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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 25, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-13782
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 13-3228969
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
625 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Initial Limited Partnership Interests
(Title of Class)
Additional Limited Partnership Interests
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE
None
Index to exhibits may be found on page 194
Page 1 of 205
PART I
Item 1. Business.
General
Cambridge Advantaged Properties Limited Partnership (formerly Hutton
Advantaged Properties Limited Partnership) (the "Partnership") is a limited
partnership which was formed under the laws of the Commonwealth of Massachusetts
on June 28, 1984. The General Partners of the Partnership are Assisted Housing
Associates Inc. (formerly Cambridge Assisted Housing Associates Inc.) (the
"Assisted General Partner"), a Delaware corporation, Related Beta Corporation
(the "Related General Partner"), a Delaware corporation and an affiliate of The
Related Companies, L.P. ("Related"), a New York limited partnership, and
Cambridge/Related Associates Limited Partnership (formerly Hutton/Related
Associates Limited Partnership) ("Cambridge/Related"), a Massachusetts limited
partnership. The general partners of Cambridge/Related are the Assisted General
Partner and the Related General Partner. The General Partners manage and control
the affairs of the Partnership. See Item 10, Directors and Executive Officers of
the Registrant, below.
Effective May 19, 1994, the Partnership's name was changed to Cambridge
Advantaged Properties Limited Partnership.
On August 9, 1984, pursuant to a prospectus dated August 9, 1984 as
supplemented by the supplements thereto dated September 7, 1984, October 5, 1984
and November 20, 1984 (as so supplemented the "Prospectus"), the Partnership
commenced a public offering (the "Offering", as so supplemented). Pursuant to
the Offering, the Partnership issued 6,674 Units in 1984, each Unit consisting
of one Initial Limited Partnership Interest and one Warrant to purchase an
Additional Limited Partnership Interest during the period from January 1, 1985
through January 25, 1985, and 5,400 Additional Limited Partnership Interests in
1985. The Partnership received $53,754,300 (net of offering expenses and sales
commissions of $6,615,700) as a result of the Offering. The Offering was
completed in March 1985 and no further issuance of Additional Limited
Partnership Interests is anticipated.
The Partnership was formed to invest, as a limited partner, in other
limited partnerships (referred to herein as "Local Partnerships" or "subsidiary
partnerships"), each of which owns or leases and operates an existing
residential housing development (an "Apartment Complex") which is receiving some
form of local, state or federal assistance, including, without limitation,
mortgage insurance, rental assistance payments, permanent mortgage financing
and/or interest reduction payments ("Government Assistance"). In acquiring its
interests in the Local Partnerships ("Local Partnership Interests"), the
Partnership's investment objectives are, to:
(1) provide current tax benefits in the form of tax losses which Limited
Partners may use to offset taxable income from other sources;
(2) provide long-term capital appreciation through an increase in the value
of the Partnership's investments in Local Partnerships;
(3) provide cash distributions from sale or refinancing transactions; and
(4) preserve and protect the Partnership's capital.
Federal, state and local government agencies have provided significant
incentives in order to stimulate private investment in government assisted
housing. Notwithstanding these incentives, there remain significant risks. These
risks include, but are not limited to, the uncertainty as to the financial
strength and expertise of the general partners of the Local Partnerships ("Local
General Partners"); the long-term nature of investments in government-assisted
housing which limits the ability of the Partnership to vary its investment
portfolio in response to changing economic, financial and investment conditions;
and changes in local economic circumstances and housing patterns which have an
impact on real estate values. Apartment Complexes benefiting from Government
Assistance also
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require greater management expertise and may have higher operating expenses than
conventional apartment buildings. See Item 7, Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Further information concerning the Government Assistance Programs in which
the Local Partnerships participate is contained in the Prospectus under the
heading "Government Programs". See Item 2, Properties, below.
The Local Partnership Interests owned by the Partnership were acquired from
unaffiliated sellers. The Partnership became the principal limited partner in
these Local Partnerships pursuant to local limited partnership agreements
entered into with the Local General Partners. As a limited partner, the
Partnership's liability for obligations of the Local Partnerships is limited to
its investment. The Local General Partners of the Local Partnerships retain
responsibility for maintaining, operating and managing the Apartment Complexes.
The Partnership is a limited partner, with an ownership interest of 98.99% in
each of the 60 remaining subsidiary partnerships.
Each Local Partnership also has a special limited partner (the "Local
Affiliated Partner") either C/R Special or another affiliate of the General
Partners, which, under certain circumstances, has the right to replace the Local
General Partners of the Local Partnership and also has certain rights with
respect to voting on or approving of certain matters, including the sale of the
Apartment Complex. These rights were given to the Local Affiliated Partner
rather than the Partnership so as to avoid claims that by the existence or
exercise of such rights, the Partnership was taking part in the control of the
Local Limited Partnerships' operations and should thereby incur liability as a
General Partner of the Local Partnerships. The Local Affiliated Partner has
agreed to exercise these rights as a fiduciary of the Limited Partners of the
Partnership.
Purchase money notes in the original amount of $85,458,825 were issued to
the selling partners of the subsidiary partnerships as part of the purchase
price and are secured only by the interest in the subsidiary partnership to
which the note relates (the "Purchase Money Notes"). A portion of these notes,
in the original amount of $31,932,568 are obligations at the subsidiary
partnership level, whereas the remaining $53,526,257 is recorded at the
Partnership level. On May 2, 1996 the property owned by Bicentennial Associated,
Ltd. ("Bicentennial") was sold to a third party and the associated purchase
money note and accrued interest thereon, which were obligations at the
subsidiary partnership level, were canceled (see Item 7. below). The Purchase
Money Notes provided for compound interest at rates which, in general, ranged
from 9% to 10% per annum (except that the Purchase Money Note with repect to
Cabarrus Arms Associates bears interest at 12% per annum) through August 31,
1989. Thereafter, simple interest has accrued, without further interest thereon,
through maturity, August through December 1996 (unless extended by the
Partnership for up to three years in general). As of March 25, 1997, the
maturity dates of each of the Purchase Money Notes associated with the remaining
properties owned by the subsidiary partnerships were extended for one year (see
below). Purchase money notes at March 25, 1997 and 1996 include $4,336,417 of
interest accrued through August 31, 1989.
The Purchase Money Notes, which provide for simple interest through
maturity during the period August through December 1996 (unless extended by the
Partnership), will not be in default during the basic term (generally twelve
years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note. Continued accrual of such
interest beyond the initial term, without payment, would reduce the effective
interest rate of 9%. The exact effect is not determinable inasmuch as it is
dependent on the actual future interest payments and ultimate repayment dates of
the notes. Unpaid interest of approximately $98,278,000 and $95,994,000 as of
March 25, 1997 and 1996, respectively, has been accrued and is included in due
to selling partners in the consolidated balance sheets. In general, the interest
on and the principal of each Purchase Money Note is also payable to the extent
of the Partnership's actual receipt of proceeds of the sale or refinancing of
the Apartment Complex, or in some cases the Local Partnership Interest to which
the Purchase Money Note relates.
The Partnership may elect, upon the payment of an extension fee of 1/2% per
annum of the outstanding principal amount, to extend the term of the Purchase
Money Notes for up to three additional years (four
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years with respect to three subsidiary partnerships). As of March 25, 1997, the
maturity dates of each of the Purchase Money Notes associated with the remaining
properties owned by the subsidiary partnerships (ranging from August to December
1996) were extended for one year and extension fees in the amount of $260,364
were incurred by the Partnership. Of such fees incurred, $206,810 was accrued
and added to the Purchase Money Notes balance in accordance with the respective
note agreements. The extension fees are being amortized over the term of the
extension. The Partnership expects that upon maturity of the Purchase Money
Notes, it will be required to refinance or sell its investments in the Local
Partnerships in order to pay the Purchase Money Notes. The Partnership cannot
sell or otherwise liquidate its investments in those Local Partnerships which
have subsidy agreements with the United States Department of Housing and Urban
Development ("HUD") during the period that such agreements are in existence
without HUD's approval. Based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is uncertain as to whether the proceeds from such sales will be sufficient to
meet the outstanding balances of principal, accrued interest and extension fees.
Management is working with the selling partners to restructure and/or refinance
the notes. No assurance can be given that management's efforts will be
successful. The Purchase Money Notes are without personal recourse to either the
Partnership or any of its partners and the sellers' recourse, in the event of
non-payment, would be to foreclose on the Partnership's interests in the
respective subsidiary partnerships.
The Tax Reform Act of 1986 (the "TRA") provides that commencing in 1991,
the passive losses generated by the Partnership can only be used to shelter
passive income or, in the alternative, may be carried forward to offset a gain,
if any, upon the sale of properties.
The General Partners will carefully analyze the opportunities available
upon the expiration of the properties' contracts with HUD, as well as the tax
consequences of each option to investors. Prior to expiration of the properties'
HUD contracts, and based on the historical operating results and current
economic conditions including changes in tax laws, it is uncertain as to whether
there would be a return to the investors upon the sale of the applicable
properties in the Partnership's portfolio.
The Local Partnerships which receive government assistance are subject to
low-income use restrictions which limit the owners' ability to sell or refinance
the properties. In order to maintain the existing inventory of affordable
housing, Congress passed a series of related acts including the Emergency Low
Income Preservation Act of 1987, the Low-Income Housing Preservation and
Resident Homeownership Act of 1990 and the Housing Opportunity Program Extension
Act of 1996 (the "1996 Act") (together the "Preservation Acts"). In exchange for
maintaining the aforementioned use restrictions, the Preservation Acts provide
financial incentives for owners of government assisted properties. The 1996 Act
provides financial assistance by funding the sale of such properties to
not-for-profit owners and also restores the owners' ability to prepay their HUD
mortgage and convert the property to condominiums or market-rate rental housing.
The following eight Local Partnerships filed for incentives under the
Preservation Acts: Lansing, MI - Cranbrook Manor Apts., Romulus, MI - Oakbrook
Villa Apts., New Bedford, MA - Buttonwood Acres, Wyandotte, MI - Villa Apollo
Associates Limited Partnership and Villa Apollo # 2 Limited Partnership, South
Dartmouth, MA - Solemar, Sterling Heights, MI - Carlton Terrace Apartments, and
San Diego, CA - Lancaster Manor Apartments. Villa Apollo Associates, Villa
Apollo #2, Carlton Terrace, Cranbrook Manor, Oakbrook Villa and Lancaster Manor
are under contract of sale.
Funding for the 1996 Act is subject to appropriations by Congress. Congress
funded $624 million in fiscal year 1996 for the preservation of housing.
Congress has funded approximately $325 million for preservation for 1997 fiscal
year. Moreover only $175 million of the 1997 allocation is available to fund
preservation, while the balance is set aside for rental assistance payments and
for special projects. There is a backlog of properties having a preservation
value in excess of $900 million. Accordingly, no assurance can be given that any
of the local partnerships will obtain such incentives.
HUD previously released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based
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Section 8 subsidy payments and an attendant reduction in debt on properties that
were supported by the Section 8 payments. The ACPA calls for a transition during
which the project-based Section 8 would be converted to a tenant-based voucher
system. Any FHA insured debt would then be "marked-to-market", that is revalued
in light of the reduced income stream.
Several industry sources have already commented to HUD and Congress that in
the event the ACPA was fully enacted in its present form, the reduction in
mortgage indebtedness would be considered taxable income to owners such as the
limited partners in the Partnership. Legislative relief has been proposed to
exempt "marked-to-market" debt from cancellation of indebtedness income
treatment. At present, there are several bills pending in Congress to address
this tax relief issue. Additionally, in the interim, HUD has agreed to annual
extensions of any expiring project-based Section 8 contracts, but there is no
guarantee that such extensions will be available in the future.
Six of the Local Partnerships have entered into contracts of sale (Villa
Apollo and Villa Apollo #2, Carlton Terrace, Cranbrook Manor, Oakbrook Villa and
Lancaster Manor) for an aggregate selling price of approximately $48,000,000.
The net proceeds will be used to satisfy the existing mortgage debt of
approximately $17,946,000. The balance of the proceeds will be used to settle
the purchase money notes and accrued interest with the balance, if any,
available for Partnership purposes. HUD has not yet approved the sale of these
properties. No assurance can be given that the transactions contemplated will
close.
On May 2, 1996, the property owned by Bicentennial was sold to a third
party for $1,700,000, resulting in a gain in the amount of $606,195 and
forgiveness of indebtedness income of $11,502,877 was also realized as a result
of forgiveness of the purchase money note payable and accrued interest thereon
(which were obligations at the Local Partnership level), amounts due to HUD, and
amounts due to general partners and affiliates.
On May 7, 1997, the properties and the related assets and liabilities of
Knollwood I, Ltd., Knollwood II, Ltd., Knollwood III, Ltd., and Knollwood IV,
Ltd. were sold to a third party for $20,750,000, which took title subject to the
principal balance of the associated Purchase Money Notes in the amount of
approximately $6,027,000, resulting in a gain in the amount of approximately
$5,500,000. No proceeds were used to settle the accrued interest on the
associated Purchase Money Notes which amounted to approximately $6,000,000,
resulting in forgiveness of indebtedness income. For tax purposes, the entire
gain to be realized by the Partnership is anticipated to be approximately
$19,900,000.
On June 30, 1997, the property and related assets and liabilities of
Parklane II, Ltd. were sold to a third party for $3,450,000 which took title
subject to the principal balance of a portion of the associated Purchase Money
Notes which amounted to approximately $1,254,000, resulting in a gain in the
amount of approximately $700,000. The Partnership used $400,000 of the net
proceeds to settle the remaining principal balance of the Purchase Money Notes
and accrued interest thereon which amounted to approximately $2,900,000,
resulting in forgiveness of indebtedness income of approximately $2,500,000. For
tax purposes, the entire gain to be realized by the Partnership is anticipated
to be approximately $4,800,000.
The Partnership is subject to the risks incident to potential losses
arising from the management and ownership of improved real estate. The
Partnership can also be affected by poor economic conditions generally, however
no more than 25% of the properties are located in any single state. There are
also substantial risks associated with owning properties receiving government
assistance, for example the possibility that Congress may not appropriate funds
to enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owners equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence, without HUD's approval. Furthermore there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.
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Competition
The real estate business is highly competitive and each of the Local
Partnerships in which the Partnership has invested owns an Apartment Complex
which must compete for tenants with other rental housing in its area. However,
the rental assistance and the preferred interest rates on mortgage financing
generally make it possible to offer the apartments to eligible tenants at a cost
to the tenant significantly below the market rate for comparable conventionally
financed apartments in the area.
Employees
The Partnership does not have any employees. All services are performed for
the Partnership by its General Partners and their affiliates. The General
Partners receive compensation in connection with such activities as set forth in
Items 11 and 13 herein. In addition, the Partnership reimburses the General
Partners and certain of their affiliates for expenses incurred in connection
with the performance by their employees of services for the Partnership in
accordance with the Partnership Agreement.
Item 2. Properties.
The Partnership holds a 98.99% limited partnership interest in each of
sixty Local Partnerships, which own sixty Apartment Complexes receiving
Government Assistance. On May 2, 1996 the property owned by Bicentennial was
sold to a third party (see Item 7. below). Set forth below is certain
information concerning the Apartment Complexes and their operations and
finances. See Schedule III to the financial statements included herein for
additional information pertaining to the Apartment Complexes.
Each of the Local Partnerships owns one Apartment Complex. The Apartment
Complexes are located in Alabama (15), Arkansas (8), California (2), Colorado
(2), Florida (1), Georgia (3), Indiana (3), Kentucky (1), Massachusetts (3),
Michigan (10), North Carolina (2), Oregon (2), South Carolina (1), Texas (5),
Virginia (1) and Washington (1).
The 60 Apartment Complexes owned by the Local Partnerships at March 25,
1997 contain a total of 7,720 rental units. The largest of the Apartment
Complexes consists of 352 units; the smallest Apartment Complex contains 49
units. Construction of each Apartment Complex was completed between 1970 and
1983.
The Apartment Complexes are occupied by low, moderate and middle-income
tenants, some of whom are elderly. Each Apartment Complex, except for the
Apartment Complexes owned by Saraland Apartments, Ltd., Park of Pecan I, Ltd.
and Park of Pecan II, Ltd., is located in the vicinity of other housing
developments receiving Government Assistance.
All of the Apartment Complexes are subject to existing permanent first
mortgages (the "Mortgage Loans"). In some cases the Apartment Complexes are also
subject to supplemental mortgages (the "Supplemental Mortgage Loans"). See
Schedule III.
