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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ------ ACT OF 1934
For the fiscal year ended February 28, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------ EXCHANGE ACT OF 1934
Commission File Number 0-12634
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 13-3161322
- -------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- -------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Initial Limited Partnership Interests
-------------------------------------
Title of Class
Additional Limited Partnership Interests
----------------------------------------
Title of Class
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X
----- -----
The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of August 31, 2002 was
($28,378,000) based on Limited Partner equity (deficit) as of such date.
Registrant's voting and non-voting common equity is not publicly traded.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Business.
General
- -------
Cambridge + Related Housing Properties Limited Partnership (the "Partnership")
is a limited partnership which was formed under the laws of the Commonwealth of
Massachusetts on April 28, 1983. The general partners of the Partnership are
Government Assisted Properties, Inc. (the "Assisted General Partner") and
Related Housing Programs Corporation (the "Related General Partner"), both of
which are Delaware corporations affiliated with an affiliate of The Related
Companies, L.P. ("Related"), a New York limited partnership, and
Cambridge/Related Housing Associates Limited Partnership ("Cambridge Related
Associates"), a Massachusetts limited partnership, (together the "General
Partners"). The general partners of Cambridge Related Associates are the
Assisted General Partner and the Related General Partner. The General Partners
manage and control the affairs of the Partnership. See Item 10, Directors and
Executive Officers of the Registrant, below.
The Partnership completed its initial public offering (the "Offering") on May 4,
1984. Pursuant to the Offering, the Partnership issued 5,019 Initial Limited
Partnership Interests in 1984 and 5,019 Additional Limited Partnership Interests
in 1985, resulting in $50,190,000 in Gross Proceeds and $36,638,700 of net
proceeds available for investment and reserves. The Partnership is currently in
the process of winding up its operations and disposing of its investments. See
"Sales of Underlying Properties/Local Partnership Interests" below. As of
February 28, 2003, the Partnership has disposed of forty-two of its forty-four
original investments. Subsequently on March 11, 2003, the property and related
assets and liabilities of one investment was sold. The remaining investment is
under contract to be sold.
Investment Objectives/Government Incentives
- -------------------------------------------
The Partnership was formed to invest, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships" or "Subsidiary
Partnerships"), each of which owns and operates an existing residential housing
development (an "Apartment Complex") which is receiving some form of local,
State or Federal assistance, such as mortgage insurance, rental assistance
payments, permanent mortgage financing and/or interest reduction payments
("Government Assistance"). The Partnership's investment objectives are to:
(1) provide current tax benefits in the form of passive losses which holders of
Limited Partnership Interests may use to offset passive income from other
sources;
(2) provide long-term capital appreciation through an increase in the value of
the Partnership's investments in Local Partnerships;
(3) provide cash distributions from sale or refinancing transactions; and
(4) preserve and protect the Partnership's capital.
The Partnership is in the process of winding down its operations as it continues
to sell its assets;. therefore investment objectives (1), (2) and (4) are no
longer applicable. The Partnership has to date distributed approximately
$6,683,000 from sales transactions and expects to continue to make distributions
from excess sales proceeds, although such aggregate distributions are not
currently anticipated to equal the original investment. The Partnership will no
longer be generating passive losses due to the sale of properties. However,
passive losses previously allocated (to the extent unused by a limited partner)
are available to offset the income expected to be generated from the sales
effort.
2
Federal, state and local government agencies have provided significant
incentives in order to stimulate private investment in government assisted
housing. The intent of these incentives is to reduce certain market risks and
permit investors to receive (i) tax benefits, (ii) limited cash distributions
and (iii) long-term capital appreciation. Notwithstanding these factors, there
remain significant risks. These risks include, and are not limited to, the
financial strength and expertise of the local general partners. The long-term
nature of the investments in government-subsidized housing and the continuance
of government incentives has limited the ability of the Partnership to vary its
investment portfolio in response to changing economic, financial and investment
conditions; such investments have also been subject to changes in local economic
circumstances and housing patterns which have had an impact on real estate
values and, in the Partnership's current liquidation phase, the ability to
achieve a profit on the sale of the apartment complexes. These Apartment
Complexes have also required greater management expertise and have had higher
operating expenses than conventional apartment buildings. See Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, below.
Investments
- -----------
The interests in the Local Partnerships in which the Partnership invested
("Local Partnership Interests") were acquired from unaffiliated sellers. The
Partnership became the principal limited partner in these Local Partnerships
pursuant to local limited partnership agreements. The Partnership has acquired a
98.99% interest in each of the Local Partnerships. As a limited partner, the
Partnership's liability for obligations of the Local Partnerships is limited to
its investment. The general partners of the Local Partnerships ("Local General
Partners") retain responsibility for maintaining, operating and managing the
Apartment Complexes. Under certain circumstances, the Partnership has the right
to replace the Local General Partner of the Local Partnership.
The Partnership purchased the Local Partnership Interests for a purchase price
consisting in each case of a cash down payment, a deferred cash payment due in
April of the following year and a Purchase Money Note (as defined below),
secured in each case by the Local Partnership Interest for which it was given in
payment. The cash payments were made in part as the purchase price of the Local
Partnership Interests and in part as capital contributions to the Local
Partnerships. Such contributions were generally used by the Local Partnership to
pay partnership management fees to the Local General Partners and fees to the
Local General Partners for guaranteeing the funding of operating deficits
(generally for a period of three to five years and subject to a maximum amount).
Purchase Money Notes
- --------------------
Nonrecourse purchase money notes (the "Purchase Money Notes") were issued to the
selling partners of the Subsidiary Partnerships as part of the purchase price,
and are secured only by the Partnership's interest in the Subsidiary Partnership
to which the Purchase Money Note relates.
The Purchase Money Notes, which provide for simple interest, will not be in
default if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding Subsidiary Partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. As of February 28, 2003, the maturity dates of the Purchase
Money Notes associated with the remaining properties owned by the Subsidiary
Partnerships were extended through a fifth year. These are the final extensions
for these Purchase Money Notes (see below). Any interest not paid currently
accrues, without further interest thereon, through the extended due date of each
of the Purchase Money Notes, respectively. Continued accrual of such interest
without payment would impact the effective rate of the Purchase Money Notes,
specifically by reducing the current effective interest rate of 9%. The exact
effect is not determinable inasmuch as it is dependent on the actual future
interest payments and ultimate repayment dates of the Purchase Money Notes.
3
Unpaid interest of $3,669,010 (with respect to the two remaining notes) and
$24,273,106 (with respect to the fourteen remaining notes) at February 28, 2003
and 2002, respectively, has been accrued and is included in the caption due to
selling partners. In general, the interest on and the principal of each Purchase
Money Note is also payable to the extent of the Partnership's actual receipt of
proceeds from the sale or refinancing of the Apartment Complex, or in some cases
the Local Partnership Interest to which the Purchase Money Note relates.
The Partnership was permitted to extend the term of the Purchase Money Notes for
up to five additional years. In connection with such extensions, the Partnership
incurred an extension fee of 1/2% per annum of the outstanding principal balance
of the Purchase Money Notes. The Partnership sent an extension notice to each
Purchase Money Note holder, pursuant to the Purchase Money Note, that it was
extending the maturity date of such notes. However in certain cases, the
Partnership did not pay the extension fee at that time, deferring such payment
to the future. The two properties with Purchase Money Notes are now extended
with maturity dates of August and October 2003. These are the final extensions
for these Purchase Money Notes. Extension fees of $107,118 were accrued and
added to the balance of these Purchase Money Notes.
The Partnership expects that upon final maturity it will be required to sell its
investments in the Local Partnerships in order to pay the Purchase Money Notes
and accrued interest thereon. Based on the historical operating results of the
Local Partnerships, the prices realized on the sale of the Partnership's
investment sold to date and the current economic conditions including changes in
tax laws, it is unlikely that the proceeds from such sales will be sufficient to
meet the outstanding balances. No assurance can be given that management's
efforts will be successful in selling the Partnership's investment in the
remaining property. The Purchase Money Notes are without personal recourse to
either the Partnership or any of its partners and the sellers' recourse, in the
event of non-payment, would be to foreclose on the Partnership's interests in
the respective Local Partnerships.
Sales of Underlying Properties/Local Partnership Interests
- ----------------------------------------------------------
General
- -------
The Partnership is currently in the process of winding up its operations and
disposing of its investments. As of February 28, 2003, the Partnership has
disposed of forty-two of its forty-four original investments. Subsequently, on
March 11, 2003 one additional investment was sold. The one remaining investment
is under contract to be sold within the next several months. There can be no
assurance that the Partnership will dispose of its last remaining investment
during this time frame or the amount of proceeds which may be received.
In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed two entities: Cambridge Liquidating Trust LLC ("Trust I"), a
Massachusetts limited liability company which is owned 99.99% by the Partnership
and .01% by affiliates of Related; and, Cambridge Liquidating Trust II ("Trust
II"), a Massachusetts general partnership which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.
On December 30, 1998, the Partnership contributed its limited partnership
interest in Bethany Glen Associates, Westwood, Ltd., Parktowne, Ltd., Rolling
Meadows Apartments, Ltd., Buena Vista Apartments, Ltd. and Wingate Associates,
Ltd. to Trust I. On December 31, 1998, the Partnership contributed its limited
partnership interests in Grandview-Blue Ridge Manor Limited,
Breckenridge-Chaparral Apartments II, Ltd., El Paso-Gateway East, Ltd.,
Albequerque-Lafayette Square Apartments, Ltd., Corpus Christi-Oso Bay
Apartments, Ltd., Westgate Associates Limited, San Diego-Logan Square Gardens
Co., Ardmore-Rolling Meadows of Ardmore, Ltd., Fort Worth-Northwoods Apartments,
Ltd. and Stephenville-Tarleton Arms Apartments, Ltd. to Trust II. In each case,
4
the interests were contributed subject to each respective Purchase Money Note.
The contribution did not involve any consideration being paid to the
Partnership, therefore, there was no tax effect to the limited partners of the
Partnership. As of February 28, 2003 all Local Partnerships named above were
sold except Gateway, which was subsequently sold on March 11, 2003.
Information Regarding Disposition
- ---------------------------------
On January 2, 2003, the Partnership's limited partnership interest in Caddo
Parish - Villas South, Ltd. ("Villas South") was transferred to the Local
General Partner resulting in a gain in the amount of approximately $2,726,000.
No proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$7,344,000 resulting in a gain of approximately $7,344,000.
On December 19, 2002, the property and the related assets and liabilities of
Wingate Associates, Limited ("Wingate") were sold to an unaffiliated third party
purchaser for approximately $2,600,000 resulting in a gain in the amount of
approximately $132,000. The Partnership used approximately $1,043,000 to settle
the associated Purchase Money Note and accrued interest thereon, which had a
total outstanding balance of approximately $1,447,000 resulting in forgiveness
of indebtedness income of approximately $404,000.
On October 31, 2002, the Partnership's limited partnership interest in
Grandview-Blue Ridge Manor, Ltd. ("Blue Ridge"), Breckenridge-Chaparral
Apartments II, Ltd. ("Chaparral"), Albuquerque-Lafayette Square Apts., Ltd.
("Lafayette"), Fort Worth-Northwood Apartments, Ltd. ("Northwood"), Corpus
Christi-Oso Bay Apartments, Ltd. ("Oso Bay"), Ardmore-Rolling Meadows of
Ardmore, Ltd. ("Ardmore") and Stephenville-Tarleton Arms Apartments, Ltd.
("Tarleton") were sold back to the Local General Partner for approximately $100
each resulting in losses of approximately $453,000, $667,000, $1,687,000,
$1,416,000, $1,053,000, $866,000 and $1,377,000, respectively. No proceeds were
used to settle the associated Purchase Money Notes and accrued interest thereon,
which had total outstanding balances of approximately $1,525,000, $1,999,000,
$3,592,000, $2,050,000, $2,364,000, $2,229,000 and $2,851,000, respectively,
resulting in gains on sale of properties in amounts equal to the interest and
principal due on such Purchase Money Notes.
On July 12, 2002, the property and the related assets and liabilities of San
Diego-Logan Square Gardens Company ("Logan") were sold to the Local General
Partners for approximately $9,241,000 resulting in a gain in the amount of
approximately $5,403,000. The Partnership used approximately $5,740,000 to fully
settle the associated Purchase Money Note and accrued interest thereon. The
Partnership netted approximately $1,104,000 of cash which was placed into
working capital to pay Partnership expenses.
On March 27, 2002, the property and the related assets and liabilities of
Ziegler Boulevard, Ltd. ("Ziegler") were sold to an unaffiliated third party
purchaser for approximately $2,379,000 resulting in a loss in the amount of
approximately $485,000. The Partnership used approximately $340,000 to settle
the associated Purchase Money Note and accrued interest thereon, which had a
total outstanding balance of approximately $2,746,000 resulting in forgiveness
of indebtedness income of approximately $2,406,000.
On March 27, 2002, the Partnership's limited partnership interest in Eastwyck
III, Ltd. Limited Partnership ("Eastwyck") was sold to the Local General
Partners for approximately $5,000 resulting in a loss of approximately $336,000.
No proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$1,220,000 resulting in a gain on sale of approximately $1,220,000.
On December 4, 2001, the Partnership's limited partnership interest in Crossett
Apartments, Ltd. ("Crossett") was sold to the Local General Partner effective
5
January 1, 2002 for $7,920 resulting in a loss of approximately $212,000 and the
related Purchase Money Note was assigned to the Local General Partner. No
proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$1,117,000 resulting in a gain on sale of property of approximately $1,117,000.
On December 4, 2001, the Partnership's limited partnership interest in Cedar
Hill Apartments, Ltd. ("Cedar Hill") was sold to the Local General Partner
effective January 1, 2002 for $11,988 resulting in a loss of approximately
$479,000 and the related Purchase Money Note was assigned to the Local General
Partner. No proceeds were used to settle the associated Purchase Money Note and
accrued interest thereon, which had a total outstanding balance of approximately
$1,220,000 resulting in a gain on sale of property of approximately $1,220,000.
On November 26, 2001, the Partnership's limited partnership interest in Buena
Vista Manor Apartments, Ltd. ("Buena Vista") was sold to the Local General
Partners for $125,000 resulting in a loss in the amount of approximately
$596,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest thereon, which had a total outstanding balance of approximately
$5,092,000 resulting in a gain of approximately $5,092,000.
On August 31, 2001, the property and the related assets and liabilities of
Rolling Meadows Apartments, Ltd. ("Rolling Meadows") were sold to an
unaffiliated third party purchaser for $1,925,000 resulting in a loss in the
amount of approximately $485,000. The Partnership used approximately $201,000 to
settle the associated Purchase Money Note and accrued interest thereon, which
had a total outstanding balance of approximately $3,757,000 resulting in
forgiveness of indebtedness income of approximately $3,556,000.
On March 16, 2001, the property and the related assets and liabilities of
Char-Mur Apartments ("Char-Mur") were sold to an affiliate of the Local General
Partner for $475,000, resulting in a loss in the amount of approximately
$193,000. The Partnership used approximately $85,000 to settle the associated
Purchase Money Note and accrued interest thereon, which had a total outstanding
balance of approximately $986,000, resulting in forgiveness of indebtedness
income of $901,000. In addition, approximately $21,000 of accounts payable to an
unrelated party were forgiven in the current year.
On December 20, 2000, the property and the related assets and liabilities of New
Jersey, Ltd. ("New Jersey") were sold to an unaffiliated third party for
$2,049,600 resulting in a gain of approximately $65,000. The Partnership used
approximately $500,000 of the net proceeds to settle the associated Purchase
Money Note and accrued interest thereon, which had an outstanding balance of
approximately $2,369,000 resulting in forgiveness of indebtedness income of
approximately $1,869,000.
On December 1, 2000, the property and the related assets and liabilities of
Westgate Associates, Limited ("Westgate") were sold to an unaffiliated third
party for $2,055,000, resulting in a loss of approximately $164,000. The
Partnership used approximately $601,000 of the net proceeds to settle the
associated Purchase Money Note and accrued interest thereon, which had a total
outstanding balance of approximately $1,516,000, resulting in forgiveness of
indebtedness income of approximately $915,000.
On September 14, 2000, the property and the related assets and liabilities of
Westwood Apartments Company, Ltd. ("Westwood") were sold to an unaffiliated
third party for $2,025,000, resulting in a loss of approximately $356,000. No
proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$3,059,000, resulting in forgiveness of indebtedness income.
On September 14, 2000, the property and the related assets and liabilities of
Parktowne Ltd. ("Parktowne") were sold to an unaffiliated third party for
$2,500,000, resulting in a gain of approximately $476,000. The Partnership used
6
approximately $844,000 of the net proceeds to settle the associated Purchase
Money Note and accrued interest thereon, which had an outstanding balance of
approximately $1,804,000, resulting in forgiveness of indebtedness income of
approximately $960,000.
On April 28, 2000, the property and the related assets and liabilities of
Pacific Palms were sold to a third party for approximately $4,900,000, resulting
in a gain of approximately $2,554,000. The Partnership used approximately
$1,668,000 of the net proceeds to settle the associated Purchase Money Notes and
accrued interest thereon which had a total outstanding balance of approximately
$5,214,000, resulting in forgiveness of indebtedness of approximately
$3,546,000. The Partnership netted approximately $1,940,000 of cash which was
placed into working capital to pay Partnership expenses.
Tax Matters
- -----------
The Tax Reform Act of 1986 (the "TRA") provides as of 1991 that the passive
losses generated by the Partnership can only be used to shelter passive income
or, in the alternative, may be carried forward to offset a gain upon the sale of
properties.
Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential property.
Competition
- -----------
The real estate business is highly competitive and each of the Local
Partnerships in which the Partnership has invested owns an Apartment Complex
which must compete for tenants in the marketplace. However, the rental
assistance and preferred interest rates on mortgage financing generally make it
possible to offer the apartments to eligible tenants at a cost to the tenant
significantly below the market rate for comparable conventionally financed
apartments in the area.
Employees
- ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partner and their affiliates. The General
Partners receive compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partners
and certain of their affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement and Certificate of Limited
Partnership (the "Partnership Agreement").
7
Item 2. Properties.
