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petitioner constructed the 50 locations over a period from prior
to its incorporation in 1957 to the date of the trial. Besides
Mr. Baker's statement of constructing fast-food locations,
petitioner did not present any evidence regarding subdivision
activities on property on which fast-food stores were later
constructed.
On the other hand, we note that petitioner was engaged in
developing other properties (in addition to the Beaumont
Property) from 1978 to 1991. Petitioner purchased 75 unimproved
lots in Pacific Street in Highland, California. Petitioner built
25 houses, installed improvements on the remaining 50 lots, and
sold all the lots in 1980. Petitioner also had development
projects in San Bernardino, Yucaipa (20 lots, which were
purchased in 1986 for the purpose of building houses thereon and
to sell the houses upon completion), and La Quinata (20 lots,
which were purchased in 1988).
We agree with petitioner that it was engaged in several
activities, which included acquiring and holding real estate for
fast-food locations (which were later leased to Baker's
Burgers).19 At the same time, we find that petitioner also was
19 Petitioner states that:
Its activities included the following (i) holding raw land
for investment purposes, (ii) holding fee title to fast-food
locations for rental to Baker's Burgers, (iii) acting as
master lessor to Baker's Burgers with respect to fast-food
(continued...)
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