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What Happened: In 1990, a real estate developer signed a 99-year lease on property in Boca Raton on which it intended to build a shopping center. The lease fixed rent at $280,000 for years 2 through 29, and $910,000 per year after that; it also gave the developer the right to purchase the property at “fair market value” (FMV). The question: Should the FMV price account for the fact that the property was encumbered by the lease? The court said yes and issued a “declaratory judgment” in the developer’s favor.
