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POWAY ROYAL MOBILEHOME OWNERS ASSOCIATION v. CITY OF POWAY Part I

POWAY ROYAL MOBILEHOME OWNERS ASSOCIATION v. CITY OF POWAY Part I
06:07:2007



POWAY ROYAL MOBILEHOME OWNERS ASSOCIATION v. CITY OF POWAY



Filed 4/20/07



CERTIFIED FOR PUBLICATION



COURT OF APPEAL, FOURTH APPELLATE DISTRICT



DIVISION ONE



STATE OF CALIFORNIA



POWAY ROYAL MOBILEHOME OWNERS ASSOCIATION et al.,



Plaintiffs and Appellants,



v.



CITY OF POWAY et al.,



Defendants and Respondents.



D048211



(Super. Ct. No. GIC849802)



CITY OF POWAY et al.,



Plaintiffs and Respondents,



v.



POWAY ROYAL MOBILEHOME OWNERS ASSOCIATION et al.,



Defendants and Appellants.



(Super. Ct. No. GIC849790)



APPEAL from judgments of the Superior Court of San Diego County, Yuri Hofmann, Judge. Affirmed in part; reversed in part.



Mitchell & Gilleon, James C. Mitchell; and V'Frank Asaro for Plaintiffs and Appellants and for Defendants and Appellants.



Stradling Yocca Carlson & Rauth, Douglas J. Evertz and Thomas P. Clark, Jr. for Defendants and Respondents and Plaintiffs and Respondents City of Poway, Poway Redevelopment Agency, City Counsel of the City of Poway, James L. Bowersox, and Wakeland Housing and Development Corporation.



McDougal, Love, Eckis, Smith & Boehmer and Lisa A. Foster for Defendants and Respondents and Plaintiffs and Respondents City of Poway and Poway Redevelopment Agency.



This case arises from the City of Poway's (the City) two-step plan to divest itself of ownership of the Poway Royal Mobilehome Park (the Park). The City held one hearing in which it approved resolutions allowing it to issue tax-exempt bonds and loan the proceeds to the Poway Redevelopment Agency (Redevelopment Agency) for its purchase of the Park, and the Redevelopment Agency to later loan the proceeds and resell the Park to Wakeland Housing and Development Corporation (Wakeland) or its subsidiary, on the condition that it obtain a determination of tax-exempt status from the Internal Revenue Service (IRS). If Wakeland or its subsidiary did not qualify, the Redevelopment Agency would retain ownership of and manage the Park so the tax-exempt status of the bonds would not be jeopardized.



Plaintiffs, Poway Royal Mobilehome Owners Association and 273 of its members (sometimes collectively the Owners Association), appeal a judgment of dismissal entered after the trial court sustained without leave to amend the demurrer of defendants, the City, the City Council of the City of Poway (City Council), City Manager James Bowersox, and the Redevelopment Agency (sometimes collectively the City). The Owners Association contends the court erred by finding it may not maintain promissory estoppel and related claims against the City arising from its alleged breach of oral promises to provide the Owners Association with "a real, true and non-illusory opportunity to purchase" the Park at fair market value. Additionally, the Owners Association contends the court abused its discretion by denying it leave to file a third amended complaint to attach a resolution of the City Council in an effort to satisfy the requirement of a written contract. We affirm the judgment.



Additionally, the Owners Association challenges the judgment in the City's action to validate its two-step plan to divest itself of the Park and associated bond financing. The Owners Association contends the court ignored that during the City's public hearing under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) (26 U.S.C.  147(f)), it failed to submit evidence that Wakeland or its subsidiary qualified for tax-exempt bond financing, or that the Park met the requirement of being a " 'qualified residential rental project[,]' " meaning "20 percent or more of the residential units . . . are occupied by individuals whose income is 50 percent or less of area median gross income" (20-50 rule). (26 U.S.C.  142(d)(1)(A).) We agree the TEFRA hearing was insufficient, and accordingly reverse that judgment.




FACTUAL AND PROCEDURAL BACKGROUND[1]



The Park has 399 spaces and is situated on approximately 50 acres of land. In January 1991 the Redevelopment Agency purchased the Park, intending to stabilize rents and preserve affordable housing. In 1995 the Redevelopment Agency transferred ownership of the Park to the City. Also in 1995, the City issued bonds in the amount of $31,770,000, which paid off debt related to the Redevelopment Agency's purchase of the Park in 1991. City staff and contract employees managed the Park until 2004, when that responsibility was transferred to Wakeland.



In 1999 the City adopted a long-term goal for the divestiture of its mobilehome parks. The City orally advised tenants of the Park that when and if it decided to sell the Park it would give them an opportunity to purchase it. The Owners Association represented tenants in seeking private ownership, and the City knew 70 percent of the Park's tenants were willing, ready and able to purchase the Park at fair market value.



In November 2004, however, the City announced its intent to sell the Park "to a [26 United States Code section] 501(c)(3) nonprofit housing corporation using tax exempt bond financing," which would exclude the Owners Association and residents of the Park as purchasers since they cannot qualify as a nonprofit entity. Nonetheless, in February 2005 the Owners Association submitted a proposal to the City to purchase the Park. The following June the City rejected the proposal and agreed to sell the Park to the Redevelopment Agency, which would resell it to Wakeland, a nonprofit housing corporation, contingent on it qualifying for tax-exempt status under federal law.



The City then filed a complaint for validation of its sale of the Park and associated tax-exempt bond financing. The complaint alleged the City would first sell the Park to the Redevelopment Agency for $35.6 million, its asserted fair market value, plus reserve deposits to ensure the Park's successful operation. To finance the purchase, the City agreed to issue bonds not to exceed $32 million and loan the proceeds to the Redevelopment Agency, and to take an additional note from it for approximately $9.5 million. Wakeland would then purchase the Park from the Redevelopment Agency for $35.6 million, plus reserve deposits, and would assume the Redevelopment Agency's rights and obligations under the bond financing documents and $9.5 million loan agreement with the City.



The Owners Association answered the complaint and contested the legality of the City's actions. Additionally, the Owners Association filed a first amended complaint against the City for promissory estoppel and declaratory relief. The parties stipulated to the consolidation of the two actions.



The first amended complaint alleged the City and Redevelopment Agency "orally and publicly, and in certain instances, in writing, expressed [an] intent" to allow the Owners Association and tenants to purchase the Park "on terms that are non-illusory, true and real, that reasonably relate to the [P]ark's fair market value and are customary and usual for any sale to tenants/residents of a mobilehome park where the ownership will be converted to residential ownership." The City allegedly breached the promise by not offering the Park to the Owners Association and tenants on reasonable terms, but rather "concoct[ing] a sales price, terms and a financing scheme" for the Park that eliminated Owners Association or tenants as purchasers. Specifically, the City required tax-exempt bond financing; provided nonprofit housing corporation bidders, including Wakeland, with financing information and Park financial information, but refused to provide the same information to the Owners Association; gave the Owners Association an unreasonably short period to submit a purchase proposal; set a closing date for the sale so soon it precluded the Owners Association from complying with the statutory process for converting the Park to resident ownership; and allowed nonprofit housing corporations to submit offers on the Park that did not require the payment of any cash.



The first amended complaint also alleged that in reliance on the City's representations, tenants of the Park signed or renewed leases, financed mobilehome purchases, relinquished the opportunity to move to other mobilehome parks and anticipated earning equity on their mobilehome spaces. The complaint sought an order requiring the City to provide the Owners Association and tenants of the Park "with a price and terms for them to purchase the [P]ark that are true, real and non-illusory, is at the fair market value of the [P]ark and upon customary and usual, fair and reasonable terms for sale to tenants/residents." Alternatively, the complaint prayed for $21 million in economic damages and damages for emotional distress.



The City demurred on the ground the promissory estoppel doctrine may not trump the requirement that public agency contracts must be adopted in accordance with statutory procedures that require, for instance, formal approval and a writing signed by the appropriate official. The court issued a tentative order sustaining the demurrer without leave to amend. After a hearing, however, the court granted the Owners Association leave to amend.



In December 2005 the Owners Association filed a second amended complaint, adding a cause of action for breach of the implied covenant of good faith and fair dealing based on leases between the City and Park tenants. The complaint alleged the leases incorporate by reference California's Mobilehome Residency Law, which requires an owner to give notice to tenants of the intent to sell a mobilehome park (Civil Code,  798.80), and the notice the City gave the tenants here was a "sham" because it was not "notice of an intent to sell the park on true, real and non-illusory terms."



The promissory estoppel cause of action remained essentially the same, but added that the City unfairly offered bond financing and subsidized the sale to Wakeland, and alleged the City "engaged in a sham, non-arms length transaction with Wakeland, which transaction will have the inevitable result of substantially increasing the present rents at the [P]ark to service the excess non-recourse debt the City and the [Redevelopment] Agency are creating." Regarding the City's representations, the second amended complaint alleged the "City and Agency, through members of the City Council, Bowersox, and employees of the Agency, including, but not limited to, David Narevsky, orally, and publicly, and in certain circumstances, in writing" expressed that intent.



The City again demurred and the court sustained the demurrer without leave to amend. The court determined the second amended complaint did not allege unusual circumstances to justify a claim for promissory estoppel against a public agency, and estoppel would thwart the protection of the statute of frauds and statutory procedures for public contracts. The court also found the complaint failed to state a cause of action for breach of the implied covenant as "such a cause of action may not extend beyond the terms of the contract in force between the parties," and in any event, the City complied with the notice requirement.



The Owners Association moved for reconsideration, arguing it could provide "the previously alleged writing" to confirm the City's promise. The Owners Association offered the minutes from the City Council's July 20, 1999 regular meeting, in which the City Council approved a consent calendar that included item No. 16, the "Adoption of Long-Term Goal for City and Redevelopment Agency Mobile Home Parks and Haley Ranch Estates" (Long-Term Goal). The draft of the Long-Term Goal, prepared by the City's Housing Commission, notes the Redevelopment Agency and the City had worked together to own and operate mobilehome parks, including the Park, "as a way of providing stable ownership and rents at these properties. The Housing Commission has requested and received approval from the City Council to develop a long term plan and goals for these properties to guide the City and [Redevelopment] Agency." The draft also stated the goal for transferring ownership of mobilehome parks was "[t]o insure an ownership and rent structure which maintains and enhances the quality and service of these properties," and as a matter of policy the City "should design a strategy which would transfer ownership to an entity such as a non-profit corporation, resident ownership/cooperative or similar structure which will insure the ownership operates the properties consistent with this policy."



The Owners Association also offered the deposition testimony of the City's deputy director of redevelopment, Narevsky, who co-authored the Long-Term Goal draft. He testified the term "non-profit corporation" as used in the policy section of the above draft meant a "charitable organization, nothing more than that." A proposed third amended complaint added the sentence, "A true and correct copy of a City Council Resolution confirming and ratifying any verbal promises is attached as Exhibit 2." It did not include any reference to Narevsky's testimony.



In a tentative ruling the court denied the motion, explaining the language of the Long-Term Goal draft did not require sale of the Park to the Owners Association, and it was not a binding document signed by the City. After a hearing, the court affirmed its ruling, and on April 13, 2006, it entered a judgment of dismissal.



As for the validation action, in October 2005 the parties had stipulated to the City's filing of a supplemental complaint to reflect changes in the agreement between the City and Wakeland for purchase of the Park. The purchaser would now be Poway Royal Estates, LLC (PRE), a Wakeland entity.



A hearing was held in February 2006, after which the court took the matter under submission. On March 1, it granted the City's request for validation and entered judgment. We discuss facts pertaining to the validation action below.




DISCUSSION



I



The Owners Association's Action



A



Standard of Review



In reviewing the propriety of the sustaining of a demurrer, the "court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] . . . The judgment must be affirmed 'if any one of the several grounds of demurrer is well taken. [Citations.]' [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment." (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) "While the decision to sustain or overrule a demurrer is a legal ruling subject to de novo review on appeal, the granting of leave to amend involves an exercise of the trial court's discretion." (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.)



B



Promissory Estoppel



1



"In California, under the doctrine of promissory estoppel, 'A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.' [Citations.] Promissory estoppel is 'a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.' " (Kajima/Ray Wilson v. Los AngelesCounty Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310.) The elements of promissory estoppel are: (1) a clear promise, (2) reliance, (3) substantial detriment, and (4) damages " 'measured by the extent of the obligation assumed and not performed.' " (Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 692.)



It is well established that "an estoppel will not be applied against the government if to do so would effectively nullify 'a strong rule of policy, adopted for the benefit of the public.' " (City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 493 (Mansell); City of South San Francisco v. Cypress Lawn Cemetery Assn. (1992) 11 Cal.App.4th 916, 923.) " 'The courts of this state have been careful to apply the rules of estoppel against a public agency only in those special cases where the interests of justice clearly require it.' " (Mansell, supra, at p. 495, fn. 30.) The " 'facts upon which such an estoppel must rest go beyond the ordinary principles of estoppel and each case must be examined carefully and rigidly to be sure that a precedent is not established through which, by favoritism or otherwise, the public interest may be mulcted or public policy defeated.' " (Ibid.)




