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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 [FEE REQUIRED]
For the fiscal year ended December 31, 2001 or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to ____________
Commission file number 0-17672
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TOWER PARK MARINA INVESTORS, L.P.,
(FORMERLY PS MARINA INVESTORS I)
a California Limited Partnership
(Exact name of registrant as specified in its charter)
California 95-4137996
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
16633 Ventura Blvd., 6th Floor, Encino, California 91436
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 907-0400
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___________________________________
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
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(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 ]
DOCUMENTS INCORPORATED BY REFERENCE
See Index to Exhibits contained herein.
PART I
ITEM 1. Business.
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Forward Looking Statements
--------------------------
This 10-K Report includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may differ materially
from these expectations due to changes in global economic, business,
competitive, market and regulatory factors.
General
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Tower Park Marina Investors, L.P. (formerly PS Marina Investors I), a
California Limited Partnership ("Registrant"), is a publicly held limited
partnership organized on January 6, 1988 under the California Revised Limited
Partnership Act. Commencing August 4, 1988, Registrant offered 12,000 units
(including options) of limited partnership interest (the "Units") to the public
at $5,000 per Unit in an interstate offering. The offering was terminated on
November 27, 1989, with limited partners purchasing 4,508 Units for an aggregate
purchase price of $22,540,000.
Registrant's general partners (the "General Partners") were originally
Westrec Investors, Inc., (formerly PS Marina Investors, Inc.) a California
corporation (the "Corporate General Partner") and B. Wayne Hughes ("Mr.
Hughes"). Effective March 1, 1997 Tower Park Marina Operating Corporation, a
wholly-owned subsidiary of Westrec Financial, Inc., a California corporation
("Westrec Financial") was substituted for Mr. Hughes. The Corporate General
Partner is a wholly-owned subsidiary of Westrec Properties, Inc., a California
corporation ("Westrec Properties"), which is a wholly-owned subsidiary of
Westrec Financial. The limited partners of Registrant have no right to
participate in the management or conduct of Registrant's business and affairs.
Registrant has entered into a management agreement with Westrec Marina
Management, Inc. ("WMMI"), a California corporation and a wholly-owned
subsidiary of Westrec Financial, whereby WMMI has agreed to manage Registrant's
properties for monthly fees generally equal to 6% of gross revenues from the
operation of Tower Park Marina. The management agreement is cancelable on 60
days' notice by either party with or without cause. WMMI also manages marina
properties for other entities
2
affiliated with the General Partners and for unaffiliated third parties.
Registrant was formed to acquire and improve existing marinas and
related facilities and, to a lesser extent, to develop marina facilities. Marina
facilities typically contain wet and/or dry boat storage facilities, gasoline
sales facilities and may contain one or more related facilities such as a
recreational vehicle ("RV") or campground facilities, boat trailer storage
facilities, boat rental and sales facilities, restaurants or similar facilities,
and boat supply and sundries stores. Substantially all of the Registrant's
income is derived from the rental of wet and/or dry boat storage facilities and
related facilities such as R.V. facilities and boat trailer storage facilities,
and from the receipt of rental payments under leases or subleases.
Registrant's principal investment objectives are to (1) preserve and
protect Registrant's invested capital; (2) provide cash distributions from
property operations; (3) maximize the potential for appreciation in value of
Registrant's property; and (4) build up equity through the reduction of the
mortgage loan on Registrant's property.
The General Partners or an affiliate supervise the construction of
improvements to Registrant's property.
As of December 31, 2001 and 2000, Registrant owned one property, known
as Tower Park Marina. Reference is made to Item 2 for summary information about
this property.
Registrant competes in the operation of its property with other
entities, some of which may have greater resources than Registrant. The primary
factors upon which competition is based are location, the manner in which the
property is managed and marketed, the nature and quality of facilities and
rental rates. Registrant's property may encounter competition from other marinas
which are located near it, and no assurance can be given that additional
competing marinas will not be developed in the vicinity of the property.
Affiliates of the General Partners operate a marina in the vicinity of
Registrant's marina, and the General Partners or their affiliates may organize
future partnerships or other entities to own and operate marinas which may
compete with Registrant's property. The General Partners and their affiliates,
including in particular WMMI, may also manage marinas owned by unaffiliated
third parties which may compete with Registrant's property.
3
A portion of the Registrant's Tower Park Marina is operated under a
lease with the California State Lands Commission ("CSLC"). Registrant's
assignment or sublease of its rights under this agreement would require the
consent of the CSLC. An uncured breach of any of the conditions of the CSLC
lease would constitute grounds for revocation of the lease. Effective January 1,
1999 the CSLC lease was extended until December 31, 2023.
Marinas are subject to numerous governmental regulations, particularly
environmental regulations, such as water pollution and water quality control
regulations, and other miscellaneous regulatory requirements. Failure to comply
with those regulations would constitute grounds for revocation of the CSLC lease
when such failure affects the leased property. Any licensee or subtenant of
Registrant is also required to comply with such regulations.
Registrant and its sublessees are subject to certain reporting
requirements relating to any water pollution caused by their operations, such as
the California Safe Drinking Water and Toxic Enforcement Act of 1986
("California Proposition 65"). California Proposition 65 contains a prohibition
on discharging specified toxic chemicals into water or land where such chemicals
pass (or probably will pass) into any source of drinking water. Civil penalties
have been established for violations of California Proposition 65 and actions
may also be brought. Registrant and its sublessees must comply with applicable
laws concerning the lawful handling and disposal of certain products used in and
generated by the operation of its marinas, such as oil, paint, sewage and fuel.
Registrant and its sublessees must also comply with applicable federal, state
and local laws concerning underground storage tanks. The Environmental
Protection Agency ("EPA") has issued a number of regulations relating to
underground storage tanks which include a reporting requirement for a specified
level of soil contamination. Moreover, at all times, owners of tanks are
responsible for the cost of cleaning up any leaks and for compensating injured
parties. Registrant may also be subject to state laws regarding underground
storage tanks that have requirements more stringent than those under the EPA. If
any leaks from storage tanks or spillage or disposal from other operations (such
as the loading of gasoline into boats by Registrant or its sublessees or the
disposal of paint, oil and other products used in the repair of boats) causes or
has caused contamination of the soil or the water, Registrant and its sublessees
will be required to comply with federal, state and
4
local laws relating to "hazardous waste" clean-up and Registrant and its
sublessees may have to incur expenses to dispose of the hazardous waste in a
lawful manner. If other parties contribute or have contributed to water or soil
contamination at Tower Park Marina, Registrant would be able to seek
reimbursement from such other parties in connection with the payment by
Registrant of any expenses to comply with such regulations.
In November 1991, contamination was discovered in the area surrounding
a fuel storage tank at Tower Park Marina. Currently, the California Regional
Water Quality Control Board has required groundwater sampling and monitoring on
a quarterly basis. The Registrant continues to engage environmental consultants
to perform the monitoring. At this time, the extent of contamination that exists
is not known and as such the cost of remediation cannot be estimated. To date
the Registrant has incurred $101,000 in monitoring costs. Included in cost of
operations for the year ended December 31, 2001 is $16,000 of monitoring costs.
Tower Park Marina is also subject to a variety of federal, state and
local laws affecting the development or improvement of the property, including
laws and regulations relating to environmental factors. Difficulties or failures
in obtaining required approvals could delay or prevent any future improvement at
the property.
The operations at Tower Park Marina are influenced by factors that
affect the boating industry both locally and nationally, with activity at Tower
Park Marina increasing seasonally during the period April through October of
each year.
There are 29 persons who render service on behalf of Registrant on a
full-time basis, and 7 persons who render services on a part-time basis. These
persons include managers, assistant managers, relief managers, area managers,
accounting, administrative and clerical personnel, construction, dock personnel
and development and supervision personnel. The persons rendering services on a
part-time basis may also render services on behalf of one or more of WMMI,
Westrec Financial, other partnerships organized by Westrec Financial and other
persons or entities owning properties managed by WMMI.
The term of Registrant's Partnership Agreement is until the property
has been sold and, in any event, not later than December 31, 2038.
5
ITEM 2. Property.
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As of December 31, 2001, the Registrant owned Tower Park Marina, which
is located in San Joaquin County, California. The property was acquired on
February 1, 1988. Tower Park Marina is situated on 44.5 acres, of which 14 acres
are leased from the California State Lands Commission (the "CSLC Lease"). Tower
Park Marina improvements and operations currently consist of the following: (a)
205 covered slips contained in 17 covered sheds; (b) 145 open slips; (c) end
ties for approximately 17 boats; (d) an RV facility containing approximately 390
existing spaces; (e) a gas dock facility; (f) three warehouse buildings utilized
as a restaurant and bar, store, boat sales offices, and maintenance shop
containing three covered dry boat storage areas with capacity for approximately
65 boats; and (g) additional dry storage areas with capacity for approximately
67 boats. The covered boat slips at Tower Park Marina are typically rented on a
month to month basis. Most of the open boat slips and the lineal boat dockage at
Tower Park Marina are rented on a monthly, weekly or daily basis. The RV
facility consists of permanent (rented on an annual basis) RV camping and
transient RV camping. As of March 25, 2002, the permanent wet slip facilities
(consisting of 205 slips) were approximately 68.8% leased and the permanent RV
spaces (consisting of 136 spaces) were approximately 79.4% leased.
