Terrene Investments, Ltd., Deerbrook Construction, Inc., Tax Matters Partner - Page 17




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          would impel a reasonable operator and landowner to consider                 
          factors such as minimizing disturbance to the neighbors.  And we            
          found credible the testimony of both a local operator who used              
          50-foot setbacks and one who used 100-foot setbacks.  Questioning           
          by Terrene’s attorney, though, brought out that the 100-foot                
          setbacks were dictated by a real-estate developer who wanted to             
          build roads around the pit once it was exhausted and filled with            
          water, to accommodate what he was planning to call lakefront                
          homes.  Neither party suggested that what was left of the Hamblen           
          Road property after it was mined out would be of interest to                
          homebuilders, so we find it most likely that an operator would              
          minimize setbacks to maximize his volume of minable material.               
          Terrene claims that local industry practice is to leave 5-foot              
          setbacks where not required by law.  This seems rather small, and           
          not in accord with the most credible evidence.  We therefore find           
          that a 10-foot setback on the western and northern edges is                 
          appropriate, and that a 25-foot setback on the eastern edge--               
          where there is a private road--would be most reasonable in light            
          of the legally mandated 25-foot setback on the property’s                   
          southern boundary.                                                          
               The effect this would have on the volume of recoverable                
          deposits is unclear, because the Geotest report does not describe           
          its formula for calculating minable material in great detail.               
          Therefore, we resort to an indirect, and necessarily imprecise,             







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