As of February 28, 2003, the Partnership holds a 98.99% limited partnership
interest in each of two Local Partnerships, which own two residential Apartment
Complexes receiving Government Assistance. During the fiscal year ended February
28, 2003, the property and the related assets and liabilities owned by three
Local Partnerships were sold and the Partnership's Local Partnership Interest in
nine other Local Partnerships were sold. Through the fiscal year ended February
28, 2003, the properties and the related assets and liabilities owned by
eighteen Local Partnerships were sold and the Partnership's Local Partnership
Interest in twenty-four other Local Partnerships were sold. Set forth below is a
schedule of these Local Partnerships, including certain information concerning
the Apartment Complexes (the "Local Partnership Schedule"). See Schedule III to
the financial statements included herein for additional information, including
encumbrances, pertaining to the Apartment Complexes.
Local Partnership Schedule
--------------------------
Government
Assistance Percentage of Units
Year ------------- Occupied at December 31,
Name and Location of Property Com- HUD --------------------------------------------
(Number of Units)(b) pleted Programs (a) 2002 2001 2000 1999 1998
- -------------------- ------ ------------- ------ ------ ------ ------ ------
Caddo Parish-Villas South, Ltd. 1972 Sec.221(d)(4) (r) 86% 86% 86% 86%
Shreveport, Louisiana (172)
Oklahoma City-Town and 1973 Sec.207 (j) (j) (j) (j) (j)
Country Village
Apartments, Ltd.
Oklahoma City, Oklahoma (201)
Rolling Meadows of
Chickasha, Ltd. 1972 Sec.236 (f) (f) (f) (f) (f)
Chickasha, Oklahoma (112)
New Jersey, Ltd. 1977 Sec.221(d)(4) (n) (n) (n) 83% 96%
Mobile, Alabama (112)
Zeigler Boulevard, Ltd. 1981 Sec.221(d)(4) (q) 80% 76% 85% 100%
Mobile, Alabama (112)
Eastwyck III, Ltd. 1979 Sec.221(d)(4) (r) 90% 100% 98% 96%
Mobile, Alabama (48)
Breckenridge-Chaparral
Apartments II, Ltd. 1973 Sec.236 (r) 91% 87% (k) 94%
Breckenridge, Texas (88)
Country, Ltd. 1978 Sec.221(d)(4) (i) (i) (i) (i) (i)
Ridgeland, Mississippi (112)(c)
Westwood Apartments
Company, Ltd. 1978 Sec.221(d)(4) (n) (n) (n) 57% 45%
Montgomery, Alabama (176)
Parktowne, Ltd. 1978 Sec.221(d)(4) (n) (n) (n) 93% 97%
Montgomery, Alabama (144)
8
Local Partnership Schedule
--------------------------
(continued)
-----------
Government
Assistance Percentage of Units
Year ------------- Occupied at December 31,
Name and Location of Property Com- HUD --------------------------------------------
(Number of Units)(b) pleted Programs (a) 2002 2001 2000 1999 1998
- -------------------- ------ ------------- ------ ------ ------ ------ ------
Corpus Christi-Oso Bay
Apartments, Ltd. 1973 Sec.236 (r) 99% 95% (k) 99%
Corpus Christi, Texas (104)
Northbrook III, Ltd. 1981 Sec.221(d)(4) (i) (i) (i) (i) (i)
Jackson, Mississippi (68)(c) Sec.8
Bethany Glen Associates 1971 Sec.221(d)(3) (l) (l) (l) (l) 95%
Glendale, Arizona (150) Sec.8
Albuquerque-Lafayette
Square Apts., Ltd. 1973 Sec.236 (r) 96% 99% (k) 99%
Albuquerque, New Mexico (188)
Roper Mountain Apartments 1979 Sec.221(d)(4) (e) (e) (e) (e) (e)
Greenville, South Carolina (152)
Warren Manor Apartments
Limited Partnership
Warren, Michigan
Warren Manor I (344) 1968 Sec.221(d)(4) (m) (m) (m) (m) 95%
Warren Manor II (136) 1970 Sec.221(d)(4) (m) (m) (m) (m) 95%
Golf Manor Apartments 1970 Sec.221(d)(4) (m) (m) (m) (m) 98%
Limited Partnership
Roseville, Michigan (128)
Warren Woods Apartments 1971 Sec.221(d)(4) (m) (m) (m) (m) 99%
Limited Partnership
Warren, Michigan (192)
Canton Commons Apartments 1973 Sec.221(d)(4) (m) (m) (m) (m) 96%
Canton, Michigan (452) Sec.236
Sec.8
Los Caballeros Apartments 1976 Sec.236 (h) (h) (h) (h) (h)
Thornton, Colorado (144) (d)
Rosewood Manor Apartments 1972 Sec.236 (m) (m) (m) (m) 99%
Rosewood, Michigan (207) Sec.8
Grosvenor South Apartments 1969 Sec.221(d)(3) (h) (h) (h) (h) (h)
Limited Partnership
Taylor, Michigan (182)
Grosvenor South Apartments 1969 Sec.221(d)(4) (h) (h) (h) (h) (h)
#2 Limited Partnership
Taylor, Michigan (54)
9
Local Partnership Schedule
--------------------------
(continued)
-----------
Government
Assistance Percentage of Units
Year ------------- Occupied at December 31,
Name and Location of Property Com- HUD --------------------------------------------
(Number of Units)(b) pleted Programs (a) 2002 2001 2000 1999 1998
- -------------------- ------ ------------- ------ ------ ------ ------ ------
Clinton Plaza Apartments 1969 Sec.221(d)(3) (h) (h) (h) (h) (h)
Limited Partnership
Clinton, Michigan (168)
Clinton Plaza Apartments 1970 Sec.221(d)(3) (h) (h) (h) (h) (h)
#2 Limited Partnership
Clinton, Michigan (192)
Oakland-Keller Plaza 1972 Sec.236 (e) (e) (e) (e) (e)
Oakland, California (200) Sec.8
San Diego-Logan Square
Gardens Company 1970 Sec.236 (q) 100% 98% (k) 98%
San Diego, California (170) Sec.8
Grandview-Blue Ridge Manor, Ltd. 1972 Sec.236 (r) 96% 95% (k) 93%
Grandview, Missouri (80)
Ardmore-Rolling Meadows
of Ardmore, Ltd. 1974 Sec.236 (r) 100% 100% (k) 98%
Ardmore, Oklahoma (101)
El Paso-Gateway East, Ltd. 1972 Sec.236 (s) 96% 99% (k) 96%
El Paso, Texas (104) Sec.8
Fort Worth-Northwood
Apartments, Ltd. 1972 Sec.236 (r) 97% 99% (k) 92%
Fort Worth, Texas (100)
Stephenville-Tarleton Arms
Apartments, Ltd. 1972 Sec.236 (r) 99% 95% (k) 95%
Stephenville, Texas (128) Sec.8
Cudahy Gardens,
a Limited Partnership 1971 Sec.236 (i) (i) (i) (i) (i)
Cudahy, California (100) Sec.8
Pacific Palms,
a Limited Partnership 1972 Sec.236 (n) (n) (n) 90% 98%
Palm Springs, California (139)
Riverside Gardens,
a Limited Partnership 1971 Sec.236 (i) (i) (i) (i) (i)
Riverside, California (192)
Bay Village Company 1971 Sec.236 99% 100% 99% 99% 95%
Fall River, Massachusetts (206) Sec.8
10
Local Partnership Schedule
--------------------------
(continued)
-----------
Government
Assistance Percentage of Units
Year ------------- Occupied at December 31,
Name and Location of Property Com- HUD --------------------------------------------
(Number of Units)(b) pleted Programs (a) 2002 2001 2000 1999 1998
- -------------------- ------ ------------- ------ ------ ------ ------ ------
Buena Vista Manor
Apartments, Ltd. 1969 Sec.221(d)(3) (p) (p) 98% 98% 100%
Nashville, Tennessee (200) Sec.8
Rolling Meadows
Apartments, Ltd. 1971 Sec.236 (o) (o) 94% 98% 96%
Midwest City, Oklahoma (200) Sec.8
Westgate Associates, Limited 1971 Sec.236 (n) (n) (n) 93% 89%
Brattleboro, Vermont (100) Sec.8
Wingate Associates Limited 1972 Sec.236 (q) 95% 99% 98% 97%
Laconia, New Hampshire (100) Sec.8
South Munjoy
Associates, Limited 1966 Sec.221(d)(3) (g) (g) (g) (g) (g)
Portland, Maine (140)
Cedar Hill Apartments, Ltd. 1973 Sec.236 (p) (p) 97% 100% 93%
Monticello, Arkansas (60)
Char-Mur Apartments, Ltd. 1973 Sec.236 (o) (o) 46% 77% 58%
Trumann, Arkansas (48)
Crossett Apartments, Ltd. 1973 Sec.236 (p) (p) 100% 100% 98%
Crossett, Arkansas (50)
(a) The Partnership invested in Local Partnerships owning existing Apartment
Complexes which receive either Federal or State subsidies. HUD, through FHA,
administers a variety of subsidies for low and moderate-income housing. FHA
administers similar housing programs for non-urban areas. The federal programs
generally provide one or a combination of the following forms of assistance: (i)
mortgage loan insurance, (ii) rental subsidies, (iii) reduction of mortgage
interest payments.
1) HUD provides mortgage insurance for rental housing projects pursuant to a
number of sections of Title II of the National Housing Act ("NHA"), including
Section 236, Section 221(d)(4), Section 221(d)(3) and Section 220. Under all of
these programs, HUD will generally provide insurance equal to 100% of the total
replacement cost of the project to non-profit owners and 90% of the total
replacement cost to limited-distribution owners. Mortgages are provided by
institutions approved by HUD, including banks, savings and loan companies and
local housing authorities. Section 221(d)(4) of NHA provides for federal
insurance of private construction and permanent mortgage loans to finance new
construction of rental apartment complexes containing five or more units. The
most significant difference between the 221(d)(4) program and the 221(d)(3)
program is the maximum amount of the loan which may be obtained. Under the
221(d)(3) program, non-profit sponsors may obtain a permanent mortgage equal to
100% of the total replacement cost; no equity contribution is required of a
non-profit sponsor. In all other respects, the 221(d)(3) program is
substantially similar to the 221(d)(4) program.
11
2) Many of the tenants in HUD insured projects receive some form of rental
assistance payments, primarily through the Section 8 Housing Assistance Payments
Program (the "Section 8 Program"). Apartment Complexes not receiving assistance
through the Section 8 Program ("Section 8 Payments") will generally have
limitations on the amounts of rent which may be charged. One requirement imposed
by HUD regulations effective for apartment complexes initially approved for
Section 8 payments on or after November 5, 1979, is to limit the amount of the
owner's annual cash distributions from operations to 10% of the owner's equity
investment in an Apartment Complex if the apartment complex is intended for
occupancy by families, and to 6% of the owner's equity investment in an
Apartment Complex intended for occupancy by elderly persons. The owner's equity
investment in the apartment complex is 10% of the project's replacement cost as
determined by HUD. HUD released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: (i) a discontinuation of
project-based Section 8 subsidy payments and (ii) an attendant reduction in debt
on properties that were supported by the Section 8 payments. The ACPA calls for
a transition during which the project-based Section 8 would be converted to a
tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market", that is revalued in light of the reduced income stream, if
any.
3) Section 236 Program. As well as providing mortgage insurance, the Section 236
program also provides an interest credit subsidy which reduces the cost of debt
service on a project mortgage, thereby enabling the owner to charge the tenants
lower rents for their apartments. Interest credit subsidy payments are made
monthly by HUD directly to the mortgagee of the Project. Each payment is in an
amount equal to the difference between (i) the monthly interest payment required
by the terms of the mortgage to pay principal, interest and the annual mortgage
insurance premium and (ii) the monthly payment which would have been required
for principal and interest if the mortgage loan bore interest at the rate of 1%.
These payments are credited against the amounts otherwise due from the owner of
the Project, who makes monthly payments of the balance.
(b) State of jurisdiction is the same state as the location, unless otherwise
indicated.
(c) State of jurisdiction is Alabama.
(d) State of jurisdiction is Michigan.
(e) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 1997 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
(f) The Partnership's Local Partnership Interest in this Local Partnership was
sold during the fiscal year ended February 28, 1997 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).
(g) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 1998 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
(h) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 28, 1998 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).
(i) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 1999 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
12
(j) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 28, 1999 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).
(k) As a result of on-going litigation, which was subsequently settled, related
to the Roar Properties (as defined herein), occupancy rates were not provided by
the management agent pursuant to the instructions from the Local General
Partner.
(l) The property and the related assets and liabilities were sold during the
fiscal year ended February 29, 2000 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
(m) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 29, 2000 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).
(n) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 2001 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
(o) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 2002 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
(p) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 28, 2002 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).
(q) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 2003 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).
(r) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 28, 2003 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).
(s) The property and the related assets and liabilities were sold on March 11,
2003 (see Note 13 in Item 8. Financial Statements and Supplemental Data).
All leases are generally for periods not greater than one to two years and no
tenant occupies more than 10% of the rentable square footage.
See Item 1, Business, above for the general competitive conditions to which the
properties described above are subject.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fiscal year
covered by this report through the solicitation of proxies or otherwise.
13
PART II
Item 5. Market for the Registrant's Limited Partnership Interests and Related
Security Holder Matters.
At February 28, 2003, the Partnership had issued and outstanding 10,038 Limited
Partnership Interests, of which 5,019 are Initial Limited Partnership Interests
and 5,019 are Additional Limited Partnership Interests, each representing a
$5,000 capital contribution per unit to the Partnership, for aggregate gross
proceeds of $50,190,000. Additional Limited Partnership Interests are the
Limited Partnership Interests acquired upon the exercise of warrants or sold by
the Partnership upon the non-exercise of the warrants. The warrants are rights
granted pursuant to the Partnership Agreement as part of the purchase of an
Initial Limited Partnership Interest. No further issuance of Initial Limited
Partnership Interests or Additional Limited Partnership Interests is anticipated
and all warrants have expired. As of February 28, 2003, the Partnership had
4,223 registered holders of Limited Partnership Interests.
Limited Partnership Interests are not traded in any organized market. It is not
anticipated that any public market will develop for the purchase and sale of any
Limited Partnership Interests. Limited Partnership Interests may be transferred
only if certain requirements are satisfied, including that in the opinion of
counsel to the Partnership such transfer would not cause a termination of the
Partnership under Section 708 of the Internal Revenue Code and would not violate
any federal or state securities laws.
In March 2003 and 2002, there were no distributions paid to the limited partners
or the General Partners, from net proceeds from the sale of properties (see Item
7. below). There are no material restrictions upon the Partnership's present or
future ability to make distributions in accordance with the provisions of the
Partnership Agreement. However, the Partnership has invested in Local
Partnerships owning Apartment Complexes which receive Government Assistance
under programs which in many instances restrict the cash return available to
owners. See Item 8, Note 11(i). The Partnership does not anticipate providing
cash distributions to its Limited Partners in circumstances other than
refinancing or sale, nor do the General Partners expect that the Partnership
will distribute sufficient net proceeds from sales or refinancings to return the
Limited Partners' original investment.
Item 6. Selected Financial Data.
14
The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
financial statements in Item 8 hereof.
Year Ended
--------------------------------------------------------------------------
February 28, February 28, February 28, February 28, February 28,
OPERATIONS 2003 2002 2001 2000 1999
- ---------- ------------ ------------ ------------ ------------ ------------
Revenues $ 32,956,656 $ 17,797,723 $ 16,831,588 $ 14,075,165 $ 35,823,217
Operating expenses 8,909,188 14,449,409 17,101,952 22,632,634 31,032,957
------------ ------------ ------------ ------------ ------------
Income (loss) before
minority interest
and extraordinary 24,047,468 3,348,314 (270,364) (8,557,469) 4,790,260
item
Minority interest in
income (loss) of
subsidiaries 225,786 6,242 (2,300) (1,430) (424,099)
------------ ------------ ------------ ------------ ------------
Income (loss) before
extraordinary item 24,273,254 3,354,556 (272,664) (8,558,899) 4,366,161
Extraordinary
item-forgiveness
of indebtedness 2,831,151 4,456,996 10,348,388 26,725,364 7,583,482
------------ ------------ ------------ ------------ ------------
Net income $ 27,104,405 $ 7,811,552 $ 10,075,724 $ 18,166,465 $ 11,949,643
============ ============ ============ ============ ============
Income (loss) before
extraordinary item
per limited $ 2,394 $ 331 $ (27) $ (844) $ 431
partnership unit
Extraordinary item
per limited
partnership unit 279 440 1,020 2,636 748
------------ ------------ ------------ ------------ ------------
Net income per
limited
partnership unit $ 2,673 $ 771 $ 993 $ 1,792 $ 1,179
============ ============ ============ ============ ============
Year Ended
--------------------------------------------------------------------------
February 28, February 28, February 28, February 28, February 28,
FINANCIAL POSITION 2003 2002 2001 2000 1999
- ------------------ ------------ ------------ ------------ ------------ ------------
Total assets $ 7,443,777 $ 30,584,781 $ 37,735,134 $ 49,506,785 $ 74,790,559
============ ============ ============ ============ ============
Long-term obligations $ 9,047,068 $ 57,097,277 $ 72,474,005 $ 93,199,151 $134,392,143
============ ============ ============ ============ ============
Total liabilities $ 12,151,677 $ 62,151,701 $ 77,233,742 $ 98,569,533 $141,014,105
============ ============ ============ ============ ============
Minority interest $ (91,601) $ 153,784 $ 33,648 $ 28,932 $ 30,399
============ ============ ============ ============ ============
During the years ended February 28, 1999, February 29, 2000, February 28, 2001,
2002 and 2003 total assets decreased primarily due to the sale of properties
(see Item 8., Note 10), depreciation and a loss for the impairment of assets,
partially offset by an increase in cash and cash equivalents resulting from net
proceeds from the sales and net additions to property and equipment. Long-term
obligations and total liabilities decreased for the years ended February 28,
1999, February 29, 2000, February 28, 2001, 2002 and 2003 primarily due to the
repayment of and forgiveness of indebtedness on Purchase Money Notes, mortgage
notes payable and amounts due to selling partners as a result of the sale of
underlying properties, partially offset by accruals of interest on Purchase
Money Notes.
* As restated - see Note 12 to the financial statements.