The CSLC Lease provides for annual rent based on gross receipts, with
minimum annual rent of $40,000. For the year ended December 31, 2001, rent
expense for the CSLC Lease was $40,000.
The acquisition of Tower Park Marina was financed through a note
secured by a deed of trust secured by the property. This note was purchased by
an affiliate of Mr. Hughes, formerly a general partner of the Registrant, in
January 1995. The Registrant entered into an option agreement (which expired on
April 10, 1996) to purchase the note from Mr. Hughes' affiliate at its cost
($1,700,000) plus carrying costs. Effective March 1, 1997 the Registrant entered
into a new option agreement to purchase the note which expired on February 28,
1998. The Registrant paid $50,000 in February 1998 to extend the option period
until February 28, 1999, and an additional $50,000 in February 1999 to extend
the option period until February 28, 2000. The extension payments were applied
as reductions in the principal amount due under the note. The principal and
interest outstanding on the note at December 31, 1998 totaled $9,869,000. On
July 1, 1999 the Registrant completed the refinancing of Tower Park
Marina and exercised its option to
6
repay the note payable for $1,600,000. As a result, the Registrant recognized a
gain of $8,515,000 from the forgiveness of debt for the year ended December 31,
1999. For additional details see Note (5) of the Notes to Financial Statements
included in Item 14(a).
ITEM 3. Legal Proceedings.
-----------------
None.
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ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matters were submitted to a vote of security holders during
the fourth quarter of 2000.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters.
---------------------------------------------------------------------
Registrant has no common stock.
The Units are not listed on any national securities exchange or quoted
on the NASDAQ System, and there is no established public trading market for the
Units. Secondary sales activity for the Units has been limited and sporadic. The
General Partners monitor transfers of the Units because the admission of the
transferee as a substitute limited partner requires the consent of the General
Partners under the Partnership Agreement. However, the General Partners do not
monitor or regularly receive or maintain information regarding the prices at
which secondary sales transactions in the Units have been effectuated. Various
organizations offer to purchase and sell limited partnership interests
(including securities of the type such as the Units) in secondary sales
transactions. Various publications such as Investment Advisor summarize and
report information (on a monthly, bi-monthly or less frequent basis) regarding
secondary sales transactions in certain limited partnership interests, including
the prices at which such secondary sales transactions are effected.
As of December 31, 2001, WMMI has acquired 422 Units in the
Registrant, representing 9.4% of the outstanding units at an average price of
$215 per unit.
Exclusive of the General Partners' interest in Registrant, as of
December 31, 2001, there were approximately 936 Unit holders of record.
If applicable, Registrant makes quarterly distributions of all "Cash
Flow from Operations" and of all "Cash from Sales or Refinancing", subject to
the provisions enumerated below. Cash Flow from
7
Operations, as defined in the Registrant's Partnership Agreement, is the total
cash receipts of the Registrant from the operations of the Registrant's
business, which includes, but is not limited to, cash receipts from the rental
of the Registrant's properties, and which excludes Cash from Sales or
Refinancing, less: (i) all operating expenses other than non-cash expenses such
as depreciation and amortization; (ii) all principal and interest payments on
any loans or advances; (iii) any sums expended for capital improvements or
replacements (excluding amounts paid from funds provided by capital
contributions); and (iv) a cash reserve for working capital or other purposes,
the amount of which shall be determined by the General Partners. Cash from Sales
or Refinancing, as defined in the Partnership Agreement, is the net proceeds to
Registrant from all sales, exchanges and refinancing of Registrant's properties,
less payment of indebtedness relating to such properties and adequate cash
reserves from such net proceeds for other obligations of Registrant for which
there is no provision; however, Cash from Sales or Refinancing does not include
any proceeds reinvested in properties.
As a result of Registrant's continued operating deficits,
distributions have been suspended since June 30, 1991. See Item 6 and 7 for a
more detailed discussion of the Registrant's operating results.
8
ITEM 6. Selected Financial Data.
-----------------------
The data set forth below should be read in connection with the
Consolidated Financial Statements and Notes thereto appearing elsewhere herein,
and Management's Discussion and Analysis of Financial Condition and Results of
Operations.
(In thousands of dollars, except per unit information)
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For the Year 2001 2000 1999 (2) 1998 (2) 1997 (2)
- ----------------------------------------------------------------------------------------------------------
Revenues $ 2,833 $ 2,663 $ 2,537 $ 2,275 $ 2,164
========== ========== ========== ========== =========
Loss before
extraordinary item $ (463) $ (428) $ (581) $ (1,090) $ (845)
Gain on extinguishment
of debt - - 8,515 - -
---------- ---------- ---------- ---------- ---------
Net (loss) income $ (463) $ (428) $ 7,934 $ (1,090) $ (845)
========== ========== ========== ========== =========
Limited Partners' share (458) (424) 7,855 (1,079) (837)
General Partners' share (5) (4) 79 (11) (8)
Limited Partners'
per unit data(1)
Loss from continuing
operation before
extraordinary item $ (97.16) $ (93.62) $ (123.78) $ (243.79) $ (179.24)
Loss from discontinued
operations (4.44) (.44) (3.77) 4.44 (6.43)
Gain on extinguishment
of debt - - $ 1,870.01 - -
---------- ---------- ---------- ---------- ---------
Net income (loss) $ (101.60) $ (94.06) $ 1,742.46 $ (239.35) (185.67)
========== ========== ========== ========== =========
Cash Distributions - - - - -
- ----------------------------------------------------------------------------------------------------------
As of December 31, 2001 2000 1999 (2) 1998 (2) 1997 (2)
- ----------------------------------------------------------------------------------------------------------
Total assets $ 3,511 $ 3,549 $ 3,373 $ 3,203 $ 3,071
========== ========== ========== ========== =========
Mortgage notes
payable $ 2,023 $ 2,056 $ 2,100 $ 6,670 $ 6,729
========== ========== ========== ========== =========
__________________________
(1) Per unit data is based on the weighted average number of Units
outstanding during each year, 4,508.
(2) The years ended December 31, 1999, 1998 and 1997 have been restated to
reflect the consolidation of Little Potato Slough Mutual Water Company
(LPSMWC) and the effect of discontinued operations. See Notes 1 and 8
to the consolidated financial statements contained herein.
9
ITEM 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
---------------------
In August 1988 the Registrant commenced an offering of up to 12,000
Units of limited partnership interest to the public at a price of $5,000 per
Unit. The offering was terminated on November 27, 1989 after the sale of 4,508
Units.
Tower Park Marina was purchased in February 1988 and as of December
31, 2001, $10,911,000 had been incurred in capital costs associated with its
acquisition and subsequent improvement.
The operations of the Registrant's marina are influenced by factors
affecting the marina and boating industries nationally, as well as by local
market and weather conditions.
Presentation of Financial Statements
------------------------------------
The financial statements of the Partnership reflect the Partnership's
ongoing business in the slip rental, RV parking, retail sales, fuel sales and
other segments and the discontinuance of its restaurant and boat service
segments. The restaurant and boat service segments are now classified as
discontinued operations. Financial statements of prior periods have been
restated to reflect the Partnership's decision to discontinue the restaurant and
boat service operations.
Results of Operations
---------------------
Historically, the Partnership's revenues were generated primarily from
slip rentals. RV parking, retail sales, fuel sales and the restaurant and boat
service segments.
As discussed in Note 10 to the consolidated financial statements,
during the first quarter of 2001 the Partnership made the decision to
discontinue its restaurant and boat service operations and to seek to identify
potential operators to lease these facilities. Consequently, the Partnership's
restaurant and boat service operations are classified as discontinued
operations. The restaurant was leased to an independent restaurant operator
effective May 1, 2001.
2001 Compared to 2000
---------------------
For the year ended December 31. 2001, the Registrant reported a net
loss before extraordinary item of $463,000, a decline of $35,000 over 2000. The
decline is the net result of increased operating costs, offset by a $53,000
decline in interest expense. The savings in interest are the result of
10
lower interest costs on advances from affiliates. Included in the net loss of
$463,000 is $238,000 of depreciation and amortization. Excluding these non-cash
items, the Registrant incurred a cash flow deficit of $225,000. This deficit was
covered by additional advances from the General Partner and by the deferral of
interest and management fee payments due to the General Partner and/or its
affiliates.
For the year ended December 31, 2001, the net operating cash flow
(Tower Park's operating income before debt service, depreciation and partnership
administrative costs) for Tower Park Marina was $339,000, compared to $304,000
in 2000. Tower Park Marina's slip rental revenues (which includes both wet slip
and dry storage revenues) declined $14,000 to $696,000 in 2001, which is
attributable to a slight decline in occupancies.
RV park revenues increased $145,000 to $957,000 in 2001, due to higher
occupancies and increased rates.
In response to numerous customer complaints during 1999, management
implemented a program to increase the operating hours of the restaurant and bar
at Tower Park Marina. Due to the disappointing results of the changes the
restaurant operations were significantly curtailed beginning January 1, 2001.
