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that such reconfiguration would be necessary. Therefore, we do
not take into account any purported extraordinary offsite costs.
Mr. Kelley and the estate assert that the City of Sherwood’s
hostility to further development made approval for additional
development difficult and expensive. Like the uncertain offsite
costs, any impact the City’s attitude toward development had on
the market should be reflected in the sales prices of comparables
1 and 2 and is thus taken into account by using those comparables
in the comparable sale method. A further discount is not
necessary.9
Finally, we do not agree with Mr. Kelley’s determination
that there was an oversupply of commercial space in Sherwood on
the date of death. In analyzing the supply and demand for
commercial property, Mr. Kelley conducted a “retail expenditure
analysis”. To summarize, Mr. Kelley determined that there were
9,218 people residing in 3,404 households within a 1.5-mile
radius of the intersection of Pacific Highway and T-S Road.
Using average retail expenditure data, he then determined that
9 There is some indication that LFLLC had particular
difficulty in getting city approval because of strained personal
relationships between Clarence Langer and members of Sherwood’s
government. Because we are determining the fair market value
based on a hypothetical sale by a hypothetical seller, we do not
necessarily take into consideration the personal characteristics
of the actual seller. See Estate of Bright v. United States, 658
F.2d 999, 1005-1006 (5th Cir. 1981). Therefore, we do not factor
in any difficulty arising from Clarence Langer’s relationship
with members of the city government.
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