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development; and (3) the purported oversupply of commercial
property in Sherwood.
The uncertain offsite costs to which Mr. Kelley refers are
the costs of traffic mitigation requirements imposed on
commercial developers by Metro. However, these requirements were
not peculiar to Phase 5--all commercial developers in Sherwood
(or at least those developing larger tracts of land) were subject
to the requirements of Metro, including the developers of
comparables 1 and 2. Any impact the uncertain traffic mitigation
costs had on the market should be reflected in the sales prices
of comparables 1 and 2, and are thus taken into account by using
those comparables in the comparable sale method. A further
discount is not necessary.
The estate also argues that Phase 5 was subject to other
extraordinary offsite costs. In valuing Phase 5, we generally
take into consideration only those costs that are reasonably
foreseeable by a hypothetical buyer and a hypothetical seller on
the valuation date. See Estate of Spruill v. Commissioner, 88
T.C. 1197, 1228 (1987). The estate has not established that
extraordinary offsite costs were reasonably foreseeable on the
date of death. Instead, it appears that the estate is focusing
on the costs associated with the reconfiguration of Phase 5 in
2002. However, the reconfiguration was not contemplated by LFLLC
on or before the date of death, nor was it reasonably foreseeable
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