CRSO - Page 4

                                        - 4 -                                         
          Wenatchee, Washington.  The Staffields paid $2,297,000 for the              
          real estate, borrowing a portion of the funds from the Washington           
          Trust Bank.                                                                 
               In December 2000, the Staffields gave the real estate to               
          petitioner.  In a certificate of corporate resolution dated                 
          December 28, 2000, petitioner agreed to accept the real estate              
          and to assume the outstanding mortgage obligation, which was then           
          about $1.4 million.  Washington Trust Bank did not modify the               
          original loan; the Staffields remained personally liable on the             
               When the Staffields purchased the real estate and at all               
          relevant times thereafter, the real estate was subject to                   
          preexisting long-term leases; the tenants were a sporting goods             
          business and a cellular telephone business.  Petitioner                     
          characterizes the leases as “triple net leases”, contending that            
          the leases require “little or no expenditure of time or funds by            
          the Lessor” and that petitioner is entitled to reimbursement from           
          the lessees for “virtually all” costs it is required to pay under           
          the terms of the lease agreements.                                          
               On April 18, 2001, petitioner entered into a management                
          agreement with Kiemle & Hagood Co., which agreed to lease,                  
          manage, and operate the real estate for a $250 monthly fee and a            
          percentage of future rents on any new leases with new tenants.              

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: November 10, 2007