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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2004 Commission File No. 0-15940
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2593067
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
280 DAINES STREET, BIRMINGHAM, MICHIGAN 48009
(Address of principal executive offices) (Zip Code)
(248) 645-9261
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
units of limited partnership interest
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 [ ]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes [ ] No [X]
The estimated aggregate Net Asset Value of the units as of March 1, 2005 (based
on a 2005 appraisal of Partnership properties) held by non-affiliates was
approximately $23,601,185. As of March 1, 2005 the number of units of limited
partnership interest of the registrant outstanding was 30,000.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART I
This Form 10-K contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements are
based on assumptions and expectations which may not be realized and are
inherently subject to risks and uncertainties, many of which cannot be predicted
with accuracy and some of which might not even be anticipated. Future events and
actual results, financial and otherwise, may differ materially from the results
discussed in the forward-looking statements. Risks and other factors that might
cause such a difference include, but are not limited to, the effect of economic
and market conditions; financing risks, such as the inability to obtain debt
financing on favorable terms; the level and volatility of interest rates; and
failure of the Partnership's properties to generate additional income to offset
increases in operating expenses, as well as other risks listed herein under Item
1.
ITEM 1. BUSINESS
General Development of Business
Uniprop Manufactured Housing Communities Income Fund, a Michigan Limited
Partnership (the "Partnership"), acquired, maintains, operates and ultimately
will dispose of income producing residential real properties consisting of four
manufactured housing communities (the "Properties"). The Partnership was
organized and formed under the laws of the State of Michigan on May 16, 1985.
Its principal offices are located at 280 Daines Street, Birmingham, Michigan
48009 and its telephone number is (248) 645-9261.
The Partnership filed an S-11 Registration Statement (Registration No.
2-98180) in June 1985, which was declared effective by the Securities and
Exchange Commission on September 24, 1985. The Partnership thereafter offered a
maximum of 30,000 units of limited partnership interest representing capital
contributions by the limited partners to the Partnership of $1,000 per unit (the
"Units"). The sale of all 30,000 Units was completed in March 1986, generating
$30 million of contributed capital to the Partnership.
On February 10, 1986, the Partnership acquired Aztec Estates, a 645-site
manufactured housing community in Margate, Florida and Kings Manor, a 314-site
manufactured housing community in Ft. Lauderdale, Florida. On March 4, 1986, the
Partnership acquired Old Dutch Farms, a 293-site manufactured housing community
in Novi, Michigan. On March 27, 1986, the Partnership acquired The Park of the
Four Seasons, a 572-site manufactured housing community in Blaine, Minnesota.
The Partnership operates the Properties as manufactured housing communities
with the primary investment objectives of: (1) providing cash from operations to
investors; (2) obtaining capital appreciation; and (3) preserving capital of the
Partnership. There can be no assurance that such objectives can be achieved.
On March 25, 1997 the Partnership borrowed $33,500,000 from Nomura Asset
Capital Corporation and secured the borrowing with liens on its Properties (the
"Financing"). The note is payable in monthly installments of $251,439, including
interest, through March 2027. The interest rate is 8.24% per annum through June
2007; thereafter, the interest rate will be adjusted based on the provisions of
the loan agreement. The loan may be prepaid without penalty beginning in January
2007. On March 26, 1997 the Partnership distributed $30,000,000 to the Limited
Partners, representing a full return of original capital contributions of $1,000
per unit held. The Partnership continues to own and operate its properties and
has been able to continue to pay cash distributions to the Limited Partners,
although in amounts substantially lower than the distributions paid prior to the
Financing. Limited Partners continue to have an interest in the Partnership as
only the original capital contributions were returned on March 26, 1997.
Financial Information About Industry Segment
The Partnership's business and only industry segment is the operation of
its four manufactured housing communities. For a description of the
Partnership's revenues, operating profit and assets, please refer to Items 6 and
8 of this Form 10-K.
Narrative Description of Business
General
The Properties were selected from 23 manufactured housing communities then
owned by affiliates of P.I. Associates Limited Partnership, a Michigan limited
partnership, the General Partner (the "General Partner") of the Partnership. The
Partnership rents home sites in the Properties to owners of manufactured homes.
It was intended that the Partnership would hold the Properties for extended
periods of time, originally anticipated to be seven to ten years after their
acquisition. The General Partner has the discretion to determine when a Property
is to be sold; provided, however, that the determination of whether a particular
Property should be disposed of will be made by the General Partner only after
consultation with an independent consultant, Manufactured Housing Services Inc.
(the "Consultant"). In making their decisions they will consider relevant
factors, including, current operating results of the particular Property and
prevailing economic conditions, with a view to achieving maximum capital
appreciation to the Partnership while considering relevant tax consequences and
the Partnership's investment objectives.
Competition
The business of owning and operating residential manufactured housing
communities is highly competitive, and the Partnership may be competing with a
number of established companies having greater financial resources. Moreover,
there has been a trend for manufactured housing community residents to purchase
(where zoning permits) their home sites on a collective basis. This trend may
result in increased competition with the Partnership for residents. In addition,
the General Partner, its affiliates or both, have participated, and may in the
future participate, directly or through other partnerships or
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investment vehicles in the acquisition, ownership, development, operation and
sale of projects, which may be in direct competition with one or more of the
Properties.
Each of the Properties competes with numerous similar facilities located in
its geographic area. The Margate/Fort Lauderdale area contains approximately
seven communities offering approximately 2,758 sites competing with Aztec
Estates. The Davie/Fort Lauderdale area contains approximately seven communities
offering approximately 3,483 sites competing with Kings Manor. Old Dutch Farms
competes with approximately ten communities offering approximately 4,724 sites.
Park of the Four Seasons competes with approximately 11 communities offering
approximately 3,211 sites. The Properties also compete against other forms of
housing, including apartment and condominium complexes, and site built homes.
Governmental Regulations
The Properties owned by the Partnership are subject to certain state
regulations regarding the conduct of the Partnership operations. For example,
the State of Florida regulates agreements and relationships between the
Partnership and the residents of Aztec Estates and Kings Manor. Under Florida
law, the Partnership is required to deliver to new residents of those Properties
a prospectus describing the Property and all tenant rights, Property rules and
regulations, and changes to Property rules and regulations. Florida law also
requires minimum lease terms, requires notice of rent increases, grants to
tenant associations certain rights to purchase the community if being sold by
the owner and regulates other aspects of the management of such properties. The
Partnership is required to give 90 days notice to the residents of Florida
properties of any rate increase, reduction in services or utilities or change in
rules and regulations. If a majority of the residents object to such changes as
unreasonable, the matter must be submitted to the Florida Department of Business
Regulations for mediation prior to any legal adjudication of the matter. In
addition, if the Partnership seeks to sell Florida Properties to the general
public, it must notify any homeowners' association for the residents, and the
association shall have the right to purchase the Property for the price, terms
and conditions being offered to the public within 45 days of notification by the
owner. If the Partnership receives an unsolicited bonafide offer to purchase the
Property from any party, it must notify any such homeowners' association that it
has received an offer, state to the homeowners' association the price, terms and
conditions upon which the Partnership would sell the Property, and consider
(without obligation) accepting an offer from the homeowners' association. The
Partnership has, to the best of its knowledge, complied in all material respects
with all requirements of the States of Florida, Michigan and Minnesota, where
its operations are conducted.
Employees
The Partnership employs three part-time employees to perform partnership
management and investor relations services. The Partnership retains an
affiliate, Uniprop AM, LLC, as the property manager for each of its Properties.
Uniprop AM, LLC is paid a fee equal to the lesser of 5% of the annual gross
receipts from each of the Properties or the amount which would be payable to
unaffiliated third parties for comparable services.
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Uniprop AM, LLC retains local managers on behalf of the Partnership at each of
the Properties. Salaries and fringe benefits of such local managers are paid by
the communities and are not included in any property management fee payable to
Uniprop AM, LLC. Local managers are employees of the communities and are paid
semi-monthly. The yearly salaries and expenses for local managers range from
$22,000 to $52,000. Local managers have no direct management authority, make no
decisions regarding operations and act only in accordance with instructions from
the property manager.
ITEM 2. PROPERTIES
The Partnership purchased all four manufactured housing communities for
cash. As a result of the 1997 financing, the Properties are now encumbered with
mortgages.
Each of the Properties is a modern manufactured housing community
containing lighted and paved streets, side-by-side off-street parking and
complete underground utility systems. The Properties consist of only the
underlying real estate and improvements, not the actual homes themselves. Each
of the Properties has a community center which includes offices, meeting rooms
and game rooms. Each of the Properties, except Old Dutch Farms, has a swimming
pool and tennis courts.
The table below contains certain information concerning the Partnership's
four properties.
PROPERTY NAME YEAR NUMBER OF
AND LOCATION CONSTRUCTED ACREAGE SITES
- ------------- ----------- ------- ---------
Aztec Estates
Sundial Circle
Margate, FL 1970 100 645
Kings Manor
State Road 84
& Flamingo Road
Ft. Lauderdale, FL 1972 45 314
Old Dutch Farms
Napier Road
Novi, MI 1972 47 293
Park of the Four
Seasons
113th Ave, N.E.