Retail store revenues declined $29,000 to $423,000, with net operating
income from retail sales declining $38,000 to $65,000 in 2001.
Fuel sales declined $9,000 to $243,000 due to lower costs and lower
retail prices. Operating income from fuel sales rose $8,000 to $44,000 as a
result of improved margins.
Water and sewer revenues increased $24,000, which was primarily due to
increased usage and demand. Water and sewer expenses increased $54,000 partially
in response to the increase in usage and also as a result of increased
administrative costs.
Lease income increased $37,000. The Registrant has entered into a five
year lease with an independent restaurant operator that commenced May 1, 2001.
The lease requires payments of 4% of gross revenues (escalating to 7% by year
four) with a minimum of $2,000 per month.
Boat service revenue declined $27,000 to $46,000, due to Registrant
limiting the level of service it offers to customers to a minimum, while it
continues its attempt to secure an operator to lease the
11
facility. Although revenues declined, the net operating deficit incurred
improved $5,000 to $16,000. These operations are included as part of
discontinued operations.
Other income increased $16,000 due primarily to a $10,000 payment
received from a cellular service provider for leasing space for a cell tower.
Cost of operations increased $144,000, which was primarily the result
of a $60,000 increase in maintenance costs and a $49,000 increase in utility
costs.
Interest expense declined $53,000, which was primarily the result of a
$49,000 decline in interest paid to affiliates because of lower interest rates.
Depreciation and amortization increased $31,000 in 2001 due to the
amortization of new improvements at Tower Park Marina.
Management fees declined $14,000 in 2001 due primarily to the leasing
of the restaurant.
2000 Compared to 1999
---------------------
For the year ended December 31, 2000, the Registrant reported a net
loss before extraordinary item of $428,000, an improvement of $153,000 over
1999. The improvement is primarily due to a $149,000 decline in interest
expense. The savings in interest are the net result of completing the
refinancing of Tower Park Marina in July 1999, offset by higher interest costs
on advances from affiliates. Included in the net loss of $428,000 is $207,000 of
depreciation and amortization. Excluding these non-cash items, the Registrant
incurred a cash flow deficit of $221,000. This deficit was covered by additional
advances from the General Partner and by the deferral of interest and management
fee payments due to the General Partner and/or its affiliates.
For the year ended December 31, 2000, the net operating cash flow
(cash flow before debt service, depreciation and partnership administrative
costs) for Tower Park Marina was $304,000 compared to $309,000 in 1999. Tower
Park Marina's slip rental revenues (which include both wet slip and dry storage
revenues) increased $32,000 to $710,000 in 2000, which is attributable to higher
levels of occupancies.
RV park revenues increased $105,000 to $812,000 in 2000, due to higher
occupancies and increased rates.
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In response to numerous customer complaints during 1999, management
implemented a program to increase the operating hours of the restaurant and bar
at Tower Park Marina. The increased level of operations resulted in a $105,000
increase in revenues in 2000 to $595,000, with net operating income from the
restaurant improving $36,000 to $19,000. Due to the disappointing increase in
revenues and operating income the restaurant operations were significantly
curtailed beginning January 1, 2001. The Registrant has entered into a five year
lease with an independent restaurant operator that commenced May 1, 2001. The
lease requires payments of 4% of gross revenues (escalating to 7% by year four)
with a minimum of $2,000 per month.
Retail store revenues increased $51,000 to $452,000, with net
operating income from retail sales increasing $15,000 to $103,000 in 2000.
Fuel sales increased $43,000 to $252,000 due to higher costs and
retail prices. Operating income from fuel sales rose $19,000 to $36,000 as a
result of improved margins.
Water and sewer revenues and expenses remained stable.
Lease income decreased $54,000, due to the loss of the tenant that
operated the boat repair facility. The Registrant is limiting the level of
service it offers to customers to a minimum while it attempts to secure an
operator to lease the facility. For the year the boat repair operation generated
$73,000 in revenue and incurred a net operating deficit of $21,000.
Other income declined $48,000 due primarily to a $33,000 decline in
special event income.
Cost of operations increased $1,000, which was the net result of a
$34,000 increase in insurance costs offset by reduced administrative costs.
Interest expense declined $149,000, which was the net result of a
$268,000 decline in interest on the note secured by Tower Park Marina, offset by
a $119,000 increase in interest paid to affiliates because of higher outstanding
balances and increased interest rates.
Depreciation and amortization increased $44,000 in 2000 due to the
amortization of new improvements at Tower Park Marina and a full year of
amortization of capitalized financing costs.
Management fees increased $16,000 in 2000 due to the increased
revenues at Tower Park Marina.
13
Liquidity and Capital Resources
-------------------------------
Since its inception in 1988 the Registrant has operated at a deficit.
These deficits have been partially covered by advances from the General Partners
($4,236,000 through December 31, 2001) and cash reserves. In addition, the
Registrant had previously discontinued making debt service payments on
substantially all of its notes payable.
Between September 1991 and June 1999, no payments were made on the
note payable secured by Tower Park Marina. During 1991, 1992, 1993 and 1994, the
Registrant was involved in various negotiations with the lender, a financial
institution, and its successor, Resolution Trust Corporation ("the RTC"), to
restructure or otherwise settle the note. In February 1994, the RTC foreclosed
on Chandlers Landing Marina (also collateral for the note) by bidding $2,038,000
on its note at a foreclosure sale. In January 1995, the RTC sold the note to a
third party. The note was then purchased by an affiliate of Mr. Hughes. The
Registrant entered into an option agreement to purchase the note from the
affiliate at its cost ($1,700,000) plus carrying costs, which expired on April
10, 1996. In connection with the substitution of a new general partner (Tower
Park Marina Operating Corporation) for Mr. Hughes, the option agreement was
extended until February 28, 1998. Registrant paid $50,000 in February 1998 to
extend the option period until February 28, 1999 and an additional $50,000 in
February 1999 to extend the option period until February 28, 2000 (see Item 3
above for additional details). Both extension payments were applied as
reductions to the principal amount due.
On July 1, 1999 the Registrant completed the refinancing of Tower Park
Marina and exercised its option to repay the note payable for $1,600,000. As a
result, the Registrant recognized a gain of $8,515,000 from the forgiveness of
debt in 1999.
The refinancing allowed the Registrant to repay liabilities and also
provided up to $500,000 ($2,500,000 less the $2,000,000 originally funded under
the note) for improvements to the property. An initial $100,000 of the $500,000
available for improvements was drawn in 1999, with the balance available to be
drawn by January 31, 2001. During 2000, an additional $200,000 of improvements
scheduled to be financed by the loan were made. However, due to the Registrant
not meeting the financial requirements specified in the loan, the request for
funding was denied and the period for making additional construction
14
draw requests expired on January 31, 2001. The cost of making the improvements
was covered by advances from an affiliate of the Corporate General Partner.
Although the Registrant has spent in excess of $800,000 for capital
improvements over the last three years, the operating results for Tower Park
Marina remain virtually unchanged. Management believes that the leasing of the
restaurant will have an immediate positive impact on the financial results of
the property.
The CSLC Lease requires minimum quarterly payments of $10,000 and the
note secured by Tower Park requires monthly payments of $23,000.
Tower Park's 2001 net operating cash flow of $339,000 reflects
$132,000 of management fees paid to an affiliate of the Corporate General
Partner. As payments to the Corporate General Partner or its affiliates can be
deferred, as necessary, the amount available for making the Registrant's annual
debt service payments of $276,000 was approximately $471,000. As expenditures
for capital improvements are discretionary, the amount and timing of these
expenditures can be adjusted based on the operating results and cash flow of the
Registrant.
Registrant's ability to continue to operate through 2002 and beyond is
contingent on, among other factors, the improvement in Tower Park Marina
operations and either continued advances from the General Partners or the
deferral of payments to the General Partners or their affiliates for management
fees and interest. There can be no assurance that these conditions will be met
or that the Registrant will be able to continue as a going concern.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------
The Registrant is exposed to changes in interest rates from its
financing arrangement with its General Partners. The Registrant's mortgage note
payable bears interest at a fixed rate. See Note 5 to the Financial Statements
for terms, valuations, and principal maturity of the mortgage note as of
December 31, 2001. Based on the market rate of the mortgage note, its fair value
at December 31, 2001 is deemed to be the carrying value, $2,008,000.
15
ITEM 8. Financial Statements and Supplementary Data.
-------------------------------------------
Registrant's financial statements are included elsewhere herein.
Reference is made to the Index to Financial Statements and Financial Statement
Schedule in Item 14(a).
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure.
--------------------
See Item 14b.
PART III
ITEM 10. Directors and Executive Officers of Registrant.
----------------------------------------------
Registrant has no directors or executive officers.
Registrant's General Partners are Westrec Investors, Inc. formerly
("PS Marina Investors, Inc.") and Tower Park Marina Operating Corporation
(substituted for B. Wayne Hughes in 1997). The Corporate General Partner, acting
through its directors and executive officers, is responsible for the day-to-day
operations of Registrant. Registrant's properties are managed and operated by
Westrec Marina Management, Inc. ("WMMI"), a wholly-owned subsidiary of Westrec
Financial.
