor's office. vice president garcia: he just has to pay some fee that goes to the mayor office on housing, and they can construct below market rate houses? >> yes. and there are certain options. if you meet certain conditions, you can provide the units on side, but you need to meet other conditions. this is primarily the fate. -- fee.

vice president garcia: thank you. commissioner fung: i would be interested in hearing a little more detail as to how the bmr conditions were not met, as possible, either in terms of rental rates or other conditions that were part of the cu. >> certainly, i can give a brief overview, and then i think the representative from the mayor's department of housing can give more. basically, under the planning code and the procedures manual, all owners or renters are required to qualify the household as a low-income or moderate-income households and then to provide information to the mayor's office on house and that they are selling or renting back below market rate prize.

here, no such ban was given, and the mayor's office found that the units were occupied, that they had not qualified to households that were occupying the units, and they did not know what the rental rates were. so that is when the mayors of us on house and started to investigate and request information from a property owner about who was occupying the units, what their income levels were, and what rents in the recharging, and they received the information back that was insufficient. in fact, they receive information back that some of the rates were above the below market rates. vice president garcia: before she comes up, patrick and whether or not the person and was evicted was paying what the city would agree were below market rates, with the mayor's

office on housing or the city's attorney agree with that statement? >> i am not specifically aware of that or if the city that information at the time. the idea was that we did not have the information about the rates being charged at that time, and that is why the mayors of us on housing was seeking, to determine if the intent -- the mayor's office on housing was seeking comment to determine if the intent was below market. vice president garcia: if they could demonstrate that they had paid, that they had been charging below market rate? >> yes, the mayors of us on housing had no other objection. does not have any objection to a legitimate eviction if the rules of the below market rate program

are being complied with. vice president garcia: >> thank you. >> i am with the mayor's office of housing. i will describe the sequence of events from my perspective. which it came to our attention that the building was out of compliance with the program somewhere around 2008-2009. we received a letter from an attorney stating that there would like to come into compliance has. i think my manager has that letter. i spoke with the planning department at the end of 2008 when we were doing the annual housing inventory and he said that these units were completed this year. i did not see it on my list, so we knew there was a problem. it was not until october of 2009

that we were able to issue the letter. this is the second largest building that we had to tackle. in october, we issued a letter from our director saying, your units are not complying with the program. we would like to bring you into compliance. we talk about it and our director thought it was the best to use the income available for low-income households instead of going through the available process. it worked beautifully. all units came into compliance. we have a fully functional bmr program at the other voting. i gave him 30 days to respond. i sent them all of the copies of everything they needed. a letter to them and a cover letter to every tenant, the application, a phone number to call, everything customized, copied. i thought, let's just make this easy and it will be fast. i had the impression that they might be close to compliance.

i did not hear back from them until july of the following year. it was october that i sent the letter and july that i finally got something back. after looking into it, it was incomplete. there was no income documentation. i needed to know who lived in the units and what rent was charged and what leases, to show the rent. i needed to know who was living in the unit and what income level they had. all i got back or the covered pieces of the application, without any income documentation. i did not receive back the income documentation pieces and i did not receive back a worksheet that i asked him to complete telling me who lived in it. i got back the same materials that i had already received the same month.

it was in october of that your -- of that year, october of 2010, i said i was not getting what i need. this is not enough. i cannot build files off of this. i did get back the spreadsheet who said who lived in the units and what read was being charged. i got a copy of the leases of all of the tenants. on the spreadsheet, they indicated that the rent he was close to the bmr rent. i sent them a statement of what the rent were -- of what the rents were, but they had taken the rent -- there were the same trends that were on that sheet. when i got the leases, there were different. they all said different rent levels. i am looking at unit 2018 -- at

unit 218, and it was completely different. that is the kind of thing i notice. i was still missing documentation. i ask them to send in. i never got any documentation except working for the owner, who sent something to me individually. i never closed the case. i never issued a letter saying, this is my final determination. this is where we stand. this is where you are. we got to a standstill. i did not issue any thing saying, your rents are wrong because we never got there. the next thing i knew -- i was contacted by tenants or two years. the one lady who was asked to leave and another who was having a lot of issues with the owner. i am neutral on that. i know all tenants are not perfect, so we try to serve as a

liaison, not to arbitration. in terms of the woman being convicted, she and her neighbor contacted me telling me this was going on. we had not confirmed that she was charged the correct friends yet under the bmr program. it does seem unfair to even occur. we do not interfere with the vixens if someone is not paying rent. it seems unfair that someone did not even know that she owed back rent. that is something that i convey to the owner. we do not even if if we have not completed this process and do not know what is going on. >> were specific units identified as part of the conditions of the bmr? >> yes. >> you have the specific number of identification of the units? >> yes. >> and the party informational provided you was related to those units?

>> yes. it was taking a long time, but they were getting close. we were 80% towards compliance per it we were almost there. >> did you receive confirmation from all seven units? >> pieces of information on all seven units, yes. >> he is on your analysis, the leases indicate rental rates that were not with any bmr guidelines? >> it appears that way to me. i did look at all the leases and make a spreadsheet of what it looks like. what initial route was and what should have been charged at that time it. we have not gone back and forth over that and talk about what is going on. but that is what it looks like. president goh: just to make sure i understood -- my initial question on the identification of specific units. were those identified in the planning commission to you?

>> this notice of special restrictions is more detailed than typical. from what i recall, it is in my bag. i can grab if you like. it spelled out the unit's and they do not all tend to do that. you can imagine unit designation names change harry it is not even wise to do that. what they do now is for plans that identify the bmr unit. this one was pretty detailed. >> i had a question in response to commissioner fong. -- fung. while the leases may or may not have been within that, the form that you had the landlord fill out indicated rates that were the same as the rates that you provided them, which turned out to be erroneous, within the bmr.