Blaine, MN 1972 107 572
-5-
ITEM 3. LEGAL PROCEEDINGS
A group of current residents, on March 4, 2005 filed a class action lawsuit in
the Circuit Court of Oakland County against the Partnership and the General
Partner of the Partnership claiming that the Old Dutch Farms community did not
honor its obligations with respect to operating various aspects of the
community. The complaint requests damages, costs and injunctive relief. Counsel
for the Partnership is presently reviewing and preparing an answer to the
complaint on behalf of the Partnership. While the discovery process has not yet
begun, the Partnership intends to vigorously defend against this claim. The
amount of potential liability, if any is indeterminable at the time.
The City of Novi, Michigan, as of February 11, 2004 filed a lawsuit in the
Circuit Court of Oakland County against the Partnership to compel the Old Dutch
Farms community to connect to the City of Novi sanitary sewer system. The
Partnership has reached a settlement agreement with the City of Novi. The
Partnership will pay a tap fee of $730,000 based on an estimated water use by
the residents, subject to adjustments after a three year monitoring period based
on actual meter reading water usage. The cost of connection and removal of the
current sanitary sewer system is estimated to be approximately $200,000. The
Partnership anticipates these cost will be incurred during 2005.
In connection with the settlement agreement, the partnership has obtained an
unsecured $750,000 note payable to a bank requiring monthly payments of $12,500
plus interest at libor plus 1.8% and is due on December 2009. There was no
outstanding balance under this agreement at December 31, 2004.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The voting privileges of the Limited Partners are restricted to certain
matters of fundamental significance to the Partnership. The Limited Partners
must approve certain major decisions of the General Partner if the General
Partner proposes to act without the approval of the Consultant. The Limited
Partners also have a right to vote with respect to the removal and replacement
of the General Partner, dissolution of the Partnership, material amendments to
the Partnership Agreement and the sale or other disposition of all or
substantially all of the Partnership's assets, except in the ordinary course of
the Partnership's disposing of the Properties. Such matters must be approved by
Limited Partners holding in the aggregate more than 50% of the then outstanding
Units. No matters were submitted to the Limited Partners for a vote during 2004.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
There is no established public trading market for the Units and it is not
anticipated that one will ever develop. During the last two years, less than
four percent of the Units
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have been transferred each year, excluding transfers on account of death or
intra-family transfers. The Partnership believes there is no formal secondary
market, or the substantial equivalent thereof, and none will develop.
The General Partner calculates the estimated net asset value of each Unit
by dividing the amount of distributions that would be made to the Limited
Partners in the event of the current sale of the Properties at their current
appraised value, less mortgage debt and sales expenses (but without
consideration to tax consequences of the sale), by 30,000. In March 2005, the
Properties were appraised at an aggregate fair market value of $64,600,000.
Assuming a sale of the four properties at the appraised value in March 2005,
less payment of 3.0% selling expenses, mortgage debt of $31,190,519, the
$1,970,000 Contingent Purchase Price due to certain partners of the General
Partner, and after the 80/20% split of sale or financing proceeds with the
General Partner, the net aggregate proceeds available for distribution to the
Limited Partners is $23,601,185, or $786.71 per Unit. There can be no assurance
that the estimated net asset value could ever be realized. As of March 1, 2005,
the Partnership had approximately 2,315 Limited Partners holding 30,000 Units.
The Partnership has no equity compensation plans.
The following table sets forth the distributions per limited partnership unit
for each calendar quarter in the last two fiscal years. Distributions were paid
in the periods immediately subsequent to the periods in which such distributions
were declared.
Distribution per Distribution to
Limited Partnership Unit General Partners
------------------------ ----------------
Quarter Ended
March 31, 2004 $3.00 $181,000
June 30, 2004 $3.00 $181,000
September 30, 2004 $3.00 $181,000
December 31, 2004 $3.00 $181,000
March 31, 2003 $3.00 $173,375
June 30, 2003 $3.00 $173,375
September 30, 2003 $3.00 $173,375
December 31, 2003 $3.00 $173,375
The Partnership intends to continue to declare quarterly distributions. However,
distributions are determined by the General Partner and will depend on the
results of the Partnership's operations.
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ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes selected financial data for Uniprop
Manufactured Housing Communities Income Fund, a Michigan Limited Partnership,
for the periods ended December 31, 2004, 2003, 2002, 2001 and 2000:
FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 2004 31, 2003 31, 2002 31, 2001 31, 2000
------------ ----------- ----------- ----------- -----------
Total Assets $ 19,330,739 $20,466,593 $20,890,327 $21,354,052 $21,694,688
============ =========== =========== =========== ===========
Note Payable $ 31,190,519 $31,576,444 $31,939,585 $32,273,332 $32,580,418
============ =========== =========== =========== ===========
Revenue $ 10,430,726 $10,713,194 $10,797,708 $10,059,885 $10,003,551
Expenses (10,324,437) (9,905,031) (9,793,992) (9,138,331) (8,863,417)
------------ ----------- ----------- ----------- -----------
Net Income $ 106,289 $ 808,163 $ 1,003,716 $ 921,554 $ 1,140,134
============ =========== =========== =========== ===========
Distributions to
Limited Partners,
per Unit $ 12.00 $ 12.00 $ 12.00 $ 11.75 $ 10.75
Income (loss)
per Unit: ($9) $ 9 $ 15 $ 13 $ 18
Class A
Class B $ 28 $ 47 $ 51 $ 49 $ 55
Weighted average
number of Units
outstanding:
Class A 20,230 20,230 20,230 20,230 20,230
Class B 9,770 9,770 9,770 9,770 9,770
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Capital Resources
The capital formation phase of the Partnership began on February 10, 1986,
when Aztec Estates and Kings Manor were purchased by the Partnership and
operations commenced. On March 4, 1986, and March 27, 1986, Old Dutch Farms and
Park of the Four Seasons were purchased, respectively. From the $30,000,000
capital raised from the sale of the units, $26,400,000 was used to purchase the
four Properties after deducting sales commissions, advisory fees and other
organization and offering costs.
-8-
In an effort to provide Limited Partners with a full return of original
capital contributions of $1,000 per unit, the General Partner, with majority
consent from the Limited Partners, mortgaged the four Properties owned by the
Partnership on March 25, 1997 in the aggregate amount of $33,500,000. The
General Partner acknowledges that the mortgages impose some risks to the
Partnership, but considers that such risks are not greater than risks typically
associated with real estate financing.
Liquidity
The Partnership has, since inception, generated adequate amounts of cash to
meet its operating needs. The Partnership retains cash reserves, which it
believes will be adequate to maintain the Properties. All funds in excess of
operating needs, amounts sufficient to pay debt service, and cash reserves have
been distributed to the Partners quarterly.
While the Partnership is not required to maintain a working capital
reserve, it has not distributed all the cash generated from operations in order
to build cash reserves. As of December 31, 2004, the Partnership's cash balance
amounted to $200,760. The amount of any funds placed in reserve is at the
discretion of the General Partner. The Partnership expects to generate adequate
amounts of cash to meet its operating needs and debt service during the next
fiscal year.
The Partnership has a renewable line of credit of $1,000,000 with National
City Bank of Michigan/Illinois that expires in 2005. The interest rate floats
180 basis points above the one month LIBOR. As of December 31, 2004 the line of
credit held a balance of $40,000. The primary purpose for the line of credit is
to meet any short-term or seasonal cash flow needs. The Partnership plans to
renew the line of credit at the expiration.
The Partnership has a renewable $1,000,000 line of credit with Uniprop Home
Finance, an affiliated entity, that expires on September 2006. The interest rate
is the prime minus .5%. The sole purpose of this line of credit is to purchase
new and used homes to be used as model homes offered for sale within the
Partnership's communities. As of December 31, 2004 the outstanding balance on
this line of credit was $ $565,190. The General Partner believes that continuing
the model home program is in the best interest of the Partnership.
On March 25, 1997, the Partnership completed the Financing pursuant to
which the Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation
and secured the borrowing with liens on its Properties. The note is payable in
monthly installments of $251,439, including interest, through March 2027. The
interest rate is 8.24% per annum through June 2007; thereafter, the interest
rate will be adjusted based on the provisions of the note agreement. The loan
may be prepaid without penalty beginning in January 2007.
On March 26,1997, the Partnership distributed $30,000,000 of the financing
proceeds to the Limited Partners, representing a full return of original capital
contributions of $1,000 per Unit held. The Partnership continues its operations
and expects to be able to continue to pay cash distributions to the Limited
Partners, although in amounts
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substantially lower than paid prior to the Financing, due to payment of debt
service resulting from the Financing. Limited Partners will continue to have an
interest in the Partnership. Only the original capital contributions were
returned on March 26, 1997.
