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1997, on behalf of respondent, Dr. Jack Friedman appraised the
gifted Litton property and the Bates Center.
II. Highest and Best Use
The parties differ over the highest and best use of the
various properties in issue in this case. We note that our
determination of the highest and best use of the various
properties in issue presents a problem of judgment, not
mathematics. Stanley Works & Subs. v. Commissioner, 87 T.C. at
408.
A. The Litton Building
Dr. Friedman's report determined that the highest and best
use of the Litton building at the time of the gift was as an
industrial facility. Dr. Friedman based his determination on the
fact that the Litton building was an existing industrial
building, and this use was consistent with legal and possible
uses. Additionally, the building was functionally adequate for
this purpose. Furthermore, Dr. Friedman noted that the
oversupply of such buildings in Lubbock drastically curtailed new
construction of such buildings. He felt that the Litton building
had the potential for generating market rent upon further
tightening of the local real estate market.
Mr. Cantrell determined that the highest and best use of the
Litton building at the time of the gift was as a specialty
manufacturing facility (also known as a research and development
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