                          T.C. Memo. 2004-123



                        UNITED STATES TAX COURT



ESTATE OF MICHEL DUNIA, DECEASED, RENEE HAWLEY AND MICHEL DUNIA,
           JR., EXECUTORS AND TRUSTEES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 6115-00.               Filed May 20, 2004.


        Paul N. Frimmer and Martin Gelfand, for petitioner.

     Jack Klinghoffer, for respondent.



                MEMORANDUM FINDINGS OF FACT AND OPINION


     GOEKE, Judge:     Respondent determined a deficiency of

$8,675,853 in the Federal estate tax of the estate of decedent

Michel Dunia.     After concessions, the issue for decision is the

value of a tract of real property held for sale as a commercial

site.     Both parties presented experts who valued the property

using comparable sales.       Respondent also relies on alleged offers
                                 - 2 -

for the property, a partnership agreement, and a partial sale

which took place 3 years after the valuation date.     Because the

offers were not completed commercial transactions and are flawed

as comparables, we rely primarily on a comparable analysis to

determine that the fair market value of the property at the

valuation date was $5,463,666.

                         FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.     At the time of his death,

Michel Dunia (decedent) was domiciled in Los Angeles, California.

The executors resided in Los Angeles, California, at the time the

petition was filed.

     Decedent died on June 22, 1996.     On the date of death,

decedent owned 100 percent of the Michel Dunia Trust (the trust).

The trust owned the property at issue (the Victorville property),

which is legally described as 92.91 net acres (4,047,160 square

feet) of undeveloped land located at the Southwest Quadrant of

Bear Valley Road and Amargosa Road, Victorville, San Bernardino

County, California.   After his death, decedent’s children, Renee

Dunia Hawley and Michel Dunia, Jr., were appointed the executors

of the estate and co-trustees of the trust (Ms. Hawley and Mr.

Dunia are sometimes hereinafter referred to as the trustees).
                                - 3 -

     From 1990 to 1996, the value of commercial real property

similar to the Victorville property declined as a result of

economic market conditions in Victorville.   The values bottomed

out in 1996, and remained stable between 1996 and 2000.    In

January 1996, decedent gave a 6-month exclusive real estate

listing authorization for the Victorville property to Vicki

Donkin of Grubb & Ellis Commercial Services, who marketed the

property with an asking price of $5 per square foot, at

decedent’s request.

     In September 1996, after decedent died, Ms. Hawley

terminated the listing agreement that decedent had entered into

with Ms. Donkin.   On September 21, 1996, the trustees signed a 1-

year exclusive listing authorization with Richard Hallett, a real

estate broker, with respect to the Victorville property.

     In October 1996, Landfolio, Inc. (Landfolio), submitted a

letter of intent (LOI) to Ms. Donkin to buy the Victorville

property for $5,320,000, payable partly in cash and partly as a

subordinated note.    Under the terms of the LOI, the buyer would

deposit $5,000 into a 150-day escrow.   The deposit was fully

refundable if the contingencies were not met after 90 days.     On

October 17, 1996, Mr. Hallett, via Ms. Donkin, sent a

counteroffer to Landfolio, offering to sell the Victorville

property for $3 per square foot.   Around February 1997, Landfolio

made another proposal to purchase the Victorville property for $6
                               - 4 -

million.   This offer included an initial escrow deposit of

$25,000, another $25,000 deposit after 120 days, and the balance

of the purchase price to be paid in cash 150 days after the

opening of the escrow.

     Landfolio’s LOI was communicated to Ms. Hawley, but the

parties dispute whether Mr. Hallett communicated the second

proposal to Ms. Hawley.

     On March 7, 1997, GVD, Inc., a commercial real estate

development company owned by Gerald Dicker, entered into a

purchase agreement with the trustees to purchase the Victorville

property for $8.4 million.   The purchase agreement provided for a

36-month escrow, with an initial deposit of $25,000, increased by

$12,500 every 6 months for 2 years.    The closing of the

transaction was subject to various contingencies, which allowed

GVD, Inc., to cancel the agreement at any point during the 36-

month escrow period.   In December 1997, 10 months after opening

the escrow, GVD, Inc., canceled the sale pursuant to the terms of

the contract.