15
Selected Quarterly Financial Data (Unaudited)
Quarter Ended
----------------------------------------------------------
May 31, August 31, November February
OPERATIONS 2002 30, 2002 30, 2002 2003
- ----------------------- ------------ ------------ ------------ ------------
Revenues $ 3,229,118 $ 2,300,581 $ 7,599,804 $ 19,827,153
Operating expense 2,900,900 2,240,167 2,748,700 1,019,421
------------ ------------ ------------ ------------
Income before minority
interest 328,218 60,414 4,851,104 18,807,732
Minority interest in
income (loss) of
subsidiaries 125,715 (2,848) 115,316 (12,397)
------------ ------------ ------------ ------------
Income before
extra-ordinary items 453,933 57,566 4,966,420 18,795,335
Extra-ordinary item --
forgiveness of
indebtedness 2,427,492 0 0 403,659
------------ ------------ ------------ ------------
Net income $ 2,881,425 $ 57,566 $ 4,966,420 $ 19,198,994
============ ============ ============ ============
Income before
extra-ordinary item
per limited
partnership unit $ 44.77 $ 5.68 $ 489.81 $ 1,853.70
Extra ordinary item
per limited
partnership unit 239.41 0 0 39.81
------------ ------------ ------------ ------------
Net income per limited
partnership unit $ 284.18 $ 5.68 $ 489.81 $ 1,893.51
============ ============ ============ ============
Quarter Ended
----------------------------------------------------------
May 31, August 31, November February
OPERATIONS 2001 30, 2001 30, 2001* 2002*
- ----------------------- ------------ ------------ ------------ ------------
Revenues $ 2,988,398 $ 3,139,040 $ 2,430,468 $ 9,239,817
Operating expenses 3,815,298 3,651,928 3,047,884 3,934,299
------------ ------------ ------------ ------------
(Loss) income before
minority interest (826,900) (512,888) (617,416) 5,305,518
Minority interest in
(loss) income of
subsidiaries (462) (832) 5,772 1,764
------------ ------------ ------------ ------------
(Loss) income before
extra-ordinary items (827,362) (513,720) (611,644) 5,307,282
Extra-ordinary item --
forgiveness of
indebtedness 901,219 0 3,861,270 (305,493)
------------ ------------ ------------ ------------
Net income (loss $ 73,857 $ (513,720) $ 3,249,626 $ 5,001,789
============ ============ ============ ============
(Loss) income before
extra-ordinary item per
limited partnership unit $ (81.60) $ (50.66) $ (60.32) $ 523.43
Extra ordinary item
per limited partnership
unit 88.88 0.00 380.82 (30.13)
------------ ------------ ------------ ------------
Net income (loss) per
limited partnership unit $ 7.28 $ (50.66) $ 320.50 $ 493.30
============ ============ ============ ============
* As restated - see Note 12.
16
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Liquidity and Capital Resources
- -------------------------------
General
- -------
The Partnership's primary sources of funds are (i) cash distributions from
operations, (ii) cash distributions from sales of the Local Partnerships in
which the Partnership has invested, (iii) interest earned on funds, and (iv)
cash in working capital reserves. All these sources of funds are available to
meet the obligations of the Partnership.
During the fiscal year ended February 28, 2003, the property and the related
assets and liabilities owned by three Local Partnerships and the Partnership's
Limited Partnership Interest in nine Local Partnerships were sold. Through the
fiscal year ended February 28, 2003, the properties and the related assets and
liabilities owned by eighteen Local Partnerships were sold and the Partnership's
Local Partnership Interest in twenty-four other Local Partnerships were sold.
The Partnership had a working capital reserve of approximately $628,000 and
$135,000 at February 28, 2003 and 2002, respectively. The working capital
reserve is temporarily invested in money market accounts which can be easily
liquidated to meet obligations as they arise. The General Partners believe that
the Partnership's reserves, net proceeds from future sales and future cash flow
distributions will be adequate for its operating needs, and plans to continue
investing available reserves in short-term investments. The General Partners
fees are being paid currently other than approximately $1,976,000 of Partnership
management fees which were accrued and continue to be deferred.
During the fiscal year ended February 28, 2003, cash and cash equivalents of the
Partnership and its consolidated Local Partnerships increased approximately
$71,000. This increase was due to proceeds from sale of properties
($13,893,000), a decrease in mortgage escrow deposits relating to investing
activities ($657,000) which exceeded cash used in operating activities
($170,000), acquisition of property and equipment ($487,000), payments to
selling partners ($4,105,000), net principal payments of mortgage notes and
purchase money notes ($8,202,000), costs paid relating to sale of properties
($1,496,000) and a decrease in minority interest ($20,000). Included in the
adjustments to reconcile the net income to cash provided by operating activities
is gain on sale of properties ($25,095,000), forgiveness of indebtedness income
($2,831,000) and depreciation ($352,000).
Cash flow distributions aggregating $207,440, $71,144 and $196,814 were made to
the Partnership in the 2002, 2001 and 2000 Fiscal Years, respectively. Of such
distributions, $169,833, $56,426 and $118,246, respectively, was used to pay
interest on the Purchase Money Notes. Distribution of proceeds from sales
aggregating $8,994,812 and $289,581 were made to the Partnership in the 2002 and
2001 Fiscal Years, respectively of which $7,123,995 and $286,080, respectively,
was used to pay principal and interest on the Purchase Money Notes.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Company's accounting policies included in Note 2 to
the consolidated financial statements in this annual report on Form 10-K.
17
a) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
b) Income Taxes
No provision has been made for income taxes in the accompanying consolidated
financial statements since such taxes, if any, are the responsibility of the
individual partners. For income tax purposes, the Partnership has a fiscal year
ending December 31.
Purchase Money Notes
- --------------------
For a discussion of Purchase Money Notes Payable, see Note 7 to the Financial
Statements.
Sales of Underlying Properties/Local Partnership Interests
- ----------------------------------------------------------
For a discussion of the sale of properties in which the Partnership owns direct
and indirect interest, see Note 10 to the Financial Statements.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
Local Partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties which have not otherwise been disclosed that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. Due to the sale
of properties, the portfolio is not diversified by the location of the
properties around the United States. The remaining property may not be protected
against a general downturn in the national economy.
Results of Operations
- ---------------------
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings. A
loss on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At the time property investments
themselves are reduced to estimated fair value (generally using discounted cash
18
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. All property and equipment for subsidiary partnerships whose assets
and liabilities are under sales contracts are classified as assets held for
sale.
Through February 28, 2003, the Partnership has recorded approximately $8,889,000
as a loss on impairment of assets.
The following is a summary of the results of operations of the Partnership for
the Fiscal Years ended February 28, 2003, 2002 and 2001 (the 2002, 2001 and 2000
Fiscal Years, respectively).
The results of operations of the Partnership, as well as the Local Partnerships,
excluding administrative and management, taxes and insurance, gain on sale of
properties and forgiveness of indebtedness income, remained fairly constant
during the 2002, 2001 and 2000 Fiscal Years.
2002 vs. 2001
- -------------
Rental income decreased by approximately 35% during the 2002 Fiscal Year as
compared to the 2001 Fiscal Year. Excluding Char Mur, Rolling Meadows, Logan,
Wingate and Ziegler which sold their properties and Buena Vista, Cedar Hill,
Crossett, Eastwyck, Blue Ridge, Chaparral, Lafayette, Northwood, Oso Bay,
Ardmore, Tarleton and Villa South in which the Partnership's interest was sold
(collectively the "Sold Assets"), rental income increased approximately 3%
during the 2002 Fiscal Year as compared to the 2001 Fiscal Year primarily due to
rental increases at the Local Partnerships.
A gain on sale of properties and forgiveness of indebtedness was recorded in the
2002 Fiscal Year (see Notes 10 and 11, respectively, in Item 8. Financial
Statements and Supplemental Data).
Total expenses, excluding the Sold Assets, administrative and management and
taxes and insurance, remained fairly consistent with a decrease of approximately
2% for the 2002 Fiscal Year as compared to the 2001 Fiscal Year.
Administrative and management decreased approximately $1,079,000 for the 2002
Fiscal Year as compared to the 2001 Fiscal Year. Excluding the Sold Assets,
administrative and management decreased approximately $126,000 primarily due to
a decrease in legal fees at the Partnership level.
Taxes and insurance decreased approximately $309,000 for the 2002 Fiscal Year as
compared to the 2001 Fiscal Year. Excluding the Sold Assets, taxes and insurance
increased approximately $24,000, primarily due to increases of insurance
premiums at one Local Partnership.
Administration and management-related parties, operating, repairs and
maintenance, financial and depreciation expense decreased approximately
$247,000, $787,000, $1,170,000, $1,163,000 and $785,000, respectively, for the
2002 Fiscal Year as compared to the 2001 Fiscal Year. Excluding the Sold Assets,
and Gateway East, Ltd. and Bay Village, for depreciation only, such expenses
remained fairly consistent with (decreases) increases of approximately
($26,000), ($56,000), $23,000, $24,000 and $0, respectively, for the 2002 Fiscal
Year as compared to the 2001 Fiscal Year. Gateway East, Ltd. and Bay Village are
not depreciated during the period because they are classified as assets held for
sale.
2001 vs. 2000
- -------------
Rental income decreased by approximately 14% during the 2001 Fiscal Year as
compared to the 2000 Fiscal Year. Excluding New Jersey, Westgate, Parktowne,
Westwood, Pacific Palm, Char-Mur and Rolling Meadows which sold their properties
and Buena Vista, Cedar Hill and Crossett in which the Partnership's interest was
sold (collectively the "Sold Assets"), rental income increased approximately 6%
19
during the 2001 Fiscal Year as compared to the 2000 Fiscal Year primarily due to
rental increases and decreases in vacancies at several Local Partnerships.
Other income decreased approximately $99,000 during the year ended February 28,
2002 as compared to 2001. Excluding the Sold Assets, other income increased
approximately $62,000, primarily due to larger cash and cash equivalent balances
earning interest at three Local Partnerships, increased laundry income at a
fourth Local Partnership and a state grant received at a fifth Local
Partnership.
A gain on sale of properties and forgiveness of indebtedness was recorded in the
2001 Fiscal Year (see Notes 10 and 11, respectively, in Item 8. Financial
Statements and Supplemental Data).
Total expenses, excluding Sold Assets, operating and taxes and insurance,
remained fairly consistent with an increase of less than 2% for the 2001 Fiscal
Year as compared to the 2000 Fiscal Year.
Operating decreased approximately $91,000 for the year ended February 28, 2002,
as compared to 2001. Excluding the Sold Assets, operating increased
approximately $294,000, primarily due to an increase in utility costs at five
Local Partnerships.
Taxes and insurance decreased approximately $165,000 for the year ended February
28, 2002, as compared to 2001. Excluding the Sold Assets, taxes and insurance
increased approximately $151,000, primarily due to increases of insurance
premiums at three Local Partnerships.
Administrative and management, repairs and maintenance, financial and
depreciation expense decreased approximately $444,000, $536,000, $813,000 and
$469,000, respectively, for the 2001 Fiscal Year as compared to the 2000 Fiscal
Year. Excluding the Sold Assets, and Zeigler Boulevard Ltd, Eastwyck III, Ltd.,
Wingate Associates, Ltd., Logan Square, Lafayette Square, Gateway East, Ltd, Bay
Village and Northwood Apts. Ltd., for depreciation only, such expenses remained
fairly consistent with decreases of approximately $11,000, $74,000, $12,000 and
$9,000 respectively, for the 2001 Fiscal Year as compared to the 2000 Fiscal
Year. Zeigler Boulevard Ltd., Eastwyck III, Ltd, Wingate Associates, Ltd., Logan
Square, Lafayette Square, Gateway East, Ltd., Bay Village and Northwood
Apartments, Ltd. are not depreciated during the period because they are
classified as assets held for sale.
Results of Operations of Certain Local Partnerships
- ---------------------------------------------------
Caddo Parish-Villas South, Ltd. ("Villas South")
- ------------------------------------------------
Villas South filed for protection under Chapter 11 of the United States
Bankruptcy Code on November 12, 1996 and the equivalent of a receiver was
appointed. The bankruptcy case was subsequently dismissed on April 18, 2002. On
January 2, 2003, the limited partnership interest in Villas South was
transferred to the Local General Partners (See Note 10 in Item 8.).
Other
- -----
The Partnership's investment, as a limited partner in the Local Partnerships, is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership's investments could also
be adversely affected by poor economic conditions generally, which could
increase vacancy levels, rental payment defaults, and increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.
There are also substantial risks associated with the operation of Apartment
Complexes receiving Government Assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
20
contracted to make; and that when the rental assistance contracts expire there
may not be market demand for apartments at full market rents in a Local
Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation generally does not impact the fixed
long-term financing under which real property investments were purchased.
Inflation also affects the Local Partnerships adversely by increasing operating
costs, particularly items such as fuel, utilities and labor. However, continued
inflation should allow for appreciated values of the Local Partnerships'
Apartment Complexes over a period of time as rental revenues and replacement
costs continue to increase, the benefit of which may be recognized at the point
in time when the Partnership is required to refinance or sell its investments in
Local Partnerships in order to meet its obligations under the Purchase Money
Notes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
None.
21
Item 8. Financial Statements and Supplementary Data. Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 23
Consolidated Balance Sheets at
February 28, 2003 and 2002 76
Consolidated Statements of Income
for the Years Ended February 28,
2003, 2002 and 2001 77
Consolidated Statements of
Partners' Deficit for the Years
Ended February 28, 2003, 2002 and
2001 78
Consolidated Statements of Cash
Flows for the Years Ended February
28, 2003, 2002 and 2001 79
Notes to Consolidated Financial
Statements 82
22
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Cambridge + Related Housing Properties Limited Partnership and Subsidiaries
We have audited the consolidated balance sheets of Cambridge + Related Housing
Properties Limited Partnership and Subsidiaries as of February 28, 2003 and
2002, and the related consolidated statements of income, partners' deficit, and
cash flows for the years ended February 28, 2003, 2002 and 2001 (the 2002, 2001
and 2000 Fiscal Years, respectively). These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits. We did not audit
the financial statements for 14 (2002 Fiscal Year), 19 (2001 Fiscal Year) and 24
(2000 Fiscal Year) subsidiary partnerships whose (losses) income constituted
$(1,844,282), $(787,626) and $1,221,181 of the Partnership's net income during
the 2002, 2001 and 2000 Fiscal Years, respectively, and whose assets constituted
90% (2002 Fiscal Year) and 85% (2001 Fiscal Year) of the Partnership's assets at
February 28, 2003 and February 28, 2002, presented in the accompanying
consolidated financial statements. The financial statements for 14 (2002 Fiscal
Year), 18 (2001 Fiscal Year) and 23 (2000 Fiscal Year) of these subsidiary
partnerships were audited by other auditors whose reports thereon have been
furnished to us, and our opinion expressed herein, insofar as it relates to the
amounts included for these subsidiary partnerships, is based solely upon the
reports of the other auditors. The financial statements of one (2001 and 2000
Fiscal Years) of these subsidiary partnerships were unaudited.
We conducted our audits in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based upon our audits, and the reports of the other auditors,
the accompanying consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cambridge + Related
Housing Properties Limited Partnership and Subsidiaries at February 28, 2003 and
2002, and the results of their operations, and their cash flows for the years
ended February 28, 2003, 2002 and 2001, in conformity with U.S. generally
accepted accounting principles.
As discussed in Notes 10 and 13, the Partnership is currently in the process of
winding up its operations and disposing of its investments. As of February 28,
2003 the Partnership has disposed of forty-two of its forty-four investments. On
March 11, 2003 one additional investment was sold and the remaining investment
is under contract to be sold.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI, LLP
New York, New York
May 20, 2003
23
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
New Jersey, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of New Jersey, Ltd. as of December 31, 2000. This financial
statement is the responsibility of the partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the changes in net assets in liquidation for the year ended
December 31, 2000 in conformity with generally accepted accounting principles.
As described in note A to the financial statement, effective as of June 19,
2000, the partnership adopted a plan to sell the rental property and liquidate
the partnership in lieu of continuing the business. On December 20, 2000, the
partnership sold the rental property. As a result, the partnership's financial
statement is presented on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic financial
statement taken as a whole. The supplemental information on pages 8 through 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statement. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 2, 2001
24
[Letterhead of Browder & Associates, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners
Caddo Parish-Villas South, Ltd.
We have audited the accompanying statement of Caddo Parish-Vallas South, Ltd., a
limited partnership organized under the laws of the State of Louisiana, as of
December 31, 2002, and the related statement of changes in net assets in
liquidation for the year then ended. This financial statement is the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note A, the Partnership's policy is to prepare its financial
statements on the liquidation basis of accounting.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the net assets in liquidation of Caddo Parish-Villas
South, Ltd. As of December 31, 2002, and the changes in net assets in
liquidation for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
Browder & Associates, P.C.
Birmingham, Alabama
March 13, 2003
25
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Zeigler Boulevard, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Zeigler Boulevard, Ltd. for the period January 1, 2002 through
May 31, 2002. This financial statement is the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the changes in net assets in liquidation for the period
January 1, 2002 through Mary 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in note A to the financial statement, during 2001, the Partnership
adopted a plan to sell the rental property and liquidate the Partnership in lieu
of continuing the business. On March 27, 2002, the Partnership sold the rental
property. As a result, the partnership's financial statement is presented on the
liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 8 through 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statement. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statement taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
August 1, 2002
26
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Zeigler Boulevard, Ltd.
We have audited the accompanying statement of net assets in liquidation of
Zeigler Boulevard, Ltd. as of December 31, 2001, and the related statement of
changes in net assets in liquidation for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As discussed in note A to the financial statements, during 2001, the Partnership
adopted a plan to sell the rental property and liquidate the Partnership in lieu
of continuing the business. As a result, the partnership's financial statements
are presented on the liquidation basis of accounting.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Zeigler Boulevard, Ltd.,
as of December 31, 2001, and the changes in net assets in liquidation for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
As discussed in note A to the financial statements, there is a letter of intent
to purchase the property.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 11 through 13
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 25, 2002
27
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Zeigler Boulevard, Ltd.
We have audited the accompanying balance sheet of Zeigler Boulevard, Ltd. as of
December 31, 2000, and the related statements of operations, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Zeigler Boulevard, Ltd., as of
December 31, 2000, and the results of its operations, the changes in partners'
equity and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 21 through 25
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated March 14,
2001 on our consideration of Zeigler Boulevard, Ltd's internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
/s/ Reznick Fedder & Silverman
Lead Auditor: Stephen Shumrak
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
March 14, 2001
28
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Eastwyck III, Ltd.