>> that is right. those rates were erroneous. >> providing new information that mashed information that you gave them but did not match the leases. >> that is correct. vice president garcia: the owner now occupies one of the bmr units, is that correct? >> i do not know what is correct because whenever finalize communication. i did hear from one of the tenants not that the owner occupies one, but that the building manager live in one of the units. i passed that on but did not hear back formally from the owner at any point, except when he did submit the spread sheet that i had created and filled it out in october of 2010. he wrote an asterisk next to

the -- nice to one of the units and said something to the extent of the building manager lived in a unit. resident/workplace. has the name of the person. that is all i had from him. vice president garcia: you said that was the unit from which someone was effected? >> no. >> i have another question. he said in the beginning that you became aware that the building was potentially out of compliance and that that came through a complaint. is that right? >> i cannot recall exactly how it went. other tenants started calling in. they had separate issues and concerns. at the same time, we were

working with planning to find out what buildings should be in compliance that year. buildings should not pass out of the department of building inspection if they are not in compliance. they are charged to ensure that they are in compliance. we do have a handful that are put through. commissioner peterson: how does the city make sure that buildings are in compliance? how is that in the purview of dbi when it is a rent is you? >> a building should not be issued its final certificate of occupancy if it is not -- even issued its first permit if it had not paid the fee under the program. you have to pay the fee before you get your site permit it.

that was the first shot that happened at the b i -- the first cjh -- the first check that happened at dbi. we have been working to firm up communication between dbi and the mayor's office. commissioner peterson: thank you. president goh: is there any public comment on this item? seeing none, we will move into rebuttal. >> on page 6 of the notice of violation and penalty, it alleges that my clients

wrongfully even did this person. if that is part of the basis on which the penalty was issued, there is a violation of state law because the unlawful detainer statute is under ccp section 11.61. any interference with that or basis of a penalty would constitute a violation of the judicial powers act in an area of law pre-empted by the state of california. the problem is quite clear. when we go into court on an unlawful detainer and we get a judge to approve a settlement in

superior court, then the city and county says that there is a wrongful depiction, there is a difference of conclusions. how is that going to be resolved if you have got this encroachment on the jurisdiction? getting back to the amnesty case, which counts of referred to, that case involved a waiver of the ellis act by the property owner. that waiver was held to be not enforceable. the city cannot require somebody, a property owner, to

waive their state, federal, or constitutional rights, unless there is compensation. there was no compensation paid to my clients. they are independent business people and therefore are absent any compensation. it would be an unlawful taking. we are not here to challenge the bmr law. it is a good law. we are not here to challenge anything except the fact that my client do not come within the type of property owner which is subject to the bmr law because of the statutory language embodied.

>> was your client represented by counsel and initially when these agreements were made? this would be 2001. >> during the permit process? yes, they were. >> i cannot find a derivation of all the penalties and were assessed. i do not know if that is amplified with the issue having to do with the eviction. i suspect that it would be 250 without the eviction and. that is not the main point of this particular case? >> is not. we consider to be unreasonable. there is no basis for it. vice president garcia: i want a clarification on that. >> we do not know.

vice president garcia: thank you. president goh: could we hear a rebuttal from the zoning administrator? >> picking up on what vice president garcia noted, this is a violation and penalty for " -- for failure to comply with the conditional use authorization. it is not that they even did someone and noted the penalty and violation was issued because of the eviction. the parties failed to comply with the mayor's office, which is extremely clear from the evidence presented her by the mayor's office of housing. $250 per day is the standard penalty rate that we do assess if we notice a violation. the eviction notice was under evidence presented at the hearing. they did not notify the mayor's office of housing. so they did not comply in that

respect. that is all i have to comment on there. >> help me with this confusion. section 315 no longer exists. it was replaced by section 415. there is no inclusion rehousing any longer? 415 gives it a different name and treatment. the treatment is 8 feet as opposed to -- >> the planning code was amended after the bomber decision -- the palmer decision. it has been amended that, first and foremost, is a fee that is appropriately assessed because of a study that was done in order to support the affordable housing v. -- housing fee.

they can choose the on-site housing. the requirements first and foremost is a fee. >> has that been tested? >> i do not believe so. >> commissioners, the matter is submitted. vice president garcia: one quick question. mrs. sanchez. does the mellow out -- the mellow act apply to this? it has to do with whether or

not 8 jurisdiction can issue bonds -- the mellow routh act. this one has to do with the housing on the coast of california having to be affordable. >> i believe that is correct. i do not believe that those particular properties are within the coastal zone. only a portion of san francisco is within the coastal zone. usually, that is noted with in the conditions of our approval and at times, the coastal commission has jurisdiction or certain jurisdiction triet as far as i am aware from the record, i do not believe it is in the coastal zone. vice president garcia: just a curiosity. thank you.

>> i guess i will start. it is unnecessarily not germane to my discussion, but the timing is interesting. there are tax consequences and condo consequences. that relate to the fact that it is rental housing and sold as condos. in the thing for me is, as one of the few non-attorneys on the board, both briefs were extremely legal. it is not for me to understand the nuances within the legal arguments so easily.

i do recognize, however, as an example come a one of the cases that was mentioned was san remo. the attorney ticket to the supreme court -- the attorney took it to the supreme court. i do not see the relation of that case to the arguments, since i sat on -- since i sat in on the hearings for both that and the cornell hotel. anyway, what struck me most is that the principles of this firm, they negotiated, took two years, it was not an overnight deal, they signed it with the same principles. they should live up to what they agreed to. vice president garcia: