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

Story continued from Part I .

Numerous cases hold promissory estoppel may not be raised against a public entity when it would defeat the public policy of requiring adherence to statutory procedures for entering into contracts. (See, e.g., Seymour v. State of California (1984) 156 Cal.App.3d 200, 204 [no estoppel against state based on oral lease when statute required a written lease approved by specified officer]; State of California v. Haslett Co. (1975) 45 Cal.App.3d 252, 257-258 [estoppel could not be raised against the state to render effective an oral agreement to enter into a lease when it was not approved by the officer designated by statute]; Santa Monica Unified Sch. Dist. v. Persh (1970) 5 Cal.App.3d 945, 953 [no estoppel against a school district when a written offer was orally affirmed but not ratified or approved by the board as required by statute].) The "doctrine of estoppel is not available to ' "defeat the effective operation of a policy adopted to protect the public." ' " (City of Fresno v. California Highway Com. (1981) 118 Cal.App.3d 687, 697.) Likewise, we conclude estoppel is unavailable here against the City to enforce the alleged oral contract. The court properly granted the demurrer to the first cause of action.^[1]

C

Implied Covenant of Good Faith and Fair Dealing

"There is implied in every contract a covenant by each party not to do anything which will deprive the other parties thereto of the benefits of the contract. [Citations omitted.] This covenant not only imposes upon each contracting party the duty to refrain from doing anything which would render performance of the contract impossible by any act of his [or her] own, but also the duty to do everything that the contract presupposes that he [or she] will do to accomplish its purpose." (Harm v. Frasher (1960) 181 Cal.App.2d 405, 417.)

The implied covenant of good faith and fair dealing does not extend beyond the terms of the contract at issue. (New Plumbing Contractors, Inc. v. Nationwide Mutual Ins. Co. (1992) 7 Cal.App.4th 1088, 1096.) In Gibson v. Government Employees Ins. Co. (1984) 162 Cal.App.3d 441, the court sustained a demurrer because the plaintiffs did not allege the defendant "failed in any way to perform pursuant to the terms of the contract" (id. at p. 447), and "we have not found[] any case which extends . . . a covenant of good faith and fair dealing . . . beyond the terms of the . . . contract in force between them." (Id. at p. 448.)

Civil Code section 798.80, subdivision (a), a provision of the Mobilehome Residency Law, states: "Not less than 30 days nor more than one year prior to an owner of a mobilehome park entering into a written listing agreement with a licensed real estate broker . . . for the sale of the park, or offering to sell the park to any party, the owner shall provide written notice of his or her intention to sell the mobilehome park by first-class mail or by personal delivery to the president, secretary, and treasurer or any resident organization formed by homeowners in the mobilehome park as a nonprofit corporation . . . , stock cooperative corporation, or other entity for purposes of converting the mobilehome park to condominium or stock cooperative ownership interests and for purchasing the mobilehome park from the management of the mobilehome park."

It is undisputed that the City notified the Owners Association in a timely manner of its intent to sell the Park. The second amended complaint alleged the notice nonetheless violated Civil Code section 798.80, subdivision (a) because "it was a sham" in that the City had no intent to "sell the park on true, real and non-illusory terms." The notice also allegedly breached the implied covenant of good faith and fair dealing in the leases between the City and tenants of the Park since the leases incorporate the terms of the Mobilehome Residency Law.

The sample lease attached to the second amended complaint states the agreement "is intended by Lessor and Homeowner to comply with the California Mobilehome Residency Law (Sections 798 et seq. of the California Civil Code), a copy of which is attached hereto and made part hereof." Neither the lease nor Civil Code section 798.80, subdivision (a), however, required the City to offer the Park to the residents under any particular terms. Moreover, the complaint's allegation the notice the City gave was a "sham" is an unsupported conclusion of fact or law the court was not bound to accept as true. Accordingly, the court properly sustained the demurrer to the second cause of action and entered a judgment of dismissal.^[2]

II

The City's Action

A

Standard of Review

"A public agency may upon the existence of any matter which under any other law is authorized to be determined pursuant to this chapter, and for 60 days thereafter, bring an action in the superior court . . . to determine the validity of such matter. The action shall be in the nature of a proceeding in rem." (Code Civ. Proc.,  860.) "Generally speaking, statutory validation actions are designed to provide expedient, uniform procedures by which public agencies can obtain binding judgments as to the validity of public financing commitments such as 'bonds, warrants, contracts, obligations or evidence of indebtedness.' " (City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43, 66, fn. 12; Gov. Code,  53511.) " 'Assurance as to the legality of the proceedings surrounding the issuance of municipal bonds is essential before underwriters will purchase bonds for resale to the public.' " (Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 842.)

"The scope of judicial review of a legislative type activity is limited to an examination of the record before the authorized decision makers to test for sufficiency with legal requirements. [Citation.] A substantial evidence review is limited to the record before the . . . city council; it is an examination of the proceedings before the entit[y] to determine if [its] actions were arbitrary, capricious, or entirely lacking in evidentiary support. The trial court reviews the decision-making process of the administrative agency and does not conduct its own evidentiary hearing." (Morgan v. Community Redevelopment Agency (1991) 231 Cal.App.3d 243, 258.)

On appeal, we apply the same standard of review. We examine the administrative record to determine whether substantial evidence supports the trial court's findings. (Beach-Cuorchesne v. City of Diamond Bar (2000) 80 Cal.App.4th 388, 394.)

B

Jurisdictional Issue

Preliminarily, we dispose of the Owners Association's contention the trial court lacked jurisdiction over the validation action because of procedural irregularities. The validation statutes (Code Civ. Proc.,  860 et seq.) require no particular procedure. Code of Civil Procedure section 867, however, states validation actions "shall be given preference over all other civil actions before the court in the matter of setting the same for hearing or trial, and in hearing the same, to the end that such actions shall be speedily heard and determined." (Italics added.)

On December 1, 2005, the City appeared ex parte to obtain a hearing date and establish a briefing schedule. The court scheduled a hearing on the matter for February 24, 2006. The court also ordered that the parties file moving, opposition and reply briefs pursuant to standard law and motion requirements under Code of Civil Procedure section 1005.

On February 22, 2006, the Owners Association appeared ex parte and argued the matter should not proceed on the law and motion calendar, but should proceed as a regular trial with the presentation of evidence outside the administrative record. The court determined the matter would proceed on the law and motion calendar and the evidence would be limited to the administrative record. At the February 24 hearing, the Owners Association argued the City was actually moving for summary judgment, and because it did not comply with the 75-day notice requirement for a summary judgment motion the court lacked jurisdiction to hear the matter.

The Owners Association cites no authority for the proposition that procedural requirements for a summary judgment motion or any other type of motion apply to a validation action. " ' "Contentions supported neither by argument nor by citation of authority are deemed to be without foundation, and to have been abandoned." [Citation.]' [Citation.] Nor is an appellate court required to consider alleged error where the appellant merely complains of it without pertinent argument. [Citation.] Since [the appellant] does not address the issue, we treat it as abandoned and offer no further comment." (Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 710-711.)

C

Sufficiency of the Evidence

1

Overview of Tax-Exempt Bond Financing

for Low-Income Housing

a

Government Projects

Local agencies may issue bonds to finance government projects, and the interest on bonds is not included in bondholders' gross income for federal taxation purposes. (26 U.S.C.  103(a).) "Interest rates on municipal bonds are lower than interest rates on conventional bonds of similar creditworthiness because the holders of municipal bonds do not pay tax on the interest received. Lower interest rates mean that municipalities have lower costs associated with building and financing government projects." (Torielli, Opining on the 501(C)(3) Tax-Free Bond Transaction: Avoiding Common Borrower's Counsel Misconceptions (2004) 31 Wm. Mitchell L.Rev. 147, 152, fn. omitted (Torielli).)

Under Part 5 of Division 31 of the Health and Safety Code ( 52000 et seq.), a local agency may issue tax-exempt bonds to provide housing to persons of low income. The Legislature has declared "that the authority to issue revenue bonds to aid in the financing of home purchase is needed in the cities and the counties of the state and that it is in the public interest and serves a public purpose by providing financing for decent, safe, and sanitary housing that people in the lower end of the purchasing spectrum can afford and is a function pertaining to the government and affairs of the cities and the counties of the state." (Health & Saf. Code,  52006.)

Under Health and Safety Code section 52075, subdivision (a), a city may issue revenue bonds "for the purpose of financing the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing." The interest on such bonds is not taxed by the state (Health & Saf. Code,  52085) or the federal government. (26 U.S.C.  103(a).)

b

Private Projects

Local agencies may also issue bonds and loan the proceeds to private businesses to encourage certain projects. (Torielli, supra, 31 Wm. Mitchell L.Rev at p. 152.) A bond is a "private activity bond" if, for instance, "more than 10 percent of the proceeds of the issue are to be used for any private business use." (26 U.S.C.  141(b)(1).)

Under section 103(b) of the Internal Revenue Code, the interest on a private activity bond is excluded from bondholders' gross income for tax purposes only if the bond is a "qualified bond" within the meaning of section 141 of the Internal Revenue Code (26 U.S.C.  141). The term "qualified bond" means any private activity bond that meets certain criteria, such as being "a qualified 501(c)(3) bond." (26 U.S.C.  141(e)(1)(G).) Under section 501(c)(3) of the Internal Revenue Code, a corporation organized and operated exclusively for charitable purposes is exempt from federal income taxation. (26 U.S.C.  501(c)(3).)

Part 5 of Division 31 of the Health and Safety Code ( 52000 et seq.) also applies to governmental financing of the provision of low-income housing by the private sector. Health and Safety Code section 52100 states: "The Legislature hereby finds and declares that it would be beneficial to empower counties and cities to issue tax-exempt revenue bonds for the purpose of lending the proceeds to nonprofit organizations exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended . . . , for the housing purposes specified in Section 52101."

Health and Safety Code section 52101 allows a city to issue bonds and loan the proceeds to a tax-exempt charitable corporation for a variety of purposes, including the acquisition of mobilehome parks "that are or will be nonprofit or cooperatively owned." Issuance of the bonds must satisfy section 145 of the Internal Revenue Code.

Under section 145 of the Internal Revenue Code, a bond shall not be a "qualified 501(c)(3) bond if any portion of the net proceeds of the issue are to be used directly or indirectly to provide residential rental property for family units." (26 U.S.C. section 145(d)(1).) An exception to that rule exists, however, for "qualified residential rental projects" as defined in 26 United States Code section 142(d). (26 U.S.C.  145(d)(2)(B).) A project is a "qualified residential rental project" if, "at all times during the qualified project period," "20 percent or more of the residential units in such project are occupied by individuals whose income is 50 percent or less of area median gross income." (26 U.S.C.  142(d)(1)(A).)

Under TEFRA, a private activity bond shall not be a qualified bond absent public approval, meaning "after a public hearing following reasonable public notice" or approval by public referendum. (26 U.S.C.  147(f)(2)(B)(i).) This requirement focuses "on the democratic nature of the approval-granting authority; it is either the electorate as a whole or persons chosen by the electorate" who approve the bonds. (Affordable Housing Dev. Corp. v. City of Fresno(9th Cir. 2006) 433 F.3d 1182, 1193 (Affordable Housing).)

2

TEFRA Hearing

The City noticed a TEFRA hearing under 26 United States Code section 147(f) for June 14, 2005. At the hearing, the City adopted resolutions approving its sale of the Park to the Redevelopment Agency (Resolution No. 05-044), and its issuance of revenue bonds to finance the Redevelopment Agency's purchase and allow the City to retire and refinance debt associated with the Park (Resolution No. 05-043). The Redevelopment Agency adopted resolutions approving its purchase of the Park and an operating agreement between it and Wakeland (Resolution No. R-05-06), and requesting that the City issue the revenue bonds (Resolution No. R-05-05).

The Owners Association contends the judgment in the validation action was improper because the City presented no evidence at the TEFRA hearing that Wakeland or its subsidiary qualified as a tax-exempt charitable corporation under 26 United States Code section 501(c)(3), or that the Park satisfied the 20-50 rule pertaining to the provision of low-income housing.^[3]

The City concedes that at the time of the hearing, PRE's approval from the IRS was pending. The City asserts PRE's tax-exempt status was not a prerequisite of the hearing, because the sale of the Park was contingent on it receiving approval from the IRS, and if it did not get approval the Redevelopment Agency could not sell the Park to PRE.

The City also asserts it was not required to present any evidence that 20 percent of the Park's spaces would be available for low-income housing because the Mobilehome Park Sale and Operating Agreement (Agreement) between the Redevelopment Agency and PRE provides: "Purchaser shall restrict occupancy of not fewer than twenty percent . . . of the Mobilehome Spaces to Very Low Income Households . . . and not fewer than an additional forty percent . . . of the Mobilehome Spaces to Lower Income Households. . . . The Purchaser shall annually submit to Agency a summary of the income, household size and rent payable by each of the residents of the Affordable Spaces who provide income certificates to Purchaser." The Agreement includes provisions on establishing maximum monthly rentals for low-income spaces based on 50 percent of the San Diego County median income for relevant family sizes.

Preliminarily, we note the City's bond resolution is misleading as to the authority for its issuance of tax-exempt bonds. The resolution's preamble states "the Agency intends to, but is not obligated to, sell the Park to [Wakeland], a non-profit corporation . . . , or an entity formed by Wakeland, provided that it will not sell the Park absent an opinion of nationally recognized bond counsel that the exclusion from gross income of interest on the Bonds will not be adversely affected for federal income tax purposes as a consequence of such sale, and therefore the Bonds are being issued as qualified 501(c)(3) bonds pursuant to the Internal Revenue Code." (Italics added.)

The resolution's preamble also states that "pursuant to Section 147(f) of [26 United States] Code, the issuance of the Bonds is required to be approved, following a public [TEFRA] hearing, by an elected representative of the issuer of the Bonds and an elected representative of the governmental unit having jurisdiction over the area in which the Park is located." As discussed, a TEFRA hearing is required when revenue bonds are issued to finance the project of a tax-exempt charitable corporation.

Further, the section of the resolution entitled "Approval of Issuance of Bonds" states the issuance "is hereby authorized and approved pursuant to Chapter 8 of Part 5 of Division 31 of the Health and Safety Code and Section 147(f) of the [Internal Revenue] Code. It is the purpose and intent of this City Council that this resolution constitute approval of the issuance of the Bonds by the applicable elected representative of the governmental unit having jurisdiction over the area in which the Project is located, all in accordance with Section 147(f) of the [Internal Revenue] Code." (Italics added.) Chapter 8 begins with Health and Welfare section 52100 and pertains to loans to tax-exempt charitable organizations under 26 United States Code section 503(c)(3).

Additionally, in its respondent's brief on appeal, the City states the bonds would be issued "as 'qualified 501(c)(3) bonds' under the [Internal Revenue] Code."

Under the first step of the City's plan, however, it intended to issue the bonds and loan the proceeds to the Redevelopment Agency, which is not a charitable corporation under 26 United States Code section 501(c)(3). We requested supplemental briefing from the parties on this and other issues, and the City now advises that the authority for its issuance of tax-exempt bonds and loan of the proceeds to the Redevelopment Agency for its purchase of the Park is actually Health and Safety Code section 52075, subdivision (a), discussed above. The City states that if PRE did not qualify for tax-exempt status, step two of its plan would not occur and the Redevelopment Agency would continue as the Park's owner and the bonds would remain tax-exempt under 26 United States Code section 103(a). If PRE did qualify as tax-exempt, borrow the bond proceeds and purchase the Park, the bonds would remain tax-exempt, but under 26 United States Code 501(c)(3).

The City explains that to take advantage of favorable interest rates and retire existing debt on the Park, it sought to issue tax-exempt bonds before Wakeland or PRE obtained a determination letter from the IRS. For reasons not satisfactorily explained, the City did not refinance the debt itself. Rather, it decided to first loan the proceeds of the bond issuance to the Redevelopment Agency for its interim purchase of the Park.

The City asserts: "The City and [Redevelopment] Agency proceeded in a conservative fashion so as to assure that the bonds would qualify as tax exempt bonds under two possible scenarios. If the City was not able to proceed with a qualified 501(c)(3) borrowing, which is the structure that requires the TEFRA hearing, the City would still move forward with a 'refunding' of the prior debt, all of which will result in significant savings to the City. Consequently, if there is . . . any tax issue, such as not receiving the IRS determination letter, the sale to PRE would not move forward and the [Redevelopment] Agency would maintain ownership of the Park. Conversely, in the event that 501(c)(3) requirements were satisfied and the Park could be sold to PRE, the City and the [Redevelopment] Agency have already complied with the requirements of TEFRA, thus not delaying the issuance of the bonds and the resulting savings."^[4] (Italics added.)

The City concedes the bond resolution does not state the specific authorization for step one of its plan, issuance of tax-exempt bonds and loan of the proceeds to the Redevelopment Agency. It submits, however, that under Health and Welfare Code section 52031 it was only required to generally cite Part 5 of Division 31 of that code, which also includes section 52075.^[5] Although the resolution specifically cites Chapter 8 of Part 5, the City asserts its authority to cite only Part 5 is not "invalidated by reference to a different chapter within the part."

The City also advises that "TEFRA compliance, and the TEFRA reference in the [b]ond [r]esolution, were included solely and exclusively to accommodate Step 2, the subsequent sale to the Park by the [Redevelopment] Agency, and were not intended to relate to Step 1, the sale of the Park to the [Redevelopment] Agency. The Resolution was drafted, and the related proceedings undertaken, to provide complete authority for both steps of the financing." Again, however, the City concedes the resolution does not set forth the specific authority for its issuance of tax-exempt bonds and loan of the proceeds to the Redevelopment Agency.

Despite the City's attempts to defend the bond resolution, a reader can only conclude from its language that the City intended to do an unauthorized act: issue tax-exempt bonds under Chapter 8 of Part 5 of Division 31 of the Health and Safety Code, which pertains to tax-exempt charitable corporations under section 501(c)(3) of the Internal Revenue Code (26 U.S.C.  501(c)(3)), and loan the proceeds to the

Redevelopment Agency, which does not qualify as such an organization. Since the resolution referred specifically to Chapter 8 of Part 5 of Division 31 of the Health and Safety Code and sections 147(f) and 501(c)(3) of the Internal Revenue Code, we question why it did not set forth the authority for the first step of the City's plan, which members of the public could not reasonably be expected to know was unrelated to PRE's status as a tax-exempt entity.

With the City's actual financing plan in mind, we must determine whether the hearing was a sufficient TEFRA hearing to satisfy the second step of the City's plan. The statute does not set forth any procedural requirements other than approval by voter referendum or the governmental unit following reasonable public notice. (26 U.S.C.  147(f)(B).) Further, there is a dearth of reported opinions citing the statute.

The Owners Association cites Steel v. Industrial Development Board (6th Cir. 2002) 301 F.3d 401 (Steel), for the proposition TEFRA "contemplates public approval by a governmental unit based upon evidence available at the public hearing that the IRS requirements have been satisfied." The issue in Steel was whether the development board should have issued tax-exempt bonds for the benefit of a private religious university. In reciting the background, the court noted without discussion that to be qualified as tax exempt, the bonds had to meet certain criteria, including that the university be "a registered 501(c)(3) organization." (Steel, supra, at p. 404.)

In Affordable Housing, supra, 433 F.3d at pages 1192-1193, the court explained the "federal focus is on the democratic nature of the approval-granting authority: it is either the electorate as a whole or persons chosen by the electorate." The court elaborated that "TEFRA mandates that the city council decide the matter [at issue] after considering local residents' views, and by clear implication requires the city council to consider city priorities and housing needs, the wisdom of preferential financing for the project, and all manner of other relevant considerations to which elected representatives normally give weight in executing their office." (Id. at p. 1195, italics added.) The court also explained that "the federal statute's explicit provisions for a voter referendum or approval by an elected representative indicate that Congress did not intend to make approval automatic or to exclude the play of democratic process in the local decision." (Id. at p. 1194, italics added.)

Ignoring Affordable Housing, supra, 433 F.3d 1182the City asserts "[t]here is nothing in Internal Revenue Code section 147(f) which even raises the inference that a 'democratic process' is required or that evidence must be taken and findings have to be made with respect to the proposed 501(c)(3) corporation." We reject the notion a democratic process is not required, because that is the purpose of the hearing requirement. Further, while 26 United States Code section 147(f) does not explicitly state a corporation must have achieved tax-exempt status by the time of the TEFRA hearing, that requirement is implicit. Indeed, the purpose of a TEFRA hearing is for a local entity's public consideration of whether to issue private activity bonds to finance a project of a charitable corporation under 26 United States Code section 501(c)(3). Here, it appears that in a rush to take advantage of favorable interest rates, laudable in and of itself, the City put the cart before the horse.