     On May 4, 1998, the trustees signed a partnership agreement

for Bear Valley Partners with Western Signature Properties, Inc.,

a company of which Mr. Dicker was president (referred to

hereinafter as WSP).   WSP was the general partner, with the

trustees (in their capacity as trustees of the trust) as the sole

limited partner.   The partnership was formed to serve as a joint
                                 - 5 -

venture to develop the Victorville property.    Under the

partnership agreement, WSP, as general partner, would receive 25

percent of the profits, losses, and distributions from the

partnership, and the trustees, as limited partner, would receive

75 percent of the profits, losses, and distributions from the

partnership.   Ownership of the Victorville property remained in

the trust, and the partnership agreement stated that portions of

the Victorville property would be transferred to Bear Valley

Partners as buyers were found.

     On July 1, 1999, Bear Valley Partners sold 15.87 acres

(691,297 square feet) of the Victorville property to Lowe’s H I

W, Inc. (Lowe’s), for approximately $4.1 million.    The sale was

subject to a holdback of a portion of the purchase price and a

reimbursement arrangement concerning improvements to be made by

Bear Valley Partners to the Victorville property.

     On March 21, 1997, the estate filed a Federal estate tax

return.   The estate elected the date of death (June 22, 1996) as

the valuation date.   On the return, the estate reported the value

of the Victorville property as $4.05 million.    On March 8, 2000,

respondent issued a statutory notice of deficiency to the estate,

determining a deficiency of $8,675,853.   Respondent’s

determination of the deficiency resulted from a valuation of the

property at $16.3 million.   The estate timely petitioned this

Court for review of respondent’s determination.
                               - 6 -

                              OPINION

     Section 20011 imposes a Federal estate tax “on the transfer

of the taxable estate of every decedent who is a citizen or

resident of the United States”.   The value of the gross estate

includes the value of all property to the extent of the

decedent’s interest therein on the date of death.   Sec. 2033.

The term “value” means fair market value, which is defined for

Federal estate tax purposes as “the price at which the property

would change hands between a willing buyer and a willing seller,

neither being under any compulsion to buy or to sell and both

having reasonable knowledge of relevant facts.” United States v.

Cartwright, 411 U.S. 546, 551 (1973); sec. 20.2031-1(b), Estate

Tax Regs.

     The parties dispute the value of the Victorville property,

which is includable in decedent’s gross estate.   At trial, the

estate called B.G. Thompson as an expert valuation witness.   Mr.

Thompson prepared an expert witness report, as supplemented, in

accordance with Rule 143.   Respondent called Robert Perdue as an

expert valuation witness.   Mr. Perdue prepared an expert witness

report, as supplemented, in accordance with Rule 143.   In

addition, the estate sought testimony from Mr. Dicker as to his

opinion of the value of the Victorville property.   While expert

     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 7 -

opinions may assist in evaluating a claim, we are not bound by

these opinions and may reach a decision based on our own analysis

of all the evidence in the record.     Helvering v. Natl. Grocery

Co., 304 U.S. 282, 295 (1938); Estate of Newhouse v.

Commissioner, 94 T.C. 193, 217 (1990).    Where experts offer

conflicting estimates of fair market value, we must weigh each

estimate by analyzing the factors they used to arrive at their

conclusions.   Casey v. Commissioner, 38 T.C. 357, 381 (1962).      We

may accept the opinion of an expert in its entirety, or we may be

selective in the use of any portion.     Parker v. Commissioner, 86

T.C. 547, 562 (1986); Buffalo Tool & Die Manufacturing Co. v.

Commissioner, 74 T.C. 441, 452 (1980).    Mr. Perdue’s report

concluded that the value of the Victorville property was $8.5

million ($2.10 per square foot) on the valuation date.    Mr.

Thompson’s report concluded that the value of the Victorville

property was $4.45 million ($1.10 per square foot) on the

valuation date.

     The Court of Appeals for the Ninth Circuit has held that the

burden of persuasion may be shifted from the taxpayer to the

Commissioner when the Commissioner’s determination is shown to be

invalid by his own expert.   See, e.g., Estate of Mitchell v.

Commissioner, 250 F.3d 696, 702 (9th Cir. 2001), affg. in part,

vacating in part and remanding T.C. Memo. 1997-461.    At trial,

respondent’s expert placed a value of $8.5 million on the
                                - 8 -

Victorville property, slightly more than half of the $16.3

million valuation stated in the statutory notice of deficiency.

