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interest expense deductions on the debt to Empire and
Commercial.5
Twenty Mile
During 1985, after success in the development of the Bankers
Trust property, the Parker Properties investors acquired another
parcel (the Clarke property) in or near the town of Parker. The
investors used Twenty Mile as the joint venture partnership for
acquisition of the Clarke property. The joint venture agreement
was completed on April 16, 1985, by and between PND and ESL, each
receiving a 50-percent interest in Twenty Mile. PDW&A and
Nicholson Enterprises were the general partners of PND.6 The
initial capital contributions from the Twenty Mile partners were
as follows: PND, $1,000; ESL, $1,000. Similar to the situation
with Parker Properties, there were few, if any, additional
5 In addition to the loans from Empire, funding was obtained
through the issuance of tax free metropolitan district bonds.
Metropolitan districts are quasi-municipal entities that can
issue tax free debt. Such districts have been utilized to
provide utility enhancements in the absence of a true
municipality or in the presence of a municipality incapable of
issuing debt.
Parker Properties also assumed an obligation of Bankers
Trust to purchase water and sewer taps as secured by a letter of
credit issued by Empire. The obligation was subject to annual
tax liability to support the retirement of bonds for improving
and widening certain streets in the town of Parker.
6 Twenty Mile also had two additional limited partners, each
with small interests: The seller of the Clarke property and a
real estate broker.
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