Future maturities on the note payable for the next five years are as
follows: 2005 - $412,000; 2006 - $450,000; 2007 - $487,000, 2008 - $522,000; and
2009 - $575,000.
The yearly Partnership Management Distribution due to the General Partner
for 2004 was $634,000, or 1.0% of the then most recent appraised value of the
properties held by the Partnership.
The General Partner elected to make a total distribution of $450,000 during
2004, 80.0% of which, or $360,000, was paid to the Limited Partners and 20.00%
of which, or $90,000, was paid to the General Partner as the Incentive
Management Interest.
Results of Operations
a. Distributions
For the years ended December 31, 2004 and 2003, the Partnership made
distributions to Limited Partners of $12.00 per Unit held, or $360,000.
The General Partner receives a quarterly Partnership Management
Distribution equal to .25% of the appraised value of the properties of the
Partnership (equal to $634,000 annually based on current 2004 appraisals).
Thereafter, distributions are made at the discretion of the General Partner, and
are allocated 20% to the General Partner as an Incentive Management Interest and
80% to the Limited Partners. The General Partner received distributions totaling
$716,375, $689,375, and $678,000 during the years ended December 31, 2004, 2003,
and 2002, respectively.
b. Revenue
The manufactured housing industry in general has experienced declining
retail home sales due to restrictive financing. In addition, the U.S. economy
has experienced sluggish growth during 2004 and high unemployment. These
adverse conditions caused the Partnership to experience a decline in occupancy
levels resulting in gross revenue decreasing by $282,468 from 2003 to 2004.
c. Net Income
For the years ended December 31, 2004, 2003 and 2002, net income was
$106,289, $808,163 and $1,003,716 on total revenues of $10,430,726, $10,713,194
and $10,797,708 respectively.
Distributions to all Partners, were $1,076,375, $1,049,375 and $1,038,000
for the years ended December 31, 2004, 2003, and 2002, respectively.
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d. Partnership Management
Certain employees of the Partnership are also employees of affiliates of
the General Partner. The Partnership paid these employees an aggregate of
$116,323, $113,289 and $96,429, in 2004, 2003 and 2002, respectively, to perform
partnership management and investor relations services for the Partnership.
e. Recent Accounting Pronouncements
There are no recent accounting pronouncements that the Fund is required to
adopt.
f. Critical Accounting Policies
In the course of developing and evaluating accounting policies and
procedures, we use estimates, assumptions and judgments to determine the most
appropriate methods to be applied. Such processes are used in determining
capitalization of costs related to real estate investments and potential
impairment of real estate investments.
Real estate assets are stated at cost less accumulated depreciation.
Expenditures for property maintenance are charged to operations as incurred,
while significant renovations are capitalized. Depreciation of the buildings is
recorded on the straight-line method using an estimated useful life of thirty
years.
In determining the fair value of real estate investments, we consider
future cash flow projections on a property by property basis, current interest
rates and current market conditions of the geographical location of each
property.
The following table outlines our contractual obligations (in thousands) as
of December 31, 2004.
Total Yr1 2-3 Yrs 4-5 Yrs Over 5 Yrs
------- ------ ------- ------- ----------
Line-of-credit $ 40 $ 40
Note payable-affiliate $ 565 $ 565
Mortgages payable $31,191 $ 412 $937 $1,097 $28,745
------- ------ ---- ------ -------
Total $31,796 $1,017 $937 $1,097 $28,745
======= ====== ==== ====== =======
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The future payments listed above for long-term debt repayments exclude interest
payments.
g. Property Operations
Overall, the four Properties had a combined average occupancy of 78% for
the year ended December 31, 2004; as compared to 88% the year ended December 31,
2003; and 91% the year ended December 31, 2002. The average collected monthly
rent for the year ended December 31, 2004 (not a weighted average) was
approximately $479 per home-site as compared to $468 for the year ended December
31, 2003 and $455 for the year ended December 31, 2002.
OCCUPIED SITES OCCUPANCY RATE AVERAGE RENT
TOTAL --------------------- ------------------ ------------------
SITES 2004 2003 2002 2004 2003 2002 2004 2003 2002
----- ----- ----- ----- ---- ---- ---- ---- ---- ----
Aztec Estates 645 482 498 552 75% 78% 86% $517 $505 $493
Kings Manor 314 295 303 305 94 97 97 514 495 479
Old Dutch Farms 293 201 252 254 69 86 87 450 448 440
Park 4 Seasons 572 455 525 555 80 92 97 434 423 405
----- ----- ----- ----- --- --- --- ---- ---- ----
Overall 1,824 1,433 1,578 1,666 78% 88% 91% $479 $468 $455
===== ===== ===== ===== === === === ==== ==== ====
The following table summarizes gross revenues and net operating income for
the Partnership and Properties during 2004, 2003 and 2002.
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NET OPERATING INCOME
GROSS REVENUE AND NET INCOME
--------------------------------------- --------------------------------------
2004 2003 2002 2004 2003 2002
----------- ----------- ----------- ---------- ----------- -----------
Aztec Estates $ 4,431,458 $ 3,922,469 $ 4,220,557 $1,459,081 $ 1,419,806 $ 1,576,265
Kings Manor 2,188,251 2,265,236 2,208,754 1,081,113 1,167,936 1,136,743
Old Dutch Farms 1,229,045 1,431,640 1,541,086 502,302 750,094 764,565
Park of the Four Seasons 2,573,639 3,086,083 2,810,588 1,428,857 1,608,843 1,692,116
----------- ----------- ----------- ---------- ----------- -----------
$10,422,393 $10,705,428 $10,780,985 $4,471,353 $ 4,946,679 $ 5,169,689
Partnership
Management $ 8,333 $ 7,766 $ 16,723 (293,844) (250,785) (220,418)
Other
Expenses (488,124) (294,459) (345,639)
Debt Service (2,715,486) (2,738,379) (2,768,270)
Depreciation (867,610) (854,893) (831,646)
---------- ----------- -----------
TOTAL: $10,430,726 $10,713,194 $10,797,708 $ 106,289 $ 808,163 $ 1,003,716
=========== =========== =========== ========== =========== ===========
Net Operating Income ("NOI") is a non-GAPP financial measure equal to net
income, the most comparable GAAP financial measure, plus depreciation, interest
expense, partnership management expense, and other expenses. Te Partnership
believes that NOI is useful to investors and the Partnership's management as an
indication of the Partnership's ability to service debt and pay cash
distributions. NOI presented by the Partnership may not be comparable to NOI
reported by other companies that define NOI differently, and should not be
considered as an alternative to net income as an indication of performance or to
cash flows as a measure of liquidity or ability to make distributions.
COMPARISON OF YEAR ENDED DECEMBER 31, 2004 TO YEAR ENDED DECEMBER 31, 2003
Total revenues decreased $282,468 or less than 3%, to $10,430,726 in 2004,
compared to $10,713,194 in 2003. The decrease was primarily the result of lower
occupancy levels for the year ended December 31, 2004. Rental revenues decreased
$246,085 for the year ended December 31, 2004.
The Partnership's operating expenses increased $419,406, from $9,905,031 in
2003, to $10,324,437 in 2004. The increase was primarily the result of higher
home sale expense, higher administrative expense and higher property operation
costs.
As a result of the foregoing factors, net income decreased $701,874 from
$808,163 in 2003 to $106,289 in 2004.
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COMPARISON OF YEAR ENDED DECEMBER 31, 2003 TO YEAR ENDED DECEMBER 31, 2002
Total revenues decreased $84,514 or less than 1%, to $10,713,194 in 2003,
compared to $10,797,708 in 2002. The decrease was primarily the result of lower
occupancy levels for the year ended December 31, 2003. Rental Revenue decreased
$305,748 for the year ended December 31, 2003. Home Sale Income increased by
$199,292 due to aggressive sales and marketing campaigns.
The Partnership's operating expenses increased $111,039, from $9,793,992 in
2002, to $9,905,031 in 2003 due to higher home sale expense corresponding with
increased home sales. Home sales expense increased due to higher sales volumes.
As a result of the foregoing factors, net income decreased $195,553 from
$1,003,716 in 2002 to $808,163 in 2003.
IMPORTANT DISCLOSURES
The General Partner believes it is important to disclose certain recent
events to the Limited Partners along with a description of the actions taken by
the General Partner to respond to the events.
During 2004, industry conditions remained depressed due to the lack of
available retail financing as well as the unemployment rate. Declining retail
home sales for manufactured homes and high default rates on chattel mortgage
loans for manufactured homes continued through 2004. The increase in
foreclosures has created a surplus of pre-owned homes for sale in the market
place. The availability of pre-owned home inventory contributed to the reduced
number of new homes purchased for the industry as a whole. The Partnership has
aggressively pursued home sales by increasing marketing efforts, including but
not limited to the addition of sales personnel.