LOCAL PARTNERSHIP SCHEDULE
Government Percentage of Units
Assistance Occupied at December 31,
Year -------------- ---------------------------------------------------
Name and Location (Number of Units) Completed HUD Programs(a) 1996 1995 1994 1993 1992
- - ----------------------------------- --------- --------------- ---- ---- ---- ---- ----
Knollwood I 1978 ss.221(d)(4) 96% 98% 98% 97% 97%
Mobile, Alabama (192)
Knollwood II 1979 ss.221(d)(4) 99% 99% 99% 97% 97%
Mobile, Alabama (192)
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LOCAL PARTNERSHIP SCHEDULE (Continued)
Government Percentage of Units
Assistance Occupied at December 31,
Year -------------- ---------------------------------------------------
Name and Location (Number of Units) Completed HUD Programs(a) 1996 1995 1994 1993 1992
- - ----------------------------------- --------- --------------- ---- ---- ---- ---- ----
Knollwood III 1981 ss.221(d)(4) 99% 99% 99% 96% 96%
Mobile, Alabama (192)
Knollwood, IV 1983 ss.221(d)(4) 98% 97% 97% 96% 96%
Mobile, Alabama (128)
Parklane II 1977 ss.221(d)(4) 99% 98% 97% 99% 99%
Mobile, Alabama (140)
Cedarbay 1981 ss.221(d)(4) 84% 89% 90% 93% 99%
Mobile, Alabama (112)
Northwoods III Apts 1982 ss.221(d)(4) 96% 99% 97% 97% 97%
Pensacola, Florida (112)
Westminster Manor Apts 1972 ss.221(d)(4) 97% 97% 97% 96% 96%
Arvada, Colorado (280) HAP
Northgate Townhouse Apts 1977 ss.221(d)(4) 99% 95% 96% 98% 98%
Thornton, Colorado (184) HAP
Hackley Village 1971 ss.236 100% 100% 100% 100% 100%
Muskegon, Michigan (54) HAP
Huntley #1 1972 ss.236 99% 99% 99% 99% 99%
Holt, Michigan (88) HAP
Huntley #2 1973 ss.236 99% 98% 98% 98% 98%
Holt, Michigan (72) HAP
Seymour O'Brien Manor Apts 1972 ss.236 96% 98% 100% 99% 99%
Seymour, Indiana (56) HAP
Washington Highland Apts 1972 ss.236 98% 99% 100% 98% 98%
Washington, Indiana (56) HAP
Vincennes Niblack Apts 1972 ss.236 97% 98% 97% 97% 97%
Vincennes, Indiana (144) HAP
Casa Ramon Apartments 1974 ss.236 100% 100% 100% 98% 98%
Orange, California (75) HAP
Nu-Elm Apartments 1972 ss.236 99% 99% 98% 96% 96%
Springfield, Missouri (72) HAP
Buttonwood Acres 1973 ss.236 100% 96% 96% 100% 100%
New Bedford, Massachusetts (132) HAP(b)
Rockdale West 1974 ss.236 100% 97% 96% 99% 99%
New Bedford, Massachusetts (225) HAP(b)
Solemar 1976 (c) 100% 96% 95% 100% 100%
South Dartmouth, Massachusetts (200)
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LOCAL PARTNERSHIP SCHEDULE (Continued)
Government Percentage of Units
Assistance Occupied at December 31,
Year -------------- ---------------------------------------------------
Name and Location (Number of Units) Completed HUD Programs(a) 1996 1995 1994 1993 1992
- - ----------------------------------- --------- --------------- ---- ---- ---- ---- ----
Decatur Apartments 1971 ss.236 93% 89% 95% 96% 96%
Decatur, Alabama (100) HAP
Florence Apartments 1973 ss.236 89% 95% 98% 99% 99%
Florence, Alabama (96)
Saraland Apartments 1972 ss.236 97% 98% 98% 100% 100%
Saraland, Alabama (60) HAP
University Garden Apts 1971 ss.236 100% 100% 100% 100% 100%
Waxahachie, Texas (104)
Southside Village Apts 1972 ss.236 98% 99% 99% 95% 95%
Brownwood, Texas (104) HAP
Dickens Ferry Apartments 1972 ss.236 90% 95% 96% 96% 99%
Mobile, Alabama (80) HAP
Bonnie Doone Apartments 1972 ss.236 88% 94% 98% 96% 98%
Athens, Alabama (60) HAP
Conifer 208 (Conifer Village) 1972 ss.236 100% 98% 98% 98% 98%
Spokane, Washington (64) HAP
Conifer 307 (Fircrest) 1973 ss.236 97% 96% 97% 98% 98%
Beaverton, Oregon (60) HAP
Conifer 317 (Pinewood) 1974 ss.236 96% 94% 95% 94% 94%
Hillsboro, Oregon (50)
Bicentennial Apts 1976 ss.221(d)(4) (d) 71% 79% 77% 77%
Houston, Texas (292)
Bellfort Apts 1979 ss.221(d)(4) 94% 94% 91% 90% 90%
Houston, Texas (272) HAP
Cloisters (Sundown) 1974 ss.236 98% 99% 99% 99% 99%
Birmingham, Alabama (192) HAP
Cabarrus Arms 1974 ss.236 96% 94% 93% 93% 92%
Kannapolis, North Carolina (76) HAP
Summer Arms Apts 1974 ss.236 91% 96% 98% 97% 97%
Sumter, South Carolina (100) HAP
Lexington Village 1973 ss.236 99% 100% 100% 94% 94%
Conyers, Georgia (108) HAP
Ware Manor 1971 ss.236 94% 99% 99% 100% 100%
Waycross, Georgia (84) HAP
Nottingham Woods Apts 1974 ss.236 99% 99% 99% 98% 98%
Oxford, Alabama (144)
-8-
LOCAL PARTNERSHIP SCHEDULE (Continued)
Government Percentage of Units
Assistance Occupied at December 31,
Year -------------- ---------------------------------------------------
Name and Location (Number of Units) Completed HUD Programs(a) 1996 1995 1994 1993 1992
- - ----------------------------------- --------- --------------- ---- ---- ---- ---- ----
Hathaway Court 1974 ss.236 99% 96% 98% 98% 98%
Covington, Kentucky (159) HAP
Tall Pines 1972 ss.236 100% 98% 99% 95% 95%
La Grange, Georgia (115) HAP
Shelton Beach Apts 1975 ss.221(d)(4) 94% 97% 96% 92% 92%
Saraland, Alabama (112)
Northpointe II 1978 ss.221(d)(4) 98% 98% 97% 95% 95%
Saraland, Alabama (80)
Caroline Forest Apts 1973 ss.236 99% 99% 100% 98% 98%
Salem, Virginia (72)
Park of Pecan I 1979 ss.221(d)(4) 94% 90% 91% 100% 100%
Rosenberg, Texas (137)
Park of Pecan II 1978 ss.221(d)(4) 93% 88% 90% 100% 100%
Rosenberg, Texas (136)
Villa Apollo No. 1 1971 ss.236 89% 95% 94% 97% 97%
Brownstown Township, Michigan (112) HAP
Carlton Terrace Apartments 1973 ss.236 99% 99% 100% 99% 99%
Sterling Heights, Michigan (300)
Cranbrook Manor Apartments 1970 ss.236 80% 93% 96% 95% 95%
Lansing, Michigan (136) HAP
Oakbrook Villa Apartments 1970 ss.236 90% 94% 94% 97% 97%
Romulus, Michigan (352) HAP
Pebble Creek 1973 ss.236 98% 100% 100% 97% 97%
East Lansing, Michigan (186)
Villa Apollo No. 2 1971 ss.236 89% 93% 91% 97% 97%
Brownstown Township, Michigan (286) HAP
Greenwood Manor 1974 ss.236 92% 99% 93% 96% 96%
Pine Bluff, Arkansas (64) HAP
Malvern Manor 1974 ss.236 96% 97% 99% 100% 100%
Malvern, Arkansas (50) HAP
Hereford Manor 1973 ss.236 98% 98% 99% 98% 98%
Siloam Springs, Arkansas (50) HAP
Henslee Heights 1974 ss.236 99% 99% 98% 99% 99%
Pine Bluff, Arkansas (78) HAP
Oakwood Manor 1972 ss.236 91% 96% 95% 88% 88%
Little Rock, Arkansas (200) HAP
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LOCAL PARTNERSHIP SCHEDULE (Continued)
Government Percentage of Units
Assistance Occupied at December 31,
Year -------------- ---------------------------------------------------
Name and Location (Number of Units) Completed HUD Programs(a) 1996 1995 1994 1993 1992
- - ----------------------------------- --------- --------------- ---- ---- ---- ---- ----
West Scenic Apartments 1971 ss.236 93% 97% 98% 97% 97%
North Little Rock, Arkansas (150)
Robindale East Apartments 1974 ss.236 88% 92% 88% 93% 93%
Blytheville, Arkansas (88) HAP
Southwest Apartments 1970 ss.236 100% 98% 100% 98% 98%
Little Rock, Arkansas (49) HAP
Valley Arms 1975 ss.236 74% 76% 76% 90% 90%
Statesville, North Carolina (100) HAP
Lancaster Manor 1970 ss.221(d)(3) 100% 100% 99% 100% 100%
San Diego, California (248)
(a) The Partnership invested in Local Partnerships owning existing
Apartment Complexes which receive either Federal or state subsidies. HUD through
FHA, administers a variety of subsidies for low and moderate-income housing. FHA
administers similar housing programs for non-urban areas. The Federal programs
generally provide one or a combination of the following forms of assistance: (i)
mortgage loan insurance, (ii) rental subsidies and (iii) reduction of mortgage
interest payments.
i) HUD provides mortgage insurance for rental housing projects pursuant to
a number of sections of Title II of the National Housing Act ("NHA"), including
Section 236, Section 221(d)(4), Section 221(d)(3) and Section 220. Under all of
these programs, HUD will generally provide insurance equal to 100% of the total
replacement cost of the project to non-profit owners and 90% of the total
replacement cost to limited-distribution owners. Mortgages are provided by
institutions approved by HUD, including banks, savings and loan companies and
local housing authorities. Section 221(d)(4) of NHA provides for federal
insurance of private construction and permanent mortgage loans to finance new
construction of rental apartment complexes containing five or more units. The
most significant difference between the 221(d)(4) program and the 221(d)(3)
program is the maximum amount of the loan which may be obtained. Under the
221(d)(3) program, non profit sponsors may obtain a permanent mortgage equal to
100% of the total replacement cost; no equity contribution is required of a non
profit sponsor. In all other respects the 221(d)(3) program is substantially
similar to the 221(d)(4) program.
ii) Many of the tenants in HUD insured projects receive some form of rental
assistance payments, primarily through the Section 8 Housing Assistance Payments
Program (the "Section 8 Program"). Apartment Complexes not receiving assistance
through the Section 8 Program ("Section 8 Payments") will generally have
limitations on the amounts of rent which may be charged. One requirement imposed
by HUD regulations effective for apartment complexes initially approved for
Section 8 Payments on or after November 5, 1979 is to limit the amount of the
owner's annual cash distributions from operations to 10% of the owner's equity
investment in an apartment complex if the apartment complex is intended for
occupancy by families and to 6% of the owner's equity investment in an apartment
complex intended for occupancy by elderly persons. The owner's equity investment
in the apartment complex is 10% of the project's replacement cost as determined
by HUD.
iii) Section 236 Program. As well as providing mortgage insurance, the
Section 236 program also provides an interest credit subsidy which reduces the
cost of debt service on a project mortgage, thereby enabling the owner to charge
the tenants lower rents for their apartments. Interest credit subsidy payments
are made monthly by HUD directly to the mortgagee of the project. Each payment
is in an amount equal to the difference between (i) the monthly interest payment
required by the terms of the mortgage to pay principal, interest and the annual
mortgage insurance premium and (ii) the monthly payment which would have been
required for principal and interest if the mortgage loan bore interest at the
rate of 1%. These payments are credited against the amounts otherwise due from
the owner of the project, who makes monthly payments of the balance.
(b) The Local Partnership receives monthly rent supplements from HUD
through MHFA and the New Bedford Housing Authority.
-10-
(c) MHFA provides interest credit subsidies pursuant to Section 13A of the
Massachusetts Acts of 1966. The Local Partnership also receives monthly rent
supplements from the Dartmouth Housing Authority and the South Shore Housing
Authority pursuant to Section 707 of the Massachusetts Act of 1966.
(d) On May 2, 1996 the property owned by Bicentennial was sold to a third
party (see Item 7. below).
All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.
Rents from commercial tenants (to which average rental per square foot
applies) comprise less than 5% of the rental revenues of the Partnership. Rents
for the residential units are determined annually by HUD and reflect increases
in consumer price indices in various geographic areas.
Management continuously reviews the physical state of the properties and
budgets improvements when required, which are generally funded from cash flow
from operations or release of replacement reserve escrows. No improvements are
expected to require additional financing.
Management continuously reviews the insurance coverage of the properties
and believes such coverage is adequate.
See Item 1, Business, above for the general competitive conditions to which
the properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations
determined by the township or city in which the property is located. Such taxes
have approximated 1% of the aggregate cost for the properties as shown in
Schedule III to the financial statements included herein.
Item 3. Legal Proceedings.
This information is incorporated by reference to the discussion of Saraland
in the Results of Operations of Certain Local Partnerships contained in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fiscal
year covered by this report through the solicitation of proxies or otherwise.
-11-
PART II
Item 5. Market for the Registrant's Limited Partnerships Interests and Related
Security Holder Matters.
As of March 25, 1997, the Partnership had issued and outstanding 12,074
Limited Partnership Interests, of which 6,674 are Initial Limited Partnership
Interests and 5,400 are Additional Limited Partnership Interests, each
representing a $5,000 capital contribution to the Partnership, for aggregate
Gross Proceeds of $60,370,000. Additional Limited Partnership Interests are the
Limited Partnership Interests acquired upon the exercise of Warrants or sold by
the Partnership upon the nonexercise of the Warrants. The Warrants are rights
granted pursuant to the Partnership Agreement as part of the purchase of an
Initial Limited Partner Interest. No further issuance of Initial Limited
Partnership Interests or Additional Limited Partnership Interests is anticipated
and all Warrants have expired.
The offering of Units consisting of Initial Limited Partnership Interests
and Warrants to purchase Additional Limited Partnership Interests terminated in
1984. The offering of Additional Limited Partnership Interests terminated in
March 1985.
No public market has developed, and it is not anticipated that any public
market will develop, for the secondary purchase and sale of any Limited
Partnership Interests. Limited Partnership Interests may be transferred only if
certain requirements are satisfied, including the rendering of an opinion of
counsel to the Partnership that such transfer would not cause a termination of
the Partnership under Section 708 of the Internal Revenue Code and would not
violate any federal or state securities laws.
As of June 4, 1997, there were approximately 4,491 registered holders of
Limited Partnership Interests.
The Partnership has made no distributions to its Limited Partners since its
inception on June 28, 1984. There are no material restrictions upon the
Partnership's present or future ability to make distributions in accordance with
the provisions of the Partnership's Amended and Restated Agreement and
Certificate of Limited Partnership. The Partnership has invested as a limited
partner in Local Partnerships owning Apartment Complexes which receive
Governmental Assistance under programs which in many instances restrict the cash
return available to owners. See Item 8, Footnote 10(f) for a discussion of these
restrictions. The Partnership does not anticipate providing significant cash
distributions to its Limited Partners in circumstances other than refinancing or
sale of the Apartment Complexes or the Local Partnership Interests.
There has recently been an increasing number of requests for the list of
holders of Limited Partnership Interests in limited partnerships such as the
Partnership. Often these requests are made by a person who, only a short time
before making the request, acquired merely a small number of Limited Partnership
Interests in the partnership and seeks the list for an improper purpose, a
purpose that is not in the best interest of the partnership or is harmful to the
partnership. In order to best serve and protect the interests of the Partnership
and all of its investors, the general partners of the Partnership have adopted a
policy with respect to requests for the Partnership's list of holders of Limited
Partnership Interests. This policy is intended to protect investors from
unsolicited and coercive offers to acquire the interests of holders of Limited
Partnership Interests and does not limit any other rights the general partners
may have under the Partnership Agreement or applicable law.
-12-
Item 6. Selected Financial Data.
The information set forth below presents selected financial data of the
Partnership. Additional detailed financial information is set forth in audited
financial statements and footnotes contained in Item 8 hereof and in the
schedules contained in Item 14 hereof.
Year Ended March 25
----------------------------------------------------------------------------
OPERATIONS 1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
Revenues $ 37,941,905 $ 37,329,186 $ 35,953,512 $ 34,980,748 $ 33,538,768
Operating expenses (50,871,861) (48,605,962) (49,555,880) (49,006,411) (49,684,989)
Provision for impairment
of assets (939,612) (4,343,215) 0 0 0
Minority interest 3,063 (24,042) 3,705 4,627 5,616
------------ ------------ ------------ ------------ ------------
Loss before extra-
ordinary item $(13,866,505) $(15,644,033) $(13,598,663) $(14,021,036) $(16,140,605)
------------ ------------ ------------ ------------ ------------
Extraordinary item-
forgiveness of
indebtedness 11,502,877 0 0 0 0
------------ ------------ ------------ ------------ ------------
Net loss $ (2,363,628) $(15,644,033) $(13,598,663) $(14,021,036) $(16,140,605)
============ ============ ============ ============ ============
Loss before extra-
ordinary item
per BAC (1,137) (1,283) (1,115) (1,150) (1,323)
Extraordinary item
per BAC 943 0 0 0 0
------------ ------------ ------------ ------------ ------------
Net loss per BAC $ (194) $ (1,283) $ (1,115) $ (1,150) $ (1,323)
============ ============ ============ ============ ============
March 25
------------------------------------------------------------------------
FINANCIAL POSITION 1997 1996 1995 1994* 1993*
------------ ------------ ------------ ------------ ------------
Total assets $157,162,664 $165,610,335 $174,113,560 $181,261,859 $188,130,548
============ ============ ============ ============ ============
Long-term obligations $275,088,044 $281,339,303 $274,288,282 $267,295,459 $260,587,409
============ ============ ============ ============ ============
Total liabilities $284,145,026 $290,195,162 $283,063,641 $276,571,053 $269,404,104
============ ============ ============ ============ ============
Minority interest $ 116,611 $ 150,518 $ 141,231 $ 183,455 $ 198,057
============ ============ ============ ============ ============
* Reclassified for comparative purposes.
