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The variations, by their terms, become irrevocable when the
CRA certifies that construction and development of the property
has been completed satisfactorily. Respondent argues that this
means that the variations conveyed a benefit to the landowner
that is either perpetual or indefinite. We disagree. Both
parties’ experts testified to the contrary and said essentially
that the variations do not automatically apply to buildings
built after those already placed in service. Their opinion is
shared by Murray Kane, who drafted the variations for CRA. When
asked at trial whether the variations would endure forever, he
said: “No, it doesn’t speak to perpetuity. It merely means that
the redevelopment agency could not revoke the permission to
build this building that was granted by this variation.”
We conclude: (1) The costs of the Library Tower and Grand
Place Tower variations are allocable to the building that was
the subject of that variation (i.e., Library Tower or Grand
Place Tower) and not to the land; (2) those variations have
limited useful lives equal to the depreciable lives of Library
Tower and Grand Place Tower; and (3) the costs of obtaining
those variations are includable in the depreciable basis of
Library Tower and Grand Place Tower.
b. Ordinance No. 159802 and MTP Designated Building
Site
We disagree with petitioners’ contention that the
variations were the only meaningful benefits that Library Square
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