We have audited the accompanying statement of net assets in liquidation of
Eastwyck III, Ltd. as of March 26, 2002, and the related statement of changes in
net assets in liquidation for the period January 1, 2002 through March 26, 2002.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As discussed in note A to the financial statements, during 2001, the Partnership
adopted a plan to sell the rental property and liquidate the Partnership in lieu
of continuing the business. As a result, the Partnership's financial statements
are presented on the liquidation basis of accounting.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Eastwyck III, Ltd., as
of March 26, 2002, and the changes in net assets in liquidation for the January
1, 2002 through March 26, 2002, in conformity with accounting principles
generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 11 through 13
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
August 1, 2002
29
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Eastwyck III, Ltd.
We have audited the accompanying statement of net assets in liquidation of
Eastwyck III, Ltd. as of December 31, 2001, and the related statement of changes
in net assets in liquidation for the year then ended. These financial statements
are the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As discussed in note A to the financial statements, during 2001, the Partnership
adopted a plan to sell the rental property and liquidate the Partnership in lieu
of continuing the business. As a result, the Partnership's financial statements
are presented on the liquidation basis of accounting.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Eastwyck III, Ltd., as
of December 31, 2001, and the changes in net assets in liquidation for the year
then ended, in conformity with accounting principles generally accepted in the
United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 11 through 13
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 25, 2002
30
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Eastwyck III, Ltd.
We have audited the accompanying balance sheet of Eastwyck III, Ltd., as of
December 31, 2000, and the related statements of operations, partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eastwyck III, Ltd., as of
December 31, 2000, and the results of its operations, the changes in partners'
equity (deficit) and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 23
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
In accordance with Government Auditing Standards, and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated March 14,
2001 on our consideration of Eastwyck III, Ltd.'s internal control and on its
compliance with specific requirements applicable to major HUD programs and fair
housing and non-discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
/s/ Reznick Fedder & Silverman
Lead Auditor: Stephen Shumrak
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
March 14, 2001
31
[Letterhead of Browder & Associates, P.C.]
Independent Auditor's Report
To the partners of
Breckenridge-Chaparral Apartments II, Ltd.
Breckenridge, Texas
We have audited the accompanying balance sheet of Breckenridge-Chaparral
Apartments II, Ltd., Project No. 113-44016-LD, as of October 31, 2002, and the
related statements of profit and loss, changes in owners' equity, and cash flows
for the period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations contracts, and
grants. Those reports are an integral part of an audit performed in accordance
with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
32
[Letterhead of Browder & Associates, P.C.]
Independent Auditor's Report
To the Partners of
Breckenridge-Chaparral Apartments II, Ltd.
Breckenridge, Texas
We have audited the accompanying balance sheet of Breckenridge-Chaparral
Apartments II, Ltd. (the Project), Project No. 113-44016-LD as of December 31,
2001, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
33
[Letterhead of Browder & Associates, P.C.]
Independent Auditor's Report
To the Partners of
Breckenridge-Chaparral Apartments II, Ltd.
Breckenridge, Texas
We have audited the accompanying balance sheet of Breckenridge-Chaparral
Apartments II, Ltd. (the Project), Project No. 113-44016-LD as of December 31,
2000, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
34
[Letterhead of Reznick, Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Westwood Apartments Company, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Westwood Apartments Company, Ltd. for the year ended December 31,
2000. This financial statement is the responsibility of the partnership's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the changes in net assets in liquidation for the year ended
December 31, 2000, in conformity with generally accepted accounting principles.
As described in note A to the financial statement, during 1999, the partnership
adopted a plan to sell the rental property and liquidate the partnership in lieu
of continuing the business. On September 14, 2000, the partnership sold the
rental property. As a result, the partnership's financial statement is presented
on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic financial
statement taken as a whole. The supplemental information on pages 8 through 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statement. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statement and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statement taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 15, 2001
35
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Parktowne, Ltd.
We have audited the accompanying statement of changes in net assets in
liquidation of Parktowne, Ltd. as of December 31, 2000. This financial statement
is the responsibility of the partnership's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the changes in net assets in liquidation for the year ended
December 31, 2000, in conformity with generally accepted accounting principles.
As described in note A to the financial statement, during 1999, the partnership
adopted a plan to sell the rental property and liquidate the partnership in lieu
of continuing the business. On September 14, 2000, the partnership sold the
rental property. As a result, the partnership's financial statement is presented
on the liquidation basis of accounting.
Our audit was made for the purpose of forming an opinion on the basic financial
statement taken as a whole. The supplemental information on pages 8 through 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statement. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statement and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statement taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 16, 2001
36
[Letterhead of Browder & Associates, P.C.]
Independent Auditor's Report
To the partners of
Oso Bay Apartments, Ltd.
Corpus Christi, Texas
We have audited the accompanying balance sheet of Oso Bay Apartments, Ltd.,
Project No. 115-44129-LDP, as of October 31, 2002, and the related statements of
profit and loss, changes in owners' equity, and cash flows for the period then
ended. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and cash flows for the period then ended
in conformity with accounting principles generally accepted in the United States
of America.
In accordance with Government Auditing Standards, we have also issued reports
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ BROWDER & ASSOCIATES P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
37
[Letterhead of Browder & Associates, P.C.]
Independent Auditor's Report
To the Partners of
Corpus Christi-Oso Bay Apartments, Ltd.
Corpus Christi, Texas
We have audited the accompanying balance sheet of Corpus Christi-Oso Bay
Apartments, Ltd. (the Project), Project No. 115-44129-LDP, as of December 31,
2001, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ BROWDER & ASSOCIATES P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
38
[Letterhead of Browder & Associates, P.C.]
Independent Auditor's Report
To the Partners of
Corpus Christi-Oso Bay Apartments, Ltd.
Corpus Christi, Texas
We have audited the accompanying balance sheet of Corpus Christi-Oso Bay
Apartments, Ltd. (the Project), Project No. 115-44129-LDP, as of December 31,
2000, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ BROWDER & ASSOCIATES P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
39
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the partners of
Lafayette Square Apartments, Ltd.
Albuquerque, New Mexico
We have audited the accompanying balance sheet of Lafayette Square Apartments,
Project No. 116-44022-LDP, as of October 31, 2002, and the related statements of
profit and loss, changes in owners' equity, and cash flows for the period then
ended. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued reports
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
40
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Albuquerque-Lafayette Square Apartments, Ltd.
Albuquerque, New Mexico
We have audited the accompanying balance sheet of Albuquerque-Lafayette Square
Apartments, Ltd. (the Project), Project No. 116-44022-LDP, as of December 31,
2001, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
41
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Albuquerque-Lafayette Square Apartments, Ltd.
Albuquerque, New Mexico
We have audited the accompanying balance sheet of Albuquerque-Lafayette Square
Apartments, Ltd. (the Project), Project No. 116-44022-LDP, as of December 31,
2000, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
42
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
San Diego-Logan Square Gardens Company
San Diego, California
We have audited the accompanying balance sheet of San Diego-Logan Square Gardens
Company, Project No. 129-44051-LD, as of July 11, 2002, and the related
statements of profit and loss, changes in owners' equity, and cash flows for the
period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of July 11, 2002
and the results of its operations and its cash flows for the period then ended
in conformity with accounting principles generally accepted in the United States
of America.
In accordance with Government Auditing Standards, we have also issued reports
dated July 16, 2002 on our consideration of the Project's internal controls and
on our tests of its compliance with certain laws, regulations, contracts, and
grants. Those reports are an integral part of an audit performed in accordance
with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
July 16, 2002
43
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
San Diego-Logan Square Gardens Company HUD Field Office Director
San Diego, California San Diego, CA
We have audited the accompanying balance sheet of San Diego-Logan Square Gardens
Company (the Project), Project No. 129-44051-LD, as of December 31, 2001, and
the related statements of profit and loss, changes in owners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
44
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
San Diego-Logan Square Gardens Company HUD Field Office Director
San Diego, California San Diego, CA
We have audited the accompanying balance sheet of San Diego-Logan Square Gardens
Company (the Project), Project No. 129-44051-LD, as of December 31, 2000, and
the related statements of profit and loss, changes in owners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Project will continue as a going concern. As discussed in the Notes to the
Financial Statements, the Project is in a poor cash position. This condition
raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in the footnotes
to the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
45
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the partners of
Blue Ridge Manor Apartments, Ltd.
Grandview, Missouri
We have audited the accompanying balance sheet of Blue Ridge Manor Apartments,
Project No. 084-44127-LDP, as of October 31, 2002, and the related statements of
profit and loss, changes in owners' equity, and cash flows for the period then
ended. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued reports
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
46
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Blue Ridge Manor, Ltd. HUD Field Office Director
Grandview, Missouri Kansas City, MO
We have audited the accompanying balance sheet of Blue Ridge Manor, Ltd. (the
Project), Project No. 084-44127-LDP, as of December 31, 2001, and the related
statements of profit and loss, changes in owners' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
and specific requirements applicable to Fair Housing and Non-Discrimination.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
47
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Blue Ridge Manor, Ltd. HUD Field Office Director
Grandview, Missouri Kansas City, MO
We have audited the accompanying balance sheet of Blue Ridge Manor, Ltd. (the
Project), Project No. 084-44127-LDP, as of December 31, 2000, and the related
statements of profit and loss, changes in owners' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
and specific requirements applicable to Fair Housing and Non-Discrimination.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
48
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the partners of
Ardmore-Rolling Meadows of Ardmore, Ltd.
Ardmore, Texas
We have audited the accompanying balance sheet of Ardmore-Rolling Meadows of
Ardmore, Ltd., Project No. 117-44044-LD, as of October 31, 2002, and the related
statements of profit and loss, changes in owners' equity, and cash flows for the
period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued reports
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
49
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Ardmore-Rolling Meadows of Ardmore, Ltd. HUD Field Office Director
Ardmore, Oklahoma Oklahoma City, OK
We have audited the accompanying balance sheet of Ardmore-Rolling Meadows of
Ardmore, Ltd. (the Project), Project No. 117-44044-LD, as of December 31, 2001,
and the related statements of profit and loss, changes in owners' equity, and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
50
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Ardmore-Rolling Meadows of Ardmore, Ltd. HUD Field Office Director
Ardmore, Oklahoma Oklahoma City, OK
We have audited the accompanying balance sheet of Ardmore-Rolling Meadows of
Ardmore, Ltd. (the Project), Project No. 117-44044-LD, as of December 31, 2000,
and the related statements of profit and loss, changes in owners' equity, and
cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
51
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the partners of
El Paso-Gateway East Apartments
El Paso, Texas
We have audited the accompanying balance sheet of El Paso Gateway East
Apartments, Project No. 133-44016-LD, as of December 31, 2002, and the related
statements of profit and loss, changes in owners' equity, and cash flows for the
period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued reports
dated January 22, 2003 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 22, 2003
52
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
El Paso-Gateway East Apartments, Ltd. HUD Field Office Director
El Paso, Texas Fort Worth, TX
We have audited the accompanying balance sheet of El Paso-Gateway East
Apartments, Ltd. (the Project), Project No. 133-44016-LD, as of December 31,
2001, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
53
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
El Paso-Gateway East Apartments, Ltd. HUD Field Office Director
El Paso, Texas Fort Worth, TX
We have audited the accompanying balance sheet of El Paso-Gateway East
Apartments, Ltd. (the Project), Project No. 133-44016-LD, as of December 31,
2000, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
54
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the partners of
Fort Worth-Northwood Apartments, Ltd.
Forth Worth, Texas
We have audited the accompanying balance sheet of Forth Worth-Northwood
Apartments, Ltd., Project No. 113-44025-LDP-SUP, as of October 31, 2002, and the
related statements of profit and loss, changes in owners' equity, and cash flows
for the period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued reports
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
55
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Fort Worth-Northwood Apartments, Ltd. HUD Field Office Director
Fort Worth, Texas Fort Worth, TX
We have audited the accompanying balance sheet of Fort Worth-Northwood
Apartments, Ltd. (the Project), Project No. 113-44025-LDP-SUP, as of December
31, 2001, and the related statements of profit and loss, changes in owners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
and specific requirements applicable to Fair Housing and Non-Discrimination.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
56
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Fort Worth-Northwood Apartments, Ltd. HUD Field Office Director
Fort Worth, Texas Fort Worth, TX
We have audited the accompanying balance sheet of Fort Worth-Northwood
Apartments, Ltd. (the Project), Project No. 113-44025-LDP-SUP, as of December
31, 2000, and the related statements of profit and loss, changes in owners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
57
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the partners of
Stephenville-Tarleton Arms Apartments, Ltd.
Stephenville, Texas
We have audited the accompanying balance sheet of Stephenville-Tarleton Arms
Apartments, Ltd., Project No. 113-44034-LD, as of October 31, 2002, and the
related statements of profit and loss, changes in owners' equity, and cash flows
for the period then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of October 31,
2002 and the results of its operations and its cash flows for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued reports
dated November 30, 2002 on our consideration of the Project's internal controls
and on our tests of its compliance with certain laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
November 30, 2002
58
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Stephenville-Tarleton Arms Apartments, Ltd. HUD Field Office Director
Stephenville, Texas Fort Worth, TX
We have audited the accompanying balance sheet of Stephenville-Tarleton Arms
Apartments, Ltd. (the Project), Project No. 113-44034-LD, as of December 31,
2001, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2001 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with U.S. generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2002 on our
consideration of the Project's internal controls and reports dated January 15,
2002 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
and specific requirements applicable to Fair Housing and Non-Discrimination.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2002
59
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Stephenville-Tarleton Arms Apartments, Ltd. HUD Field Office Director
Stephenville, Texas Fort Worth, TX
We have audited the accompanying balance sheet of Stephenville-Tarleton Arms
Apartments, Ltd. (the Project), Project No. 113-44034-LD, as of December 31,
2000, and the related statements of profit and loss, changes in owners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
2000 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 15, 2001 on our
consideration of the Project's internal controls and reports dated January 15,
2001 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the nonmajor HUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination. Those reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 15, 2001
60
[Ercolini & Company LLP Letterhead]
INDEPENDENT AUDITOR'S REPORT
The General Partners of
Bay Village Company
(a Massachusetts Limited Partnership)
Boston, Massachusetts
We have audited the accompanying balance sheets of Bay Village Company (a
Massachusetts Limited Partnership) as of December 31, 2002 and 2001 and the
related statements of income, partners' equity, and cash flows for each of the
three years in the period ended December 31, 2002. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bay Village Company as of
December 31, 2002 and 2001, and the results of its operations, changes in
partners' equity, and its cash flows for each of the three years in the period
ended December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 24, 2003
61
[Robert Ercolini & Company LLP Letterhead]
INDEPENDENT AUDITOR'S REPORT
The General Partners of
Bay Village Company
(a Massachusetts Limited Partnership)
Boston, Massachusetts
We have audited the accompanying balance sheets of Bay Village Company (a
Massachusetts Limited Partnership) as of December 31, 2001 and 2000 and the
related statements of operations, partners' equity, and cash flows for each of
the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bay Village Company as of
December 31, 2001 and 2000, and the results of its operations, changes in
partners' equity, and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 21, 2002
62
[CFL Accounting Services Letterhead]
Independent Auditors' Report
To The Partners of
Buena Vista Manor Apartments, Ltd.
I have audited the accompanying balance sheet of Buena Vista Manor Apartments,
Ltd. as of November 26, 2001, and the related statements of income, changes in
partners' capital, and cash flows for the eleven months then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit. The financial statements of Buena Vista Manor Apartments, Ltd. as of
December 31, 2000 were audited by other auditors whose report dated January 20,
2001 expressed an unqualified opinion on those statements.
I conducted my audit in accordance with U.S. generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Buena Vista Manor Apartments, Ltd.,
as of November 26, 2001, and the results of its operations, changes in partners'
capital, and cash flows for the eleven months then ended in conformity with U.S.
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated January 20, 2001, on my
consideration of Buena Vista Manor Apartments, Ltd.'s internal control, and
reports dated January 20, 2001, on its compliance with specific requirements
applicable to its major HUD programs and specific requirements applicable to
Fair Housing and Non-Discrimination.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in the report is presented for the purposes of additional
analysis and is not a required part of the basic financial statements of Buena
Vista Manor Apartments, Ltd. Such information has been subjected to the auditing
procedures applied to the audit of the basic financial statements and, in my
opinion, is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
/s/ CFL Accounting Services
Nashville, Tennessee
February 7, 2002
63
[Akersloot, Patterson & Associates, P.L.L.C. Letterhead]
Independent Auditors' Report
To The Partners of
Buena Vista Manor Apartments, Ltd.
We have audited the accompanying balance sheet of Buena Vista Manor Apartments,
Ltd. (a limited partnership), which includes HUD Project No. 086-35009-SUP-LD as
of December 31, 2000, and the related statements of operations, changes in
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of the Inspector General. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Buena Vista Manor Apartments,
Ltd., (a limited partnership) as of December 31, 2000, and the results of its
operations, changes in partners' equity, and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 2001, on our
consideration of Buena Vista Manor Apartments, Ltd.'s internal control, and
reports dated January 20, 2001, on its compliance with specific requirements
applicable to its major HUD programs and specific requirements applicable to
Fair Housing and Non-Discrimination.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
the report is presented for the purposes of additional analysis and is not a
required part of the basic financial statements of Buena Vista Manor Apartments,
Ltd. (a limited partnership). Such information has been subjected to the
auditing procedures applied to the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Akersloot, Patterson & Associates, P.L.L.C.
January 20, 2001
Brentwood, Tennessee
64
[CBEW Professional Group, LLP. Letterhead]
Independent Auditor's Report
To the Partners
Rolling Meadows Apartments, Ltd.
We have audited the accompanying balance sheet of Rolling Meadows Apartments,
Ltd., (A Limited Partnership) , as of December 31, 2001 and 2000, and the
related statements of income, changes in partners' capital (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Rolling
Meadows Apartments, Ltd. at December 31, 2001 and 2000 and the results of its
operations and changes in partners' capital (deficit) and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/ CBEW Professional Group, LLP
Certified Public Accountants
Cushing, Oklahoma
January 3, 2002
65
[EDWARD LEMKIN Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Westgate Associates Limited
I have audited the accompanying balance sheet of Westgate Associates Limited,
HUD Project No.: 026-44008-SHM (a Vermont limited partnership) as of December 1,
2000, and the related statements of income, changes in partners' capital, and
cash flows for the period then ended. These financial statements are the
responsibility of the partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Governing Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Westgate Associates Limited, HUD
Project No.: 026-44008-SHM, as of December 1, 2000, and the results of its
operations, changes in partners' capital, and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated January 4, 2001, on my
consideration of Westgate Associates Limited's internal control and reports
dated January 4, 2001, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs transactions.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 16-18 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of
Westgate Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Edward Lemkin
Certified Public Accountant
Orange, Connecticut
January 4, 2001
66
[EDWARD LEMKIN Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Wingate Associates Limited
Bridgeport, Connecticut
I have audited the accompanying statements of income, gain on sale of apartment
project, changes in partners' capital, and cash flows of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP (a New Hampshire limited partnership),
for the period January 1, 2002 to December 18, 2002. These financial statements
are the responsibility of the partnership's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the statements of income, gain on sale of apartment project,
changes in partners' capital, and cash flows referred to above present fairly,
in all material respects, the results of operations of Wingate Associates
Limited for the period January 1, 2002 to December 18, 2002, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, I have also issued my reports
dated January 30, 2003, on my consideration of Wingate Associates Limited's
internal control and on my tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of my audit.