During the years ended March 25, 1993 through 1996, total assets decreased
primarily due to depreciation, partially offset by net additions to property and
equipment. During the same periods, long-term obligations and total liabilities
increased primarily due to accruals of interest on Purchase Money Notes,
partially offset by payments equal to 60% of the cash flow distributions from
the underlying properties. For the year ended March 25, 1996, there was also a
decrease in assets due to a provision for impairment of assets. During the year
ended March 25, 1997 total assets decreased primarily due to depreciation,
provision for impairment of assets and the sale of property (see Note 10 in Item
8. Financial Statements and Supplementary Data), partially offset by net
additions to property and equipment. Long-term obligations and total liabilities
decreased for the year ended March 25, 1997 primarily due to the forgiveness of
indebtedness on Purchase Money Notes and amounts due to selling partners as a
result of the sale, principal repayments of mortgage notes payable and payments
of interest on Purchase Money Notes, partially offset by accruals of interest on
Purchase Money Notes.
-13-
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
The Partnership's capital has been invested primarily in 61 Local
Partnerships, in which the Partnership made an initial investment of $50,293,934
(including acquisition expenses) in the Local Partnerships. These investments
are highly illiquid. On May 2, 1996, the property owned by one of the Local
Partnerships was sold to a third party (see below) and, as a result,
approximately $461,000 of Partnership funds which had been advanced to the Local
Partnership were forgiven.
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated. In
addition, the Partnership evaluates the amount of a potential environmental
liability independently from any potential claim for recovery.
During the year ended March 25, 1997, cash and cash equivalents of the
Partnership decreased approximately $34,000. This decrease was primarily due to
acquisitions of property and equipment ($1,436,000), an increase in mortgage
escrow deposits ($184,000), a net decrease in purchase money notes ($1,650,000)
and repayments of mortgage notes payable ($2,372,000) which exceeded cash
provided by operating activities ($3,997,000) and net proceeds from sale of
property ($1,642,000). Included in the adjustments to reconcile the net loss to
cash flow from operations is gain on sale of property ($606,000), forgiveness of
indebtedness income ($11,964,000), depreciation ($8,485,000) and provision for
impairment of assets ($940,000).
The Partnership's primary sources of funds are the cash distributions from
operations of the Local Partnerships in which the Partnership has invested.
These sources are available to meet obligations of the Partnership. However, the
cash distributions received from the Local Partnerships to date have not been
sufficient to meet all such obligations of the Partnership. Accordingly, the
Related General Partner advanced funds totaling approximately $206,000,
$205,000, and $198,000 at March 25, 1997, 1996 and 1995, respectively, to meet
the Partnership's third party obligations. In addition, certain fees and expense
reimbursements owed to the General Partners amounting to approximately
$1,765,000, $635,000 and $860,000, were accrued and unpaid as of March 25, 1997,
1996 and 1995, respectively. Without the General Partners' advances and
continued accrual without payment of certain fees and expense reimbursements,
the Partnership will not be in a position to meet its obligations. The General
Partners have continued advancing and allowing the accrual without payment of
these amounts but are under no obligation to do so.
During the years ended March 25, 1997 ("the 1996 Fiscal Year"), 1996 ("the
1995 Fiscal Year") and 1995 ("the 1994 Fiscal Year), the Partnership received
approximately $1,410,000, $1,390,000, and $1,385,000, respectively, of cash flow
distributions from operations of the Local Partnerships. In most cases, 60% of
the cash flow distributions were applied to interest payments on the Purchase
Money Notes, resulting in a net cash inflow of approximately $597,000, $556,000
and $595,000 for Fiscal Years 1996, 1995 and 1994, respectively. At March 25,
1997, 1996 and 1995, approximately $813,000, $834,000, and $790,000,
respectively, of such distributions were required to be remitted as interest
payments on the Purchase Money Notes.
Purchase Money Notes in the original amount of $85,458,825 were issued to
the selling partners of the subsidiary partnerships as part of the purchase
price and are secured only by the interest in the subsidiary partnership to
which the note relates. A portion of these notes, in the original amount of
$31,932,568 are obligations at the subsidiary partnership level, whereas the
remaining $53,526,257 is recorded at the Partnership level. On May 2, 1996 the
property owned by Bicentennial was sold to a third party and the associated
purchase money note and accrued interest thereon, which were obligations at the
subsidiary partnership level, were canceled (see Item 7. below). The Purchase
Money Notes provided for compound interest at rates which, in general, ranged
from 9% to 10% per annum (except that the Purchase Money Note with respect to
Cabarrus Arms Associates bears interest at 12% per annum) through August 31,
1989. Thereafter, simple interest has accrued, without further interest thereon,
through maturity, August through December 1996 (unless extended by the
Partnership for up to three years in
-14-
general). As of March 25, 1997, the maturity dates of each of the Purchase Money
Notes associated with the remaining properties owned by the subsidiary
partnerships were extended for one year (see below). Purchase money notes at
March 25, 1997 and 1996 include $4,336,417 of interest accrued through August
31, 1989.
The Purchase Money Notes, which provide for simple interest through
maturity during the period August through December 1996 (unless extended by the
Partnership), will not be in default during the basic term (generally twelve
years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note. Continued accrual of such
interest beyond the initial term, without payment, would reduce the effective
interest rate of 9%. The exact effect is not determinable inasmuch as it is
dependent on the actual future interest payments and ultimate repayment dates of
the notes. Unpaid interest of approximately $98,278,000 and $95,994,000 as of
March 25, 1997 and 1996, respectively, has been accrued and is included in due
to selling partners in the consolidated balance sheets. In general, the interest
on and the principal of each Purchase Money Note is also payable to the extent
of the Partnership's actual receipt of proceeds of the sale or refinancing of
the Apartment Complex, or in some cases the Local Partnership Interest to which
the Purchase Money Note relates.
The Partnership may elect, upon the payment of an extension fee of 1/2% per
annum of the outstanding principal amount, to extend the term of the Purchase
Money Notes for up to three additional years (four years with respect to three
subsidiary partnerships). As of March 25, 1997, the maturity dates of each of
the Purchase Money Notes associated with the remaining properties owned by the
subsidiary partnerships (ranging from August to December 1996) were extended for
one year and extension fees in the amount of $260,364 were incurred by the
Partnership. Of such fees incurred, $206,810 was accrued and added to the
Purchase Money Notes balance in accordance with the respective note agreements.
The extension fees are being amortized over the term of the extension. The
Partnership expects that upon maturity of the Purchase Money Notes, it will be
required to refinance or sell its investments in the Local Partnerships in order
to pay the Purchase Money Notes. The Partnership cannot sell or otherwise
liquidate its investments in those Local Partnerships which have subsidy
agreements with HUD during the period that such agreements are in existence
without HUD's approval. Based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is uncertain as to whether the proceeds from such sales will be sufficient to
meet the outstanding balances of principal, accrued interest and extension fees.
Management is working with the selling partners to restructure and/or refinance
the notes. No assurance can be given that management's efforts will be
successful. The Purchase Money Notes are without personal recourse to either the
Partnership or any of its partners and the sellers' recourse, in the event of
non-payment, would be to foreclose on the Partnership's interests in the
respective subsidiary partnerships.
The General Partners are working with the local general partners of
Cranbrook Manor Apts., Oakbrook Villa Apts., Buttonwood Acres, Villa Apollo
Associates Limited Partnership and Villa Apollo #2 Limited Partnership, Solemar,
Carlton Terrace and Lancaster Manor properties to evaluate the opportunities
available under the Preservation Acts and the 1996 Act as discussed in Item 1
above.
The Local Partnerships which receive government assistance are
subject to low-income use restrictions which limit the owners' ability to sell
or refinance the properties. In order to maintain the existing inventory of
affordable housing, Congress passed a series of related acts including the
Emergency Low Income Preservation Act of 1987, the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 and the Housing Opportunity
Program Extension Act of 1996 (the "1996 Act") (together the "Preservation
Acts"). In exchange for maintaining the aforementioned use restrictions, the
Preservation Acts provide financial incentives for owners of government assisted
properties. The 1996 Act provides financial assistance by funding the sale of
such properties to not-for-profit owners and also restores the owners' ability
to prepay their HUD mortgage and convert the property to condominiums or
market-rate rental housing.
The following eight Local Partnerships filed for incentives under the
Preservation Acts: Lansing, MI - Cranbrook Manor Apts., Romulus, MI - Oakbrook
Villa Apts., New Bedford, MA - Buttonwood Acres, Wyandotte, MI - Villa Apollo
Associates Limited Partnership and Villa Apollo # 2 Limited Partnership, South
Dartmouth, MA - Solemar, Sterling Heights, MI - Carlton Terrace Apartments, and
San Diego, CA - Lancaster Manor Apartments.
-15-
Villa Apollo Associates, Villa Apollo #2, Carlton Terrace, Cranbrook Manor,
Oakbrook Villa and Lancaster Manor are under contract of sale.
Funding for the 1996 Act is subject to appropriations by Congress. Congress
funded $624 million in fiscal year 1996 for the preservation of housing.
Congress has funded approximately $325 million for preservation for 1997 fiscal
year. Moreover only $175 million of the 1997 allocation is available to fund
preservation, while the balance is set aside for rental assistance payments and
for special projects. There is a backlog of properties having a preservation
value in excess of $900 million. Accordingly, no assurance can be given that any
of the local partnerships will obtain such incentives.
Partnership management fees owed to the general partners amounting to
approximately $1,623,000 and $481,000 were accrued and unpaid as of March 25,
1997 and 1996, respectively.
HUD previously released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based Section 8 subsidy payments and an attendant reduction in debt on
properties that were supported by the Section 8 payments. The ACPA calls for a
transition during which the project-based Section 8 would be converted to a
tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market", that is revalued in light of the reduced income stream, if
any.
Several industry sources have already commented to HUD and Congress that in
the event the ACPA was fully enacted in its present form, the reduction in
mortgage indebtedness would be considered taxable income to limited partners in
the Partnership. Legislative relief has been proposed to exempt
"marked-to-market" debt from cancellation of indebtedness income treatment. At
present, there are several bills pending in Congress to address this tax relief
issue. Additionally, in the interim, HUD has agreed to annual extensions of any
expiring project-based Section 8 contracts, but there is no guarantee that such
extension will be available in the future.
Six of the Local Partnerships have entered into contracts of sale (Villa
Apollo and Villa Apollo #2, Carlton Terrace, Cranbrook Manor, Oakbrook Villa and
Lancaster Manor) for an aggregate selling price of approximately $48,000,000.
The net proceeds will be used to satisfy the existing mortgage debt of
approximately $17,946,000. The balance of the proceeds will be used to settle
the purchase money notes and accrued interest with the balance, if any,
available for Partnership purposes. HUD has not yet approved the sale of these
properties. No assurance can be given that the transactions contemplated will
close.
On May 2, 1996, the property owned by Bicentennial was sold to a third
party for $1,700,000, resulting in a gain in the amount of $606,195 and
forgiveness of indebtedness income of $11,502,877 was also realized as a result
of forgiveness of the purchase money note payable and accrued interest thereon
(which were obligations at the Local Partnership level), amounts due to HUD, and
amounts due to general partners and affiliates.
On May 7, 1997, the properties and the related assets and liabilities of
Knollwood I, Ltd., Knollwood II, Ltd., Knollwood III, Ltd., and Knollwood IV,
Ltd. were sold to a third party for $20,750,000, which took title subject to the
principal balance of the associated Purchase Money Notes in the amount of
approximately $6,027,000, resulting in a gain in the amount of approximately
$5,500,000. No proceeds were used to settle the accrued interest on the
associated Purchase Money Notes which amounted to approximately $6,000,000,
resulting in forgiveness of indebtedness income. For tax purposes, the entire
gain to be realized by the Partnership is anticipated to be approximately
$19,900,000.
On June 30, 1997, the property and related assets and liabilities of
Parklane II, Ltd. were sold to a third party for $3,450,000 which took title
subject to the principal balance of a portion of the associated Purchase Money
Notes which amounted to approximately $1,254,000, resulting in a gain in the
amount of approximately $700,000. The Partnership used $400,000 of the net
proceeds to settle the remaining principal balance of the Purchase Money Notes
and accrued interest thereon which amounted to approximately
-16-
$2,900,000, resulting in forgiveness of indebtedness income of approximately
$2,500,000. For tax purposes, the entire gain to be realized by the Partnership
is anticipated to be approximately $4,800,000.
For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
local partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way.
Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not been otherwise disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
Results of Operations
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective March 26, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.
Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate disposition
of the property. Cost includes the purchase price, acquisition fees and
expenses, and any other costs incurred in acquiring the properties. As required
by SFAS No. 121 a provision for loss on impairment of assets is recorded when
estimated amounts recoverable through future operations and sale of the property
on an undiscounted basis or a property appraisal when deemed necessary are below
depreciated cost. Property investments themselves are reduced to estimated fair
value (generally using discounted cash flows) when the property is considered to
be impaired and the depreciated cost exceeds estimated fair value. For the year
ended March 25, 1996, the Partnership had recorded approximately $4,343,000 as a
provision for loss on impairment of assets relating to the property owned by
Bicentennial, which was sold on May 2, 1996. For the year ended March 25, 1997,
the Partnership has recorded approximately $940,000 as a provision for loss on
impairment of assets.
The following is a summary of the results of operations of the Partnership
for the 1996, 1995, and 1994 Fiscal Years.
The results of operations of the Partnership, as well as the Local
Partnerships, excluding gain on sale of property, forgiveness of indebtedness
income, administrative and management-related parties and provision for
impairment of assets remained fairly constant for the 1996, 1995 and 1994 Fiscal
Years. Contributing to the relatively stable operations at the Local
Partnerships is the fact that all of the Apartment Complexes receive Government
Assistance. HUD has provided mortgage insurance to 15 of the Local Partnerships
pursuant to Section 221(d)(4) of the National Housing Act, and to one Local
Partnership pursuant to Section 221(d)(3) of the National Housing Act.
Forty-four of the Local Partnerships receive mortgage insurance or have entered
into interest reduction agreements with HUD under its Section 236 program and
receive interest subsidy payments from HUD. One Local Partnership receives
interest credit subsidies from MHFA pursuant to Section 13A of the Massachusetts
Act of 1966 and monthly rent supplements pursuant to Section 707 of the
Massachusetts Acts of 1966. In addition, HUD (or MHFA) has provided rental
assistance payments for a percentage of the apartment units owned by 39 of the
Local Partnerships pursuant to HAP Contracts.
-17-
The Partnership's primary source of income continues to be its portion of
the Local Partnership's operating results. The majority of Local Partnership
income continues to be in the form of rental income with the corresponding
expenses being divided among operations, depreciation, and mortgage interest. In
addition, the Partnership incurred interest expense relating to the Purchase
Money Notes which were issued when the Local Partnership Interests were
acquired.
Net loss during the 1996, 1995 and 1994 Fiscal Years totaled $2,363,628,
$15,644,033, and $13,598,663 respectively.
The Partnership continues to meet its primary investment objective of
providing current tax benefits in the form of taxable losses. The TRA provides
that commencing in 1991, the passive losses generated by the Partnership can
only be used to shelter passive income or, in the alternative, may be carried
forward to offset a gain, if any, upon the sale of properties. Since the
Partnership's investments in Local Partnerships have not provided proceeds from
sales or refinancings, the Partnership has not made any cash distributions to
the limited partners.
1996 vs 1995
Rental income decreased less than 1% for the 1996 Fiscal Year as compared
to the 1995 Fiscal Year. Excluding Bicentennial, which sold its property on May
2, 1996, rental income increased approximately 1% for the 1996 Fiscal Year as
compared to the 1995 Fiscal Year primarily due to rental rate increases.
A gain on sale of property and forgiveness of indebtedness income was
recorded in the 1996 Fiscal Year (see Note 10 and 11, respectively, in Item 8.
Financial Statements and Supplemental Data).
Total expenses excluding Bicentennial, selling and renting, administrative
and management-related parties and depreciation remained fairly consistent with
an increase of approximately 1% for the 1996 Fiscal Year as compared to the 1995
Fiscal Year.
Selling and renting expenses decreased approximately $37,000 for the 1996
Fiscal Year as compared to the 1995 Fiscal Year. Excluding Bicentennial, such
expenses increased approximately $37,000 primarily due to an increase in
advertising expenses at two Local Partnerships.
Administrative and management-related parties increased approximately
$1,028,000 for the 1996 Fiscal Year as compared to the 1995 Fiscal Year
primarily due to an increase in partnership management fees payable to the
General Partners.
Depreciation expense increased approximately $1,955,000 for the 1996 Fiscal
Year as compared to the 1995 Fiscal Year primarily due to a change in
depreciation estimates at two Local Partnerships in the 1995 Fiscal Year.
A provision for impairment of assets was recorded in the 1996 and 1995
Fiscal Years (see Note 4 in Item 8, Financial Statements and Supplementary
Data).
