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petitioner’s expert, treated such timber as merchantable. We
note that almost 50 percent of petitioner’s timber fell within
the 40-49 age classification.
We find Mr. Granvall’s approach to be inconsistent. For
timber up to 39 years old, Mr. Granvall "grew" it to age 50 and
discounted it to present value, but for timber between 40 and 49
years, he harvested it immediately. This timber, if held to age
50, would net a higher profit. We think that a hypothetical
buyer would consider this economic opportunity and value the
timber accordingly.
Finally, the parties agree that some portion of petitioner’s
undeveloped land had a higher and better use as something other
than timberland; however, they disagree as to the amount of such
property. The parties refer to this "higher and better use"
property as transitional, or development, property.
In 1968, petitioner formed Pope & Talbot Development for the
purpose of dealing in real estate sales. Petitioner often sold
or contributed property to Pope & Talbot Development that
petitioner’s management had determined was potentially
developable and was more valuable as development property than as
timberland. In 1985, Pope & Talbot Development held
approximately 17,000 acres. The most recent transfer of 13,500
10(...continued)
referred to as "reproduction". To simplify the comparison of the
reports of the two experts, we refer to all premerchantable
timber as "reproduction".
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