Norwest Corporation and Subsidiaries - Page 29

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              O.  Analysis                                                            
              We believe that petitioner decided to remove the asbestos-              
         containing materials from the Douglas Street building beginning in           
         1987 primarily because their removal was essential before the                
         remodeling work could begin.  The extent of the asbestos-containing          
         materials in the building or the concentration of airborne asbestos          
         fibers was not discovered until after petitioner decided to remodel          
         the building and a budget for the remodeling had been approved.              
         Because petitioner's extensive remodeling work would, of necessity,          
         disturb the asbestos fireproofing, petitioner had no practical               
         alternative but to remove the fireproofing. Performing the asbestos          
         removal in connection with the remodeling was more cost effective            
         than performing the same work as two separate projects at different          
         times. (Had petitioner remodeled without removing the asbestos               
         first, the remodeling would have been damaged by subsequent asbestos         
         removal, thereby creating additional costs to petitioner.)  We               
         believe that petitioner's separation of the removal and remodeling           
         work is artificial and does not properly reflect the record before           
         us.                                                                          
              The parties have stipulated that the asbestos removal did not           
         increase the useful life of the Douglas Street building. We                  
         recognize (as did petitioner) that removal of the asbestos did               
         increase the value of the building compared to its value when it was         
         known to contain a hazard.  However, we do not find, as respondent           
         advocates, that the expenditures for asbestos removal materially             




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