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agreement and that occurred within the time period surrounding
the date of death and the June 1994 agreement.6 Petitioner’s
appraiser for estate tax purposes valued the property as
development property. The estate included a discounted (for the
partial interest) value that was based on its development as
residential property. At the time its offer was made and
accepted, Ponderosa was generally aware of the political
conditions and possible problems that could be encountered in
obtaining approval for development of the Busch property.
Likewise, the sellers had consulted several sources of expertise
and were aware of the value of their property and had the
opportunity to choose from several different firms that were
interested in a development type agreement. Petitioner and
respondent agree that the “highest and best use” of the Busch
property was residential development. The property physically
abutted Pleasanton and existing residential housing. There was
contiguous street access to the existing residential areas within
6 DeVoe’s comparables are set forth in the body of this
opinion. The four sales Hulberg offered as comparables had
prices ranging from $80,071 to $245,701 per acre. A simple
average of the four sales referenced in Hulberg’s report is
$145,559. Hulberg, however, discounted the four sale prices by
as much as 80 percent to reflect his view of the inability to
obtain approval from the city of Pleasanton for residential
development, causing the range to drop to $16,014 through
$73,710. Accordingly, there is sufficient corroborative evidence
to accept the $150,000-per-acre price from the June 1994
agreement as a starting point for our consideration of the fair
market value.
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