The names and ages of all directors and executive officers of the
Corporate General Partner, and the executive officer of WMMI who performs
significant policy-making or operational functions for Registrant, the offices
held by each of them, the dates of their elections to such offices, and their
business experience during the past five years are set forth below.
16
Office and Date Business Experience
Name Age of Election During Past 5 Years
- -------- --- -------------- -------------------
Michael M. Sachs 61 President and Director Mr. Sachs has been President,
of the Corporate General Secretary and Director of
Partner (1990) and of Westrec Financial and President
Tower Park Operating of Westrec Properties (1990).
Corporation (1997) Vice-President, Secretary and
Director of WMMI (1987). Mr. Sachs
is a director of New Century
Financial Corporation, a residential
mortgage brokerage, since its
inception in 1995.
Jeffrey K. Ellis 41 Vice President (1990) and Mr. Ellis is also Vice President
Chief Financial Officer (1996) (1990) and Chief Financial Officer
of the Corporate General (1996) for Westrec Financial, Inc.,
Partner and Vice President Westrec Properties, Inc. and
and Chief Financial Officer Westrec Marina Management, Inc.
of Tower Park Operating
Corporation (1997)
William W. Anderson 53 Director of the Corporate Mr. Anderson is also the President
General Partner (1990) (1990) and Director (1995) of
and of Tower Park Operating Westrec Marina Management, Inc. and is a
Corporation (1997). Director of Westrec Financial, Inc. (1996) and
Westrec Properties, Inc. (1996)
Pursuant to Articles 16 and 17 of Registrant's Partnership Agreement,
a copy of which is included in Registrant's prospectus included in SEC
Registration No. 33-21021, each of the General Partners continues to serve until
(i) death, insanity, insolvency, bankruptcy or dissolution, (ii) withdrawal with
the consent of the other General Partner and a majority vote of the limited
partners, or (iii) removal by a majority vote of the limited partners.
Each director of the General Partners serves until he resigns or is
removed from office by Westrec Properties or Westrec Financial, and may resign
or be removed from office at any time with or without cause. Each officer of the
General Partners serves until he resigns or is removed by the board of directors
of that General Partner. Any such officer may resign or be removed from office
at any time with
17
or without cause. No such officer was selected as such pursuant to any
arrangement or understanding between such officer and any other person.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
--------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Registrant's General Partners, and the directors and executive officers of the
Corporate General Partner, and persons who own more than ten percent of the
Registrant's Units, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of Units. General
Partners, officers, directors and greater than ten-percent Unitholders are
required by SEC regulation to furnish the Registrant with copies of all Section
16(a) forms they file.
To the Registrant's knowledge, based solely on review of the copies of
such reports furnished to the Registrant and written representations that no
other reports were required, during the fiscal year ended December 31, 2001, all
Section 16(a) filing requirements applicable to its General Partners, the
executive officers and directors of the Corporate General Partner and greater
than ten-percent beneficial owners of the Registrant were complied with.
ITEM 11. Executive Compensation.
----------------------
Registrant has no directors or officers. See Item 13 for a description
of certain transactions between Registrant and its General Partners and their
affiliates.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
--------------------------------------------------------------
(a) As of the date hereof, no person is known by Registrant to own
beneficially more than 5% of the Units of limited partnership interest, other
than those units acquired by WMMI as disclosed in item (b) below.
(b) Registrant has no officers or directors.
As of December 31, 2001, the General Partners have contributed an
aggregate of $1,000 to the capital of Registrant. None of the directors and
officers of the Corporate General Partner own any Units of limited partnership
interest of Registrant. The Corporate General Partner is a wholly-owned
subsidiary of Westrec Properties.
Westrec Financial (which may be deemed a parent of Registrant) has
two classes of
18
stock outstanding, common stock and Convertible Participating Preferred Stock
(the "Preferred Stock") which votes together with the common stock, except for
the election of directors. Michael M. Sachs, an officer and director of Westrec
Financial and the Corporate General Partner owns 100% of the common stock of
Westrec Financial. As of December 31, 2001 there was no preferred stock
outstanding.
To date, WMMI has acquired 432 units (422 units at December 31, 2001)
in the Registrant, representing 9.6% of the outstanding units. WMMI's business
address is 16633 Ventura Boulevard, 6/th/ Floor, Encino, California, 91436.
(c) Registrant knows of no contractual arrangements, the operation of
the terms of which may at a subsequent date result in a change in control of
Registrant, except as described above and except for Articles 16, 17 and 21.1 of
Registrant's Partnership Agreement, a copy of which is included in Registrant's
prospectus included in SEC Registration Statement No. 33-21021. Those articles
provide, in substance, that the limited partners shall have the right, by
majority vote, to remove a general partner and that a general partner may
designate a successor with the consent of the other general partner and a
majority of the limited partners.
ITEM 13. Certain Relationships and Related Transactions.
----------------------------------------------
The Registrant's prospectus included in SEC Registration Statement No.
33-21021 discloses that the General Partners and their affiliates are entitled
to the following compensation:
1. Acquisition and Development Fees to be paid to the General Partners
or their affiliates for their services in connection with the analysis,
research, negotiation, documentation, acquisition, construction and development
related to investments for Registrant, in an amount equal to 6% of the purchase
price or the cost of construction of the properties. Cumulative Acquisition and
Development Fees paid to the General Partners and their affiliates through
December 31, 2001 totaled $1,639,000, ($22,000 of which was paid in 2001).
2. Loan Brokerage Fee to be paid to the General Partners or their
affiliates for their services in negotiating and obtaining permanent financing
on properties from an unaffiliated lender, in an amount equal to 1% of the
principal amount of the financing or refinancing, which would be reduced to the
extent any other loan brokerage fee is paid to any other loan broker in
connection with the transaction.
19
Loan Brokerage Fees paid to the General Partners and their affiliates through
December 31, 2001 totaled $96,000 (none of which was paid in 2001).
3. The Corporate General Partner made advances to Registrant during
1998, 1999, 2000 and 2001 to cover operating deficits and capital expenditures.
At December 31, 2001, these advances totaled $4,236,000 and accrue interest at
prime plus 1% (5.75% at December 31, 2001). Interest paid or accrued to the
Corporate General Partner for 2001 totaled $307,000.
4. The General Partners are entitled to receive a percentage of
distributions of Cash Flow from Operations and Cash from Sales and Refinancing
with respect to any fiscal year. The General Partners have agreed to reduce
their share of any future distributions to 1%. No such distributions were made
during 2001 and none are expected in 2002.
Registrant and WMMI, a subsidiary of Westrec Financial, have entered
into management agreements, a copy of the form of which is included as an
exhibit to Registrant's Registration Statement, SEC Registration Statement No.
33-21021. Under the terms of those agreements, WMMI is entitled to receive as
compensation for its management services a property management fee, payable
monthly, in an amount equal to the sum of (i) 6% of the "Gross Revenue" from
operations of the properties and (ii) 6% of the "Net Sales Revenue" from
operations of the properties. The term "Gross Revenue" means all receipts (net
of security deposits returned to the tenants) of Registrant from the operations
of the properties, including without limitation, rental payments of lessees of
space in the marinas, vending machine or concessionaire revenues, maintenance
charges, if any, paid by the tenants of the marinas in addition to basic rent,
parking fees, if any, revenues from boat rentals or campground rentals, if any,
and rental payments received under any subleases, but excluding all revenues
from the sale of goods or merchandise (other than vending machine and
concessionaire revenues), including gasoline. The term "Net Sales Revenue" means
all receipts of Registrant from the properties from the sale of goods or
merchandise (other than vending machine and concessionaire revenues), including
gasoline, minus the direct cost of the goods sold (not including any overhead
costs of Registrant). The management fee will cover, without additional expense
to Registrant, the time WMMI's executive officers expend on project management
and WMMI's overhead costs such as its expenses for rent, utilities and servicing
of Registrant's accounts payable. During 2001,
20
$132,000 was paid or accrued by Registrant to WMMI pursuant to the management
agreements.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
a. 1. Financial statements
The financial statements listed in the accompanying Index to
Financial Statements and Schedule hereof are filed as part of
this report.
2. Financial statements schedule
The financial statements schedule listed in the accompanying
Index to Financial Statements and Schedule hereof are filed as
part of this report.
3. Exhibits
See Index to Exhibits contained herein.
b. Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K dated February
23, 2001 (filed March 1, 2001) as amended by Form 8-K/A dated
March 1, 2001 (filed March 7, 2001), each pursuant to Item 4,
which disclosed the dismissal of the Registrant's previous
accountants and the engagement of new accountants. Also filed as
Exhibits to the Form 8-K/A were letters from the Registrant's
former and newly engaged accountants regarding their concurrence
with certain statements made by the Registrant.
c. Exhibits
See Index to Exhibits contained herein
21
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.
TOWER PARK MARINA INVESTORS, L.P.,
(formerly PS MARINA INVESTORS I),
a California Limited Partnership
Dated: April 19, 2002 By: Westrec Investors, Inc.,
------------------------
(formerly PS MARINA INVESTORS, INC.)