2



We conclude the second amended complaint does not allege exceptional circumstances necessary to justify application of the promissory estoppel doctrine against the City, and leave to amend would not cure the defect.



The second amended complaint alleged the City breached a promise to the Owners Association and Park tenants by requiring tax-exempt bond financing for purchase of the Park. The Owners Association submits the City's financing mechanism excluded it from purchasing the Park because "a residents' organization converting a park to private ownership cannot ever qualify as a charity, a prerequisite to obtaining the bond financing required by the City." The second amended complaint also alleged the City deprived the Owners Association of a true opportunity to purchase the Park because it set the selling price above the Park's fair market value. At the hearing on the demurrer on the first amended complaint, the Owners Association argued the City offered the property to Wakeland "at a price that we believe we're going to show is almost $10 million more than the property is worth."



The second amended complaint sought an order requiring the City to provide the Owners Association and Park residents "with a price and terms for them to purchase the [P]ark . . . that are true, real and non-illusory," meaning "at the fair market value of the [P]ark and upon customary and usual, fair and reasonable terms for sale."



The Owners Association asserts that because it did not allege the City was required to actually sell it the Park, its claim is not for breach of contract and the trial court erred by relying on public contract law in sustaining the demurrer. We reject the assertion. The Owners Association's theory is that the City breached an agreement that purportedly ties its hands in several respects: it must conduct the sale of the Park in a certain manner, which excludes the acceptance of offers only from nonprofit housing corporations relying on tax-free bond financing; it must include the Owners Association in the bid process even if it determines the Owners Association's operation of the Park is infeasible and not in the best interest of the City, the Park or its tenants[2]; and it is precluded from asking for or accepting more than the Owners Association considers fair market value for the property. For instance, the City would have to reject Wakeland's offer of $35.6 million, even though an independent appraiser valued the property at that amount, as the Owners Association deems it substantially above fair market value. We agree with the trial court that the Owners Association's action is actually for breach of contract, and the City may not put itself in such a situation absent compliance with proper procedures.



It is undisputed that the City is a general law city. " 'The powers of a general law city include " 'only those powers expressly conferred upon it by the Legislature, together with such powers as are "necessarily incident to those expressly granted or essential to the declared object and purposes of the municipal corporation." ' " ' " (City of Orange v. San DiegoCounty Employees Retirement Assn. (2002) 103 Cal.App.4th 45, 52 (City of Orange).) A " 'general law city . . . must comply with state statutes that specify requirements for entering into contracts. [Citations.]' " (Ibid.) " 'A contract entered into by a local government without legal authority is "wholly void," ultra vires, and unenforceable.' " (G. L. Mezetta, Inc. v. City of AmericanCanyon(2000) 78 Cal.App.4th 1087, 1092 (Mezetta).) " '[O]ne who makes a contract with a municipal corporation is bound to take notice of limitations on its power to contract and also of the power of the particular officer or agency to make the contract.' " (Id. at p. 1094, fn. 4.)



Under Government Code section 40602, subdivision (b), the mayor or another officer designated by ordinance "shall sign" "[a]ll written contracts and conveyances made or entered into by the city." The word "shall" in Government Code section 40602 is mandatory. (South Bay Senior Housing Corp. v. City of Hawthorne (1997) 56 Cal.App.4th 1231, 1236.) The only writing the Owners Association relies on, the minutes from the City Council's July 20, 1999 meeting, is not signed by the City's mayor




and thus does not qualify as a contract.[3] Further, the minutes do not show the City promised the Owners Association anything in particular. The stated goal in divesting City-owned mobilehome parks was merely to "insure an ownership and rent structure which maintains and enhances the quality and services of these properties," and the policy was to "design a strategy which would transfer ownership to an entity such as a non-profit corporation, resident ownership/cooperative or similar structure." Neither the goal nor the policy bind the City to a particular procedure for selling the Park. Indeed, the policy anticipated the possible sale of the Park to a non-profit corporation, which would include Wakeland. Accordingly, the court did not abuse its discretion by denying the Owners Association's motion for reconsideration and bid to file a third amended complaint to attach the writing.