The surplus of pre-owned homes available in the market has presented an
opportunity for the Partnership to purchase homes at low prices. On a limited
basis, these homes have been purchased by the Partnership and reviewed on a case
by case basis for retail sale. The maximum term of the retail contracts provided
by the Partnership is ten years, significantly less than is generally available
from retail lenders. This shorter amortization period allows for a faster return
of principal and reduces the risk of loss through repossession. The total amount
of retail loans made by the Partnership and outstanding at this time is not
material relative to the total assets and revenues of the Partnership. The
General Partner believes its retail sales and financing activity will help to
increase occupancy and thereby rental income. To date, the delinquency and
default rates of the retail loans are not significant. However the General
Partner will continue to monitor the portfolio and adjust its underwriting
criteria accordingly.
-14-
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership is exposed to interest rate risk primarily through its
borrowing activities. There is inherent roll over risk for borrowings as they
mature and are renewed at current market rates. The extent of this risk is not
quantifiable or predictable because of the variability of future interest rates
and the Partnership's future financing requirements.
Note Payable: At December 31, 2004 the Partnership had a note payable
outstanding in the amount of $31,190,519. Interest on this note is at a fixed
annual rate of 8.24% through June 2007.
Line-of-Credit: At December 31, 2004 the Partnership owed $40,000 pursuant
to its line-of-credit agreement, whereby interest is accrued at a variable rate
of 1.80% in excess of LIBOR. As of December 31, 2004 the one month LIBOR was
2.42%.
Line-of-Credit: At December 31, 2004 the Partnership holds a line of
credit with Nation City Bank of the Midwest for $750,000. Interest on this note
is accrued a variable rate of 1.80% in excess of One Month LIBOR. This line of
credit was established for the cost of the sewer connection at Old Dutch Farms.
Currently there is no outstanding balance.
Line-of-Credit for Homes: At December 31, 2004 the partnership had a note
payable out standing to an affiliated entity in the amount of $565,190, whereby
interest is accrued at prime minus .5% (4.75 at December 31, 2004).
A 10% adverse change in interest rates on the portion of the Partnership's
debt bearing interest at variable rates would result in an increase in interest
expense of less than $10,000.
The Partnership does not enter into financial instruments transactions for
trading or other speculative purposes or to manage its interest rate exposure.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Partnership's financial statements for the fiscal years ended
December 31, 2004, 2003 and 2002, and supplementary data are filed with this
Report:
(i) Report of Independent Registered Public Accounting Firm
(ii) Balance Sheets as of December 31, 2004 and 2003 and Statements of
Income for the fiscal years ended December 31, 2004, 2003 and
2002
(iii) Statements of Partners' Equity for the fiscal years ended
December 31, 2004, 2003 and 2002
-15-
(iv) Statements of Cash Flows for the fiscal years ended December 31,
2004, 2003 and 2002
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There has been no change in the Partnership's independent registered public
accounting firm nor have there been any disagreements during the Partnership's
two most recent fiscal years.
ITEM 9A. CONTROLS AND PROCEDURES
The Partnership maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the
Partnership's Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and that such information is accumulated and
communicated to the Partnership's management, including its Principal Executive
Officer and Principal Financial Officer, as appropriate to allow timely
decisions regarding required disclosure based closely on the definition of
"disclosure controls and procedures" in Rule 13a - 14(c). In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. As of the end of
the period covered by this report (the-evaluation date) the Partnership
conducted an evaluation under the supervision and with the participation of its
Principal Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of its disclosure controls and
procedures (as defined in Rule 13a - 14(c) under the Securities Exchange Act of
1934 ("the Exchange Act")). Based on this evaluation, the Principal Executive
Officer and Principal Financial Officer concluded that, as of the evaluation
date, the Partnership's disclosure controls and procedures were effective to
reasonably ensure that information required to be disclosed by us in the reports
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.
There was no significant change in the Partnership's internal control over
financial reporting during its most recently completed fiscal year that has
materially affected, or is reasonably likely to materially affect, its internal
control over financial reporting.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership, as an entity, does not have any officers or directors. The
General Partner of the Partnership is P.I. Associates Limited Partnership. P.I.
Associates is a Michigan limited partnership. From November 1985 until March 19,
1997, Paul M. Zlotoff
-16-
served as the sole general partner of P.I. Associates. In order to address
concerns raised by the lender in connection with the Financing, on March 19,
1997, GP P.I. Associates Corp. was admitted as a corporate General Partner of
the P.I. Associates. GP P.I. Associates Corp. is wholly owned by Paul M.
Zlotoff. Under the amended Partnership Agreement of P.I. Associates, all actions
taken by P.I. Associates must be approved by both General Partners.
Information concerning Mr. Zlotoff's age and principal occupations during
the last five years or more is as follows:
Paul M. Zlotoff, 55, became the Chairman of Uniprop, Inc. in May 1986 and
was its President from 1979 through 1997. He is currently Director/Chairman of
Uniprop, Inc. which is the General Partner of Genesis Associates Limited
Partnership Uniprop Manufactured Housing Communities Income Fund II, a public
limited partnership, which owns and operates nine manufactured housing
communities. Mr. Zlotoff currently, and in the past, has acted as the General
Partner for various other limited partnerships owning manufactured home
communities, as well as some commercial properties.
The following individuals are the directors and officers of P.I. Associates
Corp.:
Name and Age Position Held
- ------------ -------------
Paul M. Zlotoff, 55 Director and President
Joel Schwartz, 43 Secretary/Treasurer
Robert Sher, 54 Director
Charles Soberman, 56 Director/Vice President
Roger Zlotoff, 44 Vice President
Charles Soberman, 56, joined Uniprop, Inc. in June 1999 as its Chief
Executive Officer and Executive Vice President. Mr. Soberman's responsibilities
include supervision of property operations and corporate oversight. Mr. Soberman
has a law degree from The Harvard Law School and an M.B.A. from Michigan State
University. Mr. Soberman also has a B.A. from the University of Michigan. From
1979 through 1996, he was President of Mercury Paint Company, a manufacturer and
retailer of coatings and allied products. From 1996 to 1999 Mr. Soberman was a
Senior Lecturer at Wayne State University School of Business Administration.
Joel Schwartz CPA, 43, became Chief Financial Officer of Uniprop Inc. on
June 1, 2004. Mr. Schwartz is responsible for all financial affairs including
accounting operations, banking relationships, raising mortgage capital, asset
management and investor relations. From 1998 to 2004, Mr. Schwartz was Chief
Financial Officer for Village Green Companies. From 1990 to 1998, Mr. Schwartz
was Project Manager for
-17-
Ford Motor Land Services Corporation. Mr. Schwartz was also an Associate at
Plante & Moran CPA's from 1983 to1989. Mr. Schwartz received his B.A. from
Michigan State University in 1983 with a major in accounting and received an MBA
from the University of Michigan in 1990.
Roger Zlotoff, 44 became Chief Investment Officer of Uniprop, Inc. on
October 18, 1999. He became Vice President of Uniprop, Inc. in 2004. Mr. Zlotoff
is primarily responsible for raising equity capital, managing partnership
investments, evaluating acquisitions of existing properties and leading the
development process for new properties. From 1997 to 1999, Mr. Zlotoff served as
Director of Business Development for Vistana, Inc. in Orlando, FL. Previously,
Mr. Zlotoff was Managing Director for Sterling Finance International from 1994
to 1997 and was a corporate banker, with First Union National Bank from 1988 to
1994. Mr. Zlotoff received his B.A. from the University of Central Florida as a
philosophy major, and received his Master Degree in International Business from
the University of South Carolina.
Paul M. Zlotoff and Roger Zlotoff are brothers.
Under the Articles of Incorporation of GP P.I. Associates Corp., until such
time as the notes payable to the lender in connection with the Financing have
been discharged and the liens have been released from the Properties, certain
major corporate actions may be taken only with the unanimous vote of the
directors of GP P.I. Associates Corp. These actions include:
a) Filing or consenting to the filing of any bankruptcy, insolvency or
reorganization case or proceeding, instituting any proceedings under any
applicable insolvency law or otherwise seeking relief under any laws relating to
the relief from debts or the protection of debtors generally;
b) Seeking or consenting to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian or any similar official for GP P.I.
Associates Corp., P.I. Associates, or the Partnership or a substantial portion
of any of their properties;
c) Making any assignment for the benefit of the creditors of GP P.I.
Associates Corp., P.I. Associates, or the Partnership; or
d) Taking any action in furtherance of the foregoing subparagraphs (a)
through (c).
CODE OF ETHICS
Because the Partnership has no executive officers, the Partnership has not
adopted a Code of Ethics for the Partnership. A code of ethics has been
established for Directors, Officers, and Employees of Uniprop AM, LLC. A copy of
the Code of Ethics is available at no charge upon request.
-18-
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no executive officers and therefore, no officers
received a salary or remuneration exceeding $100,000 during the last fiscal
year. The General Partner of the Partnership and an affiliate, Uniprop AM, LLC,
received certain compensation and fees during the fiscal year in the amounts
described in Item 13. The Partnership anticipates that it will provide similar
compensation to the General Partner and Uniprop AM, LLC during the next fiscal
year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The Partnership is a limited partnership formed pursuant to the Michigan
Uniform Limited Partnership Act, as amended. The General Partner, P.I.