The estate did not raise the issue of the shifting of the burden

at trial or on brief.    However, it is unnecessary for us to

consider the issue.    Our decision rests on the preponderance of

the evidence, and is unaffected by the burden of proof.

I.   Admissibility of Mr. Dicker’s Testimony as to Value

     At trial, the estate sought to have Mr. Dicker testify as to

his opinion of the value of the Victorville property on the

valuation date.    Respondent objected to the admissibility of this

testimony because Mr. Dicker had not submitted an expert report,

and so was not qualified as an expert under Rule 143(f).    The

estate argues that Mr. Dicker, as general partner of Bear Valley

Partners, is an owner of the Victorville property, and is

qualified to testify as an expert as to value under rule 702 of

the Federal Rules of Evidence.2


     2
      Fed. R. Evid. 702 provides:

     Rule 702.    Testimony By Experts

          If scientific, technical, or other specialized
     knowledge will assist the trier of fact to understand the
     evidence or to determine a fact in issue, a witness
     qualified as an expert by knowledge, skill, experience,
     training, or education, may testify thereto in the form of
     an opinion or otherwise, if (1) the testimony is based upon
     sufficient facts or data, (2) the testimony is the
     product of reliable principles and methods, and (3) the
     witness has applied the principles and methods reliably to
     the facts of the case.
                                - 9 -

     An owner of property is generally qualified to testify as an

expert as to the property’s value under rule 702 of the Federal

Rules of Evidence.    LaCombe v. A-T-O, Inc., 679 F.2d 431, 433

(5th Cir. 1982); Marcus v. Commissioner, T.C. Memo. 1996-190.

Opinion testimony of a landowner is admissible without further

qualification because of the presumption of special knowledge

that arises out of ownership of the land.    LaCombe v. A-T-O,

Inc., supra at 433.

     Bear Valley Partners did not own any part of the Victorville

property until a portion of the property was contributed to the

partnership in 1999 for the purpose of selling it to Lowe’s.        It

is implied in the principle that allows owners to testify as

valuation experts that the owner must own the subject property on

the valuation date.   Bear Valley Partners did not exist on the

valuation date.   Therefore, Mr. Dicker was not an owner of the

Victorville property at that time by virtue of his being general

partner of Bear Valley Partners, as the estate claims.    In

addition, the estate has not shown that he was an owner of the

Victorville property by any other means on the valuation date.

Since Mr. Dicker did not prepare an expert report, he does not

otherwise qualify as an expert witness under Rule 143(f).      We

conclude that Mr. Dicker’s opinion testimony as to the value of

the property is not admissible under rule 702 of the Federal

Rules of Evidence.    See, e.g., Estate of Gloeckner v.
                              - 10 -

Commissioner, T.C. Memo. 1996-148 (indicating that ownership

percentage on valuation date is significant in considering

testimony of owner under rule 702 of the Federal Rules of

Evidence), revd. on other grounds 152 F.3d 208 (2d Cir. 1998).

     The estate also argues that rule 701 of the Federal Rules of

Evidence3 permits Mr. Dicker’s testimony as to value as a lay

witness.   Under rule 701 of the Federal Rules of Evidence,

opinion testimony by a lay witness who is not testifying as an

expert is “limited to those opinions or inferences which are * *

* (c) not based on scientific, technical, or other specialized

knowledge within the scope of Rule 702”.   Mr. Dicker’s testimony

as to value is not helpful to the Court unless it is based upon

the specialized knowledge derived from his experience as a real

estate developer.   When an opinion relies on specialized

knowledge, the basis of that opinion must be presented to the

other party in an expert report under this Court’s Rule

143(f)(2).   Allowing Mr. Dicker’s testimony as to value under


     3
      Fed. R. Evid. 701 provides:

     Rule 701. Opinion Testimony by Lay Witnesses

          If the witness is not testifying as an expert, the
      witness’ testimony in the form of opinions or inferences is
      limited to those opinions or inferences which are (a)
      rationally based on the perception of the witness, and (b)
      helpful to a clear understanding of the witness’ testimony
      or the determination of a fact in issue, and (c) not based
      on scientific, technical or other specialized knowledge
      within the scope of Rule 702.
                              - 11 -

rule 701 of the Federal Rules of Evidence would be inconsistent

with the spirit of our Rules and the Federal Rules of Evidence.

In addition, Mr. Dicker’s testimony, even if deemed admissible,

would not persuade us to arrive at a different valuation since it

is not based on comparable transactions.    We hold that Mr.