1995 vs. 1994
Rental income remained fairly consistent with an increase of 3% for the
1995 Fiscal Year as compared to the 1994 Fiscal Year primarily due to rental
rate increases.
Other income increased approximately $206,000 for the 1995 Fiscal Year as
compared to the 1994 Fiscal Year primarily due to an underaccrual of interest
income on the reserve for replacements escrow at three Local Partnerships in
1994.
Total expenses, excluding repairs and maintenance, depreciation and
provision for impairment of assets decreased less than 1% for the 1995 Fiscal
Year as compared to the 1994 Fiscal Year.
-18-
Repairs and maintenance increased approximately $890,000 for the 1995
Fiscal Year as compared to the 1994 Fiscal Year primarily due to eight Local
Partnerships addressing the physical needs of their properties. One property
replaced its exterior carpeting with new carpeting, replaced rotted wood on
certain sections of its buildings, repainted the exterior part of the buildings,
and installed a perimeter gate around the property. Increases at two Local
Partnerships were the result of an increase in landscaping expenses and an
upgrading of units, including light fixtures, countertops and interior carpeting
replacement. A fourth Local Partnership repaved the parking lot, installed a new
sign with the property's name, and made renovations to certain units, including
carpet replacement as well as appliance repairs. A fifth Local Partnership made
plumbing, heating and air conditioning repairs, replaced carpeting and floor
tiles, and installed new water heaters. Roof repairs, new carpeting and
countertops, and repainting in individual units led to an increase at a sixth
Local Partnership. Carpeting and floor tile replacement led to an increase at a
seventh Local Partnership. The eighth Local Partnership had increases in repairs
and maintenance primarily due to the environmental cleanup of a contamination
problem on the property as well as plumbing, sidewalk and parking lot repairs,
replacement of windows in individual units, and an increase in security.
Depreciation expense decreased approximately $2,082,000 for the 1995 Fiscal
Year as compared to the 1994 Fiscal Year, primarily due to a change in
depreciation estimates at two Local Partnerships.
A provision for impairment of assets was recorded in the 1995 Fiscal Year
(see Note 4 in Item 8, Financial Statements and Supplementary Data).
Results of Operations of Certain Local Partnerships
Bellfort Associates, Ltd.
Bellfort Associates, Ltd. ("Bellfort") has been in default on the required
interest payments due on the wraparound purchase note payable to Finger
Companies since 1992. The original maturity date of the note was the twelfth
anniversary of the transaction date or November 1, 1996. However, the debt
agreement allows Bellfort the option to extend the term of the note an
additional year on the twelfth, thirteenth and fourteenth anniversaries. On
November 1, 1996, Bellfort was granted the option to extend the term to November
1, 1997, at which time the principal plus deferred interest is due. Accumulated
deferred interest at December 31, 1996 and 1995 of approximately $3,417,000 and
$3,096,000, respectively, is also subject to 9% interest. The note is secured by
a first lien on and security interest in the Partnership's and Bellfort's
special limited partner's rights, titles and interests in Bellfort. Payments on
this note cannot exceed the required payments on the underlying Multifamily
Mortgage Trust ("MMT") note described below.
The purchase money note wraps around an underlying mortgage note. The
underlying mortgage is collateralized by a deed of trust on the rental property.
In June 1996, the underlying mortgage note was sold by HUD, who had assumed the
underlying mortgage note in December 1991, to MMT.
Prior to August 1996, the underlying mortgage note was in default first
with HUD and then with MMT. In order to avoid any acceleration or other exercise
of remedies for the defaulted mortgage, MMT allowed the previous owners to bring
the underlying mortgage note current with a payment of approximately $294,000.
Upon making the underlying mortgage note current, the debt agreement for the
underlying mortgage note payable required monthly payments of approximately
$47,000 with $37,000 relating to principal and interest payments due on the
first of each month and such payments have been made as of December 31, 1996.
Bellfort's operations have not generated sufficient cash flows to service
its existing debt structure, and Bellfort's purchase note payable is due
November 1, 1997. Bellfort's forecasted cash flows for 1997 indicate a
significant shortfall of amounts needed to repay such note and the related
deferred interest. Bellfort will be required to renegotiate the terms of the
note or to obtain alternative financing to satisfy the holder. If unsuccessful,
Bellfort may be required to sell the rental property. Management of Bellfort
intends to request the extension of the note for an additional year; however,
there can be no assurance that such an extension will be granted.
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The Partnership's investment in Bellfort has been reduced to zero by prior
years' losses. The minority interest balance was $0 at March 25, 1997 and 1996.
Bellfort's net loss after minority interest amounted to approximately $580,000,
$694,000 and $549,000 for the 1996, 1995 and 1994 Fiscal Years, respectively.
Park of Pecan I, Ltd. and Park of Pecan II, Ltd.
Park of Pecan I, Ltd. ("Park of Pecan I") and Park of Pecan II, Ltd. ("Park
of Pecan II") have experienced operating losses since inception and as of
December 31, 1996 have net capital deficiencies aggregating approximately
$4,910,000. Park of Pecan I and II previously funded their operating losses by
borrowing amounts pursuant to an operating deficit guaranty agreement made in
connection with the acquisition of the Apartment Complexes. However, such
agreement expired December 31, 1989 and Park of Pecan I and II have not made
arrangements to obtain an extension or additional funds. If Park of Pecan I and
II continue to experience significant operating losses and are unable to obtain
additional funds they may be unable to continue operations. The Partnership's
investments in Park of Pecan I and II have been reduced to zero by prior years'
losses. Park of Pecan I and II's minority interest balances were $0 at March 25,
1997 and 1996. Park of Pecan I's net loss after minority interest amounted to
approximately $158,000, $196,000 and $182,000 for the 1996, 1995 and 1994 Fiscal
Years, respectively. Park of Pecan II's net loss after minority interest
amounted to approximately $170,000, $185,000 and $183,000 for the 1996, 1995 and
1994 Fiscal Years, respectively.
Westminster Manor Apartments
In February 1995, Westminster Manor Apartments ("Westminster") received an
unsatisfactory physical inspection report from HUD. In response to the
inspection report, Westminster submitted, for HUD approval, a Management
Improvement Objective Plan (the "MIO Plan") with an accompanying estimate of
restorations and improvements and a request for funding. Westminster does not
have the working capital necessary to cover the costs contained in the MIO Plan
to cure the deficiencies.
The determination of whether the identified instances of noncompliance and
Westminster's lack of capital to fund the repair costs will ultimately effect
future cash flow cannot presently be determined. Accordingly, no provision for
any liability that may result has been recognized in Westminster 's 1996
financial statements.
The inability of Westminster to satisfy the deficiencies sited in the
inspection report without approval of the funding request accompanying the MIO
Plan raises substantial doubt about Westminster's ability to continue as a going
concern. The financial statements do not include any adjustments that possibly
would be necessary in the event Westminster is unable to continue as a going
concern. The Partnership's investment in Westminster was approximately
$1,792,000 and $1,956,000 at March 25, 1997 and 1996, respectively, and the
minority interest balance was $0 at each date. Westminster's net loss after
minority interest amounted to approximately $164,000, $257,000 and $212,000 for
the 1996, 1995 and 1994 Fiscal Years, respectively.
Cranbrook Manor Apartments Limited Partnership
During the year ended December 31, 1996 Cranbrook Manor Apartments Limited
Partnership ("Cranbrook") incurred a net loss of approximately $223,000 and
total liabilities exceeded total assets by approximately $1,451,000 at December
31, 1996. In addition, Cranbrook receives housing assistance payments and a
mortgage interest subsidy from HUD under provisions of Section 8 and Section
236, respectively, of the National Housing Act. Cranbrook entered into housing
assistance agreements (the "Section 8 agreements") with the FHA dated October 1,
1976, September 1, 1982 and November 1, 1991. The Section 8 agreements were
renewed for one year, expiring on September 30, 1997, August 31, 1997 and
October 31, 1997, respectively. Cranbrook 's cash flows may be insufficient to
meet its current obligations in the ordinary course of business. Should cash
flows be insufficient, management plans to pursue a workout agreement with HUD.
There are no assurances that the Section 8 agreement will be renewed under
comparable economic terms to Cranbrook upon the expiration of the agreement. As
of December 31, 1996, it is not possible to estimate the effect of the potential
loss of this subsidy. However, the
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termination of reduction of the benefits under this program by the government
could have an adverse effect on the operations of Cranbrook. These factors,
among others, indicate that there is substantial doubt about Cranbrook's ability
to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
Cranbrook be unable to continue as a going concern. Cranbrook's continuation as
a going concern is dependent upon its ability to generate sufficient cash flow
to meet its obligations on a timely basis and to ultimately attain successful
operations. The Partnership's investment in Cranbrook has been reduced to zero
by prior years' losses. The minority interest balance was $0 at March 25, 1997
and 1996. Cranbrook's net loss after minority interest amounted to approximately
$223,000, $138,000 and $124,000 for the 1996, 1995 and 1994 Fiscal Years,
respectively.
Saraland Apartments, Ltd.
Saraland Apartments, Ltd. ("Saraland") has been designated as a "Superfund"
site on the National Priorities List under the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"). On March 18, 1992, Redwing
Carriers, Inc., a trucking company which utilized the Saraland site prior to
development of the property as a low-income apartment complex, served an Amended
Complaint on the Partnership and H/R Special Partnership, among others, adding
them to the lawsuit previously commenced against Saraland and the general
partners in the United States District Court for the Southern District of
Alabama. That lawsuit seeks reimbursement for costs previously incurred by
Redwing Carriers with respect to the site, which at the time of the Amended
Complaint totaled approximately $2,000,000, as well as a declaration that each
of the defendants is jointly and severally liable for costs of response or
damages resulting from the release of hazardous substances, among other items of
relief. In September 1996, the 11th Circuit Court of Appeals affirmed a lower
court's decision dismissing the Partnership and H/R Special Partnership from the
case, and, accordingly, the Partnership and H/R Special Partnership are no
longer subject to liability in the lawsuit brought by Redwing Carriers, Inc.
During March 1993, the Partnership was named by the United States
Environmental Protection Agency ("EPA") as a "Potentially Responsible Party"
under Superfund in connection with the Saraland Apartment Complex Site.
On July 16, 1993, Saraland, the local general partners (Roar Corporation
and the Estate of Robert Coit), the limited partners (the Partnership and H/R
Special Partnership), and five other parties were named as Respondents in a
unilateral administrative order (the "Order") issued under CERCLA by EPA,
directing the Respondents to implement the EPA-selected remedy for addressing
contamination by hazardous substances at the site. In December 1993, Saraland
and its general partners, the Partnership and H/R Special Partnership informed
EPA that they have "sufficient cause" to not comply with the Order. Redwing
Carriers, Inc. initially advised EPA that it would commence implementation of
the Order. It has recently, however, refused to do so and EPA has now begun
implementation of the remedy.
Since September 1993, EPA has not notified the Partnership whether it
intends to take further legal action. During the 1994 Fiscal Year, EPA
determined that cleanup for the project site could cost between six and ten
million dollars. In or around late 1996, EPA elected to vacate the apartment
complex and relocate all tenants. Given the fact that EPA has not informed the
Partnership whether or not it intends to pursue the Partnership through further
legal action, neither management nor management's counsel are in a position, at
this point, to evaluate the likelihood of an unfavorable outcome or range of any
potential loss. However, the dismissal of the Partnership and H/R Special
Partnership from the Redwing litigation (discussed above) should provide strong
grounds upon which to contest any attempt by EPA to visit liability for
undertaking and funding the remedy and/or relocation upon the Partnership. The
Partnership intends to present a vigorous defense and strongly contests any
further legal action brought by or on behalf of EPA to obtain from the
Partnership remedial funding and/or any other costs associated with this matter.
Litigation costs incurred to date by the Partnership total approximately
$275,000.
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On May 13, 1997, a number of residents at the Saraland Apartments complex
served a purported class action complaint upon the Partnership and H/R Special
Partnership, as well as Redwing Carriers, Inc., Saraland, Saraland's general
partners and others alleging that all defendants are liable to the class members
for adverse health consequences and other expenses attendant to hazardous
substance exposure caused by the conduct of all defendants. The complaint
alleges causes of action under the following common law theories of recovery:
(1) Breach of Lease/Constructive Eviction; (2) Trespass to Real Property; (3)
Trespass to Personal Property; (4) Trespass to Persons; (5) Negligence and
Wantonness; (6) Ultra-hazardous or Abnormally Dangerous Activities; (7)
Nuisance; (8) Civil Conspiracy; and (9) Fraudulent Suppression. Given the early
stage of this proceeding, it is not possible to evaluate the likelihood of an
unfavorable outcome. Nonetheless, the Partnership intends to present a vigorous
defense and will strongly contest its liability for the claims made in this
action.
During the year ended December 31, 1996, the tenants of Saraland were moved
to temporary housing to facilitate cleanup of the site. Rents continued to be
collected by Saraland from the tenants and HUD. However, as of February 1997,
the EPA, along with other agencies, determined that Saraland is unsafe to live
in due to amounts of Benzine and Aldrine found to be present in the air of some
apartments. There appears to be a substantial likelihood that the EPA will
conclude that the apartments will be torn down in order to remove the
contamination that has been found to exist underneath the buildings. As of April
1997, HUD stopped making Housing Assistance Payments to Saraland and Saraland
stopped making payments on its mortgage.
The above conditions raise substantial doubt about Saraland's ability to
continue as a going concern. These financial statements do not include any
adjustments, other than the impairment loss discussed in Note 4, that might
result from the outcome of these uncertainties. The Partnership's investment in
Saraland was reduced to $0 by prior and current years' losses and approximately
$504,000 at March 25, 1997 and 1996, respectively, and the minority interest
balance was approximately $22,000 and $32,000 at each date, respectively.
Saraland's net loss after minority interest amounted to approximately $912,000,
$42,000 and $17,000 for the 1996, 1995, and 1994 Fiscal Years, respectively.
Valley Arms, Ltd.
During the year ended December 31, 1996, Valley Arms, Ltd. ("Valley Arms")
incurred a net loss of approximately $99,000 and as of that date, Valley Arms'
total current liabilities exceeded its total current assets by approximately
$150,000. As of December 31, 1996, Valley Arms is three months delinquent on its
mortgage payment. These factors, among others, raise substantial doubt about
Valley Arms' ability to continue as a going concern. The financial statements do
not include any adjustments that might be necessary if Valley Arms is unable to
continue as a going concern. Valley Arms' continuation as a going concern is
dependant upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis, to comply with the terms of its mortgage, to
obtain additional capital contributions from partners, and ultimately, to attain
successful operations. Management of Valley Arms is making all efforts possible
to increase the occupancy and the rental income of the project and to make the
necessary improvements to enhance the property, in an attempt to improve Valley
Arms' cash flow. Management of Valley Arms is also trying to refinance the
mortgage and/or repay the mortgage and also has been contacted about a sale of
Valley Arms. The Partnership's investment in Valley Arms was approximately
$560,000 and $659,000 at March 25, 1997 and 1996, respectively, and the minority
interest balance was $0 at each date. Valley Arms' net loss after minority
interest amounted to approximately $99,000, $49,000 and $94,000 for the 1996,
1995 and 1994 Fiscal Years, respectively.
Northgate Townhouse Apartments
During November 1995, the Colorado Department of Public Health identified a
contamination problem on the Northgate Townhouse Apartments ("Northgate")
property. The complex hired environmental specialists and other contractors to
remedy the problem. During the 1996 and 1995 Fiscal Years, costs in the amount
of approximately $105,000 and $157,000, respectively, were incurred relating to
the work performed. Management anticipates that no additional costs will be
incurred relating to the contamination problem. After the work was
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completed, the property was inspected, but no report has been sent. The
Partnership's investment in Northgate was approximately $1,425,000 and
$1,670,000 at March 25, 1997 and 1996, respectively, and the minority interest
balance was $0 at each date. Northgate's net loss after minority interest
amounted to approximately $245,000, $412,000 and $238,000 for the 1996, 1995 and
1994 Fiscal Years, respectively.
Bonnie Doone Apartments, Ltd.
Bonnie Doone Apartments, Ltd. ("Bonnie Doone") relies on continuance of the
Section 8 rent subsidy contracts which represent 59% of gross income. The
current contracts expire on July 31, 1997 and renewal is uncertain. Management
of Bonnie Doone intends to actively pursue renewal of the rental subsidy
contract with HUD. The Partnership's investment in Bonnie Doone was
approximately $416,000 and $485,000 at March 25, 1997 and 1996, respectively,
and the minority interest balance was $0 at each date. Bonnie Doone's net loss
after minority interest amounted to approximately $69,000, $22,000 and $20,000
for the 1996, 1995 and 1994 Fiscal Years, respectively.
Dickens Ferry Apartments, Ltd.
Dickens Ferry Apartments, Ltd. ("Dickens Ferry") relies on continuance of
the Section 8 rent subsidy contract which represents 65% of gross income. The
current contracts expire on September 30, 1997 and renewal is uncertain.
Management of Dickens Ferry intends to actively pursue renewal of the rental
subsidy contract with HUD. The Partnership's investment in Dickens Ferry was
approximately $596,000 and $578,000 at March 25, 1997 and 1996, respectively,
and the minority interest balance was $0 at each date. Dickens Ferry's net
(income) loss after minority interest amounted to approximately ($18,000),
$37,000 and $38,000 for the 1996, 1995 and 1994 Fiscal Years, respectively.
