Court Opinion

ID: 4495848
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:32.868067+00
Date Added: 2024-06-11T08:00:13.036328
License: Public Domain

McMahon,
dissenting in part: That “ the furniture warehousing business was moving away in 1929 from the vicinity ” of the property in question is not sufficient to establish that the business center in question had shifted, or, assuming (only for the purposes of discussion) that it had, that such shifting gave rise to obsolescence of the warehouse building in question. It was incumbent upon petitioner to establish both. It has established neither.
The business center in question remained substantially the same throughout the years before us. It is a matter of common knowledge *339that warehouses are common to business centers. There were other warehouses in the vicinity. It was close to the retail shopping district. Warehouses need not be close by and frequently are not. There is no showing that the warehouse in question could not have been used for general warehouse purposes by the petitioner in the condition it was in when acquired by it. There rests upon a petitioner a heavy burden to establish obsolescence of a warehouse building such as the one in question.
Furthermore, petitioner did not acquire the warehouse in question for its warehouse purposes. It acquired it and other adjoining parcels of land acquired at the same time for the purpose of ultimately demolishing it to put in its place an addition to its office building, which was also on adjoining land. All were in the same business center. It did, in fact, thus demolish it. There is no showing that the earlier demolition of the warehouse was not to the advantage of the petitioner, economically or otherwise, from the standpoint of the primary purpose of its acquisition by petitioner, which was that of expanding its office space to meet the requirements of its increasing business. There is some indication that it was. Viewed from the standpoint of obsolescence, any impairment of the usefulness as a warehouse of the warehouse building in question which occurred was not beyond petitioner’s control. It was brought about by it. An owner can not thus give rise to obsolescence of his own property.
Mere difficulty in finding a tenant is not sufficient to establish that a business center has shifted and thereby given rise to obsolescence. There is no finding that the rate of rent was reduced to attract other prospective tenants. Furthermore, reduction of value, rental or otherwise, can not give rise to obsolescence.
“ Changing business conditions ” of the character disclosed in this proceeding are not sufficient to give rise to obsolescence.
There is no basis for petitioner’s conclusion, reached on March 27, 1929, that in 1930 “ it would be impossible to lease the warehouse.”
The majority opinion allows and by its precedent opens the door to deductions not provided for or contemplated by any provision of the applicable statutes or supported by precedent. On the other hand, it is contrary to such statutes and to principles enumerated in other precedents. See First National Bank of Key West, 26 B. T. A. 370, and Joseph E. Swanson et al., Trustee, 29 B. T. A. 1123.
United States Cartridge Co. v. United States, 284 U. S. 511, and Burnet v. Niagara Falls Brewing Co., 282 U. S. 646, are clearly distinguishable from the instant proceeding and do not sustain the result reached by the majority upon the. subject of obsolescence.
I, therefore, respectfully dissent from that portion of the opinion of the majority which allows deductions for obsolescence.