The key to a legal nonconforming use is establishing that the use was previously permitted. The Utah Court of Appeals recently reiterated this statutory requirement in LJ Mascaro v. Herriman City, 2018 UT App 127, where it stated a land owner must “provide substantial evidence to support a prior legal use,” in order to
The ability to defer taxes through a 1031 Exchange can make or break a real estate transaction. But federal tax law does not treat all real estate owners equally. Under IRC Section 1031(a)(2), real property held “primarily for sale” in the ordinary course of a trade or business is excluded from Section 1031 and may be subject to ordinary income taxes in the event of a sale.
Generally, land held for investment purposes can be swapped for “like kind” property without triggering taxable gain. However, certain property is excluded from 1031 because, under IRC Section 1221(a)(1), it is not a capital asset, including:
(i) Stock in trade of the taxpayer
(ii) Inventory; or
(iii) Property held by the taxpayer primarily for sale to customers in the ordinary course of a trade or business.
Such property, including any real estate which qualifies as inventory, is excluded from 1031 treatment and, upon sale, is taxed at ordinary income rates. This means that active developers dealing in subdivided property for sale in the ordinary course of business may be excluded from capital gains tax treatment.
Portland real estate is booming and Portland is now on the map for many national and international developers for the first time. This success, while enviable, is not without some negative consequences, as evidenced by increasing housing costs and congestion.
As Portland anticipates the arrival of even more people, it is trying to figure out where to put those new arrivals and how to preserve and enhance quality of life for both new and existing residents. Large-scale City planning efforts such as the 2012 Portland Plan and 2017 Comprehensive Plan reflect a recognition that not everyone has enjoyed the benefits of past prosperity and public investment, and that the City will seek to be more intentional and inclusive going forward.
An emerging redevelopment area offers an opportunity to try new things and develop differently this time. The Broadway Corridor redevelopment area is 24 acres located between the Pearl District and Old Town/Chinatown. The area is centrally located in downtown Portland, has freeway access and is served both by Amtrak, via historic Union Station, and by TriMet’s light rail. The “pearl” of this redevelopment area is the 14-acre U.S. Post Office site, bordered by NW 9th Avenue, NW Hoyt Street, NW Broadway and NW Lovejoy and purchased by the City of Portland in 2016.
The City purchased the Post Office site for almost $90,000,000 and understandably is carefully shepherding this public investment. The City’s Broadway Corridor Framework Plan provides a conceptual “framework” for future development of a 24-acre area including the Post Office site, but actual development will require a new type of public-private partnership and substantial further refinement of the plan, with the City committed to recovering its financial investment.
A letter of intent (“LOI”) is often the first document in a proposed deal – a summary of a range of key terms or concepts for negotiation toward entering into a final, formal agreement. But what seems like a simple document can be much more than a mere list of possible terms to be discussed by the parties, and might just result in a final agreement in one side’s sole discretion. In some cases, an LOI can be an enforceable agreement to negotiate in good faith toward a final agreement based, at least in part, on its stated terms. Even those LOIs that specifically say they are non-binding may, in fact, be binding. For instance, an LOI could be enforceable in its own right if all material terms of a final agreement are set out in the LOI and the parties’ conduct suggests they treated the LOI as a final agreement. Rather than being a “safe haven” that can be terminated at will without liability, an LOI can present great risk and unintended consequences to the parties if not recognized and handled with care. Missteps in documentation and/or subsequent conduct of the parties along the way could result in blown deals and damages. Even an otherwise carefully and clearly drafted LOI may not be free from risk or unintended consequences.
In a ruling supporting common sense, the Idaho Supreme Court ruled that a county could not avoid the application of a broad force majeure clause in its development agreement with a developer based on the county’s denial of the rezoning required for the very development.
The key facts in Burns Concrete, Inc. v. Teton County…
The status of infrastructure throughout the United States, and the need to expand and rebuild facilities, is often in the news. Funding these improvements remains a challenge, but when funding is identified, the government often has to acquire private property. If the government and the property owner are unable to reach agreement, the acquisition may…
Many development projects have a federal connection — such as a federal permit or grant — that triggers compliance with Section 106 of the National Historic Preservation Act. Section 106 requires the approving federal agency to assess the impacts of the development on properties that are listed or eligible for listing on the National Register…