Other
The Partnership's investment as a limited partner in the Local Partnerships
is subject to the risks incident to the management and ownership of improved
real estate. The Partnership's investments also could be adversely affected by
poor economic conditions, which generally could increase vacancy levels, rental
payment defaults, and operating expenses, any or all of which could threaten the
financial viability of one or more of the Local Limited Partnerships.
There also are substantial risks associated with the operation of Apartment
Complexes receiving Government Assistance. These include: governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent units in the Apartment Complexes; difficulties in obtaining government
approval for rent increases; limitations on the percentage of income which low
and moderate-income tenants may pay as rent; the possibility that Congress may
not appropriate funds to enable HUD to make the rental assistance payments it
has contracted to make; and the possibility that, when the rental assistance
contracts expire, there may not be market demand for apartments at full market
rents in a Local Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.
There has recently been an increasing number of requests for the list of
holders of Limited Partnership Interests in limited partnerships such as the
Partnership. Often these requests are made by a person who, only a short time
before making the request, acquired merely a small number of Limited Partnership
Interests in the partnership and seeks the list for an improper purpose, a
purpose that is not in the best interest of the partnership or is harmful to the
partnership. In order to best serve and protect the interests of the Partnership
and all of its investors, the general partners of the Partnership have adopted a
policy with respect to requests for the Partnership's list of holders of Limited
Partnership Interests. This policy is intended to protect investors from
unsolicited and coercive offers to acquire the interests of holders of Limited
Partnership Interests and does not limit any other rights the general partners
may have under the Partnership Agreement or applicable law.
-23-
Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Financial Statements
Independent Auditors' Report 25
Consolidated Balance Sheets at March 25, 1997 and 1996 168
Consolidated Statements of Operations for the Years
Ended March 25, 1997, 1996 and 1995 169
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 25, 1997, 1996 and 1995 170
Consolidated Statements of Cash Flows for the Years
Ended March 25, 1997, 1996 and 1995 171
Notes to Consolidated Financial Statements 173
-24-
[LETTERHEAD OF TRIEN, ROSENBERG, ROSENBERG, WEINBERG, CIULLO & FAZZARI, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cambridge Advantaged Properties
Limited Partnership and Subsidiaries
We have audited the consolidated balance sheets of Cambridge Advantaged
Properties Limited Partnership and Subsidiaries as of March 25, 1997 and 1996,
and the related consolidated statements of operations, changes in partners'
deficit and cash flows for the years ended March 25, 1997, 1996 and 1995 (the
1996, 1995 and 1994 Fiscal Years, respectively). The financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for 61 (1996 Fiscal Year) and 48 (1995 and 1994
Fiscal Years) subsidiary partnerships whose net losses aggregated $5,140,862,
$7,359,145 and $4,658,558 for the 1996, 1995 and 1994 Fiscal Years,
respectively, and whose assets constituted 97% and 80% of the Partnership's
assets at March 25, 1997 and 1996, presented in the accompanying consolidated
financial statements. The financial statements of these subsidiary partnerships
were audited by other auditors whose reports thereon have been furnished to us,
and our opinion expressed herein, insofar as it relates to the amounts included
for these subsidiary partnerships, is based solely upon the reports of the other
auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based upon our audits and the reports of the other
auditors, the accompanying consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Cambridge
Advantaged Properties Limited Partnership and Subsidiaries at March 25, 1997 and
1996, and the results of their operations and their cash flows for the years
ended March 25, 1997, 1996 and 1995, in conformity with generally accepted
accounting principles.
As discussed in Note 11(a), the consolidated financial statements include
the financial statements of nine subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. The
auditors of seven (Fiscal 1996) subsidiary partnerships modified their reports
due to the uncertainty of these subsidiary partnerships' abilities to continue
in existence. These seven subsidiary partnerships' net losses aggregated
$2,344,287, $1,560,375 and $1,361,542 for the 1996, 1995 and 1994 Fiscal Years,
respectively, and their assets aggregated $22,987,155 and $23,704,766 at March
25, 1997 and 1996.
As discussed in Note 7, the principal of and all accrued interest
on the purchase money notes are due at maturity which will occur during 1997.
The Partnership expects that upon maturity it will be required to refinance or
sell its investments in the subsidiary partnerships in order to pay the purchase
money notes and related interest obligations. It is uncertain as to whether the
proceeds from such sales will be sufficient to meet the outstanding balances of
the purchase money notes.
-25-
The accompanying consolidated financial statements of Cambridge Advantaged
Properties Limited Partnership and Subsidiaries have been prepared assuming that
the consolidated entity and its subsidiary partnerships will continue as going
concerns. As discussed in the two preceding paragraphs and in the notes to the
financial statements, the consolidated entity and its subsidiary partnerships
have significant contingencies which raise substantial doubt about their ability
to continue as going concerns. Management's plans in regard to these matters are
also described in Note 11(a). The consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties or the matters referred to in the preceding paragraphs.
TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP
New York, New York
July 8, 1997
-26-
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood I, Ltd.
We have audited the accompanying balance sheets of Knollwood I, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood I, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood I, Ltd.
We have audited the accompanying balance sheets of Knollwood I, Ltd. as of
December 31, 1995 and 1994, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood I, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[Letterhead addresses]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood II, Ltd.
We have audited the accompanying balance sheets of Knollwood II, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood II, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood II, Ltd.
We have audited the accompanying balance sheets of Knollwood II, Ltd. as of
December 31, 1995 and 1994, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood II, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[Letterhead addresses]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood III, Ltd.
We have audited the accompanying balance sheets of Knollwood III, Ltd. as
of December 31, 1996 and 1995, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood III, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood III, Ltd.
We have audited the accompanying balance sheets of Knollwood III, Ltd. as
of December 31, 1995 and 1994, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood III, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[Letterhead addresses]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood IV, Ltd.
We have audited the accompanying balance sheets of Knollwood IV, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood IV, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-3-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Knollwood IV, Ltd.
We have audited the accompanying balance sheets of Knollwood IV, Ltd. as of
December 31, 1995 and 1994, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Knollwood IV, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[Letterhead addresses]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Parklane II, Ltd.
We have audited the accompanying balance sheets of Parklane II, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Parklane II, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
-3-
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-4-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Parklane II, Ltd.
We have audited the accompanying balance sheets of Parklane II, Ltd. as of
December 31, 1995 and 1994, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Parklane II, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
[Letterhead addresses]
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cedarbay, Ltd.
We have audited the accompanying balance sheets of Cedarbay, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Cedarbay, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 17, 1997
-3-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Cedarbay, Ltd.
We have audited the accompanying balance sheets of Cedarbay, Ltd. as of
December 31, 1995 and 1994, and the related statements of revenue and expenses,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Cedarbay, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 26, 1996
[Letterhead addresses]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northwoods III Apartments, Ltd.
We have audited the accompanying balance sheets of Northwoods III
Apartments, Ltd. as of December 31, 1996 and 1995, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Northwoods III Apartments,
Ltd. as of December 31, 1996 and 1995, and the results of its operations, the
changes in partners' capital and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
-3-
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
------------------------------
Bethesda, Maryland
January 10, 1997
-4-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northwoods III Apartments, Ltd.
We have audited the accompanying balance sheets of Northwoods III
Apartments, Ltd. as of December 31, 1995 and 1994, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Northwoods III Apartments,
Ltd. as of December 31, 1995 and 1994, and the results of its operations, the
changes in partners' capital and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
[Letterhead addresses]
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Westminster Manor Apartments
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Westminster Manor
Apartments (a limited partnership) as of December 31, 1996 and 1995 and the
related Comparative Statements of Revenue and Expense, Partners' Equity, and
Cash Flows and, Supplemental Schedules on Pages 9-11 for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects the financial position of Westminster Manor Apartments as of
December 31, 1996 and 1995 and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
The accompanying financial statements have been prepared assuming the
partnership will continue as a going concern. As discussed in the notes to the
financial statements, Westminster Manor Apartments does not have the working
capital necessary to cover the costs to cure deficiencies sited in a Department
of Housing and Urban Development inspection report. This raises substantial
doubt about the entity's ability to continue as a going concern.
/s/Weintraub, Nessel & Smith, PLLC
- - ----------------------------------
WEINTRAUB, NESSEL & SMITH
Certified Public Accountants
Farmington Hills, MI
January 30, 1997
[Letterhead of Weintraub, Nessel & Smith, PLLC - Farmington Hills, Michigan]
INDEPENDENT AUDITORS' REPORT
To the Partners
Westminster Manor Apartments
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Westminster
Manor Apartments (a limited partnership) as of December 31, l995 and 1994 and
the related Comparative Statements of Revenue and Expense, Partners' Equity, and
Cash Flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Westminster Manor Apartments
as of December 31, 1995 and 1994 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
The accompanying financial statements have been prepared assuming the
partnership will continue as a going concern. As discussed in the notes to the
financial statements, Westminster Manor Apartments Partnership does not have the
working capital necessary to cover the costs to cure deficiencies sited in a
Department of Housing and Urban Development inspection report. This raises
substantial doubt about the entity's ability to continue as a going concern.
[Signature of Weintraub, Nessel & Smith PLLC]
WEINTRAUB, NESSEL & SMITH
Certified Public Accountants
January 29, 1996
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northgate Townhouse Apartments
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Northgate
Townhouse Apartments (a limited partnership) as of December 31, 1996 and 1995
and the related Comparative Statements of Revenue and Expense, Partners' Equity,
and Cash Flows and Supplemental Schedules on Page 9-11, for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects the financial position of Northgate Townhouse Apartments as of
December 31, 1996 and 1995 and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Weintraub, Nessel & Smith, PLLC
- - ------------------------------------
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hills, MI
January 27, 1997
[Letterhead of Weintraub, Nessel & Smith, PLLC - Farmington Hills, Michigan]
INDEPENDENT AUDITORS' REPORT
Northgate Townhouse Apartments
Northgate Townhouse Apartments
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Northgate
Townhouse Apartments (a limited partnership) as of December 31, 1995 and 1994
and the related Comparative Statements of Revenue and Expense, Partners' Equity,
and Cash Flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Northgate Townhouse
Apartments as of December 31, 1995 and 1994 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles. The supporting data included in this report have
been subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.
[Signature of Weintraub, Nessel & Smith, PLLC]
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
February 12, 1996
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
- - ----------------------------
To the Partners of
Hackley Village Associates #1
We have audited the accompanying balance sheet of Project #047-44030-LDP-SUP of
Hackley Village Associates #1 (A Limited Partnership) as at December 31, 1996,
and the related statements of income and expense and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1996 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #047-44030-LDP-SUP as
at December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supporting data included in the report (shown
on pages 9 to 15) are presented for the purposes of additional analysis and are
not a required part of the financial statements of Project #047-44030-LDP-SUP.
Such information has been subject to the auditing procedures applied in the
audit of financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
February 11, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Hackley Village Associates #1
We have audited the accompanying balance sheet of Project #047-44030-LDP-SUP of
Hackley Village Associates #1 (A Limited Partnership) as at December 31, 1995,
and the related statements of income and expense and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #047-44030-LDP-SUP
as at December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Project
#047-44030-LDP-SUP. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
February 10, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Hackley Village Associates #1
We have audited the accompanying balance sheet of Project #047-44030-LDP-SUP of
Hackley Village Associates #1 (A Limited Partnership) as at December 31, 1994,
and the related statements of income and expense and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1993 and 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #047-44030-LDP-SUP
as at December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Project
#047-44030-LDP-SUP. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
February 5, 1995 Certified Public Accountants
[BORDMAN & WINNICK LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
- - ----------------------------
To the Partners of
Huntley Associates
We have audited the accompanying balance sheet of Project #047-44029 LDP-SUP of
Huntley Associates (A Limited Partnership) as of December 31, 1996, and the
related statements of income and changes in partner's equity for the year then
ended. We have also audited the statements of cash flows for the years ended
December 31, 1995 and 1996. These financial statements are the responsibility of
the project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #047-44029 LDP-SUP as
at December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates. Such information has been subjected to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Bordman & Winnick
--------------------
West Bloomfield, MI BORDMAN & WINNICK
January 16, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Huntley Associates
We have audited the accompanying balance sheet of Project #047-44029
LDP-SUP of Huntley Associates (A Limited Partnership) as of December 31, 1995,
and the related statements of income and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #047-44029 LDP-SUP
as at December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates. Such information has been subjected to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 20, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Huntley Associates
We have audited the accompanying balance sheet of Project #047-44029
LDP-SUP of Huntley Associates (A Limited Partnership) as of December 31, 1994,
and the related statements of income and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1993 and 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #047-44029 LDP-SUP
as at December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Project
#047-44029 LDP-SUP. Such information has been subjected to the auditing
procedures applied in the audit of financial statements and, in our opinion, is
fairly stated in all material requests in relation to the financial statements
taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 21, 1995 Certified Public Accountants
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
- - ----------------------------
To the Partners of
Huntley Associates #2
We have audited the accompanying balance sheet of Project #047-44063-LDP of
Huntley Associates #2 (A Limited Partnership) as of December 31, 1996, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1995 and 1996. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #047-44063-LDP as at
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 10 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates #2. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 25, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Huntley Associates #2
We have audited the accompanying balance sheet of Project #047-44063-LDP of
Huntley Associates #2 (A Limited Partnership) as of December 31, 1995, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #047-44063-LDP as at
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 10 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Huntley
Associates #2. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 22, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
To the Partners of
Huntley Associates #2
We have audited the accompanying balance sheet of Project #047-44063-LDP of
Huntley Associates #2 (A Limited Partnership) as at December 31, 1994, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1993 and 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #047-44063-LDP as at
December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 10 to 15) are presented for the purposes of additional
analysis and are not a required part of the financial statements of Project
#047-44063-LDP. Such information has been subject to the auditing procedures
applied in the audit of financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 25, 1995 Certified Public Accountants
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Seymour O'Brien Manor Apartments
We have audited the accompanying balance sheet of Project #073-44152 LDP of
Seymour O'Brien Manor Apartments (a Limited Partnership) as at December 31,
1996, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and 1996. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #073-44152 LDP as of
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Seymour O'Brien Manor Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 20, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Seymour O'Brien Manor Apartments
We have audited the accompanying balance sheet of Project #073-44152 LDP of
Seymour O'Brien Manor Apartments (a Limited Partnership) as at December 31,
1995, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1994 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #073-44152 LDP as of
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Seymour O'Brien Manor Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 23, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Seymour O'Brien Manor Apartments
We have audited the accompanying balance sheet of Project #073-44152 LDP of
Seymour O'Brien Manor Apartments (a Limited Partnership) as at December 31,
1994, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1993 and 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #073-44152 LDP as of
December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project #073-44152 LDP. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
February 6, 1995 Certified Public Accountants
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditors Report
---------------------------
To the Partners of
Washington Highland Apartments
We have audited the accompanying balance sheet of HUD Project No. 073-44073 of
Washington Highland Apartment (a Limited Partnership) as of December 31, 1996,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and December 31, 1995. These financial statements are
the responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
Opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 073-44073 as of
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Washington Highland Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 28, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditors Report
To the Partners of
Washington Highland Apartments
We have audited the accompanying balance sheet of HUD Project No. 073-44073
of Washington Highland Apartment (a Limited Partnership) as of December 31,
1995, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and December 31, 1994. These financial
statements are the responsibility of the project's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of HUD Project No. 073-44073 as
of December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Washington Highland Apartments. Such information has been subject to the
auditing procedures applied in the audit of basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 29, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditors Report
To the Partners of
Washington Highland Apartments
We have audited the accompanying balance sheet of HUD Project No. 073-44073
of Washington Highland Apartment (a Limited Partnership) as of December 31,
1994, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1994 and December 31, 1993. These financial
statements are the responsibility of the project's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of HUD Project No. 073-44073 as
of December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of HUD
Project No. 073-44073. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 31, 1995 Certified Public Accounts
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners
Vincennes Niblack Apartments
We have audited the accompanying balance sheet of Project #073-58501 LDP of
Vincennes Niblack Apartments (A Limited Partnership) as at December 31, 1996,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
Opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #073-58501 LDP as at
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Vincennes Niblack Apartments. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 29, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners
Vincennes Niblack Apartments
We have audited the accompanying balance sheet of Project #073-58501 LDP of
Vincennes Niblack Apartments (A Limited Partnership) as at December 31, 1995,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1995 and 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #073-58501 LDP as at
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Vincennes Niblack Apartments. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 30, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners
Vincennes Niblack Apartments
We have audited the accompanying balance sheet of Project #073-58501 LDP of
Vincennes Niblack Apartments (A Limited Partnership) as at December 31, 1994,
and the related statements of operations and changes in partner's equity for the
year then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1993. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #073-58501 LDP as at
December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project #073-58501 LDP. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 31, 1995 Certified Public Accountants
[BORDMAN & WINNICK LETTERHEAD]
To the Partners of
Casa Ramon Apartments
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Project #122-44476 LDP-SUP of
Casa Ramon Apartments (A Limited Partnership) as at December 31, 1996, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1996 and 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #122-44476 LDP-SUP as
at December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Casa
Ramon Apartments. Such information has been subject to the auditing procedures
applied in the audit of basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
February 20, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
To the Partners of
Casa Ramon Apartments
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Project #122-44476
LDP-SUP of Casa Ramon Apartments (A Limited Partnership) as at December 31,
1995, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #122-44476 LDP-SUP
as at December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Casa
Ramon Apartments. Such information has been subject to the auditing procedures
applied in the audit of basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 31, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
To the Partners of
Casa Ramon Apartments
We have audited the accompanying balance sheet of Project #122-44476
LDP-SUP of Casa Ramon Apartments (A Limited Partnership) as at December 31,
1994, and the related statements of operations and changes in partner's equity
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1994 and 1993. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #122-44476 LDP-SUP
as at December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 12) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project #122-44476 LDP-SUP. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 25, 1995 Certified Public Accountants
[BORDMAN & WINNICK LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Nu-Elm Apartments
We have audited the accompanying balance sheet of Project #084-44035 LDP of
Nu-Elm Apartments (A Limited Partnership) as of December 31, 1996, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statement of cash flows for the years ended
December 31, 1996 and December 31, 1995. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Project #084-44035 LDP as of
December 31, 1996, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Nu-Elm
Apartments. Such information has been subject to the auditing procedures applied
in the audit of basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Bordman & Winnick
---------------------
West Bloomfield, MI BORDMAN & WINNICK
January 23, 1997 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Nu-Elm Apartments
We have audited the accompanying balance sheet of Project #084-44035 LDP of
Nu-Elm Apartments (A Limited Partnership) as of December 31, 1995, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statement of cash flows for the years ended
December 31, 1995 and December 31, 1994. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #084-44035 LDP as of
December 31, 1995, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of Nu-Elm
Apartments. Such information has been subject to the auditing procedures applied
in the audit of basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 29, 1996 Certified Public Accountants
EIN 38-2900295
[Letterhead of BORDMAN & WINNICK]
Independent Auditor's Report
To the Partners of
Nu-Elm Apartments
We have audited the accompanying balance sheet of Project #084-44035 LDP of
Nu-Elm Apartments (A Limited Partnership) as of December 31, 1994, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statement of cash flows for the years ended
December 31, 1994 and December 31, 1993. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An Audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Project #084-44035 LDP as of
December 31, 1994, and the results of its operations and the changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in the
report (shown on pages 9 to 11) are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project #084-44035 LDP. Such information has been subject to the auditing
procedures applied in the audit of basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 28, 1995 Certified Public Accountants
[LEFKOWITZ, GARFINKEL, CHAMPI & DERIENZO P.C. LETTERHEAD]
Independent Auditors' Report
- - ----------------------------
The Partners
Buttonwood Acres at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying balance sheet of Buttonwood Acres at New
Bedford (a Limited Partnership), Project No. 71-005-N, as of December 31, 1996,
and the related statements of operations, partners' equity (deficiency) and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Buttonwood Acres at New
Bedford (a Limited Partnership) as of December 31, 1996, and the results of its
operations, changes in its partners' equity (deficiency) and cash flows for the
year then ended, in conformity with generally accepted accounting principles.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
-------------------------------------------------
Providence, Rhode Island
February 7, 1997
[LEFKOWITZ, GARFINKEL, CHAMPI & DERIENZO P.C. LETTERHEAD]
Independent Auditors' Report
- - ----------------------------
The Partners
Rockdale West at New Bedford
(a Limited Partnership)
Quincy, Massachusetts
We have audited the accompanying balance sheet of Rockdale West at New
Bedford (a Limited Partnership), MHFA Project No. 71-225-N, as of December 31,
1996, and the related statements of operations, partners' equity (deficiency)
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rockdale West at New Bedford
(a Limited Partnership) as of December 31, 1996, and the results of its
operations, changes in its partners' equity (deficiency) and cash flows for the
year then ended, in conformity with generally accepted accounting principles.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
-------------------------------------------------
Providence, Rhode Island
February 7, 1997
[LEFKOWITZ, GARFINKEL, CHAMPI & DERIENZO P.C. LETTERHEAD]
Independent Auditors' Report
- - ----------------------------
The Partners
Solemar at South Dartmouth Limited Partnership
Quincy, Massachusetts
We have audited the accompanying balance sheet of Solemar at South
Dartmouth Limited Partnership, MHFA Project No. 72-085-N, as of December 31,
1996, and the related statements of income, partners' equity (deficiency) and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Solemar at South Dartmouth
Limited Partnership as of December 31, 1996, and the results of its operations,
changes in partners' equity (deficiency) and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued
reports dated February 7, 1997 on our consideration of the Partnership's
internal control structure and on its compliance with laws and regulations.
