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claim that, between November 17 and December 31, 1997, he did not
renegotiate an agreement to purchase the property, FRGC’s
execution of a new purchase agreement on January 15, 1998, is
inconsistent with its contention that the project was abandoned
in 1997. At trial, petitioner stressed the difference in
material terms of the 1998 purchase agreement. However, FRGC
acquired the same 404 acres of property for which it bargained in
the 1996 purchase agreement. The increase in purchase price and
decrease in interest obtained in the Flagstaff Ranch Water Co.
did not appear materially to affect FRGC’s ability to enter into
a new purchase agreement to acquire the property for ultimate
development by Flagstaff Ranch.
As additional evidence that the project was abandoned in
1997, petitioner contends that the general development plan
report that was approved for the project in December 1999 was
substantially and materially different with respect to cost,
ownership, acreage, and design than the original zoning in the
1997 plan, which petitioner presented in November 1997. However,
we are not persuaded that changes in the development plans that
were made in 1999 prove that the entire project was abandoned in
1997. We are also mindful that, in the land development and
construction arena, extra expenses due to errors in planning or
design are part of the costs that the builder must bear. See
Haspel v. Commissioner, 62 T.C. 59 (1974); Driscoll v.
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