Beyond that, the Owners Association's claims are based on the allegation in the second amended complaint that beginning in 1991 and on "many" occasions, unnamed members of the City Council, City Manager Bowersox, and employees of the Redevelopment Agency, including Narevsky, orally expressed an intent to "afford the tenants/residents a real, true and non-illusory opportunity" to purchase the Park. The complaint does not allege the specifics of the representations or where they took place. There is no suggestion the City ever approved such an oral agreement, or even that the




issue was submitted to the City for formal consideration.



The Owners Association cites no authority to support application of the promissory estoppel doctrine based on similar alleged oral agreements. It relies on City of Orange, supra, 103 Cal.App.4th 45, in which the court concluded that read together the language of Government Code section 40602 and provisions of a municipal code not at issue here, "do not unambiguously require that every city contract, without exception, be in writing and signed by the mayor." (City of Orange, at p. 54.)



In City of Orange, the court considered the general purpose of Government Code section 40602, which "is to ' " 'ensure that expensive decisions are not hastily made' " ' and to create ' " 'a broad base of authority by requiring [contract] approval by a number of different individuals.' " ' " (City of Orange, supra, 103 Cal.App.4th at pp. 54-55.) The court held the city could enforce an oral option contract with the retirement association that required it to hold open its settlement offer in litigation between it and the city, as restrictions on a municipality's power to contract are designed to protect the public, not those who deal with the public. (Id. at p. 54.)



The court further explained the oral option contract imposed no financial burden on the city, the sole consideration was the city's agreement to stay litigation while considering the retirement association's settlement offer, and the "litigation standstill would save the city money if the offer were accepted." (City of Orange, supra, 103 Cal.App.4th at p. 54.) Under those circumstances, the purpose of Government Code section 40602 to prevent hasty decisions on important public matters was served by honoring the oral option agreement because it gave the city adequate time to review the settlement offer and secure approval from city officials without fear the retirement association would withdraw the offer. (City of Orange, at p. 55.) "Orange had much to gain and little, if anything, to lose from the oral option contract." (Ibid.)



City of Orange is readily distinguishable on its facts. Here, in contrast to that case, private parties seek to enforce an alleged oral promise against a public entity, which is ordinarily not subject to promissory estoppel. Further, the City has little or nothing to gain and much to lose if the promissory estoppel doctrine is held to bind it to the alleged oral representations of its council members or employees. For instance, the City could not sell the Park to Wakeland, or anyone else for that matter, for the agreed price of $35.6 million, as that amount allegedly exceeds fair market value by some $10 million and thus deprives the Owners Association of a genuine opportunity to purchase the Park. Accordingly, the alleged oral agreement may place a financial burden on the City.



It is true that Government Code section 40602, standing alone, does not expressly require that every contract of a municipality be in writing. However, a statute prescribing a city's method for contracting may impliedly prohibit any other method of contracting. (Nash v. City of Los Angeles (1926) 78 Cal.App. 516, 522; see also 10A McQuillin, Municipal Corporations (3d ed. 1999)  29.112.) In our view, Government Code section 40602 impliedly requires a written contract here, because an oral contract would violate the statute's purpose of requiring a city's governing body to make considered decisions on important matters affecting the public fisc. " ' "No single individual has absolute authority to bind the municipality; many parts of the city government must work together." ' " (Mezetta, supra, 78 Cal.App.4th at p. 1094.)



The Owners Association's reliance on Mansell, supra, 3 Cal.3d 462, is likewise misplaced. Mansellinvolved long-standing and complicated boundary disputes that affected thousands of persons who lived in the Alamitos Bay area. Because a variety of factors "cast a cloud on the title to this land to such an extent . . . the normal procedure of removing such a cloud, by an action to quiet title, [was] of no practical value" (id. at p. 467), the Legislature attempted to resolve the disputes by disclaiming state and other public interests in certain tidelands and submerged lands. The city manager and the city clerk, however, refused to perform their ministerial duties to carry out the legislation on the ground it violated constitutional and common law prohibitions against the alienation of state-owned tidelands and submerged lands. The citysought a writ of mandate compelling the officers to perform their duties, and the state was the real party in interest. Among other arguments, the city and state raised an equitable estoppel argument against themselves. They asserted that since "the subject lands were filled and improved with the knowledge and acquiescence of the state and city and that since annexation of the area in 1923 the city has exercised full municipal jurisdiction over it granting building permits, approving subdivision maps, constructing and maintaining streets and city services, [and] collecting taxes," it would result in manifest injustice if they claimed paramount title. (Mansell, supra, 3 Cal.3d at p. 487.) The court noted the estoppel argument was not relevant to its decision (ibid.), but it nonetheless considered the issue and found the elements of estoppel present. (Id. at p. 493.)



