Payless Cashways, Inc. and Its Subsidiaries - Page 18

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          written plan and the party that incurred or committed more than             
          50 percent of the adjusted basis of the equipped building.                  
               The specific written plan relied on by Payless is the                  
          construction contract between TPS and DiCarlo Construction.                 
          Under that contract TPS not Payless, incurred or committed the              
          construction costs for Two Pershing Square.                                 
               The TRA transitional provisions make no accommodation for              
          attributing costs incurred by a limited partnership to the                  
          partners for the purpose of determining whether they have                   
          “incurred or committed” costs.  Even if such attribution were               
          proper, we would be unwilling to attribute to Payless more than             
          16.67 percent of the costs of construction, which was the extent            
          of Payless’ interest in the TPS, partnership.  If 16.67 percent             
          of the construction costs of $36,600,000 claimed by Payless as              
          part of its precommitted costs were attributed to Payless, and              
          assuming we accepted Payless’ total cost of the equipped building           
          of $77,627,266 and Payless’ other committed costs, Payless’                 
          commitment would amount to substantially less than 50 percent of            
          the total estimated cost of the equipped building on or before              
          December 31, 1985.11                                                        

               11(Ownership interest times cost of Two Pershing Square)               
          plus tenant allowance plus equipment and furnishings equals                 
          Payless’ pre-1986 committed costs ((.167 x $36,600,000) +                   
          $4,900,000 + $14,812,179 = $25,824,379.  $25,824,379/total                  
          estimated costs of $77,627,266 x 100 = 33.3 percent of total                

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Last modified: May 25, 2011