Norwest Corporation and Subsidiaries, Successor in Interest to United Banks of Colorado, Inc., and Subsidiaries, et al. - Page 50

                                       - 50 -                                         
          the basic purpose of the Atrium was not the enhancement of the              
          adjoining properties so as to induce sales of those properties,             
          and we so find.10                                                           
                    4.  Conclusion                                                    
               Our finding with respect to the Bank's basic purpose renders           
          an analysis of the extent of the Bank's retained interest in the            
          Atrium unnecessary.  In any event, we believe that such an                  
          analysis would support our conclusion that cost recovery for the            
          Atrium should be independent of sales of the adjoining                      
          properties.  Although both the easements allowing ingress and               
          egress of pedestrians and the Bank's obligation to maintain and             
          operate the Atrium at its sole cost and expense for a period of             
          years restricted the Bank's ownership and control of the Atrium,            
          such restrictions did not prevent the Bank from entering into a             


          10   The fact that the Atrium has consistently generated net                
          operating losses does not change our conclusion.  If the presence           
          of some profit is not always fatal to a taxpayer's case, we                 
          believe then that the absence of profit is also not dispositive.            
          See Willow Terrace Dev. Co. v. Commissioner, 40 T.C. 689, 701               
          (1963), affd. 345 F.2d 933 (5th Cir. 1965); Colony, Inc. v.                 
          Commissioner, 26 T.C. 30, 46 (1956), affd. per curiam 244 F.2d              
          75 (6th Cir. 1957); Bryce's Mountain Resort, Inc. v.                        
          Commissioner, T.C. Memo. 1985-293; Montclair Dev. Co. v.                    
          Commissioner, T.C. Memo. 1966-200.  But more importantly, the               
          Atrium's operating loss figures do not consider the benefits (if            
          any) derived by the Bank when it entered into the commitment to             
          build the Atrium in 1981 as part of an integrated series of                 
          agreements.  We are unclear whether any possible benefits derived           
          by the Bank as part of those agreements, e.g., a favorable lease            
          agreement in 1UBC or enhanced Bank image derived from a prominent           
          complex bearing the Bank's name, would skew the significance of             
          those loss figures.  Therefore, we have little confidence in the            
          import of those figures.                                                    




Page:  Previous  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  Next

Last modified: May 25, 2011