We also conclude the hearing 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. Again, a bond is not a "qualified 501(c)(3) bond" if any portion of the net proceeds of the issue are to be used for residential rental property (26 U.S.C.  145(d)(1)), unless "20 percent or more of the residential units in such project are occupied by individuals whose income is 50 percent or less of area median gross income." (26 U.S.C.  142(d)(1)(A).)

As explained in Affordable Housing, supra, 433 F.3d 1182under TEFRA approval of tax-exempt bonds is subject to community input, and in making its decision the City is required to consider such input. The City points to no evidence in the administrative record that it brought forth or discussed any information on the provision of low-income housing at the Park, a critical element in maintenance of the tax-free status of the bonds. We disagree that the Agreement between the Redevelopment Agency and PRE satisfied TEFRA because it includes provisions requiring PRE to comply with the 20-50 rule. We conclude that given the contingent nature of step two of the City's divestiture plan, the uncertain status of Wakeland or PRE at the time of the hearing, and the lack of any information on the low-income aspect of the project, the City's hearing was essentially tantamount to no TEFRA hearing at all.^[6]/^[7]

DISPOSITION

The judgment on the Owners Association's action is affirmed. The judgment on the City's validation action is reversed. The parties are to bear their own costs on appeal.

CERTIFIED FOR PUBLICATION

McCONNELL, P. J.

WE CONCUR:

HALLER, J.

IRION, J.

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^[1] Given our holding, we are not required to consider the City's argument the alleged oral contract also violated the statute of frauds, or the apparent lack of any consideration to support the alleged oral contract.

^[2] The Owners Association does not challenge the granting of the demurrer to the second amended complaint's third cause of action for declaratory relief. Because the promissory estoppel and breach of the implied covenant causes of action lack merit, the Owners Association is not entitled to declaratory relief.

^[3] We deny the City's requests that we take judicial notice of a July 28, 2006 letter from the IRS to Wakeland pertaining to the tax-exempt status of PRE, as the matter was not before the trial court and is not relevant to our opinion. We grant the Owners Association's motions to strike the portions of the City's supplemental briefs that refer to the letter.

^[4] This statement muddies the waters, as it suggests the City did not intend to issue the bonds until PRE received tax-exempt status. The City has explained numerous times, however, that it intended to issue the bonds and loan the proceeds to the Redevelopment Agency notwithstanding PRE's status. It is unclear how holding a second hearing to comply with TEFRA after PRE received IRS approval would delay issuance of the bonds.

^[5] Health and Welfare Code section 52031 provides: "The exercise of any or all powers granted by this part shall be authorized and the bonds shall be authorized to be issued under this part for the purposes set forth in this part, by resolution or ordinance of the governing body of the city or county which shall take effect immediately upon adoption. Any such resolution or ordinance shall set forth a finding and declaration (1) of the public purpose therefor and (2) that such resolution or ordinance is being adopted pursuant to the powers granted by this part. The finding and declaration shall be conclusive evidence of the existence and sufficiency of the public purpose and powers."

^[6] A public agency may issue "industrial development bonds" (IDB's) but, as with private activity bonds, they do not qualify for tax-exempt status unless a public approval process was satisfied before their issuance. A temporary income tax regulation sets forth the requirements of the process for IDB's, and provides, "Public hearing means a forum providing a reasonable opportunity for interested individuals to express their views, both orally and in writing, on the proposed issue of bonds and the location and nature of a proposed facility to be financed." (26 C.F.R.  5f.103-2(g)(2), italics added.) There is currently no regulation pertaining to the public hearing requirement for private activity bonds, but by analogy, the regulation for IDB's is instructive. With the contingent nature of PRE's purchase of the Park, and the lack of any information on the 20-50 rule, the public had no reasonable opportunity to express their views on significant matters.

^[7] Given our conclusion that TEFRA was unsatisfied, we are not required to consider the Owners Association's contention that the City was not legally authorized to sell the Park to the Redevelopment Agency because there was no evidence the Park is within a redevelopment zone.