Associates Limited Partnership, is vested with full authority as to the general
management and supervision of the business and other affairs of the Partnership,
subject to certain constraints in the partnership agreement and consulting
agreement. Limited Partners have no right to participate in the management of
the Partnership and have limited voting privileges only on certain matters of
fundamental significance. To the Partnership's knowledge, no person owns of
record or beneficially, more than five percent of the Partnership's Units.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following discussion describes all of the types of compensation, fees
or other distributions paid by the Partnership or others to the General Partner
or its affiliates from the operations of the Partnership during the last fiscal
year, as well as certain of such items which may be payable during the next
fiscal year. Certain of the following arrangements for compensation and fees
were not determined by arm's length negotiations between the General Partner,
its affiliates and the Partnership.
Paul M. Zlotoff has an interest in the successors to the sellers of all the
Properties acquired by the Partnership and may be entitled to share in a
Contingent Purchase Price with respect to each Property, when and if the
successors to the sellers become entitled thereto. Each of the sellers has been
dissolved and liquidated and their interests in the Contingent Purchase Price
have been assigned to certain partners of the General Partner. The Contingent
Purchase Price for each Property was determined by reference to the average of
two independent real estate appraisals that were obtained by the General
Partner. Such appraisals are only estimates of value and are not necessarily
indicative of the actual real estate value. Each seller becomes entitled to any
unpaid Contingent Purchase Price upon the sale, financing or other disposition
of one or more Properties, but, only after the receipt by each Limited Partner
of any shortfall in his 9% cumulative preferred return plus the return of his
adjusted capital contribution. Because the Financing resulted in a complete
return of the Limited Partners' capital contributions, and because the Limited
Partners have received their cumulative preferred return in full, the successors
to the sellers did receive $1,500,000 in partial payment of the Contingent
Purchase Price on
-19-
or about May 15, 1997. The maximum amounts which could be payable to the
successors to the sellers are as follows: Aztec Estates, $1,374,323; Kings
Manor, $529,724; Old Dutch Farms, $452,359; and Park of the Four Seasons,
$1,113,594. The partial payment made for each property was as follows: Aztec
Estates, $594,088; Kings Manor, $228,987; Old Dutch Farms, $195,544; and Park of
the 4 Seasons, $481,381. The maximum amounts remaining which could be payable to
the successors of the sellers are as follows: Aztec Estates, $780,235; Kings
Manor, $300,737; Old Dutch Farms, $256,815; and Park of the Four Seasons,
$632,213. The actual amounts to be received, if any, will depend upon the
results of the Partnership's operations and the amounts received upon the sale,
financing or other disposition of the Properties and are not determinable at
this time.
The Partnership paid and will continue to pay an Incentive Management
Interest to the General Partner for managing the Partnership's affairs,
including: determining distributions, negotiating agreements, selling or
financing properties, preparing records and reports, and performing other
ongoing Partnership responsibilities. As a result of the Financing and full
return of the $30,000,000 original capital contributions of the Limited
Partners, no further Preferred Return or Cumulative Return will apply, and the
payment of the Incentive Management Interest will not be contingent on the
satisfaction of those returns. The Incentive Management Interest is
discretionary and is based on 20% of the net cash from operations (cash revenues
less cash operating expenses and specified reserves) in any taxable year. For
the year ended December 31, 2004, the General Partner had received a
distribution of $90,000. The actual amount to be received in future years will
depend upon the results of the Partnership's operations and is not determinable
at this time. Because the Limited Partners have received the return of their
adjusted capital contributions, the General Partner also has a right to receive
20% of any sale or financing proceeds.
The General Partner is also entitled to a quarterly Partnership Management
Distribution equal to one-fourth of 1% of the most recent appraised value of the
Properties of the Partnership. The Partnership Management Distribution for each
quarter is paid in arrears, 45 days after the end of each fiscal quarter. The
Partnership Management Distribution was proposed by the General Partner and
approved by the Limited Partners to compensate, in part, for the substantial
reduction in the amounts expected to be paid to the General Partner pursuant to
the Incentive Management Interest following the Financing. Based on the
Properties' March 2004 aggregate appraised value of $63,400,000, the Partnership
Management Distribution due to the General Partner was $634,000. The Partnership
Management Distribution paid to the General Partner during 2004 was $626,375, a
portion of which was calculated on the 2003 aggregate appraised value of
$60,350,000. As of December 31, 2004, the Partnership Management Distribution
due the General Partner totaled $158,500. This amount was paid to the General
Partner on February 15, 2005 from cash reserves. Based on the Properties' March
2005 aggregate appraised value of $64,600,000, the Partnership Management
Distribution due the General Partner for the Partnership's 2005 fiscal year will
be $646,000 (64,600,000 x 1.0% = $646,000).
Uniprop AM, LLC, an affiliate of the General Partner, received and will
receive property management fees for each Property managed by it. Uniprop AM,
LLC is primarily
-20-
responsible for the day-to-day management of the Properties and for the payment
of the costs of operating each Property out of the rental income collected. The
property management fees are equal to the lesser of 5% of the annual gross
receipts from the Properties managed by Uniprop AM, LLC, or the amount which
would be payable to an unaffiliated third party for comparable services. During
the last fiscal year, Uniprop AM, LLC received property management fees totaling
$421,356. In addition, certain employees of the Partnership are also employees
of affiliates of the General Partner. During the last fiscal year, these
employees received an aggregate of $116,323 for performing partnership
management, data processing and investor relations' services for the
Partnership. The actual amounts to be received during the next fiscal year will
depend upon the results of the Partnership's operations and are not determinable
at this time. Uniprop Inc. had been the Partnership's management entity until it
was replaced by Uniprop AM, LLC in 2003. Uniprop Homes, Inc., an affiliate of
the General Partner, received commissions totaling $96,611 for certain services
provided as a broker/dealer of manufactured homes for the communities. Uniprop
Homes represented the communities in the sale of new and pre-owned homes to
community residents.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Partnership retained BDO Seidman, LLP to audit its financial statements for
the year ended December 31, 2004. The Partnership also retained BDO Seidman LLP
to provide other services in 2004.
The Aggregate fees billed to the Partnership for professional services performed
by BDO Seidman, LLP were as follows.
2004 2003
------- -------
(1) Audit Fees $22,200 $19,000
(2) Audit-Related Fees $ 0 $ 0
(3) Tax Fees $12,500 $12,100
(4) All Other Fees $ 0 $ 0
(5) Total $34,700 $31,100
AUDIT FEES: pertain to the audit of the Partnerships annual financial
statements, including reviews of the interim financial statements contained in
the Partnerships Quarterly Reports of Form 10-Q.
TAX FEES: pertain to services performed for tax compliance, tax planning and tax
advice, including preparation of tax returns and partners Schedule K-1
processing. The services performed by BDO Seidman in 2004 were pre-approved by
the General Partner.
-21-
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
(1) The following financial statements and related documents are filed with
this Report:
(i) Report of Independent Registered Public Accounting Firm
(ii) Balance Sheets as of December 31, 2004 and 2003 and Statements
of Income for the fiscal years ended December 31, 2004, 2003 and
2002
(iii) Statements of Partners' Equity for the fiscal years ended
December 31, 2004, 2003 and 2002
(v) Statements of Cash Flows for the fiscal years ended December 31,
2004, 2003 and 2002
(2) The following financial statement schedule is filed with this report:
Schedule III - Real Estate and Accumulated Depreciation for the
fiscal years ended December 31, 2004, 2003 and 2002
(3) Exhibits
The following exhibits are incorporated by reference to the S-11
Registration Statement of the Partnership filed June 4, 1985, as amended on
August 1, 1985 and September 11, 1985:
3(a) Amended Certificate of Limited Partnership for the Partnership
3(b) Agreement of Limited Partnership for the Partnership
10(a) Form of Management Agreement between the Partnership and Uniprop,
Inc. as amended.
The following exhibits are incorporated by reference to the Form 10-K for
fiscal year ended December 31, 1997:
3(c) Certificate of Amendment to the Certificate of Limited Partnership for
the Partnership (originally filed with Form 10-Q for the fiscal quarter
ended June 30, 1986).
-22-
4 Form of Certificate of Limited Partnership Interest in the
Partnership (Originally filed with Form 10-K for the fiscal year
ended December 31, 1986)
10(c) Contingent Purchase Price Agreement between the Partnership, Aztec
Estates (Originally filed with Form 10-K for the fiscal year ended
December 31, 1987)
10(d) Contingent Purchase Price Agreement between the Partnership and
O.D.F. Mobile Home Park (Originally filed with Form 10-K for the
fiscal year ended December 31, 1987)
10(e) Contingent Purchase Price Agreement between the Partnership and The
Park of the Four Seasons (Originally filed with Form 10-K for the
fiscal year ended December 31, 1987)
The following exhibits are attached to this Report:
10(f) First Amended and Restated Consulting Agreement among the
Partnership, the General Partner and the Consultant.