The court explained "the activities, representations, and conduct of the state and its subtrustee the city . . . rise to the level of culpability necessary to support an equitable estoppel against them . . . . The stipulated facts clearly establish that from an early date the state and city have been aware of the serious and complex title problems in the Alamitos Bay area. More importantly, those public entities have been in a position to resolve such problems and to determine the true boundaries between public and private lands. This they have not done. Instead they have conducted themselves relative to settled and subdivided lands . . . as if no title problems existed and have misled thousands of homeowners in the process." (Mansell, supra, 3 Cal.3d at p. 492.)



The Mansellcourt concluded application of the estoppel doctrine would not have a deleterious effect on the public policy of ensuring public ownership of tidelands, as development in the Alamitos Bay area "has resulted in an area providing an impressive array of public facilities for navigation and recreation." (Mansell, supra, 3 Cal.3d at p. 500.) The court cautioned that the estoppel issue arose in a "peculiar context" (id. at p. 499), "similarly compelling circumstances will not often recur" (id. at p. 500), and it intended to "create an extremely narrow precedent for application in future cases." (Ibid.)



Here, in contrast, the City did not raise the estoppel doctrine against itself, and application of the doctrine would have deleterious effects. Manselland City of Orangeare unhelpful to the Owners Association as they do not address the scenario at issue here. "A decision is authority only for the point actually passed on by the court and directly involved in the case. General expressions in opinions that go beyond the facts of the case will not necessarily control the outcome in a subsequent suit involving different facts." (Gomes v. County of Mendocino (1995) 37 Cal.App.4th 977, 985; Chevron U.S.A., Inc. v. Workers' Comp. Appeals Bd. (1999) 19 Cal.4th 1182, 1195.)



Story continued as Part II .







Publication courtesy of California free legal advice.



Analysis and review provided by Carlsbad Property line Lawyers.







[1] To the extent we are reviewing rulings made at the pleading stage, we take the factual background from allegations of the first and second amended complaints, assuming their truth. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 171.)



[2] In considering the sale of its mobilehome parks, the City was particularly concerned with ensuring "an ownership and rent structure which maintains and enhances the quality of services" for residents. In a March 2005 memorandum to the City, the Park's five-member "Selection Panel" explained it had reviewed submissions by and interviewed the Owners Association, Wakeland and two other entities, and found Wakeland and one of the other entities more qualified to purchase, own and operate the Park. The memorandum explained that in addition to not demonstrating an ability to finance purchase of the Park, the Owners Association "did not demonstrate that it has the capacity to asset manage a 399 space mobilehome community. Asset management responsibilities for such a large project are complex. These duties include developing budgets, making decisions on spending, identifying capital replacement priorities, maintaining and overseeing the rent structure . . . , overseeing the financial and accounting systems and preparation of financial reports including audits, and providing services to residents."



[3] In its opening brief, the Owners Association refers to "a 2003 City Council resolution adopted after several public hearings" in which it promised "that if and when the City decided to sell the [P]ark, it would include the residents in the bidding and sale process. . . ." The statement is not supported by any citation to the record.





Description Allegations that city breached a promise to mobilehome owners and tenants by requiring tax exempt bond financing for purchase of mobilehome park thus excluding owners' association from purchasing the park since it could not qualify and that it deprived the association of a true opportunity to purchase the park because it set the selling price above the park's fair market value failed to state a cause of action based on promissory estoppel, since city could not legally be bound by such alleged promises in absence of legal formalities, the existence of which were not alleged. Allegations that city's notice of intent to sell park violated notice requirements of the Mobilehome Residency Law because "it was a sham" in that the city had no intent to "sell the park on true, real and non illusory terms" and that the notice breached the implied covenant of good faith and fair dealing in the leases between the city and tenants since the leases incorporate the terms of the Mobilehome Residency Law failed to state a cause of action because city was not required by statute or contract to offer to sell the park to tenants on any particular terms. Summary judgment procedures do not apply to validation actions. Hearing held pursuant to Tax Equity and Fiscal Responsibility Act of 1982 on city's plan to privatize mobilehome park through tax exempt bond financing was legally inadequate where evidence was not provided at the hearing that IRS requirements had been met, and city did not give the public an adequate opportunity to comment on the matter of low income housing, the provision of which is the purpose of financing the private project with tax exempt bonds.
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