------------------------------------
General Partner
By: /s/ Michael M. Sachs
-----------------------
President
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 Capacity Date
--------- -------- ----
/s/ Michael M. Sachs President, Secretary and Director April 19, 2002
- -------------------- of Westrec Investors, Inc., the
Michael M. Sachs Corporate General Partner of the
Registrant (principal executive
officer)
/s/ William W. Anderson Director of Westrec Investors, Inc., April 19, 2002
- ----------------------- the Corporate General Partner of
William W. Anderson the Registrant.
/s/ Jeffrey K. Ellis Vice President and Chief Financial April 19, 2002
- -------------------- Officer of Westrec Investors, Inc.,
Jeffrey K. Ellis the Corporate General Partner of the
Registrant (principal financial
officer and principal accounting
officer)
22
TOWER PARK MARINA INVESTORS, L.P.,
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
Index to Financial Statements and Schedules
(Item 14 (a))
Page
Reference
---------
Report of Vasquez & Company LLP, Independent Auditors F-1
Report of Ernst & Young LLP, Independent Auditors F-2
Consolidated Balance Sheets at December 31, 2001 and 2000 F-3
Consolidated Statements of Operations for the years ended
December 31, 2001, 2000 and 1999 F-4
Consolidated Statements of Changes in Partners' Deficit for
the years ended December 31, 2001, 2000 and 1999 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999 F-6
Notes to Consolidated Financial Statements F-7 to F-19
Schedule
III - Real Estate and Accumulated Depreciation F-20 to F-21
All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information is included in the financial statements or
the notes thereto.
REPORT OF INDEPENDENT AUDITORS
The Partners
Tower Park Marina Investors, L.P.,
(formerly PS Marina Investors I),
a California Limited Partnership
and Subsidiary
We have audited the accompanying consolidated balance sheet of Tower Park Marina
Investors, L.P. (formerly PS Marina Investors I), a California Limited
Partnership, and Subsidiary (the Partnership), as of December 31, 2001 and 2000,
and the related consolidated statements of operations, partners' deficit, and
cash flows for the years ended December 31, 2001 and 2000. Our audits also
included the financial statement schedule as of December 31, 2001 listed in the
accompanying index at Item 14(a). These consolidated financial statements and
schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements and schedule based on our audits. The financial statements of Tower
Park Marina Investors, L.P. for the year ended December 31, 1999, were audited
by other auditors whose report dated March 25, 2000 (except for Note 8 for which
the date is September 27, 2001) on those statements included an explanatory
paragraph that described substantial doubt about the Partnership's ability to
recover the carrying value of its assets and to continue as a going concern
discussed in Notes 2 and 7 to the financial statements.
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 consolidated
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 2001 and 2000 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Tower
Park Marina Investors, L.P. (formerly PS Marina Investors I), a California
Limited Partnership, and Subsidiary as of December 31, 2001 and 2000, and the
results of their operations and cash flows for the years ended December 31, 2001
and 2000, in conformity with accounting principles generally accepted in the
United States of America. Also, in our opinion the related financial statement
schedule as of December 31, 2001 and 2000, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth thereon.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Notes 2 and 7, the
Partnership's property is not generating a satisfactory level of cash flow and
cash flow projections do not indicate significant improvement in the near term.
These circumstances raise substantial doubt about the Partnership's ability to
recover the carrying value of its assets (notwithstanding the writedown of the
marina facility to its net realizable value) and to continue as a going concern.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Partnership to continue as a going concern.
/s/ Vasquez & Company LLP
Los Angeles, California
March 8, 2002
F-1
REPORT OF INDEPENDENT AUDITORS
The Partners
Tower Park Marina Investors, L.P.,
(formerly PS Marina Investors I),
a California Limited Partnership
We have audited the accompanying balance sheet of Tower Park Marina Investors,
L.P. (formerly PS Marina Investors I), a California Limited Partnership, as of
December 31, 1999, and the related statement of operations, partners' deficit,
and cash flow for the year ended December 31, 1999. Our audit also included the
financial statement schedule listed in the accompanying index at Item 14 (a).
These financial statements and schedule are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in 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 presents fairly, in
all material respects, the financial position of Tower Park Marina Investors,
L.P. (formerly PS Marina Investors I), a California Limited Partnership, at
December 31, 1999 and the results of its operations and its cash flows for the
year ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth thereon.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Notes 2 and 7, the
Partnership's property is not generating a satisfactory level of cash flow and
cash flow projections do not indicate significant improvement in the near term.
These circumstances raise substantial doubt about the Partnership's ability to
recover the carrying value of its assets (notwithstanding the write-down of the
marina facility to its net realizable value) and to continue as a going concern.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Partnership to continue as a going concern.
/s/ Ernst & Young LLP
Los Angeles, California
March 25, 2000, except for Note 8, which date is September 27, 2001.
F-2
TOWER PARK MARINA INVESTORS, L.P
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
CONSOLIDATED BALANCE SHEETS
December 31
--------------------------------------
2001 2000
------------ ------------
ASSETS
- ------
Cash $ 49,000 $ 70,000
Reserve fund 253,000 233,000
Accounts receivable 131,000 112,000
Tower Park Marina, net (Note 2) 2,711,000 2,642,000
Water and sewer facilities, net (Note 3) 93,000 101,000
Other assets, net (Note 4) 274,000 391,000
------------ ------------
$ 3,511,000 $ 3,549,000
============ ============
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Accounts payable and accrued expenses $ 195,000 $ 221,000
Interest payable 16,000 16,000
Payable to affiliates (Note 6) 4,236,000 3,780,000
Deferred rentals 136,000 111,000
Notes payable (Note 5) 2,023,000 2,056,000
------------ ------------
6,606,000 6,184,000
------------ ------------
Minority partners' interest 187,000 184,000
------------ ------------
Commitments and contingencies (Note 7) - -
Partners' deficit:
Limited partners' deficit, $5,000
per unit, 4,508 units authorized, issued
and outstanding (2,388,000) (1,930,000)
Deferred contributions (76,000) (76,000)
------------ ------------
(2,464,000) (2,006,000)
General partners' deficit (818,000) (813,000)
------------ ------------
Total partners' deficit (3,282,000) (2,819,000)
------------ ------------
$ 3,511,000 $ 3,549,000
============ ============
See accompanying notes and report of independent auditors.
F-3
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2001, 2000 and 1999
2001 2000 1999
------------- ------------- ------------
(Restated)
Revenues:
Slip rentals $ 696,000 $ 710,000 $ 678,000
RV Parking 957,000 812,000 707,000
Retail store 423,000 452,000 401,000
Fuel service 243,000 252,000 209,000
Water and sewer 214,000 190,000 193,000
Lease 191,000 154,000 208,000
Other income 109,000 93,000 141,000
------------ ------------ ------------
2,833,000 2,663,000 2,537,000
------------ ------------ ------------
Expenses:
Slip rental 58,000 64,000 48,000
RV parking 161,000 112,000 109,000
Retail store 358,000 349,000 313,000
Fuel service 199,000 216,000 192,000
Water and sewer 209,000 155,000 157,000
Cost of operations 1,419,000 1,275,000 1,274,000
Interest expense 499,000 552,000 701,000
Depreciation and amortization 238,000 207,000 163,000
Minority partner's interest 3,000 13,000 14,000
Management fees (Note 6) 132,000 146,000 130,000
------------ ------------ ------------
3,276,000 3,089,000 3,101,000
------------ ------------ ------------
Loss before discontinued
operations and extraordinary item (443,000) (426,000) (564,000)
Loss from discontinued operations (20,000) (2,000) (17,000)
------------ ------------ ------------
Loss before extraordinary item (463,000) (428,000) (581,000)
Gain on extinguishment of debt - - 8,515,000
------------ ------------ ------------
Net (loss) income $ (463,000) $ (428,000) $ 7,934,000
============ ============ ============
Allocation of net (loss) income:
Limited Partners' $ (458,000) $ (424,000) 7,855,000
General Partners' (5,000) (4,000) 79,000
------------ ------------ ------------
$ (463,000) $ (428,000) $ 7,934,000
============ ============ ============
Limited Partners' net (loss) income per unit:
Loss from continuing operations before
extraordinary item $ (97.16) $ (93.62) $ (123.78)
Loss from discontinued operations (4.44) (0.44) (3.77)
Extraordinary item - - 1,870.01
------------ ------------ ------------
Net (loss) income $ (101.60) $ (94.06) $ 1,742.46
============= ============ ============
See accompanying notes and report of independent auditors.
F-4
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the years ended December 31, 2001, 2000 and 1999
General Limited
Partners Partners Total
----------- ------------ ------------
Balances at December 31, 1998 (Restated) $ (888,000) $ (9,437,000) $(10,325,000)
Net income (Restated) 79,000 7,855,000 7,934,000
----------- ------------ ------------
Balances at December 31, 1999 (Restated) (809,000) (1,582,000) (2,391,000)
Net loss (4,000) (424,000) (428,000)
----------- ------------ ------------
Balances at December 31, 2000 (813,000) (2,006,000) (2,819,000)
Net loss (5,000) (458,000) (463,000)
----------- ------------ ------------
Balances at December 31, 2001 $ (818,000) $ (2,464,000) $ (3,282,000)
=========== ============ ============
See accompanying notes and report of independent auditors.