28 Letter summary of the estimated fair market values of the
Partnership's four Manufactured housing communities, as of March 1,
2005.
-23-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners
Uniprop Manufactured Housing
Communities Income Fund
(a Michigan limited partnership)
We have audited the accompanying balance sheets of Uniprop Manufactured Housing
Communities Income Fund (a Michigan limited partnership), as of December 31,
2004 and 2003, and the related statements of income, partners' equity (deficit)
and cash flows for each of the three years in the period ended December 31,
2004. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (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 consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Uniprop Manufactured Housing
Communities Income Fund at December 31, 2004 and 2003 and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2004 in conformity with accounting principles generally accepted in
the United States of America.
Also, in out opinion, the schedule listed under Item 15 of Form 10-K presents
fairly, in all material respects, the information set forth therein
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Troy, Michigan
February 8, 2005, except for Note 13 which is as of March 4, 2005
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
BALANCE SHEETS
December 31, 2004 2003
- ------------ ------------ ------------
ASSETS
PROPERTY AND EQUIPMENT
Buildings and improvements $ 25,763,359 $ 25,419,430
Land 5,280,000 5,280,000
Furniture and equipment 229,879 218,518
------------ ------------
31,273,238 30,917,948
Less accumulated depreciation 14,734,193 13,866,583
------------ ------------
NET PROPERTY AND EQUIPMENT 16,539,045 17,051,365
Cash 200,760 258,423
Cash - security deposit escrow 305,158 305,158
Manufactured homes and improvements 1,339,857 1,312,787
Unamortized financing costs 194,548 280,548
Other assets 751,371 1,258,312
------------ ------------
$ 19,330,739 $ 20,466,593
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Note payable $ 31,190,519 $ 31,576,444
Note payable - affiliate 565,190 --
Line-of-credit 40,000 235,000
Accounts payable 176,661 149,213
Other liabilities 708,052 885,533
------------ ------------
TOTAL LIABILITIES 32,680,422 32,846,190
------------ ------------
PARTNERS' EQUITY (DEFICIT)
Class A limited partners (9,907,130) (9,473,234)
Class B limited partners 1,441,557 1,282,630
General partner (4,884,110) (4,188,993)
------------ ------------
TOTAL PARTNERS' DEFICIT (13,349,683) (12,379,597)
------------ ------------
$ 19,330,739 $ 20,466,593
============ ============
See accompanying notes to financial statements
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
Year Ended December 31, 2004 2003 2002
- ----------------------- ----------- ----------- -----------
REVENUE
Rental $ 8,009,772 $ 8,255,857 $ 8,561,605
Home sale income 1,981,493 1,980,043 1,780,751
Other 439,461 477,294 455,352
----------- ----------- -----------
10,430,726 10,713,194 10,797,708
----------- ----------- -----------
OPERATING EXPENSES
Administrative 2,070,613 1,925,496 1,874,648
Property taxes 964,275 958,023 950,624
Utilities 537,220 513,806 542,070
Property operations 1,258,566 1,153,281 1,150,933
Depreciation 867,610 854,893 831,646
Interest 2,715,486 2,738,379 2,768,270
Home sale expense 1,910,667 1,761,153 1,675,801
----------- ----------- -----------
10,324,437 9,905,031 9,793,992
----------- ----------- -----------
NET INCOME $ 106,289 $ 808,163 $ 1,003,716
=========== =========== ===========
INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT
Class A $ (9.45) $ 9.43 $ 14.95
Class B $ 28.27 $ 46.64 $ 51.24
DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT
Class A $ 12.00 $ 12.00 $ 12.00
Class B $ 12.00 $ 12.00 $ 12.00
NUMBER OF LIMITED PARTNERSHIP
Units Outstanding
Class A 20,230 20,230 20,230
Class B 9,770 9,770 9,770
NET INCOME ALLOCABLE TO GENERAL PARTNER $ 21,258 $ 161,633 $ 200,743
DISTRIBUTIONS ALLOCABLE TO GENERAL PARTNER $ 716,375 $ 689,375 $ 678,000
=========== =========== ===========
See accompanying notes to financial statements
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31,2004, 2003 AND 2002
TOTAL
Class A Class B PARTNERS'
General Limited Limited EQUITY
Partner Partners Partners (DEFICIT)
----------- ----------- ---------- ------------
BALANCE, January 1, 2002 $(3,183,994) $(9,480,901) $ 560,794 $(12,104,101)
Distributions to partners (678,000) (242,760) (117,240) (1,038,000)
Net income for the year 200,743 302,343 500,630 1,003,716
----------- ----------- ---------- ------------
BALANCE, December 31, 2002 (3,661,251) (9,421,318) 944,184 (12,138,385)
Distributions to partners (689,375) (242,760) (117,240) (1,049,375)
Net income for the year 161,633 190,844 455,686 808,163
----------- ----------- ---------- ------------
BALANCE, December 31, 2003 (4,188,993) (9,473,234) 1,282,630 (12,379,597)
Distributions to partners (716,375) (242,760) (117,240) (1,076,375)
Net income (loss) for the year 21,258 (191,136) 276,167 106,289
----------- ----------- ---------- ------------
BALANCE, December 31, 2004 $(4,884,110) $(9,907,130) $1,441,557 $(13,349,683)
=========== =========== ========== ============
See accompanying notes to financial statements
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
Year Ended December 31, 2004 2003 2002
- ----------------------- ----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 106,289 $ 808,163 $ 1,003,716
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation 867,610 854,893 831,646
Amortization 86,000 86,000 86,000
Increase in homes and
improvements (27,070) (160,028) (26,586)
Decrease (increase) in other
assets 506,941 (530,662) 104,594
Increase (decrease) in accounts
payable 27,448 29,209 (39,547)
(Decrease) increase in other
liabilities (177,481) 112,165 18,853
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,389,737 1,199,740 1,978,676
----------- ----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and equipment (355,290) (175,253) (827,474)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (1,076,375) (1,049,375) (1,038,000)
Repayment of note payable (385,925) (363,141) (333,747)
Net (payments) proceeds under line
of credit (195,000) 39,245 (75,000)
Proceeds from note payable - affiliate 565,190 -- --
----------- ----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (1,092,110) (1,373,271) (1,446,747)
----------- ----------- -----------
NET DECREASE IN CASH (57,663) (348,784) (295,545)
CASH, at beginning of year 258,423 607,207 902,752
----------- ----------- -----------
CASH, at end of year $ 200,760 $ 258,423 $ 607,207
=========== =========== ===========
See accompanying notes to financial statements
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING ORGANIZATION AND BUSINESS
POLICIES
Uniprop Manufactured Housing Communities Income
Fund, a Michigan Limited Partnership (the
"Partnership") acquired, maintains, operates and
will ultimately dispose of income producing
residential real properties consisting of four
manufactured housing communities (the
"properties") located in Florida, Minnesota and
Michigan. The Partnership was organized and formed
under the laws of the State of Michigan on May 16,
1985.
The general partner of the Partnership is P.I.
Associates Limited Partnership Taxable investors
acquired 20,230 Class A units, and 9,770 Class B
units were acquired by tax exempt investors.
Depreciation is allocated only to holders of Class
A units and to the general partner:
USE OF ESTIMATES
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect the reported amounts
of (1) assets and liabilities and the disclosure
of contingent assets and liabilities as of the
date of the financial statements, and (2) revenues
and expenses during the reporting period. Actual
results could differ from these estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Partnership's
financial instruments, which consist of cash, the
line-of-credit and notes payable, approximate
their fair values.
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost
Depreciation is provided using the straight-line
method over a period of thirty years except for
furniture and equipment which is depreciated over
a period ranging from three to ten years.
Accumulated depreciation for tax purposes was
$17,222,420 and $16,069,009 as of December 31,
2004 and 2003, respectively.
Long-lived assets, such as property and equipment,
are evaluated for impairment when events or
changes in circumstances indicate that the
carrying amount of the assets may not be
recoverable through the estimated undiscounted
future cash flows from the use of these assets.
When any such impairment exists, the related
assets will be written down to fair value. No
impairment loss recognition has been requited
through December 31,2004.
MANUFACTURED HOMES AND IMPROVEMENTS
Manufactured homes and improvements are stated at
the lower of cost or market and represent
manufactured homes held for sale.
FINANCING COSTS
As a result of management's present intent to
refinance the note payable after ten years, costs
to obtain the 1997 financing (see Note 2) are
amortized over a ten-year period.
REVENUE RECOGNITION
Rental income attributable to leases is recorded
when due from the lessees.
INCOME TAXES
Federal income tax regulations provide that any
taxes on income of a partnership are payable by
the partners as individuals. Therefore, no
provision for such taxes has been made at the
partnership level.
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
RECLASSIFICATIONS
Certain amounts in prior years' financial
statements have been reclassified to conform with
current year's presentation.
