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well-established test, and, as mentioned above, may be fatal. In
this regard, our reading of Mansbach's appraisal report does not
persuade us that he ever considered whether a hypothetical
willing seller would sell the Redwood City Fox for the value he
determined. In light of the prices the sellers of the San Jose
Fox and the Stanford received, as well as the income producing
potential of the retail/office component of the property, we
think it is doubtful that a hypothetical seller of the Redwood
City Fox would be willing to sell the property for $1,290,000, if
he or she were not under a compulsion to sell.
Based on the above errors, we are not convinced that
Mansbach's appraisal is a reliable reflection of the fair market
value of the theater component of the property. We are also not
convinced that the Ingram/Ewing and Mitten/Reynolds appraisals
are reflective of the fair market value.
Ingram/Ewing performed what they termed a "market approach
value estimate" by adding the projected renovation costs of the
San Jose Fox to its $1,307 per seat purchase price. This
resulted in an upward adjustment of $3,013, for a total of $4,320
per seat. They then estimated the value of the Redwood City Fox,
by comparison to the San Jose Fox, to be $4,881,850 (1,130 seats
at $4,320 per seat). From this figure, Ingram/Ewing then
deducted what they estimated to be the restoration cost of the
Redwood City Fox. After an adjustment for inflation,
Ingram/Ewing estimated a value of $3,850,115 for the theater
component of the Redwood City Fox.
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