F-5
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2001, 2000 and 1999
2001 2000 1999
------------ ------------ -------------
(Restated)
Cash flows from operating activities:
Net (loss) income $ (463,000) $ (428,000) $ 7,934,000
Adjustments to reconcile net income (loss) to net cash
used for operating activities:
Depreciation and amortization 238,000 207,000 163,000
Minority partners' interest 3,000 13,000 14,000
Forgiveness of debt - - (8,515,000)
(Increase) decrease in accounts receivable (19,000) (1,000) 122,000
Decrease (increase) in other assets 89,000 (66,000) (136,000)
Increase (decrease) in accounts payable
and accrued expenses (26,000) 67,000 (382,000)
(Decrease) increase in interest payable, net - (1,000) 318,000
Decrease in deferred rentals 25,000 (49,000) (37,000)
------------ ------------ -----------
Cash flow used for operating activities (153,000) (258,000) (519,000)
------------ ------------ -----------
Cash flows from investing activities:
Improvements to marina facilities (271,000) (270,000) (264,000)
Improvements to water and sewer facilities - - (9,000)
Increase in reserve fund (20,000) (56,000) (19,000)
------------ ------------ -----------
Cash flow used for investing activities (291,000) (326,000) (292,000)
------------ ------------ -----------
Cash flows from financing activities:
Proceeds from notes payable - - 2,118,000
Repayments of notes payable (33,000) (44,000) (1,673,000)
Advances from affiliates, net 456,000 618,000 392,000
------------ ------------ -----------
Net cash provided by financing activities 423,000 574,000 837,000
------------ ------------ -----------
Net (decrease) increase in cash (21,000) (10,000) 26,000
Cash at the beginning of year 70,000 80,000 54,000
------------ ------------ -----------
Cash at the end of year $ 49,000 $ 70,000 $ 80,000
============ ============ ===========
See accompanying notes and report of independent auditors.
F-6
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
Description of the Partnership
------------------------------
Tower Park Marina Investors, L.P. (formerly PS Marina Investors I), a
California Limited Partnership (the "Partnership"), was organized under the
California Revised Limited Partnership Act, pursuant to a Certificate of
Limited Partnership filed on January 6, 1988 to acquire, own, and operate
and to a lesser extent, develop marina facilities.
The General Partners in the Partnership are Westrec Investors, Inc.
(formerly PS Marina Investors, Inc.), a wholly-owned subsidiary of Westrec
Properties, Inc. ("Westrec"), and B. Wayne Hughes, a shareholder of Westrec
until June 1990. Effective March 1, 1997, the limited partners approved the
substitution of Tower Park Marina Operating Corporation, a wholly owned
subsidiary of Westrec Financial, Inc., for Mr. Hughes.
The Partnership was formed to sell a maximum of 12,000 units of limited
partnership interest at $5,000 per unit ($60,000,000). The General Partners
have contributed a total of $1,000. On November 27, 1989, the Partnership's
offering was terminated with 4,508 units issued, resulting in $22,540,000
of limited partner funds being raised (before commission discount of $3,000
granted to an investor). Half of each Limited Partner's total capital
contribution was deferred. The final installment was due on August 1, 1990,
and $76,000 of such deferrals remain outstanding.
Principles of Consolidation
---------------------------
The accompanying consolidated financial statements include the accounts of
Tower Park Marina Investors, L.P. and its majority-owned subsidiary, Little
Potato Slough Mutual Water Company, ("LPSMWC"). All significant
inter-company transactions and balances have been eliminated in the
consolidation. Certain reclassifications of prior year amounts have been
made to conform to the presentation adopted for 2000.
Tower Park Marina Investors, L.P. was organized on January 6, 1988 and
elected a December 31 year end for tax reporting and financial reporting
purposes. Little Potato Slough Mutual Water Company was organized on March
8, 1982 and elected a February 28 year end for tax reporting and financial
reporting purposes. The Company acquired a majority interest in Little
Potato Slough Mutual Water Company. The Subsidiary's February 28 financial
statements are consolidated with the December 31 financial statements of
the Company since the difference in reporting periods is not more than 93
days. There are no intervening events which may materially affect the
financial position or results of operations.
F-7
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
(continued)
----------
Reserve Fund
------------
The bylaws of LPSMWC require a reserve fund to be established for the
replacement of its existing facilities and any expansion. This reserve is
funded by monthly water and sewer charges assessed to all the shareholders.
At December 31, 2001 and 2000 the reserve fund balance were $253,000 and
$233,000, respectively.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from these estimates.
Revenue Recognition
-------------------
Revenue from slip rentals and RV Parking are recognized over the length of
the contract term. Restaurant, retail and fuel service revenues are
recognized at point of sale.
In 2000, the Partnership adopted the Securities and Exchange Commission's
Staff Accounting Bulletin (SAB) No. 101, which establishes guidelines for
applying generally accepted accounting principles to revenue recognition in
financial statements. The adoption of SAB No. 101 did not affect the
results of operations or financial position of the Partnership.
Net Realizable Value Reserve
----------------------------
As of December 31, 2001 the Partnership owns Tower Park Marina. A net
realizable value reserve of $2,193,000 was established at December 31, 1995
to reduce the carrying value of Tower Park Marina to its then estimated net
realizable value. No addition to this reserve has been considered necessary
since the Partnership has determined that, based on current cash flows,
estimated future cash flows will be sufficient to recover the carrying
value of the marina. The reserve represents an aggregate cost adjustment to
individual assets in compliance with SFAS 121 and no restoration of this
previously recognized reserve is permitted in accordance with paragraph 11
of this guidance.
F-8
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
(continued)
-----------
Offering and Organization Costs
-------------------------------
Costs incurred in preparing Partnership documents, prospectuses and any
other sales literature, costs incurred in qualifying the units for sale
under federal and state securities laws and costs incurred in marketing the
units have been charged to the limited partners' equity to the extent the
total does not exceed 5% of the gross proceeds of the offering. The amount
by which these organization and registration costs exceeded 5% of the gross
proceeds of the offering were borne by Westrec Investors, Inc.
Cash Distributions
------------------
The General Partners interest in Cash Flow from Operations (as defined) and
Cash from Sales or Refinancings (as defined) is 1%.
Allocations of Net Income or Loss
---------------------------------
As set forth in the Partnership Agreement, net loss shall be allocated 99%
to the Limited Partners and 1% to the General Partners. Net income shall
generally be allocated to Partners in proportion to their cash
distributions.
Earnings Per Unit
-----------------
Per unit data is based on the weighted average number of the Limited
Partnership units outstanding during the period; 4,508.
Tower Park Marina
-----------------
Tower Park Marina is stated at cost to the Partnership less a net
realizable value reserve. Depreciation is calculated on a straight-line
basis. Depreciable lives for the major asset categories are as follows:
Asset Category Depreciable Life
-------------- ----------------
Buildings 20 years
Improvements 20 years
Floating docks 7 years
Furniture, fixtures and equipment 7 years
Leasehold interest life of lease
F-9
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
(continued)
-----------
Taxes Based on Income
---------------------
Taxes based on income are the responsibility of the individual partners
and, accordingly, are not reflected in the accompanying financial
statements. The difference between the tax basis and the reported amounts
of the Partnership's assets and liabilities is attributable to the net
realizable value reserve of $2,193,000 and accumulated depreciation of
$744,000.
Segment Reporting
-----------------
Effective January 1, 1998, the Partnership adopted the Financial Accounting
Standards Board's (FASB) Statement of Financial Accounting Standards
("SFAS") No. 131 "Disclosures about Segments of an Enterprise and Related
Information". SFAS No. 131 establishes standards for the way public
business enterprises report information about operating segments in annual
financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports and
requires restatement of prior year information. Operating segments are
defined as components of an enterprise for which separate financial
information is available that is evaluated regularly by the chief operating
decision makers in assessing performance. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic
areas, and major customers. The adoption of SFAS No. 131 did not affect the
results of operations or financial position but did affect the disclosure
of segment information, as presented in Note 9.
New Accounting Pronouncements
-----------------------------
FASB issued on June 2001, SFAS No. 142, Goodwill and Other Intangible
Assets. This Statement addresses the financial accounting and reporting for
acquired goodwill and other intangible assets and supersedes APB 17,
Intangible Assets. The provisions of this Statement are required to be
applied starting with fiscal years beginning after December 15, 2001. This
Statement is not expected to affect the Partnership's financial statements.
FASB issued on June 2001, SFAS No. 143, Accounting for Asset Retirement
Obligations. This Statement addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement shall be
effective for financial statements issued for fiscal years beginning after
June 15, 2002. The effect of SFAS 143 on the Partnership's financial
statements is not yet known.
FASB issued on August 2001, SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived
assets. This Statement shall be effective for financial statements issued
for fiscal years beginning after December 15, 2001. This Statement will
require the Partnership to test its marina facilities for recoverability
because of current period operating or cash flow loss combined with a
history of operating or cash flow losses. An impairment loss shall be
recognized if the carrying amount is greater than the sum of undiscounted
cash flows expected to result from the use and eventual disposition of its
marina facilities. The Partnership reduced the carrying value of its marina
facilities to its net realizable value in 1995 in accordance with SFAS 121.