/s/ Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
-------------------------------------------------
Providence, Rhode Island
February 7, 1997
1
[BROWDER & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditor's report
----------------------------
To the Partners of
Decatur (Alta Vista) Apartments, Ltd.
Decatur, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Decatur (Alta Vista)
Apartments, Ltd., Project No. 062-44012-Ltd, as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Decatur (Alta Vista)
Apartments, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Decatur (Alta
Vista) Apartments, Ltd.'s internal control structure and reports dated January
20, 1997 on compliance with specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program, specific
requirements applicable to Affirmative Fair Housing and laws and regulations
applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Decatur (Alta Vista) Apartments, Ltd.. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
- - ------------------------------
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Decatur (Alta Vista) Apartments, Ltd.
Decatur, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Decatur (Alta Vista)
Apartments, Ltd., Project No. 062-44012-LD, as of December 31, 1995, and the
related statements of income, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Decatur (Alta Vista)
Apartments, Ltd. as of December 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Decatur
(Alta Vista) Apartments, Ltd.'s internal control structure and reports dated
January 22, 1996 on its compliance with laws and regulations applicable to the
basic financial statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Decatur (Alta Vista)
Apartments, Ltd. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C. - BIRMINGHAM, ALABAMA]
Independent Auditor's Report
To the Partners of
Decatur (Alta Vista) Apartments, Ltd.
Decatur, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Dacatur (Alta Vista)
Apartments, Ltd., Project No. 062-44012-LD, as of December 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Decatur (Alta Vista)
Apartments, Ltd. as of December 31, 1994, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Decatur (Alta Vista)
Apartments, Ltd. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Browder & Associates, P.C.]
BROWDER & ASSOCIATES, P.C.
January 31, 1995
[BROWDER & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Florence (Hermitage Hills) Apartments, Ltd.
Florence, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Florence (Hermitage Hills)
Apartments, Ltd., Project No. 062 44083-LD, as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Florence (Hermitage Hills)
Apartments, Ltd. as of December 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Florence
(Hermitage Hills) Apartments, Ltd.'s internal control structure and reports
dated January 20, 1997 on its compliance with specific requirements applicable
to the major HUD program, specific requirements applicable to Affirmative Fair
Housing, and laws and regulations applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Florence (Hermitage Hills) Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements, and in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
- - ------------------------------
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Florence Apartments (Hermitage Hills), Ltd.
Florence, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Florence Apartments
(Hermitage Hills), Ltd., Project No. 062-44083-LD, as of December 31, 1995, and
the related statements of income, changes in partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Florence Apartments
(Hermitage Hills), Ltd. as of December 31, 1995, and the results of its
operations, changes in partners' equity and cash flows for the year then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Florence
Apartments (Hermitage Hills), Ltd.'s internal control structure and reports
dated January 22, 1996 on its compliance with laws and regulations applicable to
the basic financial statements and the major HUD programs.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Florence Apartments
(Hermitage Hills), Ltd.. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C.] - BIRMINGHAM, ALABAMA
Independent Auditor's Report
To the Partners of
Florence Apartments (Hermitage Hills), Ltd.
Florence, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Florence Apartments
(Hermitage Hills), Ltd., Project No. 062-44083-LD, as of December 31, 1994, and
the related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Prorams
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reaasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Florence Apartments
(Hermitage Hills), Ltd. as of December 31, 1994, and the results of its
operations, changes in partners' equity and cash flows for the year then ended
in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Florence Apartments
(Hermitage Hills), Ltd. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
[Signature of Browder & Associates, P.C.]
BROWDER & ASSOCIATES, P.C.
January 20, 1995
[LETTERHEAD OF BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Saraland Apartments. Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Saraland Apartments,
Ltd., Project No. 062-44065-LD, as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Saraland Apartments, Ltd. as
of December 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Saraland Apartments, Ltd. will continue as a going concern. As discussed in Note
J to the financial statements, the project is located on an Environmental
Protection Agency "Superfund Cleanup" site and has been determined to be
uninhabitable. Saraland Apartments, Ltd. is a party to related litigation of
which the outcome is uncertain. These conditions raise substantial doubt about
the project's ability to continue as a going concern. These financial statements
do not include any adjustments, other than the impairment loss discussed in Note
K, that might result from the outcome of these uncertainties.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated May 9, 1997 on our consideration of Saraland
Apartments, Ltd.'s internal control structure and reports dated May 9, 1997 on
its compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the non-major HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Saraland Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ illegible
Birmingham, Alabama Federal Employer
May 9, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Saraland Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Saraland Apartments,
Ltd., Project No. 062-44065-LD, as of December 31, 1995, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Saraland Apartments, Ltd. as
of December 31, 1995, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Saraland
Apartments, Ltd.'s internal control structure and reports dated January 22, 1996
on its compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Saraland Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C. - BIRMINGHAM, ALABAMA]
Independent Auditor's Report
To the Partners of
Saraland Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Saraland Apartments,
Ltd., Project No. 062-44065-LD, as of December 31, 1994, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Saraland Apartments, Ltd. as
of December 31, 1994, and the results of its operations, change in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Saraland Apartments, Ltd. will continue as a going concern. As discussed in NOTE
F to the financial statements, the project has been placed on the Environmental
Protection Agency's "Superfund Cleanup List" and is involved in a lawsuit
regarding the clean up costs. Although the ultimate outcome of the lawsuit is
not presently determinable, this condition raises substantial doubt about the
ability of Saraland Apartments, Ltd. to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Saraland Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as
a whole.
[Signature of Browder & Associates, P.C.]
BROWDER & ASSOCIATES P.C
January 23, 1995
[CRABTREE, CRABTREE & HATTER LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
University Gardens Apartments, Ltd.
Dallas, Texas
We have audited the accompanying balance sheet of University Gardens Apartments,
Ltd., Project No. 112-44200 LD as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of University Gardens Apartments,
Ltd. as of December 31,1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 9, 1997 on our consideration of University
Gardens Apartments, Ltd.'s internal control structure and reports dated February
9, 1997 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the non-major HUD program and specific
requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of University Gardens Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Crabtree, Crabtree & Hatter
- - -------------------------------
Crabtree, Crabtree & Hatter
Certified Public Accountants
Azle, Texas
February 9, 1997
[Letterhead of Crabtree, Crabtree & Hatter]
Independent Auditors's Report
To The Partners
University Gardens Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of University Gardens
Apartments LTD., Project No. 112-44200 LD, (a limited partnership) as of
December 31, 1995 and the related statements of income, changes in partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
It is the Partnership's policy to prepare its financial statements in the
format prescribed by the Consolidated Audit Guide for Audits of HUD Programs
issued July 1993. The formats for the financial statements prescribed by that
Guide differ somewhat from those prescribed by generally accepted accounting
principles.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above, present fairly
in all material respects, the financial position of University Gardens
Apartments LTD. at December 31, 1995 and the results of its operations, changes
in partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, except for the format differences
explained in the second paragraph above, applied on a basis consistent with that
of the preceding year.
In accordance with Government Auditing Standards we have also issued a
combined report dated January 31, 1996 on our consideration of the Partnership's
internal control structure applicable to the financial statements and HUD
assisted programs.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in this
report (shown on pages 16 to 25) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Crabtree, Crabtree & Hatter]
CRABTREE, CRABTREE & HATTER
Certified Public Accountants
Azle, Texas
January 31, 1996
[Letterhead of Crabtree, Crabtree & Hatter]
INDEPENDENT AUDITOR'S REPORT
To The Partners
University Gardens Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of University Gardens
Apartments LTD., Project No. 112-44200 LD, (a limited partnership) as of
December 31, 1994 and the related statements of income, changes in partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
It is the Partnership's policy to prepare its financial statements in the
format prescribed by the Consolidated Audit Guide for Audits of HUD Programs
issued July 1993. The formats for the financial statements prescribed by that
Guide differ somewhat from those prescribed by generally accepted accounting
principles.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above, present fairly
in all material respects, the financial position of University Gardens
Apartments LTD. at December 31, 1994 and the results of its operations, changes
in partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, except for the format differences
explained in the second paragraph above, applied on a basis consistent with that
of the preceding year.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in this
report (shown on pages 14 to 32) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Crabtree, Crabtree & Hatter]
CRABTREE, CRABTREE & HATTER
Certified Public Accountants
Azle, Texas
January 19, 1995
[CRABTREE, CRABTREE & HATTER LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Southside Village Apartments, Ltd.
Dallas, Texas
We have audited the accompanying balance sheet of Southside Village Apartments,
Ltd., Project No. 112-44076 LD as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southside Village Apartments,
Ltd. as of December 31, 1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 10, 1997 on our consideration of Southside
Village Apartments, Ltd.'s internal control structure and reports dated February
10, 1997 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
specific requirements applicable to the non-major HUD program and specific
requirements applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Southside Village Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Crabtree, Crabtree & Hatter
- - -------------------------------
Crabtree, Crabtree & Hatter
Certified Public Accountants
Azle, Texas
February 10, 1997
[Letterhead of Crabtree, Crabtree & Hatter]
INDEPENDENT AUDITOR'S REPORT
To The Partners
Southside Village Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of Southside Village
Apartments LTD., Project No. 112-44076 LD, (a limited partnership) as of
December 31, 1995 and the related statements of income, changes in partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
It is the Partnership's policy to prepare its financial statements in the
format prescribed by the Consolidated Audit Guide for Audits of HUD Programs
issued July 1993. The formats for the financial statements prescribed by that
Guide differ somewhat from those prescribed by generally accepted accounting
principles.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above, present fairly
in all material respects, the financial position of Southside Village Apartments
LTD. at December 31, 1995 and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, except for the format differences
explained in the second paragraph above, applied on a basis consistent with that
of the preceding year.
In accordance with Government Auditing Standards we have also issued a
combined report dated February 2, 1996 on our consideration of the Partnership's
internal control structure applicable to the financial statements and HUD
assisted programs.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in this
report (shown on pages 16 to 24) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Crabtree, Crabtree & Hatter]
CRABTREE, CRABTREE & HATTER
Certified Public Accountants
Azle, Texas
February 2, 1996
[Letterhead of Crabtree, Crabtree & Hatter]
INDEPENDENT AUDITOR'S REPORT
To The Partners
Southside Village Apartments LTD.
(A Limited Partnership)
We have audited the accompanying balance sheet of Southside Village
Apartments LTD., Project No. 113-44076-LDP, (a limited partnership) as of
December 31, 1994 and the related statements of income, changes in partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
It is the Partnership's policy to prepare its financial statements in the
format prescribed by the Consolidated Audit Guide for Audits of HUD Programs
issued July 1993. The formats for the financial statements prescribed by that
Guide differ somewhat from those prescribed by generally accepted accounting
principles.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above, present fairly
in all material respects, the financial position of Southside Village Apartments
LTD. at December 31, 1994 and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, except for the format differences
explained in the second paragraph above, applied on a basis consistent with that
of the preceding year.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data included in this
report (shown on pages 14 to 32) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Crabtree, Crabtree & Hatter]
CRABTREE, CRABTREE & HATTER
Certified Public Accountants
Azle, Texas
January 21, 1995
[BROWDER & ASSOCIATES, P.C. LETTERHEAD]
Independent Auditor's Report
----------------------------
To the Partners of
Dickens Ferry Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Dickens Ferry Apartments,
Ltd., Project No. 062 44055-LD, as of December 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dickens Ferry Apartments, Ltd.
as of December 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Audition Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Dickens Ferry
Apartments, Ltd.'s internal control structure and reports dated January 20, 1997
on its compliance with specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program, specific
requirements applicable to Affirmative Fair Housing, and laws and regulations
applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Dickens Ferry Apartments, Ltd. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
- - ------------------------------
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number:
63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Dickens Ferry Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Dickens Ferry Apartments,
Ltd., Project No. 062-44055-LD, as of December 31, 1995, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dickens Ferry Apartments,
Ltd. as of December 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Dickens
Ferry Apartments, Ltd.'s internal control structure and reports dated January
22, 1996 on its compliance with laws and regulations applicable to the basic
financial statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Dickens Ferry Apartments,
Ltd. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder. Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C. - BIRMINGHAM, ALABAMA]
Independent Auditor's Report
To the Partners of
Dickens Ferry Apartments, Ltd.
Mobile, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Dickens Ferry Apartments,
Ltd., Project No. 062-44055-LD, as of December 31, 1994, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide 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 represent fairly,
in all material respects, the financial position of Dickens Ferry Apartments,
Ltd. as of December 31, 1994, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Dickens Ferry Apartments,
Ltd. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
[Signature of Browder & Associates, P.C.]
BROWDER & ASSOCIATES, P.C
January 31, l995
BROWDER & ASSOCIATES, P.C.
[LETTERHEAD]
Independent Auditor's report
To the Partners of
Bonnie Doone Apartments, Ltd.
