- 32 -
low-income area that failed to share in the Southern California
housing boom, and (iii) his experience in the banking business.
However, Mr. Kanengiser's testimony indicated that the recession
was unforeseeable.
In discounting the relevance of Mr. Kanengiser's testimony,
petitioner points out the difference between Meadowlark Homes'
development and petitioner's development:
(1) Meadowlark Homes built houses with an average selling
price of $140,000 while petitioner built "entry level
housing" in the $70,000 to $100,000 range; and
(2) Meadowlark Homes borrowed approximately $6,000,000 to
finance the project while petitioner used working
capital, borrowing no more than $400,000.
Mr. Baker testified that petitioner was not equipped for more
than entry-level houses.
We know that petitioner's 14 houses in Tract No. 10018-1
sold in the price range of $77,000 to $89,950 and that Meadowlark
Homes upgraded petitioner's plan selling its houses for about
$140,000. At trial, there was testimony presented regarding the
market in the city of Beaumont. Mr. Dotson, the city's engineer,
and Mr. Bounds, the city's manager, testified to the increased
real estate market in Beaumont from 1985 until the recession in
1990. Other than Mr. Baker's testimony, petitioner presented no
market data on sales in Beaumont. Mr. Baker admitted he was
generally unaware of the general level of income in Beaumont and
had merely an impression of the market. We are not convinced
that the market in Beaumont supported only the upgraded houses of
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