The amount of impairment loss, if any, that will result from SFAS 144 is
not yet known.
F-10
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
2. Tower Park Marina
-----------------
Tower Park Marina, located in the Sacramento - San Joaquin Delta near
Sacramento, California, includes the purchase price of the property and
related acquisition and closing costs. The Partnership pays an acquisition
fee of 6% of the contract purchase price of the marina facility, plus a
development fee of 6% of the cost of improvements made. Capitalized as a
cost of Tower Park Marina were development fees paid to Westrec of $22,000
and $16,000 for the year ended December 31, 2001 and 2000, respectively. At
December 31, Tower Park Marina comprised the following:
2001 2000
----------- -----------
Land $ 1,040,000 $ 1,040,000
Buildings 2,264,000 2,125,000
Improvements 2,241,000 2,237,000
Floating docks 3,107,000 3,048,000
Furniture, fixtures and equipment 1,318,000 1,252,000
Leasehold interest 941,000 941,000
------------ -----------
10,911,000 10,643,000
Less accumulated depreciation
and amortization (6,007,000) (5,808,000)
----------- -----------
4,904,000 4,835,000
Net realizable value reserve (2,193,000) (2,193,000)
----------- -----------
$ 2,711,000 $ 2,642,000
=========== ===========
The Partnership's marina is not generating satisfactory levels of cash
flows and cash flow projections do not indicate significant improvement in
the near term. These matters raise substantial doubt about the
Partnership's ability to recover the carrying value of its assets, (not
withstanding the write-down of the marina facility to its net realizable
value) and to continue as a going concern. The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability
of the Partnership to continue as a going concern.
F-11
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
3. Water and sewer facilities
--------------------------
Water and sewer facilities at December 31, consist of the following:
2001 2000
---------- ----------
Water and sewer equipment $ 169,000 $ 169,000
Less accumulated depreciation (76,000) (68,000)
---------- ----------
$ 93,000 $ 101,000
========== ==========
4. Other Assets
------------
Other assets at December 31, consist of the following:
2001 2000
---------- ----------
Inventory $ 152,000 $ 207,000
Capitalized financing costs 152,000 152,000
Other 41,000 75,000
---------- ----------
345,000 434,000
Accumulated amortization (71,000) (43,000)
---------- ----------
$ 274,000 $ 391,000
========== ==========
Capitalized financing costs were incurred during 1999 in connection with
the refinancing of Tower Park Marina. These costs are amortized over the
loan term, five years.
Inventory is stated at the lower of cost (average cost method) or market
(replacement or net realizable value).
F-12
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
5. Notes Payable
-------------
Notes payable at December 31, consist of the following:
2001 2000
----------- -----------
Note payable secured by a deed
of trust on Tower Park Marina $ 2,008,000 $ 2,048,000
Other 15,000 8,000
----------- -----------
$ 2,023,000 $ 2,056,000
=========== ===========
At December 31, 2001 future principal payments are as follows:
Year
----
2002 $ 51,000
2003 55,000
2004 1,911,000
2005 4,000
2006 2,000
----------
$2,023,000
==========
Between September 1991 and June 1999, no payments had been made on the note
collateralized by Tower Park Marina. Throughout 1991, 1992, 1993 and 1994,
the Partnership was involved in various negotiations with the lender, a
financial institution, and its successor, Resolution Trust Corporation
("RTC"), to restructure or otherwise settle the note. In January 1995, the
RTC sold the note as part of a sales initiative to a third party. The note
was immediately sold to an affiliate of the individual general partner. The
Partnership entered into an option agreement to purchase the note from its
then current holder for its cost ($1,700,000) plus carrying costs which
expired on April 10, 1996. In connection with the substitution of Tower
Park Marina Operating Corporation for Mr. Hughes as General Partner, the
affiliate of Mr. Hughes which held the note, entered into a new option
agreement with the Partnership, which allowed the Partnership to purchase
the note collateralized by Tower Park Marina, for the affiliate's cost,
$1,700,000, plus $68,000 of accrued unpaid interest.
F-13
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
5. Notes Payable (continued)
-------------------------
As of December 31, 1998, the note was reflected on the Partnership's
balance sheet at its face value of $6,665,000 with an additional $3,199,000
being shown as accrued unpaid interest. The option was initially for a
one-year period expiring on February 28, 1998. The Partnership extended the
option agreement for one year in February 1998 by paying the affiliate
$50,000, which was applied as a reduction in the principal amount due. The
Partnership extended the option agreement for one additional year by making
an additional $50,000 principal payment in February 1999. On July 1, 1999
the Partnership completed the refinancing of Tower Park and exercised its
option to repay the note payable for $1,600,000. As a result, the
Partnership recognized a gain of $8,515,000 from the forgiveness of debt.
The new note payable was for an initial amount of $2,000,000, with an
additional $500,000 available to make improvements to the property. As of
December 31, 2000, $100,000 had been borrowed for capital improvements. The
period of time to borrow the remaining $400,000 for capital improvements
expired on January 31, 2001 with no additional amounts being drawn. The
loan accrues interest at 9.34% and requires monthly principal and interest
payments of $23,000. The loan is due on July 1, 2004.
Interest paid on these notes for the year ended December 31, 2001, 2000,
and 1999 was $193,000, $196,000, and $147,000, respectively.
In connection with the refinancing of the Partnership's note payable during
1999 the General Partner was paid a loan brokerage fee of $25,000.
Based on the market rate of the mortgage note, the fair value at December
31, 2001 is deemed to be the carrying value, $2,008,000.
6. Related Party Transactions
--------------------------
The Partnership has an agreement with Westrec Marina Management, Inc., an
affiliate of Westrec, to manage the day-to-day operations of the marinas
for a fee equal to 6% of the marinas' monthly gross revenues (as defined).
Management fees for the year ended December 31, 2001, 2000 and 1999 were
$132,000, $146,000 and $130,000, respectively.
In connection with funding operating deficits and with the acquisition of
marina facilities, funds have been borrowed from Westrec. These borrowings
accrue interest at the prime rate plus 1% (5.75% at December 31, 2001).
Total interest accrued to Westrec for the year ended December 31, 2001,
2000, and 1999 was $307,000, $356,000 and $237,000, respectively.
F-14
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
7. Commitments and Contingencies
-----------------------------
The operations at Tower Park Marina are influenced by factors that affect
the boating industry both locally and nationally, with activity at Tower
Park Marina increasing seasonally during the period April through October
of each year.
In November 1991, contamination was discovered in the area surrounding a
fuel storage tank at Tower Park Marina. Currently, the Partnership is
required to perform quarterly groundwater sampling and monitoring.
Environmental consultants have been engaged to perform this sampling to
determine the extent of the contamination. Presently, sufficient data has
not been obtained to estimate the cost of remediation; consequently no loss
accrual has been made in the financial statements. To date the Partnership
has incurred $101,000 in monitoring fees. Included in cost of operations at
December 31, 2001 is $16,000 of monitoring fees.
The Partnership operates a portion of Tower Park Marina on approximately 14
acres of waterfront property under a lease with the California State Land
Commission (the "CSLC Lease"). Effective January 1, 1999 the CSLC Lease was
extended until December 31, 2023. The CSLC Lease provides for an annual
rent based on gross receipts, with a minimum annual rent of $40,000,
payable in advance in quarterly installments of $10,000. Rent expense
associated with the CSLC Lease is included in cost of operations and was
$40,000 for each of the years ended December 31, 2001, 2000 and 1999.
F-15
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
7. Commitments and Contingencies (continued)
-----------------------------------------
Future minimum lease payments under this lease are as follows:
Year
----
2002 $ 40,000
2003 40,000
2004 40,000
2005 40,000
2006 40,000
Thereafter 684,000
----------
$ 884,000
==========
The Partnership's ability to continue to operate through 2002 and
beyond is contingent on, among other factors, the improvement in Tower
Park Marina operations and continued advances from the General
Partners. Management's plans include the expenditure of approximately
$150,000 (unaudited) in additional repairs and capital improvements
during 2002, which management believes will continue to improve the
operations of the property. The financial statements do not include any
adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible
inability of the Partnership to continue as a going concern.
8. Prior Period Adjustment
-----------------------
The Partnership has a 51% ownership interest in Little Potato Slough
Mutual Water Company ("LPSMWC"). LPSMWC supplies and distributes water
to its shareholders and operates a sewer system and drainage canals for
use by its shareholders. The 51% interest was accounted for as an
investment under the equity method in prior years and not consolidated.
Additionally, the Partnership had expensed capital assessments paid to
LPSMWC. As a result of the error, the balance sheet as of December 31,
1999 and the related statement of operations for the year ended
December 31, 1999 has been restated to consolidate LPSMWC and to adjust
net income (loss) and Partners' Equity.