Athens, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Bonnie Doone Apartments, Ltd.,
Project No. 062-44045-LD, as of December 31, 1996, and the related statements of
profit and loss, changes in partners' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bonnie Doone Apartments, Ltd.
as of December 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of Bonnie Doone
Apartments, Ltd.'s internal control structure and reports dated January 20, 1997
on its compliance with specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program, specific
requirements applicable to Affirmative Fair Housing, and laws and regulations
applicable to the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of Bonnie Doone Apartments, Ltd. Such information
has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/ Browder & Associates, P.C.
Birmingham, Alabama Federal Employer
January 20, 1997 Identification Number
63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C.]
Independent Auditor's Report
To the Partners of
Bonnie Doone Apartments, Ltd.
Athens, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Bonnie Doone Apartments,
Ltd., Project No. 062-44045-LD, as of December 31, 1995, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bonnie Doone Apartments,
Ltd. as of December 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 22, 1996 on our consideration of Bonnie Doone
Apartments, Ltd.'s internal control structure and reports dated January 22, 1996
on its compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the nonmajor HUD program.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying information included in
the report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Bonnie Doone Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
[Signature of Browder & Associates, P.C.]
Birmingham, Alabama Federal Employer
January 22, 1996 Identification Number: 63-0986156
Audit Principal: E.O. Browder, Jr.
[Letterhead of BROWDER & ASSOCIATES, P.C. - BIRMINGHAM, ALABAMA]
Independent Auditor's Report
To the Partners of
Bonnie Doone Apartments, Ltd.
Athens, Alabama
HUD Field Office Director
Birmingham, Alabama
We have audited the accompanying balance sheet of Bonnie Doone Apartments,
Ltd., Project No. 062-44045-LD, as of December 31, 1994, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bonnie Doone Apartments,
Ltd. as of December 31, 1994, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting data included in the
report are presented for the purpose of additional analysis and are not a
required part of the basic financial statements of Bonnie Doone Apartments, Ltd.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
[Signature of Browder & Associates, P.C.]
BROWDER & ASSOCIATES, P.C.
January 31, 1995
[RULJANCICH BLUME LOVERIDGE & CO. ,PLLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 208
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 208 (a limited
partnership), sponsor of FHA Project No. 171-44038, as of December 31, 1996 and
1995, and the related statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an 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 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 Conifer 208, as of December 31,
1996 and 1995, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 24, 1997, on our consideration of the Partnership's internal
control structure and reports, dated January 24, 1997, on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 20
is presented for purposes of additional analysis for the year ended December 31,
1996 and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Ruljancich, Blume, Loveridge & Co.
Bellevue, Washington
January 24, 1997
Page 1
11100 NE 8th Street, Suite 410 Bellevue, Washington 98004-4441 (206) 453-2088
Fax (206) 646-3368
[Letterhead of Ruljancich Blume Loveridge & Co., PLLC - Bellevue, Washington]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 208
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 208 (a limited
partnership), sponsor of FHA Project No. 171-44038, as of December 31, 1995 and
1994, and the related statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditinq Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform an 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 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 Conifer 208, as of December
31, 1995 and 1994, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditinq Standards, we have also issued a
report dated January 24, 1996 on our consideration of the Partnership's internal
control structure and reports dated January 24, 1996 on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 17
is presented for purposes of additional analysis for the year ended December 31,
1995 and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
[Signature of Ruljancich, Blume, Loveridge & Co.]
January 24, 1996
[RULJANCICH BLUME LOVERIDGE & CO., PLLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 307 Oreg. Ltd.
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 307 Oreg. Ltd. (a
limited partnership), sponsor of FHA Project No. 126-44038, as of December 31,
1996 and 1995, and the related statements of operations, changes in partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an 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 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 Conifer 307 Oreg. Ltd., as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 31, 1997, on our consideration of the Partnership's internal
control structure and reports, dated January 31, 1997, on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 20
is presented for purposes of additional analysis for the year ended December 31,
1996, and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Ruljancich, Blume, Loveridge & Co.
Bellevue, Washington
January 31, 1997
Page 1
11100 NE 8th Street, Suite 410 Bellevue, Washington 98004-4441 (206) 453-2088
Fax (206) 646-3368
[Letterhead of Ruljancich Blume Loveridge & Co., PLLC - Bellevue, Washington]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 307 Oreg. Ltd.
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 307 Oreg. Ltd.
(a limited partnership), sponsor of FHA Project No. 126-44038, as of December
31, 1995 and 1994, and the related statements of income, changes in partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform an 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 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 Conifer 307 Oreg. Ltd., as
of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a
report dated February 5, 1996 on our consideration of the Partnership's internal
control structure and reports dated February 5, 1996 on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 17
is presented for purposes of additional analysis for the year ended December 31,
1995, and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
[Signature of Ruljancich, Blume, Loveridge & Co.]
February 5, 1996
[RULJANCICH BLUME LOVERIDGE & CO., PLLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 317, an Oregon Limited Partnership
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 317, an Oregon
Limited Partnership, sponsor of FHA Project No. 126-44134, as of December 31,
1996 and 1995, and the related statements of income, changes in partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform an 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 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 Conifer 317, an Oregon Limited
Partnership, as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report,
dated January 27, 1997, on our consideration of the Partnership's internal
control structure and reports, dated January 27, 1997, on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 20
is presented for purposes of additional analysis for the year ended December 31,
1996 and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ Ruljancich, Blume, Loveridge & Co.
Bellevue, Washington
January 27, 1997
Page 1
11100 NE 8th Street, Suite 410 Bellevue, Washington 98004-4441 (206) 453-2088
Fax (206) 646-3368
[Letterhead of Ruljancich Blume Loveridge & Co., PLLC - Bellevue, Washington]
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
Partners
Conifer 317, an Oregon Limited Partnership
Tacoma, Washington
We have audited the accompanying balance sheets of Conifer 317, an Oregon
Limited Partnership, sponsor of FHA Project No. 126-44134, as of December 31,
1995 and 1994, and the related statements of income, changes in partners' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform an 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 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 Conifer 317, an Oregon
Limited Partnership, as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated February 2, 1996 on our consideration of the Partnership's internal
control structure and reports dated February 2, 1996 on its compliance with
specific requirements applicable to HUD programs.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional information shown on pages 9 to 17
is presented for purposes of additional analysis for the year ended December 31,
1995 and is not a required part of the financial statements. Such additional
information has been subjected to the auditing procedures applied in the audit
of the financial statements for that year, and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
[Signature of Ruljancich, Blume, Loveridge & Co.]
February 2, 1996
[DICKEY & WOLF, LLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
BiCentennial Associates, Ltd.
Houston, TX
We have audited the accompanying balance sheet of BICENTENNIAL ASSOCIATES, LTD.
(a Texas Limited Partnership) as of December 31, 1996, and the related
statements of operations, changes in partners' equity/(deficit) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BICENTENNIAL ASSOCIATES, LTD.
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ DICKEY & WOLF, LLC
DICKEY & WOLF, LLC
Certified Public Accountants
Harrisonville, MO
January 27, 1997
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
1
[Letterhead of Dickey & Wolf, LLC)
INDEPENDENT AUDITORS' REPORT
To the Partners
BiCentennial Associates, Ltd.
Houston, TX
We have audited the accompanying balance sheet of BICENTENNIAL ASSOCIATES,
LTD. (a Texas Limited Partnership) as of December 31, 1995, and the related
statements of operations, changes in partners' equity (deficit) and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BICENTENNIAL ASSOCIATES,
LTD. as of December 31, 1995, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As shown in the financial
statements, the Partnership incurred a net loss of ($5,179,731) during the year
ended December 31, 1995, and at that date was in default on a wraparound
purchase note payable (Note 3). These conditions raise substantial doubt about
the Partnership's ability to continue as a going concern.
The ability of the Partnership to continue depends upon its ability to
obtain additional or restructured financing and ultimately to attain a level of
operating profit sufficient to enable it to meets its obligations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
[Signature of Dickey & Wolf]
DICKEY & WOLF, LLC
Certified Public Accountants
Harrisonville, MO
January 26, 1996
[Letterhead of Dickey, Franklin & Wolf, LLC]
INDEPENDENT AUDITORS' REPORT
To the Partners
BiCentennial Associates, Ltd.
Houston, TX
We have audited the accompanying balance sheet of BICENTENNIAL ASSOCIATES,
LTD, FHA Project Number 114-35195 (a Limited Partnership), as of December 31,
1994, and the related statements of profit and loss (on HUD Form No. 92410),
partners' equity (deficiency) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BICENTENNIAL ASSOCIATES,
LTD. as of December 31, 1994, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As shown in the financial
statements, the Partnership incurred a net loss of $(891,421) during the year
ended December 31, 1994, and at that date was in default on a wraparound
purchase note payable (Note 3). These conditions raise substantial doubt about
the Partnership's ability to continue as a going concern.
To the Partners
BiCentennial Associates, Ltd.
Page Two
The ability of the Partnership to continue depends upon its ability to
obtain additional or restructured financing and ultimately to attain a level of
operating profit sufficient to enable it to meet its obligations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
[Signature of Dickey, Franklin & Wolf, LLC]
DICKEY, FRANKLIN & WOLF, LLC
Certified Public Accountants
Harrisonville, MO
January 27, 1995
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bellfort Associates, Ltd
Houston, Texas
We have audited the accompanying balance sheets of Bellfort Associates, Ltd.
(the "Partnership"), a Texas limited partnership, as of December 31, 1996 and
1995, and the related statements of operations, partners' deficiency, and cash
flows for each of the three years in the period ended December 31,1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Bellfort Associates, Ltd. as of December 31,
1996 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 4 to the
financial statements, the Partnership's operations have not generated and are
not expected to generate sufficient cash flows to service its existing debt
structure, and the Partnership's purchase note payable is due November 1, 1997.
These matters raise substantial doubt about its ability to continue as a going
concern. The Partnership's plans concerning these matters are also described in
Note 4. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Deloitte & Touche LLP
Houston, Texas
February 17, 1997
Deloitte Touche
Tohmatsu
International
-1-
[Letterhead of Deloitte & Touche LLP - Houston, Texas]
INDEPENDENT AUDITORS' REPORT
To the Partners
Bellfort Associates, Ltd.
Houston, Texas
We have audited the accompanying balance sheets of Bellfort Associates,
Ltd. (the "Partnership"), a Texas limited partnership, as of December 31, 1995,
1994 and 1993, and the related statements of operations, partners' deficiency
and cash flows for each of the three years in the period ended December 31,
1995. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Bellfort Associates, Ltd. as of December 31,
1995, 1994 and 1993, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 4 to the
financial statements, the Partnership could experience liquidity problems which
raises substantial doubt about its ability to continue as a going concern. The
Partnership's plans concerning this matter are also described in Note 4. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
[Signature of Deloitte & Touche LLP]
February 9, 1996
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Cloisters Associates, Ltd.
Atlanta, Georgia
We have audited the balance sheets of Cloisters Associates, Ltd. as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Cloisters Associates, Ltd. at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
January 28, 1997
-1-
[Letterhead of Williams Benator & Libby, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Cloisters Associates, Ltd.
Atlanta, Georgia
We have audited the balance sheets of Cloisters Associates, Ltd. as of
December 31, 1995 and 1994, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1995. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Cloisters Associates, Ltd.
at December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
[Signature of Williams Benator & Libby, LLP]
Atlanta, Georgia
January 29, 1996
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Cabarrus Arms Associates
Atlanta, Georgia
We have audited the balance sheets of Cabarrus Arms Associates as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Cabarrus Arms Associates at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
February 5, 1997
-1-
[Letterhead of Williams Benator & Libby, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Cabarrus Arms Associates
Atlanta, Georgia
We have audited the balance sheets of Cabarrus Arms Associates as of
December 31, 1995 and 1994, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1995. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Cabarrus Arms Associates at
December 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.
[Signature of Williams Benator & Libby, LLP]
Atlanta, Georgia
January 29, 1996
[MAULDIN & JENKINS LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Summer Arms Apartments, Ltd.
Sumter, South Carolina
We have audited the accompanying balance sheets of Summer Arms Apartments,
Ltd. (a limited partnership) as of December 31, 1996, 1995 and 1994, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Summer Arms Apartments, Ltd.
(a limited partnership) as of December 31, 1996, 1995 and 1994, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
February 5, 1997
Mauldin & Jenkins
[LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lexington Village Company
Conyers, Georgia
We have audited the accompanying balance sheets of Lexington Village
Company (a limited partnership) as of December 31, 1996, 1995 and 1994, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Lexington Village Company (a
limited partnership) as of December 31, 1996, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
February 5, 1997
[MAULDIN & JENKINS LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Ware Manor Associates
Waycross, Georgia
We have audited the accompanying balance sheets of Ware Manor Associates (a
limited partnership) as of December 31, 1996, 1995 and 1994 and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Ware Manor Associates (a
limited partnership) as of December 31, 1996, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
February 5, 1997
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Nottingham Woods Apartments Limited
Atlanta, Georgia
We have audited the balance sheets of Nottingham Woods Apartments Limited as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' capital (deficit), and cash flows for each of the three years in
the period ended December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Nottingham Woods Apartments
Limited at December 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
January 28, 1997
-1-
[Letterhead of Williams Benator & Libby, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Nottingham Woods Apartments Limited
Atlanta, Georgia
We have audited the balance sheets of Nottingham Woods Apartments Limited
as of December 31, 1995 and 1994, and the related statements of operations,
changes in partners' capital (deficit), and cash flows for each of the three
years in the period ended December 31, 1995. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Nottingham Woods Apartments
Limited at December 31, 1995 and 1994, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
[Signature of Williams Benator & Libby, LLP]
Atlanta, Georgia
January 30, 1996
[WILLIAMS BENATOR & LIBBY, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Hathaway Court Associates
Atlanta, Georgia
We have audited the balance sheets of Hathaway Court Associates as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Hathaway Court Associates at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ WILLIAMS BENATOR & LIBBY, LLP
Atlanta, Georgia
February 3, 1997
-1-
[Letterhead of Williams Benator & Libby, LLP]
INDEPENDENT AUDITORS' REPORT
Partners
Hathaway Court Associates
Atlanta, Georgia
We have audited the balance sheets of Hathaway Court Associates as of
December 31, 1995 and 1994, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 1995. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Hathaway Court Associates at
December 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.
[Signature of Williams Benator & Libby, LPP]
Atlanta, Georgia
January 25, 1996
[MAULDIN & JENKINS LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Tall Pines Associates
LaGrange, Georgia
We have audited the accompanying balance sheets of Tall Pines Associates (a
limited partnership) as of December 31, 1996, 1995 and 1994, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Tall Pines Associates as of
December 31, 1996, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
February 5, 1997
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Shelton Beach Apartments. Ltd.
We have audited the accompanying balance sheets of Shelton Beach
Apartments, Ltd. as of December 31, 1996 and 1995, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Shelton Beach Apartments,
Ltd. as of December 31, 1996 and 1995, and the results of its operations, the
changes in partners' capital and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
-1-
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 10, 1997
-2-
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Shelton Beach Apartments, Ltd.
We have audited the accompanying balance sheets of Shelton Beach
Apartments, Ltd. as of December 31, 1995 and 1994, and the related statements of
revenue and expenses, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Shelton Beach Apartments,
Ltd. as of December 31, 1995 and 1994, and the results of its operations, the
changes in partners' capital and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 13
through 15 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northpointe II, Ltd.
We have audited the accompanying balance sheets of Northpointe II, Ltd. as
of December 31, 1996 and 1995, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Northpointe II, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 10, 1997
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners
Northpointe II, Ltd.
We have audited the accompanying balance sheets of Northpointe II, Ltd. as
of December 31, 1995 and 1994, and the related statements of revenue and
expenses, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 Northpointe II, Ltd. as of
December 31, 1995 and 1994, and the results of its operations, the changes in
partners' capital and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 11
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Reznick Fedder & Silverman]
Bethesda, Maryland
January 9, 1996
[KPMG PEAT MARWICK LLP LETTERHEAD]
Independent Auditors' Report
The Partners
Caroline Forest Apartments:
We have audited the accompanying balance sheet of Caroline Forest Apartments (A
Virginia Limited Partnership) as of December 31, 1996, and the related
statements of operations, changes in partners' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Caroline Forest Apartments (A
Virginia Limited Partnership) as of December 31, 1996, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Roanoke, Virginia
February 7, 1997
Report of Independent Public Accountant
To the Partners of
Park of Pecan I, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN I, LTD., (a Texas
limited partnership) as of December 31, 1996, and the related statements of
loss and partners' deficit and cash flows for the year then ended. These
financial statements ate the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a seasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan I, Ltd. as of
December 31, l996, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Randal B. McDonald Jr., CPA
March 10, 1997,
Houston, Texas
Report of Independent Public Accountant
To the Partners of
Park of Pecan I, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN I, LTD., (a Texas
limited partnership) as of December 31, 1995, and the related statements of loss
and partners' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan I, Ltd. as of
December 31, 1995, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
[Signature of Randal B. McDonald Jr., CPA]
March 15, 1996,
Houston, Texas.
Report of Independent Public Accountant
To the Partners of
Park of Pecan I, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN I, LTD., (a
Texas limited partnership) as of December 31, 1994, and the related statements
of loss and partners' deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan I, Ltd. as of
December 31, 1994, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
[Signature of Randal B. McDonald Jr., CPA]
February 27, 1995,
Houston, Texas.
