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organization, would pay to reproduce the Redwood City Fox, which
derives a great deal of its appeal from the fact that it was
built in 1928 and reflects the architectural charm of that era.
Consistent with this, Jacobs' expert, Reynolds, testified that
"one wouldn't replicate this theater, because it wouldn't be
historic if it were replicated." Moreover, in light of the many
historically distinctive features, it is doubtful that a building
such as the Redwood City Fox could be constructed today. Indeed,
Jacobs testified that he would not replicate the property:
The Fox Theater, to me, if I had to -- and I've built
forty-five concrete buildings before in my time. If I
had to take the contract to replicate the Fox Theater
from scratch, I wouldn't take it for $10 million. I
think it would be a very difficult thing to build,
rebuild for that price.
After considering the evidence presented and the arguments
of the parties, we find that petitioners have not proven the
requisite probative correlation between the reproduction cost of
the Redwood City Fox and its fair market value.46 Accordingly,
we confine ourselves to an examination of the expert valuations
utilizing the comparable sales method, as well as the income
capitalization method for the retail/office component.
While we do not consider the replacement cost of the Redwood
City Fox to be indicative of its fair market value, after
comparing the substance and reasoning of each appraisal report,
46 Both petitioners recognize that the replacement cost
approach to valuation is not favored. On brief, Jacobs stated
that "[t]here is no question that there exists a preference for
the market data approach." Crocker also stated on brief that the
"comparable sales method is the preferred method."
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