Dicker’s testimony as to the value of the Victorville property is

inadmissible.

II.   Valuation

      Both parties’ experts analyzed similar properties that were

recently sold in the proximate timeframe.    The characteristics of

the properties were then compared to the Victorville property,

and adjustments in value were made to the comparable properties,

as appropriate.   The experts in this case compared market

conditions, location, size, topography, access, frontage, offsite

improvements, and zoning.

      Mr. Thompson selected the February 1996 sale of a 106.74-

acre parcel of primarily undeveloped land for $1.42 per square

foot (the Jess Ranch sale) as the most relevant comparable.

After adjustments, Mr. Thompson concluded that the Jess Ranch

sale indicated a value of $1.14 per square foot for the

Victorville property.   He based his final valuation primarily on

this comparable analysis.   Although he also considered the

various contingent offers that were made by Landfolio, and the

canceled sale contract between Mr. Dicker and the trustees, he
                               - 12 -

did not consider these offers as comparables.   Mr. Thompson

stated that the most important factor in valuing the Victorville

property was its size; in this regard, his report stated that on

the valuation date, “far less than the entire 92.91 acres had a

reasonable expectation of near term development potential.”     Mr.

Thompson’s final opinion was that the value of the Victorville

property on the valuation date was $4.45 million, or $1.10 per

square foot.

     Mr. Perdue selected the October 1996 sale of 31.82 acres of

undeveloped land for $996,435 ($.719 per square foot) plus the

assumption of bonds4 as the most relevant comparable.     His report

also considered the Jess Ranch sale, and concluded that, as

adjusted, it indicated a value of $2.10 per square foot for the

Victorville property.   In addition to sales of similar

properties, Mr. Perdue considered as comparables the contingent

offers from Landfolio and the canceled purchase agreement between

Mr. Dicker and the trustees.   Lastly, his analysis took into

account the 1996 listing price for the Victorville property under

the listing agreement between the decedent and Ms. Donkin, the

terms of the Bear Valley Partners’ partnership agreement, and the

San Bernardino County Assessor’s office’s 1999/2000 assessed

     4
      The bonds resulted from an assessment to which the property
was subject, payable over 27 years. The buyer’s pro rata portion
of such bonds was $1,325,498, resulting in a total purchase price
of $2,321,933 ($1.68 per square foot), according to Mr. Perdue’s
expert report, as supplemented.
                               - 13 -

value of the developed portion of the Victorville property.

Considering each of these factors, Mr. Perdue concluded that the

Victorville property’s value at the valuation date was

$8,500,000, or $2.10 per square foot.

     After taking into account each expert’s analysis, we believe

that because of the large size of the Victorville property, the

Jess Ranch sale is the most relevant comparable transaction.       No

other comparable property in either expert’s analysis was as

large as the Victorville property.      We believe the July 1999

actual sale of a portion of the Victorville property to Lowe’s

should be given limited weight because it was a partial sale 3

years after the valuation date.   The alleged offers from

Landfolio for the Victorville property do not represent completed

transactions.   The parties disagree about many details concerning

the validity and presentation of these offers, but it is most

significant that the potential buyer was not financially

committed to the transaction due to the escrow agreements.

Likewise, the purchase agreement between Mr. Dicker and the

trustees did not result in a sale.      We do not find the terms of

this contract to be indicative of value, because the amount and

term of the escrow allowed Mr. Dicker to abandon the transaction

with little economic effect.   The existence of the partnership

between WSP and the trustees also fails to provide an indication

of value.   Consequently, we must now examine each factor the
                              - 14 -

experts took into account in comparing the Victorville property

to the Jess Ranch property.

     The table below describes each expert witness’s adjustments

to the Jess Ranch sale, as supplemented at trial.



     Factor               Mr. Thompson              Mr. Perdue

Market conditions               0                      -3%
Adjusted unit                 $1.42                   $1.37
   price
Location/exposure              20%                     30%
Size                            0                       0
Topography                     5%
Access
Frontage
                              -10%
                                0
                                                      }  20%
Offsite                       -35%                     -2%
improvements
Total adjustment              -20%                      50%
Adjusted unit                 $1.14                    $2.10
   price
                               - 15 -

     A.   Market Conditions

     The parties stipulated that the market for properties such

as the Victorville property and the Jess Ranch property declined

from 1990 until 1996, and that values bottomed out in 1996.      Mr.

