Garwood Irrigation Company - Page 11

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          for a transfer of the unused water out of the Colorado River                
          Basin, it would likely have faced greater regulatory hurdles than           
          it faced with the Corpus Christi transaction.                               
               No prospective buyers, other than Corpus Christi, had made             
          an offer or was actively pursuing the purchase of any portion of            
          petitioner’s water right as of the valuation date.  Austin is               
          located in the Colorado River Basin and might have been a                   
          potential customer for petitioner’s water, but Austin had a long-           
          standing agreement with the LCRA that entitled it to free water.            
          Austin did not predict that it would exceed its allotted free               
          water until at least 2030.  Similarly, the city of San Antonio              
          had discussions with petitioner in 1991 about purchasing a                  
          portion of its water right, but those discussions had ended by              
          the end of 1991.  Neither city was actively pursuing a purchase             
          of any part of petitioner’s water right as of the valuation date.           
               Petitioner’s shareholders had discussions with the LCRA in             
          1967, 1972, and 1992 regarding the possibility of the LCRA’s                
          purchase of petitioner’s water right.  None of these discussions            
          resulted in a sale, and the LCRA did not even make an offer                 
          during the most recent discussions in 1992.  The LCRA had                   
          expressed interest in purchasing petitioner’s entire water right.           
          Mr. Lehrer was willing to sell only a portion of the water right.           
          As of the valuation date, the LCRA had not made any recent offers           
          or initiated any serious discussions regarding the sale of                  

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Last modified: May 25, 2011