As Previously
Reported Adjustment As Restated
------------- ---------- -----------
For the Year Ended December 31, 1999:
Total Assets $ 3,082,000 $ 291,000 $ 3,373,000
============ ========== ===========
Total Partners' Deficit $ (2,505,000) $ 114,000 $(2,391,000)
============ ========== ===========
F-16
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
8. Prior Period Adjustment (continued)
-----------------------------------
As Previously
Reported Adjustment As Restated
------------- ------------ -----------
For the Year Ended December 31, 1999:
Income (loss) before extraordinary item $ (589,000) $ 8,000 $ (581,000)
Gain on extinguishment of debt 8,515,000 - 8,515,000
------------- ------------ -----------
Net income $ 7,926,000 $ 8,000 $ 7,934,000
============= ============ ===========
Limited Partners' net income (loss) per unit:
Income (loss) before discontinued
operations and extraordinary item $ (125.55) $ 1.77 $ (123.78)
Loss from discontinued operations (3.77) - (3.77)
Gain on extinguishment of debt 1,870.01 - 1,870.01
------------- ------------ -----------
Net income $ 1,740.69 $ 1.77 $ 1,742.46
============= ============ ===========
9. Segment Reporting
-----------------
The Partnership has been aggregated into four reportable business segments,
(Slip rentals, RV parking, Retail sales, and Fuel services): Slip rentals
comprise the wet boat slip rentals and dry boat storage operations at the
marina. RV parking represents both long term and transient recreational
vehicle parking at the campgrounds adjacent to the marina. Retail sales
segment consists of the operations of the retail boat supply and sundries
store at the marina. The Fuel service segment reports the operations of the
fuel dock at the marina.
The accounting policies of the reportable segments are the same as those
described in summary of significant accounting policies. The Company
evaluates the performance of its operating segments based on income from
operations before depreciation and amortization.
Summarized financial information concerning the Company's reportable
segments is shown in the following table. The "other" line item includes
results of insignificant operations and as it relates to segment profit
(loss), income and expenses not allocated to reportable segments.
F-17
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
9. Segment Reporting (continued)
-----------------------------
Segment Information (in 000's) 2001 2000 1999
------ ------ ------
Revenues
--------
Slip Rental 696 710 678
RV Parking 957 812 707
Retail Sales 423 452 401
Fuel Service 243 252 209
Other 514 437 542
------ ------ ------
Total Consolidated Revenues 2,833 2,663 2,537
------ ------ ------
Depreciation
------------
Slip Rental 52 32 14
RV Parking 18 18 18
Retail Sales - - -
Fuel Service - - -
Unallocated amount (2) 168 157 131
------ ------ ------
Total Consolidated Depreciation 238 207 163
------ ------ ------
Profit (Loss)
-------------
Slip Rental 586 614 616
RV Parking 778 682 580
Retail Sales 65 103 88
Fuel Service 44 36 17
Other (1) (1,916) (1,861) (1,865)
------ ------ ------
Total Loss Before Discontinued
Operations and Extraordinary Item (443) (426) (564)
------ ------ ------
Assets
------
Slip Rental 271 263 78
RV Parking 251 265 283
Retail Sales 59 96 81
Fuel Service 17 22 12
Unallocated amount (2) 2,913 2,903 2,919
------ ------ ------
Total Consolidated Assets 3,511 3,549 3,373
------ ------ ------
(1) These items are not provided to management on a segment basis and are
not used by management to measure segment profit or loss. These
include general and administrative expenses.
(2) Information about assets is not included in the measure of segment
profit or loss that is reviewed by management. However, certain
information is provided to management and is thus provided here.
F-18
TOWER PARK MARINA INVESTORS, L.P.
(formerly PS MARINA INVESTORS I)
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
10. Discontinued Operations
-----------------------
The Partnership discontinued the restaurant operations and boat service
effective January 1, 2001. The Partnership still owns the assets of the
restaurant operations and boat service. Concessionaires are now
operating the restaurant and boat service under operating leases,
including the assets of the restaurant operations and boat service.
2001 2000 1999
------------ ----------- -------------
Restaurant
Revenue $ 3,000 $ 595,000 $ 490,000
Expenses 7,000 576,000 507,000
-------- --------- ---------
Income (loss) $ (4,000) $ 19,000 $ (17,000)
======== ========= =========
Boat Service
Revenue $ 46,000 $ 73,000 $ -
Expenses 62,000 94,000 -
--------- --------- ---------
Income (loss) $ (16,000) $ (21,000) $ -
========= ========= =========
Discontinued Operations, total
Revenue $ 49,000 $ 668,000 $ 490,000
Expenses 69,000 670,000 507,000
--------- --------- ---------
Income (loss) $ (20,000) $ (2,000) $ (17,000)
========= ========= =========
F-19
TOWER PARK MARINA INVESTORS LP
a California Limited Partnership
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Cost
Subsequent to
Initial Cost Acquisition
---------------------------------- -----------------
Date Buildings & Buildings &
Acquired Description Encumbrances Land Improvements Improvements
- ------------ ----------------------------- ---------------- -------------- ------------------ -----------------
02/88 Tower Park $2,008,000 $1,040,000 $6,213,000 $3,658,000
Net Realizable Value Reserve
---------------- -------------- ------------------ -----------------
$2,008,000 $1,040,000 $6,213,000 $3,658,000
=============== ============= ================= ================
Gross Carrying Amount at December 31, 2001
----------------------------------------------------------------------
Date Buildings & Accumulated
Acquired Description Land Improvements Total Depreciation
- ------------ ----------------------------- ----------------- ----------------- ----------------- ---------------
02/88 Tower Park $1,040,000 $9,871,000 $10,911,000 $6,007,000
Net Realizable Value Reserve (2,193,000) 0
----------------- ----------------- ----------------- ---------------
$1,040,000 $9,871,000 $ 8,718,000 $6,007,000
================ ================ ================ ===============
F-20
TOWER PARK MARINA INVESTORS LP
a California Limited Partnership
SCHEDULE III - REAL ESTATE AND
ACCUMULATED DEPRECIATION (continued)
REAL ESTATE RECONCILIATION
Year Ended December 31,
-----------------------------------------
2001 2000 1999
---------- ---------- -----------
Balance at beginning of the year $8,450,000 $8,180,000 $7,916,000
Contruction in progress and
improvements to facilities
during the year 268,000 270,000 264,000
Acquisitions during the year
Deductions during the year
---------- ----------- -----------
Balance at the end of the year $8,718,000 $8,450,000 $8,180,000
========== =========== ===========
ACCUMULATED DEPRECIATION RECONCILIATION
Year Ended December 31,
-----------------------------------------
2001 2000 1999
---------- ---------- ------------
Balance at beginning of the year $5,808,000 $5,638,000 $5,497,000
Additions during the year:
Depreciation 199,000 170,000 141,000
Deductions during the year
---------- ---------- ------------
Balance at the end of the year $6,007,000 $5,808,000 $5,638,000
========== ========== ============
The aggregate cost for Federal income tax purposes is $ 10,911,000.
F-21
INDEX TO EXHIBITS
-----------------
Exhibit No.
----------
(4) (A) Amended and Restated Agreement of Limited Partnership (form included
as Exhibit A to the Prospectus of Registrant dated August 4, 1988,
contained in Amendment No. 2 to Registration Statement No. 33-21021,
of Registrant filed July 29, 1988, and is incorporated herein by
reference).
(B) Amended form of execution copy of Subscription Agreement/Promissory
Note (filed as pages A-1 through A-6 to Post-Effective Amendment No. 1
to Registration Statement No. 33-21021 of Registrant filed February
14, 1989, and is incorporated herein by reference).
(10) (A) Form of Property Management Agreement between Registrant and PS Marina
Management, Inc. (filed as Exhibit 10.1 to Registration Statement No.
33-21021 of Registrant and is incorporated herein by reference).
(B) Copy of Purchase Agreement together with certain documents, leases and
the CSLC Lease relating to the purchase of Tower Park Marina (filed as
Exhibit 10.3 to Registration Statement No. 33-21021 of Registrant and
is incorporated herein by reference).
(C) Copy of Purchase Agreement together with certain documents, subleases
and the Concession Agreement relating to the purchase of Chandlers
Landing Marina (filed as Exhibit 10.4 to Registration Statement No.
33-21021 of Registrant and is incorporated herein by reference).
(D) Copy of lease between Registrant and Marine Ventures Limited relating
to restaurant/bar, general store and pontoon boat rental operation at
Tower Park Marina (filed as Exhibit 10.5 to Registration Statement No.
33-21021 of Registrant and is incorporated herein by reference).
(E) Copy of Purchase Agreement together with certain documents relating to
the purchase of ThunderBoat Marina (filed as Exhibit 28A to the
Registrant's Current Report on Form 8-K filed December 28, 1989, and
is incorporated herein by reference).
(F) Copy of Purchase Agreement together with certain documents relating
to the purchase of Banyan Bay Marina (filed as Exhibit 28B to the
Registrant's Current Report on Form 8-K filed December 28, 1989, and
is incorporated herein by reference).
(G) Registrant's Annual Report on Form 10-K for the year ended December
31, 1999 (incorporated herein by reference).
(H) Registrant's Annual Report on Form 10-K for the year ended December
31, 1998 (incorporated herein by reference).