2. NOTE PAYABLE In 1997, the Partnership entered into a
$33,500,000 note payable agreement. The borrowings
are secured by mortgages on the Partnership's
properties and the assignment of all current and
future leases and rents. The note is payable in
monthly installments of $251,439, including
interest, through March 2027. The interest rate is
8.24% per annum through June 2007; thereafter, the
interest rate will be adjusted based on the
provisions of the note agreement. The loan may be
prepaid without penalty beginning in January 2007.
There are certain requirements contained in the
note payable agreement. The Partnership was in
compliance with these requirements at December 31,
2004. The proceeds of the note were used primarily
to return to the limited partners their original
$30,000,000 capital contribution, to pay certain
amounts to the general partner as described in
Note 6, and to pay related financing costs.
Future maturities on the note payable for the next
five years are as follows: 2005 - $412,000; 2006 -
$450,000; 2007 - $487,000; 2008 - $522,000; and
2009 - $575,000.
3. OTHER ASSETS At December 31, 2004 and 2003, "Other Assets"
included cash of approximately $362,000 and
$816,000, respectively, in an escrow account for
property taxes, capital improvements, and debt
service payments, as required by the Partnership's
note payable agreement, which is restricted from
operating use.
4. NOTE PAYABLE - AFFILIATE The Partnership has an unsecured $1,000,000
revolving line-of-credit with an affiliated entity
that expires on September 2006. Interest on
outstanding balances is charged at the prime rate
less 1/2% (4.75% at December 31, 2004). The
balance outstanding under this agreement was
$565,190 at December 31, 2004.
5. LINE-OF-CREDIT The Partnership currently has an unsecured $
1,000,000 revolving line-of-credit agreement with
a bank that expires in October 2005. Interest on
outstanding balances is charged at 1.80% in excess
of LIBOR; the Partnership's interest rate at
December 31, 2004 was 4.21%. The balance
outstanding under this agreement was $40,000 at
December 31, 2004.
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
6. OTHER LIABILITIES Other liabilities consisted of:
December 31, 2004 2003
------------ -------- --------
Tenants' security $512,967 $561,196
deposits
Accrued interest 149,922 151,777
Other 45,163 172,560
-------- --------
TOTAL $708,052 $885,533
======== ========
7. RELATED PATTY MANAGEMENT AGREEMENT
TRANSACTIONS
The Partnership has an agreement with an affiliate
of the general partner to manage the properties
owned by the Partnership. The management agreement
is automatically renewable annually, but may be
terminated by either party upon sixty days written
notice. The property management fee is the lesser
of 5% of annual gross receipts from the properties
managed, or the amount which would be payable to
an unaffiliated third party for comparable
services.
FEES AND EXPENSES
During the years ended December 31, 2004, 2003 and
2002 the affiliate earned property management fees
of $421,356, $435,846, and $449,867, respectively,
as permitted in the Agreement of Limited
Partnership. These fees are included with
"Administrative" expenses in the respective
statements of income. The Partnership was owed
$5,244 and $23,754 by the affiliate at December
31, 2004 and 2003, respectively.
CONTINGENT PURCHASE PRICE
The general partner of P.I. Associates has an
interest in the sellers of all the properties
acquired by the Partnership and is entitled to
share in a contingent purchase price with respect
to each property. Each seller will become entitled
to any unpaid contingent purchase price upon the
sale, financing or other distribution of one or
more of the properties, but only after the receipt
by the limited partners of any shortfall in their
9% cumulative preferred return, plus the return of
their adjusted capital contribution.
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
Since inception of the Partnership, there has been
no shortfall in the 9% cumulative return and, as
described in Note 2, the Partnership used a
portion of the proceeds from the 1997 financing to
return the limited partners' original capital
contribution. In addition, $1,500,000 of the
proceeds from the financing transaction was used
to make a partial payment in 1997 on the
contingent purchase price. The total remaining
contingent purchase price will not exceed
$1,970,000. Additional amounts to be paid, if any,
will depend upon the results of the Partnership's
operations and the amounts received upon the sale,
financing or other disposition of the properties;
such amounts are not determinable at this time.
Therefore, no liability related to this remaining
contingency has been recorded at December 31,
2004.
8. RECONCILIATION OF Year Ended December 31, 2004 2003 2002
FINANCIAL STATEMENT ----------------------- --------- --------- ----------
INCOME AND TAXABLE
INCOME Income per the financial
statements $ 106,289 $ 808,163 $1,003,716
Adjustments to depreciation
for difference in
methods (285,800) (507,707) (165,022)
Adjustments for prepaid
rent, meals and
entertainment (9,426) 10,834 10,887
--------- --------- ----------
Income (Loss) Per the
Partnership's Tax Return $(188,937) $ 311,290 $ 849,581
========= ========= ==========
9. PARTNERS' CAPITAL Subject to the orders of priority under certain
specified conditions more fully described in the
Agreement of Limited Partnership (as amended on
February 6, 1997), distributions of partnership
funds and allocations of net income from
operations are principally determined as follows:
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
DISTRIBUTIONS
The general partner receives a quarterly
Partnership Management Distribution equal to 25%
of the appraised value of the properties of the
Partnership (equal to $634,000 annually based on
current 2004 appraisals). Thereafter,
distributions are made at the discretion of the
general partner, and are allocated 20% to the
general partner as an Incentive Management
Interest and 80% to the limited partners.
ALLOCATION OF NET INCOME
Net income is to be allocated in the same manner
as distributions except that:
a) Depreciation expense is allocated only to the
general partner and the Class A (taxable)
limited partners and,
b) In all cases, the general partner is to be
allocated at least 1% of all Partnership
items.
10. SUPPLEMENTAL CASH Cash paid for interest totaled approximately
FLOW INFORMATION $2,631,000, $2,654,000, and $2,684,000, in
2004, 2003 and 2002, respectively.
11. INTERIM RESULTS The following summary represents the unaudited
(UNAUDITED) results of operations of the Partnership,
expressed in thousands except per unit amounts,
for the periods from January 1, 2003 through
December 31, 2004:
Three Months Ended
-------------------------------------------------------------------------------
2004 March 31, June 30, September 30, December 31,
---- --------- -------- ------------- ------------
REVENUES $2,358 $2,917 $2,512 $2,644
====== ====== ====== ======
NET INCOME (LOSS) $ 36 $ 106 $ (46) $ 10
====== ====== ====== ======
INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT
Class A $ (2) $ 0 $ (4) $ (3)
Class B $ 7 $ 9 $ 5 $ 7
====== ====== ====== ======
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
Three Months Ended
-------------------------------------------------------------------------------
2003 March 31, June 30, September 30, December 31,
---- --------- -------- ------------- ------------
REVENUES $2,515 $2,848 $2,561 $2,789
====== ====== ====== ======
NET INCOME $ 304 $ 268 $ 152 $ 84
====== ====== ====== ======
INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT
Class A $ 5 $ 4 $ 1 $ (1)
Class B $ 14 $ 13 $ 11 $ 9
====== ====== ====== ======
12. CONTINGENCIES On February 11, 2004, the City of Novi, Michigan
filed a lawsuit against the Partnership to compel
the community Old Dutch Farms to connect to the
City of Novi sanitary sewer system The Partnership
has reached a settlement agreement with the City
of Novi and will pay a tap fee of approximately
$730,000 based on estimated water use by the
residents, subject to adjustments after a
three-year monitoring period based on actual meter
reading water usage. The cost of connection and
removal of the current sanitary sewer system is
estimated to be approximately $200,000. The
Partnership anticipates these costs will be
incurred during 2005.
In connection with the settlement agreement, the
Partnership has obtained an unsecured $ 750,000
note payable to a bank requiring monthly payments
of $12,500 plus interest at LIBOR plus 1.80% and
is due on December 2009. There was no outstanding
balance under this agreement at December 31, 2004.
13. SUBSEQUENT EVENT On March 4, 2005, a group of current residents
filed a class action lawsuit in the Circuit Court
of Oakland County against the Partnership and the
general partner of the Partnership claiming that
the Old Dutch Farms community did not honor its
obligations with respect to operating various
aspects of the community. The complaint requests
damages, costs and injunctive relief Counsel for
the Partnership is presently reviewing and
preparing an answer to the complaint on behalf of
the Partnership. While the discovery process has
not yet begun, the Partnership intends to
vigorously defend against this claim. The amount
of potential liability, if any, is indeterminable
at this time.