Perdue adjusted comparable sales made prior to the valuation

date, including the Jess Ranch sale, downward to reflect the

decreased market conditions in 1996.      Mr. Thompson adjusted each

comparable sale that was made prior to January 1995 downward to

reflect this market decline.   The parties did not show that there

was a decline in market conditions between February 1996, the

date of the Jess Ranch sale, and June 1996, the valuation date.

In addition, the record does not show a specific point during

1996 at which values bottomed out.      We decline to make any

adjustment to the Jess Ranch sale price for market conditions

given the proximity of the Jess Ranch sale to the valuation date.

     B.   Location/Exposure

     The Victorville property is adjacent to Interstate 15, a

major north-south freeway, and Bear Valley Road, a major east-

west road.   The Jess Ranch property is located about 5 miles west

of Interstate 15, also on Bear Valley Road.      Mr. Thompson applied

a positive 20-percent adjustment to the Jess Ranch sale price,

and Mr. Perdue applied a positive 30-percent adjustment, to

reflect Jess Ranch’s distance from the freeway relative to the

Victorville property.   Mr. Perdue attributed his 30-percent
                                 - 16 -

adjustment to the fact that the Jess Ranch property, being 5

miles from the freeway, would attract local, rather than

regional, customers.     He also stated that the Victorville

property was across the street from the region’s only regional

shopping center.     The determination of the amount of this

adjustment is necessarily subjective, but we find that a 20-

percent adjustment sufficiently takes into account the Jess Ranch

property’s distance from the freeway, and the disadvantages that

accompany that location.      Therefore, we apply a 20-percent

positive adjustment to the Jess Ranch sale price for

location/exposure.

     C.   Size

     Neither expert made any adjustment for the size of the two

properties.      The Victorville property is 92.91 acres, and Jess

Ranch was 106.74 acres.      No other comparables examined by either

expert (except the alleged offers on the Victorville property,

which we do not consider as comparables) are nearly as large as

the Jess Ranch property.      We conclude that no adjustment is

necessary for size.

     D.   Topography

     Both experts reported that the Jess Ranch property had a 5-

acre flood retention basin, which caused awkward building siting

and poor functional utility on the affected 5 acres.      As a

result, Mr. Thompson positively adjusted the Jess Ranch sale
                                - 17 -

price by 5 percent because he concluded that the 5 acres

represented almost 5 percent of the Jess Ranch property.    Mr.

Perdue combined topography with access and frontage and made an

aggregate positive 20-percent adjustment for those three factors.

He did not explain how he would have divided the 20-percent

adjustment, and we decline to speculate on his analysis.    We

therefore accept Mr. Thompson’s 5-percent positive adjustment for

topography.

     E.    Access

     Mr. Thompson made a negative adjustment of 10 percent for

access because he stated that the Jess Ranch property was

surrounded on four sides by streets, while the Victorville

property has streets on only two sides.    Mr. Perdue made a

positive 20-percent adjustment for topography, access, and

frontage.     He stated that the Jess Ranch property was inferior to

the Victorville property in access, because it was 5 miles from

the freeway.    In addition, he stated that two of the streets

surrounding the Jess Ranch property were minor, residential

streets.

     We believe that Mr. Perdue’s positive adjustment for access

because of the Victorville property’s proximity to the freeway

was appropriately factored into our 20-percent positive

adjustment for location, and to make another adjustment here

would be double-counting.    We disagree with Mr. Thompson that the
                                   - 18 -

additional streets serving the Jess Ranch property add more

value.    However, the estate has demonstrated that the shape and

lack of street access on two sides of the Victorville property

decreases accessibility to some parts of the acreage, and will

limit development on those parts.       Therefore, we adjust Mr.

Thompson’s negative 10-percent adjustment for access to negative

5 percent.

     F.    Frontage

     Both experts agreed in their reports that the Jess Ranch

property and the Victorville property had similar frontage.        Mr.

Thompson did not make an adjustment for frontage.       Mr. Perdue, as

we explained above, made a positive 20-percent adjustment for

topography, access, and frontage combined but stated in his

report that the Jess Ranch property and the Victorville property

had similar frontage.      We make no adjustment for frontage.

     G.     Offsite Improvements

          Both experts agreed that the Victorville property needed

extensive offsite improvements in order to be developed.       These

included the widening of exterior and interior streets, the

relocation of overhead electrical lines to underground, and the

installation of water lines, sewer lines, telephone lines, and

traffic signals.      The Jess Ranch property, according to Mr.

