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50-percent interest in
Motorbank I land 321,083
The parties agree that those adjusted bases are correct, except
to the extent, if any, that the cost of the Atrium Assets, see
supra sec. II.A.7., is allocable to the bases of the properties
sold in the 2UBC transaction.
9. The 3UBC Transaction
a. The Various Agreements
By purchase and sale agreement dated December 31, 1987, LBC
sold 3UBC, but not the land underlying 3UBC (the 3UBC land), to
Holme, Roberts & Owen (HRO), a partnership that was engaged in
the practice of law and that served as the Bank's legal counsel
during the years in issue (the 3UBC Sale Agreement). The
purchase price of $15,957,648 was paid by a note that was
nonrecourse to the partners of HRO; however, the note was secured
by a deed of trust to 3UBC and an irrevocable letter of credit in
the amount of $2.4 million.
By an agreement dated December 31, 1987, LBC leased the 3UBC
land to HRO for a term commencing on December 31, 1987, and
running for 34 years and 9 months (the 3UBC Ground Lease). For
the period through September 30, 2012, the annual rent was
$25,000 plus 30 percent of any net rental income generated by
3UBC in excess of $2.5 million. After September 30, 2012, the
rent was to be at fair market value. Pursuant to the 3UBC Ground
Lease, LBC and HRO granted to each other certain reciprocal
easements pertaining to the ingress and egress of pedestrians
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