The accompanying supplementary information shown on pages 17-18 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements of Wingate Associates Limited. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in my opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Edward Lemkin
Certified Public Accountant
Orange, Connecticut
January 30, 2003
67
[EDWARD LEMKIN Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Wingate Associates Limited
I have audited the accompanying balance sheet of Wingate Associates Limited, HUD
Project No.: 024-44018-LDP (a New Hampshire limited partnership), as of December
31, 2001, and the related statements of income, changes in partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wingate Associates Limited, HUD
Project No.: 024-44018-LDP, as of December 31, 2001, and the results of its
operations, changes in partners' capital, and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated January 25, 2002, on my
consideration of Wingate Associates Limited's internal control and reports dated
January 25, 2002, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs transactions. Those reports are an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of my audit.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 19-21 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Edward Lemkin
Certified Public Accountant
Orange, Connecticut
January 25, 2002
68
[EDWARD LEMKIN Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Wingate Associates Limited
I have audited the accompanying balance sheet of Wingate Associates Limited, HUD
Project No.: 024-44018-LDP (a New Hampshire limited partnership), as of December
31, 2000, and the related statements of income, changes in partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wingate Associates Limited, HUD
Project No.: 024-44018-LDP, as of December 31, 2000, and the results of its
operations, changes in partners' capital, and cash flows for the year then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated January 20, 2001, on my
consideration of Wingate Associates Limited's internal control and reports dated
January 20, 2001, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs transactions.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 17-20 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of Wingate
Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Edward Lemkin
Certified Public Accountant
Orange, Connecticut
January 20, 2001
69
[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cedar Hill Apartments:
We have audited the accompanying balance sheet of Cedar Hill Apartments, (the
"Partnership") as of December 31, 2001 and for the year then ended, listed in
the foregoing table of contents. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cedar Hill Apartments as of
December 31, 2001, and the results of its operations, changes in partners'
equity, and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 16, 2002, on our
consideration of Cedar Hill Apartments' internal control and reports dated
January 16, 2002, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 10 and 11 is presented for the purpose of additional
analysis and are not a required part of the basic financial statements of Cedar
Hill Apartments. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 16, 2002
70
[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cedar Hill Apartments:
We have audited the accompanying balance sheet of Cedar Hill Apartments, (the
"Partnership") as of December 31, 2000 and the related statements of income,
changes in partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cedar Hill Apartments as of December 31,
2000, and the results of its operations, changes in partners' equity, and cash
flows for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 29, 2001, on our
consideration of Cedar Hill Apartments' internal control and reports dated
January 29, 2001, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 9 and 10 is presented for the purpose of additional
analysis and are not a required part of the basic financial statements of Cedar
Hill Apartments. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 29, 2001
71
[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Char-Mur Apartments:
We have audited the accompanying special-purpose balance sheet of Char-Mur
Apartments (the "Partnership") as of March 16, 2001, and the related
special-purpose statements of income, partners' equity, and cash flows for the
period then ended. These financial statements are the responsibility of the
General Partner. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the General Partner, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying special-purpose financial statements have been prepared, as
described in Note 1 to the financial statements, for the purpose of
consolidation with those of Cambridge + Related Housing Properties Limited
Partnership ("Cambridge"), and on the basis of accounting practices specified by
the management of Cambridge. These financial statements are not intended to be a
presentation in conformity with accounting principles generally accepted in the
United States of America.
In our opinion, such special-purpose financial statements present fairly, in all
material respects, the financial position of the Partnership as of March 16,
2001, and the results of its operations and its cash flows for the period then
ended in conformity with basis of accounting described in Note 1.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 and 8 to
the financial statements, the Partnership sold its sole revenue producing asset
during the period and its liabilities exceed its assets by approximately
$120,000 at March 16, 2001, which raises substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
This report is intended solely for the information and use of the partners of
Char-Mur Apartments, management and Cambridge and should not be used for any
other purpose.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
June 13, 2001
72
[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Char-Mur Apartments:
We have audited the accompanying financial statements of Char-Mur Apartments
(the "Partnership") as of December 31, 2000, and for the year then ended, listed
in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 2000, and the results of its operations, changes in partners' equity, and
cash flows for the year then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss and its total
current liabilities exceed its total current assets, which raises substantial
doubt about its ability to continue as a going concern. Management's plan
regarding those matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 9, 2001, on our
consideration of Char-Mur Apartments' internal control and reports dated
February 9, 2001, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 10 and 11 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
February 9, 2001
73
[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Crossett Apartments, Ltd.:
We have audited the accompanying financial statements of Crossett Apartments,
Ltd. (the "Partnership") as of December 31, 2001, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 2001, and the results of its operations, changes in partners' equity, and
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 16, 2002, on our
consideration of Crossett Apartments, Ltd.'s internal control, and reports dated
January 16, 2002, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirement applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 9 and 10 are presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, is fairly stated,
in all material respects, in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 16, 2002
74
[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Partners
Crossett Apartments, Ltd.:
We have audited the accompanying balance sheet of Crossett Apartments, Ltd. (the
"Partnership") as of December 31, 2000, and the related statements of income,
changes in partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the General Partner. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 2000, and the results of its operations, changes in partners' equity, and
cash flows for the year then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of Hud Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 2001, on our
consideration of Crossett Apartments, Ltd.'s internal control and reports dated
January 20, 2001, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions, and specific requirement applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 9-10 are presented for purposes of additional analysis and
is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, is fairly stated,
in all material respects, in relation to the basic financial statements taken as
a whole.
/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 20, 2001
75
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
February 28, February 28,
2003 2002*
------------ ------------
Property and equipment - at cost, less accumulated
depreciation (Notes 2, 4, 6 and 7) $ 0 $ 5,941,766
Property and equipment-held for sale 5,029,926 16,273,634
Cash and cash equivalents (Notes 2 and 11) 851,768 780,650
Cash - restricted for tenants' security deposits 11,457 235,380
Mortgage escrow deposits (Notes 5, 6 and 11) 1,207,847 6,203,393
Rents receivable 8,372 194,567
Prepaid expenses and other assets 334,407 955,391
------------ ------------
Total assets $ 7,443,777 $ 30,584,781
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable (Notes 6 and 11) $ 2,953,940 $ 16,740,978
Purchase money notes payable (Note 7) 2,408,117 16,067,193
Due to selling partners (Note 7) 3,685,011 24,289,106
Accounts payable, accrued expenses and other liabilities 374,298 2,362,862
Tenants' security deposits payable 11,457 235,380
Due to general partners of subsidiaries and their
affiliates (Note 8) 33,423 8,423
Due to general partners and affiliates (Note 8) 2,685,431 2,447,759
------------ ------------
12,151,677 62,151,701
Minority interest (Note 2) (91,601) 153,784
------------ ------------
Commitments and contingencies (Note 11)
Partners' deficit:
Limited partners (4,121,609) (30,954,969)
General Partners (494,690) (765,735)
------------ ------------
Total partners' deficit (4,616,299) (31,720,704)
------------ ------------
Total liabilities and partners' deficit $ 7,443,777 $ 30,584,781
============ ============
* As restated - see note 12
See accompanying notes to consolidated financial statements.
76
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended February 28,
------------------------------------------
2003 2002* 2001
------------ ------------ ------------
Revenues
Rentals, net $ 7,446,674 $ 11,526,261 $ 13,309,693
Other 415,327 807,705 945,008
Gain on sale of properties (Note 10) 25,094,655 5,463,757 2,576,887
------------ ------------ ------------
Total revenues 32,956,656 17,797,723 16,831,588
------------ ------------ ------------
Expenses
Administrative and management 1,864,265 2,943,077 3,311,645
Administrative and management-related
parties (Note 8) 1,215,390 1,462,655 1,672,915
Operating 1,549,319 2,335,867 2,426,925
Repairs and maintenance 1,769,229 2,939,677 3,475,553
Taxes and insurance 1,137,048 1,446,091 1,610,907
Financial, principally interest 1,021,743 2,184,701 2,997,610
Depreciation 352,194 1,137,341 1,606,397
------------ ------------ ------------
Total expenses 8,909,188 14,449,409 17,101,952
------------ ------------ ------------
Income (loss) before minority interest and
extraordinary item 24,047,468 3,348,314 (270,364)
Minority interest in income (loss) of subsidiaries 225,786 6,242 (2,300)
------------ ------------ ------------
Income (loss) before extraordinary item 24,273,254 3,354,556 (272,664)
Extraordinary item - forgiveness of
indebtedness income (Note 10) 2,831,151 4,456,996 10,348,388
------------ ------------ ------------
Net income $ 27,104,405 $ 7,811,552 $ 10,075,724
============ ============ ============
Income (loss) before extraordinary item -
limited partners $ 24,030,522 $ 3,321,010 $ (269,938)
Extraordinary item - limited partners 2,802,839 4,412,426 10,244,904
------------ ------------ ------------
Net income - limited partners $ 26,833,361 $ 7,733,436 $ 9,974,966
============ ============ ============
Number of limited partnership units outstanding 10,038 10,038 10,038
============ ============ ============
Income (loss) before extraordinary item per
limited partnership unit $ 2,394 $ 331 $ (27)
Extraordinary item per limited partnership unit 279 440 1,020
------------ ------------ ------------
Net income per limited partnership unit $ 2,673 $ 771 $ 993
============ ============ ============
* As reclassified for comparative purposes and restated - see note 12.
See accompanying notes to consolidated financial statements.
77
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT
Limited General
Total Partners Partners
------------ ------------ ------------
Balance - March 1, 2000 (49,091,680) (48,152,233) (939,447)
Net income - year ended February 28, 2001 10,075,724 9,974,966 100,758
Distributions (516,300) (511,139) (5,161)
------------ ------------ ------------
Balance - February 28, 2001 (39,532,256) (38,688,406) (843,850)
Net income - year ended February 28, 2002 -
as restated (see Note 12) 7,811,552 7,733,436 78,116
------------ ------------ ------------
Balance - February 28, 2002 - as restated
(see Note 12) (31,720,704) (30,954,970) (765,734)
Net income - year ended February 28, 2003 27,104,405 26,833,361 271,044
------------ ------------ ------------
Balance - February 28, 2003 $ (4,616,299) $ (4,121,609) $ (494,690)
============ ============ ============
See accompanying notes to consolidated financial statements.
78
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in Cash and Cash Equivalents
Year Ended February 28,
--------------------------------------------
2003 2002* 2001
------------ ------------ ------------
Cash flows from operating activities:
Net income $ 27,104,405 $ 7,811,552 $ 10,075,724
------------ ------------ ------------
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Gain on sale of properties (Note 10) (25,094,655) (5,463,757) (2,576,887)
Extraordinary item - forgiveness of
indebtedness income (Note 10) (2,831,151) (4,456,996) (10,348,388)
Depreciation 352,194 1,137,341 1,606,397
(Increase) decrease in assets:
Cash - restricted for tenants' security deposits 21,883 (2,805) 136,769
Mortgage escrow deposits 101,301 (436,686) (178,953)
Rents receivable 75,609 (28,409) (168,786)
Prepaid expenses and other assets 25,655 383,168 216,327
Increase (decrease) in liabilities:
Due to selling partners 917,354 1,265,343 2,082,541
Accounts payable, accrued expenses and
other liabilities (839,584) 492,760 (241,568)
Tenants' security deposits payable (39,846) (1,284) (106,395)
Increase in due to general partners of
subsidiaries and their affiliates 55,000 2,998 54,053
Decrease in due to general partners of
subsidiaries and their affiliates (30,000) (165,473) (21,281)
Due to general partners and affiliates 237,672 751,235 188,506
Minority interest in (loss) income of
subsidiaries (225,786) (6,242) 2,300
------------ ------------ ------------
Total adjustments (27,274,354) (6,528,807) (9,355,365)
------------ ------------ ------------
Net cash (used in) provided by operating
activities (169,949) 1,282,745 720,359
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of properties 13,893,200 2,564,158 13,529,600
Costs paid relating to sale of properties (1,496,160) 0 (547,886)
Acquisition of property and equipment (486,918) (592,837) (533,266)
Decrease (increase) in mortgage escrow
deposits 657,293 (634,668) (321,601)
------------ ------------ ------------
Net cash provided by investing activities 12,567,415 1,336,653 12,126,847
------------ ------------ ------------
79
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in Cash and Cash Equivalents
(continued)
Year Ended February 28,
--------------------------------------------
2003 2002* 2001
------------ ------------ ------------
Cash flows from financing activities:
Distributions 0 (516,300) (1,004,200)
Principal payments of mortgage notes payable (5,012,921) (2,845,578) (8,680,311)
Payments to selling partners (4,104,999) (284,433) (118,247)
Principal payments of purchase money
notes payable (3,188,829) (796,274) (4,001,078)
(Decrease) increase in minority interest (19,599) 126,378 2,416
------------ ------------ ------------
Net cash used in financing activities (12,326,348) (4,316,207) (13,801,420)
------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents 71,118 (1,696,809) (954,214)
Cash and cash equivalents, beginning of year 780,650 2,477,459 3,431,673
------------ ------------ ------------
Cash and cash equivalents, end of year $ 851,768 $ 780,650 $ 2,477,459
============ ============ ============
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 4,161,021 $ 513,569 $ 881,422
============ ============ ============
Supplemental disclosures of noncash
investing and financing activities:
Distributions payable $ 0 $ 0 $ 516,300
Increase in property and equipment-held for
sale reclassified from property and equipment 5,589,572 10,578,791 1,331,305
Increase in purchase money notes payable due
to the capitalization of prepaid expenses and
other assets 177,053 232,803 340,337
Forgiveness of indebtedness (Note 10):
(Decrease) increase in purchase money
notes payable (720,000) 1,643,270 (2,174,744)
Decrease in due to selling partners (2,089,453) (2,813,726) (8,173,644)
Decrease in accounts payable, accrued
expenses and other liabilities (21,698) 0 0
80
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in Cash and Cash Equivalents
(continued)
Year Ended February 28,
--------------------------------------------
2003 2002* 2001
------------ ------------ ------------
Summarized below are the components of the
gain on sale of properties:
Decrease in property and equipment, net of
accumulated depreciation $ 0 $ 2,313,463 $ 0
Decrease in property and equipment-held
for sale 17,320,198 3,491,217 10,074,931
Decrease in cash-restricted for tenants'
security deposits 202,040 51,018 0
Decrease in rents receivable 110,586 85,253 47,606
Decrease in mortgage escrow deposits 4,236,952 478,995 195,540
Decrease in prepaid expenses and other assets 772,382 113,347 82,810
(Decrease) increase in accounts payable,
accrued expenses and other liabilities (1,127,282) 27,268 170,965
Decrease in tenants' security deposits payable (184,077) (46,929) (30,374)
Decrease in mortgage notes payable (8,774,117) (1,625,397) 0
Decrease in due to general partners of
subsidiaries and affiliates 0 (51,382) (136,651)
Decrease in purchase money notes payable (9,927,300) (2,937,300) 0
Decrease in due to selling partners (15,326,997) (4,600,946) 0
Increase (decrease) in due to general partners
and their affiliates 0 (198,206) 0
* As restated - see note 12
See accompanying notes to consolidated financial statements.
81
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
NOTE 1 - Organization
Cambridge + Related Housing Properties Limited Partnership, (the "Partnership")
was formed pursuant to the laws of the State of Massachusetts on April 28, 1983.
The Partnership invests, as a limited partner, in other limited partnerships
(referred to herein as "Local Partnerships", "subsidiary" or "subsidiary
partnerships"), each of which owns and operates an existing apartment complex
(an "Apartment Complex") which is receiving some form of local, State or Federal
assistance, including mortgage insurance, rental assistance payments, permanent
mortgage financing and/or interest reduction payments ("Government Assistance").
The general partners of the Partnership are Government Assisted Properties, Inc.
(the "Assisted General Partner") and Related Housing Programs Corporation (the
"Related General Partner"), both of which are Delaware corporations affiliated
with an affiliate of The Related Companies, L.P. ("Related"), a New York limited
partnership, and Cambridge/Related Housing Associates Limited Partnership
("Cambridge Related Associates"), a Massachusetts limited partnership,
(together, the "General Partners"). The general partners of Cambridge Related
Associates are the Assisted General Partner and the Related General Partner.
Pursuant to the public offering, which occurred during 1983 through 1985, the
Partnership received $50,190,000 of gross proceeds from 4,297 investors. No
further issuance of Initial Limited Partnership Interests or Additional Limited
Partnership Interests is anticipated.
As of February 28, 2003, the Partnership holds an interest in each of the
remaining Local Partnerships, which own Apartment Complexes receiving Government
Assistance. During the fiscal year ended February 28, 2003, the properties and
the related assets and liabilities owned by three Local Partnerships were sold
and the Partnership's Local Partnership Interest in nine other Local
Partnerships were sold. Through the fiscal year ended February 28, 2003, the
properties and the related assets and liabilities owned by eighteen Local
Partnerships were sold and the Partnership's Local Partnership Interest in
twenty-four other Local Partnerships were sold (See Note 10).
The terms of the Amended and Restated Agreement and Certificate of Limited
Partnership of the Partnership (the "Partnership Agreement") provide, among
other things, that profits or losses, in general, be shared 99% by the limited
partners and 1% by the General Partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership
and 14, 19 and 24 subsidiary partnerships in which the Partnership is a limited
partner for the years ended February 28, 2003, 2002, and 2001, respectively.
Through the rights of the Partnership and/or a General Partner, which General
Partner has a contractual obligation to act on behalf of the Partnership to
remove the general partner of the subsidiary partnerships and to approve certain
major operating and financial decisions, the Partnership has a controlling
financial interest in the subsidiary partnerships.
