MARBLEHEAD – The developer of the town?s first Smart Growth project, a 17-unit residential project with commercial space on the first floor and indoor parking, has agreed to some of an independent architect?s recommendations – but Attorney Paul Lynch, who represents developer Heidi Wattendorf, looked at some key proposals as something for “a perfect world.”One of the recommendations Lynch and the consultants hammered was a proposal to shrink the building.Expanding on an explanation by Wattendorf?s consultant Peter Pitman – “The project has to be financially viable” – Lynch said the Smart Growth law requires three affordable units, even if Wattendorf only builds 14 units altogether.?We have met the design criteria,” Lynch said. Assistant Town Counsel Lisa Mead questioned that statement and Planning Board members spent some time discussing the process by which they could grant Wattendorf waivers of the design guidelines if they choose to do so.Lynch also called a traffic study “unnecessary” since the residences will create less traffic than the YMCA did. Residents and business people continued to express concern about the amount and speed of traffic in the area, and the fact that parking garage traffic will exit onto Essex Street, a narrow one-way street.The hearing, which was still ongoing at deadline, will continue after the holidays. Wattendorf has moved the building dumpster inside and added more landscaping and a fence.The planners raised aesthetic questions about the design for the School Street side, which is less decorative than the other three.The meeting began with a discussion of drainage by Wattendorf consultant Peter Ogen of Hayes Engineering. Ogen said further soil tests are needed once the former YMCA is demolished but the plan is to establish an underground drainage system in the vicinity of the “Y” swimming pool, which is below street level.