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Well, yeah, not the best business decision, but, from a town’s standpoint, I don’t see the economic default they were facing, just a moral one. A bigger shop meant more taxes, both in property value and taxable revenue of the shop.
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zoning boundaries are in place for a reason, to keep businesses and residential areas separate. If he wanted to have a larger barber shop he should have done what millions of other business owner do and lease a shop in a business area.