Uniprop Manufactured
Housing Communities Income Fund
(a Michigan limited partnership)
Schedule III - Real Estate and Accumulated Depreciation
December 31,2004
Column A Column B Column C Column D
- ----------------------- ----------- -------------------------- --------------------
Costs Capitalized
Subsequent to
Initial Cost Acquisition
-------------------------- --------------------
Buildings and Buildings and
Description Encumbrance Land Improvements Land Improvements
- ----------------------- ----------- ---------- ------------- ---- -------------
Aztec Estates
(Margate, FL) $11,801,408 $2,199,868 $ 8,799,475 $-- $1,842,890
Kings Manor
(Ft. Lauderdale, FL) 5,954,941 847,923 3,391,694 482,575
Park of the Four
Seasons (Blaine, MN) 8,095,571 1,508,121 6,032,483 1,011,882
Old Dutch Farms
(Novl, MI) 5,338,599 724,088 2,896,348 1,306,012
----------- ---------- ----------- --- ----------
$31,190,519 $5,280,000 $21,120,000 $-- $4,643,359
=========== ========== =========== === ==========
Column A Column E Column F Column G Column H
- ----------------------- ---------------------------------------- ------------ -------- ---------------
Gross Amount at Which Life on Which
Carried at Close of Period Depreciation in
---------------------------------------- Latest Income
Buildings and Accumulated Date Statement is
Description Land Improvements Total Depreciation Acquired Computed
- ----------------------- ---------- ------------- ----------- ------------ -------- ---------------
Aztec Estates
(Margate, FL) $2,199,868 $10,642,365 $12,842,233 $ 5,858,799 1986 30 years
Kings Manor
(Ft. Lauderdale, FL) 847,923 3,874,269 4,722,192 2,302,137 1986 30 years
Park of the Four
Seasons (Blaine, MN) 1,508,121 7,044,365 8,552,486 4,069,956 1986 30 years
Old Dutch Farms
(Novl, MI) 724,088 4,202,360 4,926,448 2,302,506 1986 30 years
---------- ----------- ----------- -----------
$5,280,000 $25,763,359 $31,043,359 $14,533,398
========== =========== =========== ===========
UNIPROP MANUFACTURED
HOUSING COMMUNITIES INCOME FUND
(A MICHIGAN LIMITED PARTNERSHIP)
NOTES TO SCHEDULE III
DECEMBER 31, 2004
1. RECONCILIATION OF BUILDINGS The following table reconciles buildings and
AND IMPIOVEMENTS improvements from January 1, 2002 to December
31, 2004:
2004 2003 2002
----------- ----------- -----------
BALANCE, at January 1 $25,419,430 $25,249,181 $24,444,204
Additions to buildings and
improvements 343,929 170,249 804,977
----------- ----------- -----------
BALANCE, at December 31 $25,763,359 $25,419,430 $25,249,181
=========== =========== ===========
There were no additions to land during this
three-year period.
2. RECONCILIATION OF The following table reconciles the accumulated
ACCUMULATED DEPRECIATION depreciation from January 1, 2002 to December
31, 2004:
2004 2003 2002
----------- ----------- -----------
BALANCE, at January 1 $13,681,094 $12,846,019 $12,042,940
Current year depreciation
expense 852,304 835,075 803,079
----------- ----------- -----------
BALANCE, at December 31 $14,533,398 $13,681,094 $12,846,019
=========== =========== ===========
3. TAX BASIS OF BUILDINGS AND The aggregate cost of buildings and
IMPROVEMENTS improvements for federal income tax purposes is
equal to the cost basis used for financial
statements purposes.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Uniprop Manufactured Housing Communities Income Fund, a
Michigan Limited Partnership, has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Uniprop Manufactured Housing Communities
Income Fund, a Michigan Limited
Partnership
BY: P.I. Associates Limited Partnership,
General Partner
BY: GP P.I. Associates Corp.,
General Partner
BY: /s/ Paul M. Zlotoff
--------------------------------
Dated: March 18, 2005 Paul M. Zlotoff, 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.
By: /s/ Joel Schwartz By: /s/ Paul M. Zlotoff
--------------------------------- ------------------------------------
Joel Schwartz Paul M. Zlotoff
(Principal Financial Officer) (Principal Executive Officer,
President & Director of
GP P.I. Associates Corp.)
By: /s/ Susann E. Szepytowski
---------------------------------
Susann E. Szepytowski
(Chief Accounting Officer)
Dated: March 18, 2005
EXHIBIT 28
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
2005 PROPERTY APPRAISALS
Cushman & Wakefield recently completed market value appraisals of UMHCIF's four
properties as of March 2005. The table below sets forth certain appraisal
information for each property, as well as relevant comparisons:
MARCH 05 MARCH 04 VARIANCE
PROPERTY APPRAISALS APPRAISALS IN %
- -------- ----------- ----------- --------
Aztec Estates, FL $22,400,000 $19,900,000 12.6%
Kings Manor, FL 15,850,000 13,850,000 14.4%
Old Dutch Farms, MI 7,250,000 7,250,000 (25.6%)
Park of Four Seasons, MN 19,100,000 19,100,000 (4.0%)
----------- ----------- -----
GRAND TOTAL: $64,600,000 $63,400,000 1.9%
2005 ESTIMATED NET ASSET VALUE OF UNITS
Based on the March 2005 appraisal of the Partnership's properties, the General
Partner has calculated the estimated net asset value of each unit, based on the
following assumptions:
- - Sale of all the Properties in March 2005 for their appraised value.
- - Costs and selling expenses are 3.0% of the sale price.
- - Amount payable to creditors other than the mortgage debt, is negligible.
- - Tax consequences of a sale are not taken into consideration.
Calculations:
March 2005 appraised value of the properties: $64,600,000
-----------
Minus: Costs and selling expenses (3.0%): 1,938,000
Mortgage Debt: 31,190,519
Sellers' Contingent Purchase Price: 1,970,000 *
-----------
Net Sale Proceeds: $29,501,481
===========
Limited Partners' Share of Net Sales Proceeds (80.0%) $23,601,185
Number of Units: 30,000
ESTIMATED CURRENT NET ASSET VALUE PER UNIT: $ 786.71
===========
* Reflects the $1,500,000 partial payment of Contingent Purchase Price which
was paid on May 15, 1997 out of operating cash reserves.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
- ------- ----------- ----------------
3(a) Amended Certificate of Incorporated by reference to
Limited Partnership for the the S-11 Registration
Partnership Statement of the Partnership
filed June 4, 1985, as
amended on August 1, 1985
and September 11, 1985
("Registration Statement").
3(b) Agreement of Limited Incorporated by reference to
Partnership for the The Registration Statement.
Partnership
3(c) Certificate of Amendment to Incorporated by reference to
the Certificate of Limited Form 10-K for fiscal year
Partnership for the ended December 31, 1992.
Partnership (originally filed
with Form 10-Q for the fiscal
Quarter ended June 30, 1986).
3(d) First Amendment to Agreement Incorporated by reference to
of Limited Partnership Form 10-K for the fiscal year
ended December 31, 1996.
3(e) Second Amendment to Incorporated by reference to
Agreement of Limited Form 10-K for the fiscal year
Partnership ended December 31, 1996.
4 Form of Certificate of Limited Incorporated by reference to Form
Partnership Interest in the 10-K for fiscal year ended
Partnership (originally filed with December 1997.
Form 10-K for the fiscal year
ended December 31, 1986).
10(a) Form of Management Incorporated by reference to
Agreement between the The Registration Statement.
Partnership and Uniprop AM, LLC
10(b) Form of Consulting Incorporated by reference to
Agreement between the The Registration Statement.
Partnership, the General
Partner and Consultant
10(c) Contingent Purchase Price Incorporated by reference to Form
Agreement between the 10-K for fiscal year ended
Partnership, Aztec Estates, December 1997.
Ltd., and Kings Manor
Associates (originally filed
with Form 10-K for the fiscal
year ended December 31, 1987)
10(d) Contingent Purchase Price Incorporated by reference
Agreement between the to Form 10-K for fiscal
Partnership and O.D.F. year ended December 1997.
Mobile Home Park (originally
filed with Form 10-K for the
fiscal year ended December
31, 1987
10(e) Contingent Purchase Price Incorporated by reference
Agreement between the to Form 10-K for fiscal
Partnership and The Park of year ended December 1997.
the Four Seasons (originally
filed with Form 10-K for the
fiscal year ended December
31, 1987)
10(f) Refinancing loan Agreement Filed herewith
between the Partnership and
Nomura Asset Capital
Corporation March 24, 1997
10(g) Line of Credit Loan Filed herewith
Agreement between the
Partnership and National City
Bank of Michigan/Illinois
August 24, 1994
10(h) Line of Credit Loan between Filed herewith
the Partnership and Uniprop
Homes Financial, LLC
August 8, 2004
31.1 Certificate of Principal Filed herewith.
Executive Officer pursuant to
Section 302 of the Sarbanes-
Oxley Act of 2002
31.2 Certificate of Principal Filed herewith.
Financial Officer pursuant to
Section 302 of the Sarbanes-
Oxley Act of 2002
*32.1 Certification Pursuant to Filed herewith.
Section 906 of the Sarbanes
-Oxley Act of 2002
*32.2 Certification Pursuant to Filed herewith.
Section 906 of the Sarbanes-
Oxley Act of 2002
* This certificate is being furnished solely to accompany the report pursuant
to 18 U.S.C. 1350 and is not being filed for purposes of Section 18 of the
Securities and Exchange Act of 1934, as amended, and is not to be
incorporated by reference into any filing of the Partnership, whether made
before or after the date hereof, regardless of any general incorporation
language in such filing.