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incorporated herein by this reference. Petitioners, Mr. Baker
and Mrs. Baker, resided in Riverside, California, at the time
they filed their petition.
I. Background
On December 22, 1989, petitioners and Air Force Village
West, Inc. (AFVW) executed a residence agreement entitling
petitioners to a lifetime residence at Air Force Village West
(Village West). AFVW is a nonprofit organization that was
incorporated in the State of California on September 21, 1984.
AFVW was organized to establish, maintain, endow, and operate
continuing care retirement communities (CCRCs) for officers (and
their spouses and qualified dependents) of the U.S. uniformed
services who are more than 60 years old and have been retired or
honorably separated from active duty. Village West is one of the
CCRCs owned and operated by AFVW. Village West is a gated,
guarded, perimeter-fenced, resortlike retirement community
located on 153 acres of land in Riverside, California.
A. Construction of Village West
The construction of Village West occurred in three phases.
The first phase involved the construction of the following living
units and health care facilities: (1) Independent Living Unit
(ILU) apartments, duplexes, and cottages; (2) an Assisted Living
Unit (ALU) facility with 20 rooms; (3) a Skilled Nursing Facility
(SNF) with 59 beds; (4) a Commons building with a suite of rooms
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