For financial reporting purposes, the Partnership's fiscal year ends on the last
day of February. All subsidiaries have fiscal years ending December 31. Accounts
of subsidiaries have been adjusted for intercompany transactions from January 1
82
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
through the last day of February. The Partnership's fiscal year ends on the last
day of February in order to allow adequate time for the subsidiaries' financial
statements to be prepared and consolidated. The books and records of the
Partnership are maintained on the accrual basis of accounting, in accordance
with U.S. generally accepted accounting principles ("GAAP").
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from contributions and distributions to
the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. No such losses
have been aggregated for the years ended February 28, 2003, 2002 and 2001, (the
2002, 2001 and 2000 Fiscal Years), respectively. The Partnership's investment in
each subsidiary is equal to the respective subsidiary's partners' equity less
minority interest capital, if any.
b) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. All property and equipment for subsidiary partnerships whose assets
and liabilities are under sales contracts are classified as assets held for
sale.
Through February 28, 2003, the Partnership has recorded approximately $8,889,000
as a loss on impairment of assets.
c) Interest Subsidies
Interest expense has been reduced by interest subsidies (Note 6).
d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term investments with an original maturity of three months or less.
83
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
e) Income Taxes
No provision has been made for income taxes in the accompanying consolidated
financial statements since such taxes, if any, are the responsibility of the
individual partners. For income tax purposes, the Partnership has a fiscal year
ending December 31 (Note 9).
f) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.
g) Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles (GAAP) requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for non-trading
purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents, Certificates of Deposit, Cash-Restricted for Tenants'
- --------------------------------------------------------------------------------
Security Deposits and Mortgage Escrow Deposits
- ----------------------------------------------
The carrying amount approximates fair value because of the short maturity of
those instruments.
Mortgage Notes Payable
- ----------------------
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.
84
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
The estimated fair values of the Partnership's mortgage notes payable are as
follows:
February 28, 2003 February 28, 2002
------------------------- -------------------------
Carrying Carrying
Amount* Fair Value Amount* Fair Value
----------- ----------- ----------- -----------
Mortgage notes payable for
which it is:
Practicable to estimate
fair value $ 0 $ 0 $ 2,448,648 $ 2,518,585
Not practicable (a) 2,953,940 (a) 14,292,330 (a)
Purchase money notes
payable for which it is
not practicable (b) $ 2,408,118 $ 0 $16,329,543 $ 0
(a) The mortgage notes payable are insured by the Department of Housing and
Urban Development (the "HUD") primarily in accordance with Section 236 of the
National Housing Act. New loans are no longer being insured in accordance with
Section 236 and presently existing loans are subject to restrictions regarding
prepayment. Management believes the estimation of fair value to be
impracticable.
(b) For the reasons discussed in Note 11(b), it is not practicable to estimate
the fair value of these notes.
*The carrying amount of other assets and liabilities, except for related party
liabilities, reported on the statement of financial position that require such
disclosure approximate fair value. Regarding the fair value of the related party
liabilities, it has been determined that fair value is not practicable to
determine due to the unique nature, repayment terms and related conditions
pertaining to these instruments.
NOTE 4 - Property and Equipment and Property and Equipment-Held for Sale
The components of property and equipment and their estimated useful lives are as
follows:
February 28, February 28, Estimated
2003 2002 Useful Lives
------------ ------------ ------------
Land $ 0 $ 1,068,090
Building and improvements 0 12,374,820 15-40 years
Furniture and fixtures 0 3,318,627 3-10 years
------------ ------------
0 16,761,537
Less: Accumulated depreciation (0) (10,819,771)
------------ ------------
$ 0 $ 5,941,766
============ ============
Depreciation expense for the 2002, 2001 and 2000 Fiscal Years amounted to
$352,194, $1,137,341 and $1,606,397, respectively.
85
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
The components of property and equipment-held for sale are as follows:
February 28, February 28,
2003 2002
------------ ------------
Land $ 498,671 $ 1,802,764
Building and improvement 9,770,692 30,852,595
Furniture and fixtures 628,749 1,165,017
------------ ------------
10,898,112 33,820,376
Less: Accumulated depreciation (5,868,186) (17,546,742)
------------ ------------
$ 5,029,926 $ 16,273,634
============ ============
NOTE 5 - Mortgage Escrow Deposits
Mortgage escrow deposits consist of the following:
February 28, February 28,
2003 2002
------------ ------------
Reserve for replacements $ 696,545 $ 4,195,312
Real estate taxes, insurance and other 491,504 1,988,283
Preservation Acts 19,798 19,798
------------ ------------
$ 1,207,847 $ 6,203,393
============ ============
86
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
NOTE 6 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of
approximately $38,000, including principal and interest at rates ranging from
7.0% to 9.0% per annum, through May 2013. Each subsidiary partnership's mortgage
note payable is collateralized by the land and buildings of the respective
subsidiary partnership, the assignment of certain subsidiary partnership's rents
and leases and is without further recourse. These mortgage notes were eligible
for interest rate subsidies under the terms of regulatory agreements with HUD.
Accordingly, the subsidiary partnerships paid only that portion of the monthly
payments that would be required if the interest rate was 1% per annum; the
balance was subsidized under Section 236 of the National Housing Act.
Annual principal payment requirements for each of the next five fiscal years are
as follows:
Year Ending December 31 Amount
- ----------------------- -------------
2003 $ 221,703
2004 240,583
2005 261,069
2006 283,316
2007 307,469
Thereafter 1,639,800
-------------
$ 2,953,940
=============
The mortgage agreements require monthly deposits to reserves for replacements
aggregating approximately $32,000 and monthly deposits to escrow accounts for
real estate taxes, insurance and other (Note 5).
NOTE 7 - Purchase Money Notes Payable
Nonrecourse purchase money notes (the "Purchase Money Notes") were issued to the
selling partners of the Subsidiary Partnerships as part of the purchase price,
and are secured only by the Partnership's interest in the Subsidiary Partnership
to which the Purchase Money Note relates.
The Purchase Money Notes, which provide for simple interest, will not be in
default if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding Subsidiary Partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. As of February 28, 2003, the maturity dates of the Purchase
Money Notes associated with the remaining properties owned by the Subsidiary
Partnerships were extended through a fifth year. These are the final extensions
for the Purchase Money Notes (see below). Any interest not paid currently
accrues, without further interest thereon, through the extended due date of each
of the Purchase Money Notes, respectively. Continued accrual of such interest
without payment would impact the effective rate of the Purchase Money Notes,
specifically by reducing the current effective interest rate of 9%. The exact
effect is not determinable inasmuch as it is dependent on the actual future
interest payments and ultimate repayment dates of the Purchase Money Notes.
Unpaid interest of $3,669,010 (with respect to the two remaining notes) and
$24,273,106 (with respect to the fourteen remaining notes) at February 28, 2003
and 2002, respectively, has been accrued and is included in the caption due to
selling partners. In general, the interest on and the principal of each Purchase
Money Note is also payable to the extent of the Partnership's actual receipt of
87
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
proceeds from the sale or refinancing of the Apartment Complex, or in some cases
the Local Partnership Interest to which the Purchase Money Note relates.
The Partnership was permitted to extend the term of the Purchase Money Notes for
up to five additional years. In connection with such extensions, the Partnership
incurred an extension fee of 1/2% per annum of the outstanding principal balance
of the Purchase Money Notes. The Partnership sent an extension notice to each
Purchase Money Note holder, pursuant to the Purchase Money Note, that it was
extending the maturity date of such notes. However in certain cases, the
Partnership did not pay the extension fee at that time, deferring such payment
to the future. The two properties with Purchase Money Notes are now extended
with maturity dates of August and October 2003. These are the final extensions
for these Purchase Money Notes. Extension fees of $107,118 were accrued and
added to the balance of these Purchase Money Notes.
The Partnership expects that upon final maturity it will be required to
refinance or sell its investments in the Local Partnerships in order to pay the
Purchase Money Notes and accrued interest thereon. Based on the historical
operating results of the Local Partnerships, the prices realized on the sale of
the Partnership's investment sold to date and the current economic conditions
including changes in tax laws, it is unlikely that the proceeds from such sales
will be sufficient to meet the outstanding balances. No assurance can be given
that management's efforts will be successful in selling the Partnership's
investment in the remaining property. The Purchase Money Notes are without
personal recourse to either the Partnership or any of its partners and the
sellers' recourse, in the event of non-payment, would be to foreclose on the
Partnership's interests in the respective Local Partnerships.
Cash flow distributions aggregating $207,440, $71,144 and $196,814 were made to
the Partnership in the 2002, 2001 and 2000 Fiscal Years, respectively. Of such
distributions, $169,833, $56,426 and $118,246, respectively, was used to pay
interest on the Purchase Money Notes. Distribution of proceeds from sales
aggregating $8,994,812 and $289,581 were made to the Partnership in the 2002 and
2001 Fiscal Years, respectively, of which $7,123,995 and $286,080, respectively,
was used to pay principal and interest on the Purchase Money Notes.
88
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
NOTE 8 - Related Party Transactions
The costs incurred to related parties for the years ended February 28, 2003,
2002 and 2001 were as follows:
Year Ended February 28,
------------------------------------
2003 2002 2001
---------- ---------- ----------
Partnership management fees (a) $ 966,838 $ 966,838 $ 966,838
Expense reimbursement (b) 117,897 137,059 107,602
Property management fees incurred
to affiliates of the General Partners (c) 0 0 75,455
Local administrative fee (d) 7,500 12,500 16,250
---------- ---------- ----------
1,092,235 1,116,397 1,166,145
Property management fees incurred
to affiliates of the subsidiary partnership's
general partners (c) 123,155 346,258 499,165
Subsidiary partnerships general partners'
incentive fee (e) 0 0 7,605
---------- ---------- ----------
Total general and administrative
related parties $1,215,390 $1,462,655 $1,672,915
========== ========== ==========
(a) After all other expenses of the Partnership are paid, an annual partnership
management fee of up to .5% of invested assets is payable to the Partnership's
general partners and affiliates. Partnership management fees have been charged
to operations and are included in administrative and management-related parties'
expenses. Partnership management fees owed to the General Partners amounting to
approximately $1,976,000 and $1,759,000 were accrued and unpaid as of February
28, 2003 and 2002, respectively.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.
(c) Property management fees paid by Local Partnerships to affiliates of the
Local Partnerships amounted to approximately $123,155, $346,258 and $499,165 for
the 2002, 2001 and 2000 Fiscal Years, respectively. Of such fees $0, $0 and
$75,455 was paid to a company which is also an affiliate of the Related General
Partner for the 2002, 2001 and 2000 Fiscal Years, respectively.
(d) Cambridge/Related Associates, a limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
from each subsidiary partnership.
(e) The Partnership entered into an agreement with the local general partner of
Parktowne Ltd. and Westwood Apartment Company Ltd., which provides for an annual
incentive fee based on cash flow distributed from the respective properties.
Such fee amount to $0, $0 and $7,605 for the years ended February 28, 2003, 2002
and 2001, respectively.
89
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
Cambridge/Related Associates has a .01% interest, as a limited partner, in each
of the subsidiary partnerships.
Due to local general partners and affiliates at December 31, 2002 and 2001
includes operating advances of $33,423 and $8,423, respectively.
NOTE 9 - Income Taxes
A reconciliation of the financial statement net income to the income tax income
for the Partnership and its consolidated subsidiaries is as follows:
Year Ended December 31,
--------------------------------------------
2002 2001* 2000
------------ ------------ ------------
Financial statement net income $ 27,104,405 $ 7,811,552 $ 10,075,724
Difference between depreciation expense re-
corded for financial reporting purposes and
the accelerated cost recovery system utilized
for income tax purposes 256,983 913,361 1,151,452
Difference resulting from parent company hav-
ing a different fiscal year for income tax and
financial reporting purposes (546,749) (14,565) (47,960)
Difference between gain on sale of properties
recorded for financial reporting purposes and
for income tax purposes (11,254,958) 770,835 7,755,939
Difference between extraordinary item-
forgiveness of indebtedness income recorded
for financial reporting purposes and for in-
come tax purposes 17,451,841 731,715 33,770
Other (442,571) (743,310) 2,300
------------ ------------ ------------
Net income as shown on the income tax return
for the calendar year ended $ 32,568,951 $ 9,469,588 $ 18,971,225
============ ============ ============
* As restated - see Note 12.
NOTE 10 - Sale of Properties
General
- -------
The Partnership is currently in the process of winding up its operations and
disposing of its investments. As of February 28, 2003, the Partnership has
disposed of forty-two of its forty-four original investments. Subsequently, on
March 11, 2003 one additional investment was sold. The remaining investment is
under contract to be sold within the next several months. There can be no
90
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
assurance that the Partnership will dispose of its last remaining investment or
the amount of proceeds which may be received.
In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed two entities: Cambridge Liquidating Trust LLC ("Trust I"), a
Massachusetts limited liability company which is owned 99.99% by the Partnership
and .01% by affiliates of Related; and, Cambridge Liquidating Trust II ("Trust
II"), a Massachusetts general partnership which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.
On December 30, 1998, the Partnership contributed its limited partnership
interest in Bethany Glen Associates, Westwood, Ltd., Parktowne, Ltd., Rolling
Meadows Apartments, Ltd., Buena Vista Apartments, Ltd. and Wingate Associates,
Ltd. to Trust I. On December 31, 1998, the Partnership contributed its limited
partnership interests in Grandview-Blue Ridge Manor Limited,
Breckenridge-Chaparral Apartments II, Ltd., El Paso-Gateway East, Ltd.,
Albequerque-Lafayette Square Apartments, Ltd., Corpus Christi-Oso Bay
Apartments, Ltd., Westgate Associates Limited, San Diego-Logan Square Gardens
Co., Ardmore-Rolling Meadows of Ardmore, Ltd., Fort Worth-Northwoods Apartments,
Ltd. and Stephenville-Tarleton Arms Apartments, Ltd. to Trust II. In each case,
the interests were contributed subject to each respective Purchase Money Note.
The contribution did not involve any consideration being paid to the
Partnership, therefore, there was no tax effect to the limited partners of the
Partnership. As of February 28, 2003, all Local Partnerships named above were
sold except Gateway, which was subsequently sold on March 11, 2003.
Information Regarding Disposition
- ---------------------------------
On January 2, 2003, the Partnership's limited partnership interest in Caddo
Parish - Villas South, Ltd. ("Villas South") was transferred to the Local
General Partner resulting in a gain in the amount of approximately $2,726,000.
No proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$7,344,000 resulting in a gain of approximately $7,344,000.
On December 19, 2002, the property and the related assets and liabilities of
Wingate Associates, Limited ("Wingate") were sold to an unaffiliated third party
purchaser for approximately $2,600,000 resulting in a gain in the amount of
approximately $132,000. The Partnership used approximately $1,043,000 to settle
the associated Purchase Money Note and accrued interest thereon, which had a
total outstanding balance of approximately $1,447,000 resulting in forgiveness
of indebtedness income of approximately $404,000.
On October 31, 2002, the Partnership's limited partnership interest in
Grandview-Blue Ridge Manor, Ltd. ("Blue Ridge"), Breckenridge-Chaparral
Apartments II, Ltd. ("Chaparral"), Albuquerque-Lafayette Square Apts., Ltd.
("Lafayette"), Fort Worth-Northwood Apartments, Ltd. ("Northwood"), Corpus
Christi-Oso Bay Apartments, Ltd. ("Oso Bay"), Ardmore-Rolling Meadows of
Ardmore, Ltd. ("Ardmore") and Stephenville-Tarleton Arms Apartments, Ltd.
("Tarleton") were sold back to the Local General Partner for approximately $100
each resulting in losses of approximately $453,000, $667,000, $1,687,000,
$1,416,000, $1,053,000, $866,000 and $1,377,000, respectively. No proceeds were
used to settle the associated Purchase Money Notes and accrued interest thereon,
which had total outstanding balances of approximately $1,525,000, $1,999,000,
$3,592,000, $2,050,000, $2,364,000, $2,229,000 and $2,851,000, respectively,
resulting in gains on sale of properties in amounts equal to the interest and
principal due on such Purchase Money Notes.
91
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
On July 12, 2002, the property and the related assets and liabilities of San
Diego-Logan Square Gardens Company ("Logan") were sold to the Local General
Partners for approximately $9,241,000 resulting in a gain in the amount of
approximately $5,403,000. The Partnership used approximately $5,740,000 to fully
settle the associated Purchase Money Note and accrued interest thereon. The
Partnership netted approximately $1,104,000 of cash which was placed into
working capital to pay Partnership expenses.
On March 27, 2002, the property and the related assets and liabilities of
Ziegler Boulevard, Ltd. ("Ziegler") were sold to an unaffiliated third party
purchaser for approximately $2,379,000 resulting in a loss in the amount of
approximately $485,000. The Partnership used approximately $340,000 to settle
the associated Purchase Money Note and accrued interest thereon, which had a
total outstanding balance of approximately $2,746,000 resulting in forgiveness
of indebtedness income of approximately $2,406,000.
On March 27, 2002, the Partnership's limited partnership interest in Eastwyck
III, Ltd. Limited Partnership ("Eastwyck") was sold to the Local General
Partners for approximately $5,000 resulting in a loss of approximately $336,000.
No proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$1,220,000 resulting in a gain on sale of approximately $1,220,000.
On December 4, 2001, the Partnership's limited partnership interest in Crossett
Apartments, Ltd. ("Crossett") was sold to the Local General Partner effective
January 1, 2002 for $7,920 resulting in a loss of approximately $212,000 and the
related Purchase Money Note was assigned to the Local General Partner. No
proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$1,117,000 resulting in a gain on sale of property of approximately $1,117,000.
On December 4, 2001, the Partnership's limited partnership interest in Cedar
Hill Apartments, Ltd. ("Cedar Hill") was sold to the Local General Partner
effective January 1, 2002 for $11,988 resulting in a loss of approximately
$479,000 and the related Purchase Money Note was assigned to the Local General
Partner. No proceeds were used to settle the associated Purchase Money Note and
accrued interest thereon, which had a total outstanding balance of approximately
$1,220,000 resulting in a gain on sale of property of approximately $1,220,000.
On November 26, 2001, the Partnership's limited partnership interest in Buena
Vista Manor Apartments, Ltd. ("Buena Vista") was sold to the Local General
Partners for $125,000 resulting in a loss in the amount of approximately
$596,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest thereon, which had a total outstanding balance of approximately
$5,092,000 resulting in a gain of approximately $5,092,000.