Thompson, had underground water, sewer, and electrical on its

entire frontage, which was approximately the same size as the
                              - 19 -

Victorville property frontage, at the time of its sale.   He

stated that it had also received “widening [of] interior streets,

signals, walks, curbs, gutters, etc.,” prior to its sale.    He

applied a downward adjustment of 35 percent to the Jess Ranch

sale price.5

     Mr. Perdue stated that the Jess Ranch property was left as

raw land at its sale date, and needed the same improvements that

the Victorville property needed.   However, he admitted that the

Jess Ranch property did have some curbs, gutters, sidewalks, and

a traffic signal, and some of the road was done.   He made a

negative adjustment of 2 percent for offsite improvements.

     Neither expert provided a clear explanation of the amounts

of their final adjustments for offsite improvements.   Mr.

Thompson explained that he believed that the Jess Ranch property

required 25 percent less improvement than the Victorville

property.   Mr. Perdue claimed that he based his adjustment on a

conversation he had with the seller of the Jess Ranch property.

From this conversation, he speculated that the only improvements

that had been made were to service a Target store that was

adjacent to, but not actually a part of, the Jess Ranch property.

The Jess Ranch development plan allocated 27.34 acres, or 25.6

     5
      Mr. Thompson split utilities out from offsite improvements.
He made a negative 25-percent adjustment for offsite
improvements, and a negative 10-percent adjustment for utilities.
Because we believe the term “offsite improvements” sufficiently
encompasses utilities, we do not separate the two.
                              - 20 -

percent of the site, for support of the Target store.   Because we

believe that the improvements made to the Jess Ranch property

significantly added to its value, but also left much of the site

to be improved, we apply a negative adjustment of 25 percent to

the Jess Ranch sale price.

     H.   Zoning

     Mr. Perdue testified that 39 acres of the Jess Ranch

property were intended to be used as residential property at the

time of its sale, but are now planned for use as a multiscreen

cineplex.   He made a 5-percent upward adjustment for the

residential use.   Mr. Thompson disputes Mr. Perdue’s conclusion,

and states that the Jess Ranch development plan indicates that

the 39 acres in question were zoned neighborhood commercial.    We

do not think “intended residential use” warrants a 5-percent

adjustment; Mr. Perdue did not show that zoning restrictions

limited the 39 acres to residential use.   Therefore, we make no

adjustment for zoning.

     In summary, we conclude that the net total adjustment to the

Jess Ranch sale price, based on our comparison of the Jess Ranch

sale to the Victorville property, should be negative 5 percent.

The adjustment results in a unit price of $1.35 per square foot,

or $5,463,666.
                               - 21 -

     I.   The Lowe’s Sale

     On July 1, 1999, Bear Valley Partners sold 15.87 acres of

the Victorville property to Lowe’s for a stated purchase price of

$4.1 million.    The sale agreement provided that Bear Valley

Partners would be obligated to reimburse Lowe’s for up to

$600,000 of development costs.    Mr. Dicker testified that

approximately $1.5 to $2 million was spent by Bear Valley

Partners to improve the Victorville property as part of the sale

to Lowe’s.    This was spent to build a storm drain, widen an

exterior road, and install traffic signals.    Most of these

improvements benefited the entire Victorville property, not just

the portion sold to Lowe’s.    On the basis of these figures, we

can estimate that Bear Valley Partners received, net of

development costs, approximately $2.7 million for the Lowe’s

property.    Under the partnership agreement, the trustees

presumably received only 75 percent of this amount, or

approximately $2,025,000, for the most marketable tract in the

92.91 acres of the Victorville property.    We give this

transaction limited weight, because it occurred 3 years after the

valuation date.    We conclude that it is consistent with our

conclusion that the Victorville property as a whole was worth no

more than $5,463,666 on the valuation date.
                               - 22 -

III.   Conclusion

       Because we find that the Jess Ranch sale provides a relevant

comparable to the Victorville property, we have focused primarily

on the characteristics of the sale of that parcel of land for our

analysis.    Based on this comparable sale, we conclude that the

value of the Victorville property on the valuation date was

$5,463,666, or $1.35 per square foot.

       To reflect the foregoing and concessions of the parties,



                                          Decision will be entered

                                     under Rule 155.
