Terrene Investments, Ltd., Deerbrook Construction, Inc., Tax Matters Partner - Page 19




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          Dividing 3,899,696 tons by 31.41 acres, we get 124,155 tons of              
          sand and gravel per acre.  Thus, a loss of 2 acres of land to               
          setbacks will reduce the available volume by 248,310 tons.                  
                ii.  Work Area                                                       
               The next factor reducing recoverable volume is the need for            
          some land to be set aside for a workplant to sort the excavated             
          material.  We find credible the evidence that most plants are               
          built on the property being mined.  Terrene disagrees, arguing              
          that we should not make any adjustments for a workplant because             
          one might be set up next door on property that is still owned by            
          Terrene or on the tract already given to the Foundation.  We are            
          unpersuaded.  No evidence exists that shows Terrene ever                    
          contemplated such an offer during its talks with the Foundation,            
          and we find that it would not be practical to have a plant on the           
          previously donated parcel because it lies on the other side of a            
          very busy Hamblen Road.                                                     
               A closer question is the size of the work area.  The                   
          Commissioner urges us to find that roughly seven acres would be             
          needed, while Terrene claims it would take only three.                      
          Voluminous testimony on this exact point convinces us that four             
          acres would suffice.  Local operators Enloe and Vestal credibly             
          testified that, in their experience, operators on plots the size            
          of the Hamblen Road property usually used about three-to-four               
          acres to set up their work area.  According to witnesses, the               







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Last modified: November 10, 2007