On August 31, 2001, the property and the related assets and liabilities of
Rolling Meadows Apartments, Ltd. ("Rolling Meadows") were sold to an
unaffiliated third party purchaser for $1,925,000 resulting in a loss in the
amount of approximately $485,000. The Partnership used approximately $201,000 to
settle the associated Purchase Money Note and accrued interest thereon, which
had a total outstanding balance of approximately $3,757,000 resulting in
forgiveness of indebtedness income of approximately $3,556,000.
On March 16, 2001, the property and the related assets and liabilities of
Char-Mur Apartments ("Char-Mur") were sold to an affiliate of the Local General
Partner for $475,000, resulting in a loss in the amount of approximately
$193,000. The Partnership used approximately $85,000 to settle the associated
92
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
Purchase Money Note and accrued interest thereon, which had a total outstanding
balance of approximately $986,000, resulting in forgiveness of indebtedness
income of $901,000.
On December 20, 2000, the property and the related assets and liabilities of New
Jersey, Ltd. ("New Jersey") were sold to an unaffiliated third party for
$2,049,600 resulting in a gain of approximately $65,000. The Partnership used
approximately $500,000 of the net proceeds to settle the associated Purchase
Money Note and accrued interest thereon, which had an outstanding balance of
approximately $2,369,000 resulting in forgiveness of indebtedness income of
approximately $1,869,000.
On December 1, 2000, the property and the related assets and liabilities of
Westgate Associates, Limited ("Westgate") were sold to an unaffiliated third
party for $2,055,000, resulting in a loss of approximately $164,000. The
Partnership used approximately $601,000 of the net proceeds to settle the
associated Purchase Money Note and accrued interest thereon, which had a total
outstanding balance of approximately $1,516,000, resulting in forgiveness of
indebtedness income of approximately $915,000.
On September 14, 2000, the property and the related assets and liabilities of
Westwood Apartments Company, Ltd. ("Westwood") were sold to an unaffiliated
third party for $2,025,000, resulting in a loss of approximately $356,000. No
proceeds were used to settle the associated Purchase Money Note and accrued
interest thereon, which had a total outstanding balance of approximately
$3,059,000, resulting in forgiveness of indebtedness income.
On September 14, 2000, the property and the related assets and liabilities of
Parktowne Ltd. ("Parktowne") were sold to an unaffiliated third party for
$2,500,000, resulting in a gain of approximately $476,000. The Partnership used
approximately $844,000 of the net proceeds to settle the associated Purchase
Money Note and accrued interest thereon, which had an outstanding balance of
approximately $1,804,000, resulting in forgiveness of indebtedness income of
approximately $960,000.
On April 28, 2000, the property and the related assets and liabilities of
Pacific Palms were sold to a third party for approximately $4,900,000, resulting
in a gain of approximately $2,554,000. The Partnership used approximately
$1,668,000 of the net proceeds to settle the associated Purchase Money Notes and
accrued interest thereon which had a total outstanding balance of approximately
$5,214,000, resulting in forgiveness of indebtedness of approximately
$3,546,000. The Partnership netted approximately $1,940,000 of cash which was
placed into working capital to pay Partnership expenses.
NOTE 11 - Commitments and Contingencies
a) Events of Default and Going Concern
Caddo Parish-Villas South, Ltd.
- -------------------------------
Villas South filed for protection under Chapter 11 of the United States
Bankruptcy Code on November 12, 1996 and the equivalent of a receiver was
appointed. The bankruptcy case was subsequently dismissed on April 18, 2002. On
January 2, 2003, the limited partnership interest in Villas South was
transferred to the Local General Partners. See Note 10 above.
93
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2003
b) Purchase Money Notes
As part of the purchase price of its investment in the Local Partnerships, the
Partnership issued approximately $61,029,000 of Purchase Money Notes. As of the
end of the 2002 Fiscal Year, unpaid accrued interest on the Purchase Money Notes
amounted to approximately $3,699,010. The principal of and all accrued interest
on the Purchase Money Notes is due at maturity. The Partnership was permitted to
extend the term of the Purchase Money Notes for up to five additional years. In
connection with such extensions, the Partnership incurred an extension fee of
1/2% per annum of the outstanding principal balance of the assets. The
Partnership sent an extension notice to each Purchase Money Note holder that
pursuant to the note, it was extending the maturity. However, in certain cases
the Partnership did not pay the extension fee at that time, deferring such
payment to the future. The holders of the Note could argue that until the fee is
paid the Note has not been properly extended.
c) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") up to $100,000. As of February 28, 2003, uninsured cash and
cash equivalents and mortgage escrow deposits approximated $464,000.
NOTE 12 - Prior Period Adjustment
During the quarter ended November 30, 2001, extension fees in connection with
the Purchase Money Notes were overaccrued by $671,850. Such extension fees were
capitalized and amortized over the period of extension, and during the fiscal
year end February 28, 2002 the Partnership amortized $335,925 of such extension
fees resulting in net income being understated for that year. To correct the
misstatement Partners' deficit has been increased by $335,925 for the fiscal
year ended February 28, 2002
NOTE 13 - Subsequent Event
On March 11, 2003, the property and the related assets and liabilities of
Gateway East, Ltd. ("Gateway") were sold to an unaffiliated third party for
approximately $2,700,000 resulting in a gain in the amount of approximately
$1,333,000. The Partnership used approximately $2,416,000 to settle the
associated Purchase Money Note and accrued interest thereon, which had a total
outstanding balance of approximately $2,463,000, resulting in forgiveness of
indebtedness income of approximately $47,000.
94
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no directors or officers. The Partnership's affairs are
managed and controlled by the General Partners.
Government Assisted Properties, Inc. (the "Assisted General Partner") and
Related Housing Programs Corporation (the "Related General Partners") are
affiliated with The Related Companies, L.P. ("Related"). The general partner of
Related is The Related Realty Group, Inc., of which Stephen M. Ross is
president, director and a stockholder. The General Partners manage and control
the affairs of the Partnership by engaging other affiliates of Related.
The Assisted General Partner was incorporated in Delaware on April 15, 1983 and
the Related General Partner was incorporated in Delaware on July 2, 1982.
In December 2002, Charter Municipal Mortgage Acceptance Company ("CharterMac"),
which is also managed by an affiliate of Related Capital Company, announced a
proposed acquisition of Related Capital Company, an affiliate of the General
Partner. Pursuant to the proposed acquisition, CharterMac will acquire
controlling interests in the general partners of the General Partners. This
acquisition will not affect the Partnership or its day-to-day operations as
management of the General Partners will not change.
Certain information concerning the directors and officers of the General
Partners are set forth below.
The director and officers of the Related General Partner are as follows:
Name Position
- ---- --------
Stephen M. Ross Director
Alan P. Hirmes President
Stuart J. Boesky Senior Vice President
Denise Kiley Vice President
Marc Schnitzer Vice President
Mark E. Carbone Vice President
Robert Bordonaro Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
Susan J. McGuire Assistant Secretary
95
STEPHEN M. ROSS, 63, is the President, a Director and a shareholder of The
Related Realty Group, Inc., the general partner of The Related Companies, L.P.
He graduated from the University of Michigan School of Business Administration
with a Bachelor of Science degree and from Wayne State University School of Law
with a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. ("TRCLP") in 1972 to develop, manage, finance and
acquire subsidized and conventional apartment developments. Mr. Ross also serves
on the Board of Trustees of Charter Municipal Mortgage Acceptance Company.
ALAN P. HIRMES, 48, has been a Certified Public Accountant in New York since
1978. Prior to joining Related in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree. Mr. Hirmes also serves on the Board of Trustees of Charter Municipal
Mortgage Acceptance Company.
STUART J. BOESKY, 47, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye Fialkow Richard & Rothstein, and from 1978 to 1980 was a consultant
specializing in real estate at the accounting firm of Laventhol & Horwath. Mr.
Boesky graduated from Michigan State University with a Bachelor of Arts degree
and from Wayne State School of Law with a Juris Doctor degree. He then received
a Master of Laws degree in Taxation from Boston University School of Law. Mr.
Boesky also serves on the Board of Trustees of Charter Municipal Mortgage
Acceptance Company and American Mortgage Acceptance Company.
DENISE L. KILEY, 43, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981 through 1985 she was an auditor
with Price Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.
MARC D. SCHNITZER, 42, joined Related in January 1988 after receiving his Master
of Business Administration degree from The Wharton School of The University of
Pennsylvania in December 1987. From 1983 to 1986, Mr. Schnitzer was a Financial
Analyst with The First Boston Corporation in New York, an international
investment banking firm. Mr. Schnitzer received a Bachelor of Science degree,
summa cum laude, in Business Administration, from the School of Management at
Boston University in May 1983.
MARK E. CARBONE, 46, rejoined Related in 1998 where his primary responsibility
has been disposition of real estate. From 1994 to 1998 he was President of WHC,
Inc., a distressed asset real estate fund. From 1986 to 1994 he was President of
Marigold Real Estate and Development, Inc., a real estate development company
located in Greenwich, CT. From 1979 to 1986 he was a Vice President at Related
Capital Company. He received a Bachelor of Arts in Government from Harvard
University in 1979.
ROBERT BORDONARO, 49, is a Vice President - Finance of Related. He has also
served as Controller of Related. Mr. Bordonaro has been a Certified Public
Accountant in New York since 1977. Prior to joining Related, Mr. Bordonaro was
employed by the accounting firms of Weiner & Co. from 1982 to 1985 and Arthur
Young from 1975 to 1981. Mr. Bordonaro graduated summa cum laude from New York
University with a Bachelor of Science degree and with a Masters degree in
Business Administration.
96
GLENN F. HOPPS, 40, joined Related in December 1990, and prior to that date was
employed by Marks Shron & Company and Weissbarth, Altman and Michaelson
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science Degree in Accounting.
TERESA WICELINSKI, 37, joined Related in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski, graduated from Pace University with a Bachelor of Arts Degree in
Accounting.
SUSAN J. McGUIRE, 56, graduated from William Cullen Bryant High School in
Woodside, New York, and attended Queensboro Community College. Since January
1977, she has served as Assistant to the President and Office Manager at
Capital. From May 1973 to January 1977, she was employed as an administrative
assistant with Condren, Walker & Co., Inc., an investment banking firm in New
York City.
The directors and executive officers of the Assisted General Partner are as
follows:
Name Position
- ---- --------
Michael Brenner Director
Alan P. Hirmes President
Stuart J. Boesky Executive Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Mark E. Carbone Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
MICHAEL BRENNER, 57, is the Executive Vice President and Chief Financial Officer
of TRCLP. Prior to joining TRCLP in 1996, Mr. Brenner was a partner with Coopers
& Lybrand, having served as managing partner of its Industry Programs and Client
Satisfaction initiatives from 1993-1996, managing partner of the Detroit group
of offices from 1986-1993 and Chairman of its National Real Estate Industry
Group from 1984-1986. Mr. Brenner graduated summa cum laude from the University
of Detroit with a Bachelors degree in Business Administration and from the
University of Michigan with a Masters of Business Administration, with
distinction. Mr. Brenner also serves on the Board of Trustees of Charter
Municipal Mortgage Acceptance Company.
Biographical information with respect to Messrs. Hirmes, Boesky, Schnitzer,
Kiley, Carbone, Hopps and Ms. Wicelinski is set forth above.
Item 11. Executive Compensation.
The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to directors or
officers of the General Partners for their services. However, under the terms of
the Partnership Agreement, the General Partners and their affiliates are
entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partners collectively hold a 1% interest in all profits, losses and
distributions attributable to operations and a subordinated 15% interest in such
items attributable to sales and refinancings. See Note 8 to the Financial
97
Statements in Item 8 above, which information is incorporated herein by
reference thereto. Certain directors and officers of the General Partners
receive compensation from the General Partner and their affiliates for services
performed for various affiliated entities which may include services performed
for the Partnership.
Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partners and/or their affiliates is limited
by the terms of the Partnership Agreement and may not be increased therefrom on
a discretionary basis.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The General Partners own all of the outstanding general partnership interests in
the Partnership. The General Partners collectively have a 1% interest in all
profits, losses and distributions of the Partnership from operations and a
subordinated 15% interest in such items from sale or refinancing proceeds.
Except as aforesaid, no person is known to own beneficially in excess of 5% of
the outstanding partnership interests.
At February 28, 2003, security ownership by the General Partners and their
affiliates was as follows:
Name and Address of Amount of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- -------------- -------------------- -------------------- -----------
General Partnership Government Assisted
Interest in the Properties, Inc. $ 1 25%
Partnership 625 Madison Avenue
New York, NY 10022
Related Housing Programs
Corporation 1 25%
625 Madison Avenue
New York, NY 10022
Cambridge/Related Housing
Associates Limited Partnership 998 50%
625 Madison Avenue
New York, NY 10022
The Assisted General Partner and the Related General Partner each hold a .5%
general partnership interest in Cambridge Related Associates. Ronald W. Weiss
and J. Michael Fried each own a 49.5% limited partner interest in Cambridge
Related Associates. Ronald W. Weiss is not affiliated with the Assisted or
Related General Partner. J. Michael Fried is no longer affiliated as of December
31, 1999.
98
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with the
General Partner and its affiliates, as discussed in Item 11 and also Note 8 to
the Financial Statements in Item 8 above, which are incorporated herein by
reference thereto. However, there have been no direct financial transactions
between the Partnership and the directors and officers of the General Partners.
Item 14. Controls and Procedures
The Principal Executive Officer and Principal Financial Officer of Government
Assisted Properties, Inc. and Related Housing Programs Corporation, each of
which is a general partner of the Partnership, has evaluated the Partnership's
disclosure controls and procedures relating to the Partnership's annual report
on Form 10-K for the period ending February 28, 2003 as filed with the
Securities and Exchange Commission and has judged such controls and procedures
to be effective as of February 28, 2003 (the "Evaluation Date").
There have been no significant changes in the internal controls or in other
factors that could significantly affect internal controls relating to the
Partnership since the Evaluation Date.
99
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 23
Consolidated Balance Sheets at
February 28, 2003 and 2002 76
Consolidated Statements of Income
for the Years Ended February 28,
2003, 2002 and 2001 77
Consolidated Statements of
Partners' Deficit for the Years
Ended February 28, 2003, 2002 and
2001 78
Consolidated Statements of Cash
Flows for the Years Ended February
28, 2003, 2002 and 2001 79
Notes to Consolidated Financial
Statements 82
(a) 2. Financial Statement Schedules
-----------------------------
Independent Auditors' Report 106
Schedule I - Condensed Financial
Information of Registrant 107
Schedule III - Real Estate and
Accumulated Depreciation 110
All other schedules have been omitted because the required
information is included in the financial statements and
notes thereto or they are not applicable or not required.
(a) 3. Exhibits
-----------
(3) The Partnership's Amended and Restated Agreement and
Certificate of Limited Partnership, as filed with the
Secretary of State of the Commonwealth of Massachusetts,
incorporated by reference to Exhibit (3) to the Partner-
ship's Annual Report on Form 10-K for the fiscal year
ended February 29, 1984 (Commission File #0-12634).
(21) The Local Partnerships set forth in Item 2 may be con-
sidered subsidiaries of the Registrant
(b) Reports on Form 8-K
-------------------
None
(c) Additional Exhibits
-------------------
99.1 Certification Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002. 105
100
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CAMBRIDGE + RELATED HOUSING PROPERTIES
--------------------------------------
LIMITED PARTNERSHIP
-------------------
By: GOVERNMENT ASSISTED PROPERTIES, INC.,
a general partner
Date: May 20, 2003
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President, Chief Executive Officer and
Chief Financial Officer
and
By: RELATED HOUSING PROGRAMS CORPORATION,
a general partner
Date: May 20, 2003
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President, Chief Executive Officer and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signature Title Date
- ------------------ ----------------------------------------- ------------
President, Chief Executive Officer and
/s/ Alan P. Hirmes Chief Financial Officer of Related
- ------------------ Housing Programs Corporation and
Alan P. Hirmes Government Assisted Properties, Inc. May 20, 2003
Treasurer (principal accounting
/s/ Glenn F. Hopps officer) of Related Housing
- ------------------ Programs Corporation and
Glenn F. Hopps Government Assisted Properties, Inc. May 20, 2003
/s/ Stephen M. Ross Director of Related Housing
- ------------------- Programs Corporation
Stephen M. Ross May 20, 2003
CERTIFICATION
I, Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of
Government Assisted Properties, Inc. and Related Housing Programs Corporation
(the "General Partners"), each of which is a general partner of Cambridge +
Related Housing Properties L.P. (the "Partnership"), hereby certify that:
1. I have reviewed this annual report on Form 10-K for the year ending
February 28, 2003 of the Partnership;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this annual report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14)
for the Partnership and I have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Partnership, including and
its consolidated subsidiaries, is made known to me by others
within those entities, particularly during the period in which
this annual report is being prepared;
b) evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of February 28, 2003 (the "Evaluation
Date"); and
c) presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on
my evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
Partnership's auditors and to the board of directors of the General
Partners:
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Partnership's
ability to record, process, summarize and report financial data
and have identified for the Partnership's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and
6. I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President, Chief Executive Officer and
Chief Financial Officer
May 20, 2003
Exhibit 99.1
CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Cambridge + Related Housing Properties
Limited Partnership (the "Partnership") on Form 10-K for the year ending
February 28, 2003 as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), I, Alan P. Hirmes, Chief Executive Officer and Chief
Financial Officer of Government Assisted Properties, Inc. and Related Housing
Programs Corporation, each of which is a general partner of the Partnership,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
By: /s/Alan P. Hirmes
-----------------
Alan P. Hirmes
President, Chief Executive Officer and
Chief Financial Officer
May 20, 2003
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Cambridge + Related Housing Properties Limited Partnership and Subsidiaries
In connection with our audits of the consolidated financial statements of
Cambridge + Related Housing Properties Limited Partnership and Subsidiaries
included in this Form 10-K as presented in our opinion dated May 20, 2003 on
page 23, and based on the reports of other auditors, we have also audited
supporting Schedules I and III for the 2002, 2001 and 2000 Fiscal Years. In our
opinion, and based on the reports of other auditors, these consolidated
schedules present fairly, when read in conjunction with the related consolidated
financial statements, the financial data required to be set forth therein.
As discussed in Notes 10 and 13, the Partnership is currently in the process of
winding up its operations and disposing of its investments. As of February 28,
2003 the Partnership has disposed of forty-two of its forty-four investments. On
March 11, 2003 one additional investment was sold and the remaining investment
is under contract to be sold.
TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI, LLP
New York, New York
May 20, 2003
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships)
CONDENSED BALANCE SHEETS
ASSETS
February 28, February 28,
2003 2002(*)
------------ ------------
Cash and cash equivalents $ 627,816 $ 134,880
Investment in and advances to subsidiary partnerships 3,335,608 13,670,503
Other assets 57,567 135,062
------------ ------------
Total assets $ 4,020,991 $ 13,940,445
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Purchase money notes payable $ 2,408,117 $ 16,067,194
Due to general partner and affiliates 2,490,376 2,332,646
Due to selling partners 3,685,011 24,289,106
Other liabilities 25,374 23,156
------------ ------------
Total liabilities 8,608,878 42,712,102
Partners' deficit (4,587,887) (28,771,657)
------------ ------------
Total liabilities and partners' deficit $ 4,020,991 $ 13,940,445
============ ============
(*) As restated (see Footnote 12 in consolidated financial statements).
Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly, partners' deficit on the consolidated balance sheet will differ
from partners' deficit shown above.
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
Year Ended February 28,
--------------------------------------------
2003 2002(*) 2001
------------ ------------ ------------
Revenues
Other $ 12,965 $ 0 $ 59,849
------------ ------------ ------------
12,965 0 59,849
------------ ------------ ------------
Expenses
Administrative and management 315,430 889,154 1,043,674
Administrative and management-
related parties 1,084,735 1,103,897 1,082,045
Financial, principally interest 844,914 1,338,918 2,082,541
------------ ------------ ------------
2,245,079 3,331,969 4,208,260
------------ ------------ ------------
(2,232,114) (3,331,969) (4,148,411)
Gain on sale of investments in subsidiary
partnerships 19,957,479 6,141,555 0
Forgiveness of indebtedness income 2,809,454 4,456,996 10,348,388
Equity in gain income of subsidiary
partnerships (**) 3,648,951 696,003 3,884,831
------------ ------------ ------------
Net income $ 24,183,770 $ 7,962,585 $ 10,084,808
============ ============ ============
(*) As restated (see Footnote 12 in consolidated financial statements).
(**) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to $3,064,862, $0 and $0 for the
years ended February 28, 2003, 2002 and 2001.
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended February 28,
--------------------------------------------
2003 2002(*) 2001
------------ ------------ ------------
Cash flows from operating activities:
Net income $ 24,183,770 $ 7,962,585 $ 10,084,808
------------ ------------ ------------
Adjustments to reconcile net income to
net cash used in operating activities:
Gain on sale of investments in subsidiary
partnerships (19,957,479) (6,141,555) 0
Forgiveness of indebtedness income (2,809,453) (4,456,996) (10,348,388)
(Increase) decrease in assets:
Equity in income of subsidiary
partnerships (3,648,951) (747,261) (3,884,831)
Other assets 135,835 636,274 367,339
Increase (decrease) in liabilities:
Due to general partners and affiliates 157,730 694,862 185,433
Due to selling partners 917,354 1,674,843 2,082,541
Other liabilities 2,218 (23,070) (50,782)
------------ ------------ ------------
Total adjustments (25,202,746) (8,362,903) (11,648,688)
------------ ------------ ------------
Net cash used in operating activities (1,018,976) (400,318) (1,563,880)
------------ ------------ ------------
Cash flows from investing activities:
(Expenses paid) proceeds from sale of
investments in subsidiary partnerships (324,071) 164,158 0
Repayments from investment in and
advances to subsidiaries 0 (78,654) 107,803
Distributions from subsidiaries 9,129,811 403,556 6,121,971
------------ ------------ ------------
Net cash provided by investing activities 8,805,740 489,060 6,229,774
------------ ------------ ------------
Cash flows from financing activities:
Principal payments of purchase money notes (3,188,829) (1,132,199) (4,001,079)
Payments to selling partners (4,104,999) (22,081) (118,246)
Distributions to partners 0 (516,300) (1,004,200)
------------ ------------ ------------
Net cash used in financing activities (7,293,828) (1,670,580) (5,123,525)
------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents 492,936 (1,581,838) (457,631)
Cash and cash equivalents, beginning of year 134,880 1,716,718 2,174,349
------------ ------------ ------------
Cash and cash equivalents, end of year $ 627,816 $ 134,880 $ 1,716,718
============ ============ ============
(*) As restated (see Footnote 12 in consolidated financial statements).
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
FEBRUARY 28, 2003
Initial Cost to Partnership Cost Capitalized
------------------------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------ ----------- -------------- ----------------
(9) Bay Village Company $ 3,737,713 $ 333,604 $ 6,053,390 $ 1,579,830
(12) Bethany Glen Associates 0 341,004 3,025,540 (3,366,544)
(11) Grandview-Blue Ridge Manor, Limited 0 128,604 2,011,867 (2,140,471)
(4) Buena Vista Manor Apts. Ltd. 0 258,604 4,355,907 (4,614,511)
(7) Canton Commons Apartments 0 683,605 11,875,258 (12,558,863)
(18) Cedar Hill Apartments, Ltd. 0 67,419 1,337,361 (1,404,780)
(10) Breckenridge-Chaparral Apartments II, Ltd. 0 123,604 2,010,522 (2,134,126)
(18) Char-mur Apartments 0 55,048 1,080,372 (1,135,420)
(7) Clinton Plaza Apartments L. P. 0 238,604 4,443,787 (4,682,391)
(7) Clinton Plaza Apartments #2 L. P. 0 288,604 5,293,492 (5,582,096)
(18) Crossett Apartments, Ltd. 0 61,840 1,176,962 (1,238,802)
(8) Cudahy Gardens, Ltd. 0 168,604 3,092,733 (3,261,337)
(10) El Paso-Gateway East, Ltd. 1,624,344 158,604 2,422,623 350,061
(7) Golf Manor Apartments, Ltd. 0 183,605 3,060,084 (3,243,689)
(7) Grosvenor South Apartments L. P. 0 233,604 4,341,549 (4,575,153)
(7) Grosvenor South Apartments #2 L. P. 0 81,104 1,460,463 (1,541,567)
(3) Oakland-Keller Plaza 0 358,605 5,742,056 (6,100,661)
(16) Lafayette Square Apartment's Ltd. 0 348,604 4,116,308 (4,464,912)
(8) San Diego-Logan Square Gardens Co. 0 308,604 5,005,103 (5,313,707)
(6) Los Caballeros Apartments 0 223,604 4,124,963 (4,348,567)
(3) South Munjoy Associates Ltd. 0 208,604 3,456,920 (3,665,524)
(13) Country, Ltd. 0 210,827 3,807,680 (4,018,507)
(13) Northbrook III, Ltd. 0 131,383 2,305,900 (2,437,283)
(10) Forth Worth-Northwood Apartments, Ltd. 0 118,604 2,226,552 (2,345,156)
(10) Corpus Christi-Oso Bay Apartments, Ltd. 0 158,604 2,501,173 (2,659,777)
(8) Pacific Palms, Ltd. 0 233,604 4,819,956 (5,053,560)
(14) Zeigler Blvd., Ltd. 0 218,605 3,945,003 (4,163,608)
(14) Parktowne, Ltd. 0 176,605 3,273,501 (3,450,106)
(8) Riverside Gardens, Ltd. 0 308,604 5,357,903 (5,666,507)
(5) Rolling Meadows Apts., Ltd. 0 258,604 4,418,421 (4,677,025)
(5) Ardmore-Rolling Meadows of Ardmore, Ltd. 0 138,604 2,320,412 (2,459,016)
(5) Rolling Meadows of Chickasha, Limited 0 128,604 2,298,164 (2,426,768)
(15) Roper Mountain Apartments 0 258,605 4,925,617 (5,184,222)
(7) Rosewood Manor Apartments 0 508,604 5,328,672 (5,837,276)
(14) New Jersey, Ltd. 0 178,605 3,214,241 (3,392,846)
(10) Stephenville-Tarleton Arms 0 238,604 2,832,970 (3,071,574)
(5) Oklahoma City-Town & Country Village 0 408,604 7,307,195 (7,715,799)
(17) Caddo Parish-Villas South, Ltd. 0 298,604 6,019,236 (6,317,840)
(14) Eastwyck III, Ltd. 0 108,605 1,790,877 (1,899,482)
(7) Warren Manor Apts., Ltd.-Property A and B 0 758,604 10,506,325 (11,264,929)
(7) Warren Woods Apartments, Ltd. 0 308,605 4,697,009 (5,005,614)
(1) Westgate Associates Ltd. 0 183,604 2,824,512 (3,008,116)
Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnership's Residential Property Land Improvements Total Depreciation
- --------------------------------------------- ------------ ---------------- ------------- ---------------
(9) Bay Village Company $ 334,015 $ 7,632,808 $ 7,966,823 $ (4,144,839)
(12) Bethany Glen Associates 0 0 0 0
(11) Grandview-Blue Ridge Manor, Limited 0 0 0 0
(4) Buena Vista Manor Apts. Ltd. 0 0 0 0
(7) Canton Commons Apartments 0 0 0 0
(18) Cedar Hill Apartments, Ltd. 0 0 0 0
(10) Breckenridge-Chaparral Apartments II, Ltd. 0 0 0 0
(18) Char-mur Apartments 0 0 0 0
(7) Clinton Plaza Apartments L. P. 0 0 0 0
(7) Clinton Plaza Apartments #2 L. P. 0 0 0 0
(18) Crossett Apartments, Ltd. 0 0 0 0
(8) Cudahy Gardens, Ltd. 0 0 0 0
(10) El Paso-Gateway East, Ltd. 164,656 2,766,633 2,931,289 (1,723,347)
(7) Golf Manor Apartments, Ltd. 0 0 0 0
(7) Grosvenor South Apartments L. P. 0 0 0 0
(7) Grosvenor South Apartments #2 L. P. 0 0 0 0
(3) Oakland-Keller Plaza 0 0 0 0
(16) Lafayette Square Apartment's Ltd. 0 0 0 0
(8) San Diego-Logan Square Gardens Co. 0 0 0 0
(6) Los Caballeros Apartments 0 0 0 0
(3) South Munjoy Associates Ltd. 0 0 0 0
(13) Country, Ltd. 0 0 0 0
(13) Northbrook III, Ltd. 0 0 0 0
(10) Forth Worth-Northwood Apartments, Ltd. 0 0 0 0
(10) Corpus Christi-Oso Bay Apartments, Ltd. 0 0 0 0
(8) Pacific Palms, Ltd. 0 0 0 0
(14) Zeigler Blvd., Ltd. 0 0 0 0
(14) Parktowne, Ltd. 0 0 0 0
(8) Riverside Gardens, Ltd. 0 0 0 0
(5) Rolling Meadows Apts., Ltd. 0 0 0 0
(5) Ardmore-Rolling Meadows of Ardmore, Ltd. 0 0 0 0
(5) Rolling Meadows of Chickasha, Limited 0 0 0 0
(15) Roper Mountain Apartments 0 0 0 0
(7) Rosewood Manor Apartments 0 0 0 0
(14) New Jersey, Ltd. 0 0 0 0
(10) Stephenville-Tarleton Arms 0 0 0 0
(5) Oklahoma City-Town & Country Village 0 0 0 0
(17) Caddo Parish-Villas South, Ltd. 0 0 0 0
(14) Eastwyck III, Ltd. 0 0 0 0
(7) Warren Manor Apts., Ltd.-Property A and B 0 0 0 0
(7) Warren Woods Apartments, Ltd. 0 0 0 0
(1) Westgate Associates Ltd. 0 0 0 0
Life on which
Depreciation in
Latest Income
Year of Statement is
Subsidiary Partnership's Residential Property Construction Acquired Computed (c)(d)
- --------------------------------------------- --------------- ----------- ---------------
(9) Bay Village Company (c) 10/83 15-30
(12) Bethany Glen Associates (c) 10/83 10-30
(11) Grandview-Blue Ridge Manor, Limited (c) 9/83 30
(4) Buena Vista Manor Apts. Ltd. (c) 11/83 20-30
(7) Canton Commons Apartments (c) 8/83 25
(18) Cedar Hill Apartments, Ltd. (c) 12/84 20-35
(10) Breckenridge-Chaparral Apartments II, Ltd. (c) 9/83 30
(18) Char-mur Apartments (c) 12/84 35
(7) Clinton Plaza Apartments L. P. (c) 8/83 30
(7) Clinton Plaza Apartments #2 L. P. (c) 8/83 30
(18) Crossett Apartments, Ltd. (c) 12/84 30
(8) Cudahy Gardens, Ltd. (c) 9/83 10-30
(10) El Paso-Gateway East, Ltd. (c) 9/83 25-30
(7) Golf Manor Apartments, Ltd. (c) 8/83 25
(7) Grosvenor South Apartments L. P. (c) 8/83 30
(7) Grosvenor South Apartments #2 L. P. (c) 8/83 30
(3) Oakland-Keller Plaza (c) 9/83 15-30
(16) Lafayette Square Apartment's Ltd. (c) 9/83 15-30
(8) San Diego-Logan Square Gardens Co. (c) 9/83 7-30
(6) Los Caballeros Apartments (c) 9/83 30
(3) South Munjoy Associates Ltd. (c) 11/83 30-40
(13) Country, Ltd. (c) 8/83 5-30
(13) Northbrook III, Ltd. (c) 8/83 30
(10) Forth Worth-Northwood Apartments, Ltd. (c) 9/83 10-30
(10) Corpus Christi-Oso Bay Apartments, Ltd. (c) 9/83 27.5-30
(8) Pacific Palms, Ltd. (c) 9/83 9-30
(14) Zeigler Blvd., Ltd. (c) 8/83 40
(14) Parktowne, Ltd. (c) 8/83 15-30
(8) Riverside Gardens, Ltd. (c) 9/83 15-30
(5) Rolling Meadows Apts., Ltd. (c) 11/83 27
(5) Ardmore-Rolling Meadows of Ardmore, Ltd. (c) 9/83 15-30
(5) Rolling Meadows of Chickasha, Limited (c) 11/83 27
(15) Roper Mountain Apartments (c) 8/83 25
(7) Rosewood Manor Apartments (c) 9/83 30
(14) New Jersey, Ltd. (c) 8/83 30
(10) Stephenville-Tarleton Arms (c) 9/83 15-40
(5) Oklahoma City-Town & Country Village (c) 9/83 10-30
(17) Caddo Parish-Villas South, Ltd. (c) 9/83 15-30
(14) Eastwyck III, Ltd. (c) 8/83 30
(7) Warren Manor Apts., Ltd.-Property A and B (c) 8/83 25
(7) Warren Woods Apartments, Ltd. (c) 8/83 25
(1) Westgate Associates Ltd. (c) 11/83 40
CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED
PARTNERSHIP
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
FEBRUARY 28, 2003
Initial Cost to Partnership Cost Capitalized
------------------------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------ ----------- -------------- ----------------
(14) Westwood Apartments Company, Limited 0 233,605 4,168,757 (4,402,362)
(2) Wingate Associates Ltd. 0 198,604 2,968,529 (3,167,133)
------------ ----------- -------------- ----------------
$ 5,362,057 $10,619,983 $ 173,345,865 $ (173,067,736)
============ =========== ============== ================
Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnership's Residential Property Land Improvements Total Depreciation
- --------------------------------------------- ------------ ---------------- ------------- ---------------
(14) Westwood Apartments Company, Limited 0 0 0 0
(2) Wingate Associates Ltd. 0 0 0 0
------------ ---------------- ------------- ---------------
$ 498,671 $ 10,399,441 $ 10,898,112 $ (5,868,186)
============ ================ ============= ==============
Life on which
epreciation in
Latest Income
Year of Date Statement is
Subsidiary Partnership's Residential Property Construction Acquired Computed (c)(d)
- --------------------------------------------- --------------- ----------- ---------------
(14) Westwood Apartments Company, Limited (c) 8/83 15-30
(2) Wingate Associates Ltd. (c) 11/83 30-40
(a) Properties are subject to mortgage notes and purchase money notes, as shown
above.
(b) No carrying costs have been capitalized since all properties were acquired
after completion of construction.
(c) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight-line method over the estimated useful
lives determined by the Partnership date of acquisition.
(d) Furniture and fixtures, included in building and improvements, are
depreciated primarily by the straight-line method over the estimated useful
lives ranging from 5 to 15 years.
(e) These amounts differ from the amounts presented in the audited financial
statements of these subsidiary partnerships due to a difference in
accounting between these partnerships and the other forty-one subsidiary
partnerships. This difference, which is significant to the individual
subsidiary partnerships, relates to discounts on the respective mortgages
payable and the related acquisition cost and current carrying value of
property and equipment.
Geographic Locations: (1) Vermont, (2) New Hampshire, (3) Maine, (4) Tennessee,
(5) Oklahoma, (6) Colorado, (7) Michigan, (8) California, (9) Massachusetts,
(10) Texas, (11) Missouri, (12) Arizona, (13) Mississippi, (14) Alabama, (15)
South Carolina, (16) New Mexico, (17) Louisiana, (18) Arkansas
Cost of Property and Equipment Accumulated Deprecication
-------------------------------------------- --------------------------------------------
Year Ended February 28,
--------------------------------------------------------------------------------------------
2003 2002 2001 2003 2002 2001
------------ ------------ ------------ ------------ ------------ ------------
Balance at beginning of period $ 50,581,913 $ 64,915,831 $ 84,972,630 $ 28,366,513 $ 36,351,247 $ 45,259,984
Additions during period:
Improvements 486,918 592,837 441,990
Depreciation expense 352,194 1,137,341 1,606,397
Reductions during period:
Dispositions (40,170,719) (14,926,755) (20,498,789) (22,850,521) (9,122,075) (10,515,134)
------------ ------------ ------------ ------------ ------------ ------------
Balance at end of period $ 10,898,112 $ 50,581,913 $ 64,915,831 $ 5,868,186 $ 28,366,513 $ 36,351,247
============ ============ ============ ============ ============ ============
At the time the local partnerships were acquired by Cambridge + Related Housing
Properties Limited Partnership, the entire purchase price paid by Cambridge +
Related Housing Properties Limited Partnership was pushed down to the local
partnerships as property and equipment with an offsetting credit to capital.
Since the projects were in the construction phase at the time of acquisition,
the capital accounts were insignificant at the time of purchase. Therefore,
there are no material differences between the original cost basis for tax and
GAAP.