Report of Independent Public Accountant
To the Partners of
Park of Pecan II, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN, LTD., (a Texas
limited partnership) as of December 31, 1996, and the related statements of loss
and partners' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards I require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan II, Ltd. as of
December 31, 1996, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency, The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Randal B. McDonald Jr., CPA
March 10, 1997,
Houston, Texas
Report of Independent Public Accountant
To the Partners of
Park of Pecan II, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN II, LTD., (a
Texas limited partnership) as of December 31, 1995, and the related statements
of loss and partners' deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan II, Ltd. as of
December 31, 1995, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
[Signature of Randal B. McDonald Jr., CPA]
March 15, 1996,
Houston, Texas.
Report of Independent Public Accountant
To the Partners of
Park of Pecan II, Ltd.:
I have audited the accompanying balance sheet of PARK OF PECAN II, LTD., (a
Texas limited partnership) as of December 31, 1994, and the related
statements of loss and partners' deficit and cash flows for the year then
ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on
these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audit provides
a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Park of Pecan II, Ltd. as of
December 31, 1994, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has suffered recurring losses from
operations resulting in a net capital deficiency. The Partnership's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
[Signature of Randal B. McDonald Jr., CPA]
February 27, 1995,
Houston, Texas.
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Villa Apollo Associates Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Villa Apollo
Associates Limited Partnership (a limited partnership) as of December 31, 1996
and 1995 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency and, Cash Flows and, Supplemental Schedules on Page 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by I
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Villa Apollo Associates
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
/s/ WEINTRAUB, NESSEL & SMITH, PLLC
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hills, MI
January 29, 1997
[WEINTRAUB, NESSEL & SMITH, PLLC, LETTERHEAD - FARMINGTON HILLS, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Villa Apollo Associates Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Villa Apollo
Associates Limited Partnership (a limited partnership) as of December 31, 1995
and 1994 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency and Cash Flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Villa Apollo Associates
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
[Signature of Weintraub, Nessel & Smith, PLLC]
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
February 7, 1996
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Carlton Terrace Apartments Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Carlton
Terrace Apartments Limited Partnership (a limited partnership) as of December
31, 1996 and 1995 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency, and Cash Flows and, the supplemental information on Pages
9-11 for the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Carlton Terrace Apartments
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are presented
fairly in all material respects in relation to the basic financial statements
taken as a whole.
/s/ WEINTRAUB, NESSEL & SMITH, PLLC
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hill, MI
January 23, 1997
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD - FARMINGTON HILLS, MICIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
Carlton Terrace Apartments Limited Partnership
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of Carlton
Terrace Apartments Limited Partnership (a limited partnership) as of December
31, 1995 and 1994 and the related Comparative Statements of Revenue and Expense,
Partners' Deficiency and Cash Flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Carlton Terrace Apartments
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.
[Signature of Weintraub, Nessel & Smith, PLLC]
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
February 12, 1996
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cranbrook Manor Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Cranbrook Manor Apartments
Limited Partnership (a Michigan Limited Partnership) Project No.
047-44002-LDP-SUP, as of December 31, 1996, and the related statements of profit
and loss, changes in partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cranbrook Manor Apartments Limited
Partnership Project No. 047-44002-LDP-SUP as of December 31, 1996, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership is experiencing difficulty in generating
sufficient cash flow to meet its obligations and sustain its operations, which
raises substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Cranbrook
Manor Apartments Limited Partnership Project No. 047-44002-LDP-SUP on pages 12-
19 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This additional information is the
responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
Deloitte Touche
Tomatsu
International
In accordance with Government Auditing Standards, we have also issued a report
dated February 5, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 5, 1997, on its compliance with
laws and regulations.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 5, 1997
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
[Letterhead of DELOITTE & TOUCHE LLP - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cranbrook Manor Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Cranbrook Manor Apartments
Limited Partnership (a Michigan Limited Partnership) Project No.
047-44002-LDP-SUP, as of December 31, 1995, and the related statements of profit
and loss, changes in partners' deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cranbrook Manor Apartments Limited
Partnership Project No. 047-44002-LDP-SUP as of December 31, 1995, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership is experiencing difficulty in generating
sufficient cash flow to meet its obligations and sustain its operations, which
raises substantial doubt about the Partnership's ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Cranbrook
Manor Apartments Limited Partnership Project No. 047-44002-LDP-SUP on pages
12-18 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This additional information is the
responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 8, 1996, on our consideration of the Partnership's internal
control structure and a report dated February 8, 1996, on its compliance with
laws and regulations.
[Signature of Deloitte & Touche, LLP]
February 8, 1996
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
-2-
[Letterhead of DELOITTE & TOUCHE LLP - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cranbrook Manor Apartments
Limited Partnership
Farmington Hills, Michigan
We have audited the financial statements of Cranbrook Manor Apartments
Limited Partnership (a Michigan Limited Partnership) Project No.
047-44002-LDP-SUP, listed in the accompanying Table of Contents, as of and for
the year ended December 31, 1994. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cranbrook Manor Apartments Limited
Partnership Project No. 047-44002-LDP-SUP as of December 31, 1994, and the
results of its operations, the changes in its partners' deficit and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying Table of Contents, which are also the responsibility of the
Partnership's management, are presented for purposes of additional analysis and
are not a required part of the basic financial statements of Cranbrook Manor
Apartments Limited Partnership Project No. 047-44002-LDP-SUP. Such schedules
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Deloitte & Touche, LLP]
January 23, 1995
Audit Partner: Philip M. Goy
Telephone No.: (313) 396-3675
Federal Tax Employer Identification Number: 13-5133500
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Oakbrook Villa Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Oakbrook Villa Apartments
Limited Partnership (a Michigan Limited Partnership) Project No. 044-44001-LDP
as of December 31, 1996, and the related statements of profit and loss, changes
in partners' deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Oakbrook Villa Apartments Limited
Partnership Project No. 044-44001 -LDP as of December 31, 1996, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Oakbrook
Villa Apartments Limited Partnership (Project No. 044-44001 -LDP) on pages 11 -
16, is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. This additional information is the
responsibility of the Partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 4, 1997, on our consideration of the Partnership's internal
control structure and a report dated February 4, 1997, on its compliance with
laws and regulations.
/s/ Deloitte Touche LLP
Detroit, Michigan
February 5, 1997
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
Deloitte Touche
Tohmatsu
International
[Letterhead of DELOITTE & TOUCHE LLP - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Oakbrook Villa Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the accompanying balance sheet of Oakbrook Villa Apartments
Limited Partnership (a Michigan Limited Partnership) Project No. 044-44001-LDP
as of December 31, 1995, and the related statements of profit and loss, changes
in partners' deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Oakbrook Villa Apartments Limited
Partnership Project No. 044-44001-LDP as of December 31, 1995, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Oakbrook
Villa Apartments (Project No. 044-44001-LDP) on pages 11-16, is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements. This additional information is the responsibility of the
Partnership's management. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a
report dated February 21, 1996, on our consideration of Oakbrook Villa's
internal control structure and a report dated February 21, 1996, on its
compliance with laws and regulations.
[Signature of Deloitte & Touche, LLP]
February 21, 1996
Audit Partner: Richard D. DiBartolomeo
Telephone No.: (313) 396-3670
Federal Tax Employer Identification Number: 13-5133500
[Letterhead of DELOITTE & TOUCHE LLP - DETROIT, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Oakbrook Villa Apartments Limited Partnership
Farmington Hills, Michigan
We have audited the financial statements of Oakbrook Villa Apartments
Limited Partnership (a Michigan Limited Partnership) Project No. 044-44001-LDP,
listed in the accompanying Table of Contents, as of and for the year ended
December 31, 1994. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Oakbrook Villa Apartments Limited
Partnership Project No. 044-44001-LDP as of December 31, 1994, and the results
of its operations, the changes in its partners' deficit and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying Table of Contents, which are also the responsibility of the
Partnership's management, are presented for purposes of additional analysis and
are not a required part of the basic financial statements of Oakbrook Villa
Apartments Limited Partnership Project No. 044-44001-LDP. Such schedules have
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
[Signature of Deloitte & Touche, LLP]
January 30, 1995
Audit Partner: Philip M. Goy
Telephone No.: (313) 396-3675
Federal Tax Employer Identification Number: 13-5133500
[BORDMAN & WINNICK LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Pebble Creek LDHA
We have audited the accompanying balance sheet of MSHDA Development No. 277 of
Pebble Creek LDHA (A Michigan Limited Partnership) as of December 31, 1996, and
the related statements of Profit and loss, and changes in accumulated earnings
for the year then ended. We have also audited the statements of cash flows for
the years ended December 31, 1995 and 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
Opinion.
In our opinion, the financial statements above present fairly, in all material
respects, the financial position of MSHDA Development No. 277, Pebble Creek
LDHA, as of December 31, 1996, and the results of its operations and the changes
in cumulative income and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Pebble
Creek LDHA, MSHDA NO. 277 on pages 8 to 15 is presented for the purposes of
additional analysis and is not a required part of the basic financial
statements. This additional information is the responsibility of the
partnership's management. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1997 on our consideration of the partnership's internal
control structure and a report dated January 27, 1997 on its compliance with
laws and regulations.
West Bloomfield, MI /s/ BORDMAN & WINNICK
January 27, 1997 Certified Public Accountants
[Letterhead of BORDMAN & WINNICK]
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Pebble Creek LDHA
We have audited the accompanying balance sheet of MSHDA Development No. 277 of
Pebble Creek LDHA (A Limited Partnership) as of December 31, 1995, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1994 and 1995. These financial statements are the
responsibility of the Development's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MSHDA Development No. 277,
Pebble Creek LDHA, as of December 31, 1995, and the results of its operations
and the changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental data included in the report (shown
on pages 9 to 15) is presented for the purposes of additional analysis and are
not a required part of the financial statements of MSHDA Development No. 277.
Such information has been subject to the auditing procedures applied in the
audit of financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 31, 1996 Certified Public Accountants
[Letterhead of BORDMAN & WINNICK]
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Pebble Creek LDHA
We have audited the accompanying balance sheet of MSHDA Development No. 277
of Pebble Creek LDHA (A Limited Partnership) as of December 31, 1994, and the
related statements of operations and changes in partner's equity for the year
then ended. We have also audited the statements of cash flows for the years
ended December 31, 1993 and 1994. These financial statements are the
responsibility of the Development's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of MSHDA Development No. 277,
Pebble Creek LDHA, as of December 31, 1994, and the results of its operations
and the changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 9 to 15) is presented for the purposes of additional
analysis and are not a required part of the financial statements of MSHDA
Development No. 277. Such information has been subject to the auditing
procedures applied in the audit of financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
[Signature of Bordman & Winnick]
West Bloomfield, MI BORDMAN & WINNICK
January 25, 1995 Certified Public Accountants
[WEINTRAUB, NESSEL & SMITH, PLLC LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
VILLA APOLLO #2 LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of VILLA APOLLO #2
LIMITED PARTNERSHIP (a limited partnership) as of December 31, 1996 and 1995 and
the related Comparative Statements of Revenue and Expense, Partners' Deficiency,
and Cash Flows, and Supplemental Schedules on Pages 9-11 for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects the financial position of Villa Apollo #2 Limited Partnership
as of December 31, 1996 and 1995 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles. The supporting data included in this report have been subjected to
the same auditing procedures applied in the examination of the basic financial
statements and, in our opinion, are presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/ WEINTRAUB, NESSEL & SMITH, PLLC
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
Farmington Hills, MI
January 29, 1997
[Letterhead of WEINTRAUB, NESSEL & SMITH, PLLC - FARMINGTON HILLS, MICHIGAN]
INDEPENDENT AUDITORS' REPORT
To the Partners
VILLA APOLLO #2 LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100
Southfield, MI 48034
We have audited the accompanying Comparative Balance Sheet of VILLA APOLLO
#2 LIMITED PARTNERSHIP (a limited partnership) as of December 31, 1995 and 1994
and the related Comparative Statements of Revenue and Expense, Partners'
Deficiency, and Cash Flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, ovidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Villa Apollo #2 Limited
Partnership as of December 31, 1995 and 1994 and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles. The supporting data included in this report have
been subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.
[Signature of Weintraub, Nessel & Smith, PLLC]
WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants
February 8, 1996
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Greenwood Manor, Ltd.:
We have audited the accompanying financial statements of Greenwood Manor,
Ltd. (Project Number 082-44070 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 13, 1997, on our consideration of Greenwood Manor, Ltd.'s
internal control structure and a report dated January 13, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 13, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Malvern Manor, Ltd.:
We have audited the accompanying financial statements of Malvern Manor,
Ltd. (Project Number 082-440496 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 16, 1997, on our consideration of Malvern Manor, Ltd.'s
internal control structure and a report dated January 16, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 16, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Hereford Manor, Ltd.:
We have audited the accompanying financial statements of Hereford Manor,
Ltd. (Project Number 082-44071 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 1996, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 20, 1997, on our consideration of Hereford Manor, Ltd.'s
internal control structure and a report dated January 20, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 20, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Henslee Heights, Ltd.:
We have audited the accompanying financial statements of Henslee Heights,
Ltd. (Project Number 082-44076 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 14, 1997, on our consideration of Henslee Heights, Ltd.'s
internal control structure and a report dated January 14, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 14 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Oakwood Manor, Ltd.:
We have audited the accompanying financial statements of Oakwood Manor,
Ltd. (Project Number 082-44034 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. we believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997, on our consideration of Oakwood Manor, Ltd.'s
internal control structure and a report dated January 29, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 29, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
West Scenic Apartments, Ltd.:
We have audited the accompanying financial statements of West Scenic
Apartments, Ltd. (Project Number 082-44017 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1996, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. we believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997, on our consideration of West Scenic Apartments,
Ltd.'s internal control structure and a report dated January 28, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 14 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 28, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Robindale East Apartments, Ltd.:
We have audited the accompanying financial statements of Robindale East
Apartments, Ltd. (Project Number 082-44045 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1996, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 31, 1997, on our consideration of Robindale East
Apartments, Ltd.'s internal control structure and a report dated January 31.
1997. on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 31, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Southwest Apartments, Ltd.:
We have audited the accompanying financial statements of Southwest
Apartments, Ltd. (Project Number 082-44020 LD/SUP) (a limited partnership
hereinafter referred to as the "Partnership") as of December 31, 1996, and for
the year then ended, listed in the foregoing table of contents. These financial
statements are the responsibility of the General Partner. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 20, 1997, on our consideration of Southwest Apartments,
Ltd.'s internal control structure and a report dated January 20, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 20, 1997
[LETTERHEAD OF JEFFREY PHILLIPS MOSLEY & SCOTT, PA.]
INDEPENDENT AUDITORS' REPORT
To The Partners
Valley Arms, Ltd.:
We have audited the accompanying financial statements of Valley Arms, Ltd.
(Project Number 053-44191 LDP) (a limited partnership hereinafter referred to as
the "Partnership") as of December 31, 1996, and for the year then ended, listed
in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss, its total current
liabilities exceed its total current assets and it is delinquent on its mortgage
payments, which raises substantial doubt about its ability to continue as a
going concern. Management's plan regarding those matters also are described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In accordance with Government Auditing Standards, we have also issued a
report dated January 22, 1997, on our consideration of Valley Arms, Ltd.'s
internal control structure and a report dated January 22, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken Oas a whole. The supplemental schedules of the
Partnership on pages 12 - 16 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership' but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ JEFFREY PHILLIPS MOSLEY & SCOTT, P.A.
Little Rock, Arkansas
January 22, 1997
[BICK FREDMAN & CO. LETTERHEAD]
Independent Auditor's Report
The General and Limited Partners
Lancaster Manor Associates, Ltd.
Cleveland, Ohio
We have audited the accompanying balance sheets of Lancaster Manor
Associates, Ltd. (a California Limited Partnership), as of December 31, 1996 and
1995, and the related statements of operations. partners, deficit and cash flows
for the years then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lancaster Manor Associates,
Ltd. as of December 31, 1996 and 1995, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 24, 1997 on our consideration of Lancaster Manor
Associates, Ltd.'s internal control structure and a report dated January 24,
1997 on its compliance with laws and regulations.
/s/ Bick Fredman & Co.
Cleveland, Ohio
January 24, 1997
1
[Letterhead of Ciuni & Panichi, Inc. Certified Public Accountants]
INDEPENDENT AUDITOR'S REPORT
General and Limited Partners
Lancaster Manor Associates, Ltd.
Cleveland, Ohio
We have audited the accompanying balance sheet of Lancaster Manor
Associates, Ltd. (A California Limited Partnership), as of December 31, 1994,
and the related statements of operations, partners' deficit and cash flows for
the year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of Lancaster
Manor Associates, Ltd. as of December 31, 1993 were audited by other auditors
whose report, dated January 19, 1994, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lancaster Manor Associates,
Ltd. as of December 31, 1994, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
[Signature of Ciuni & Panichi, Inc.]
Cleveland, Ohio
January 20, 1995
[Addresses]
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 25
------------------------------
1997 1996
------------- -------------
ASSETS
Property and equipment - at cost, less accumulated depreciation
(Notes 2, 4 and 6) $ 140,195,814 $ 149,262,982
Cash and cash equivalents (Notes 2 and 11) 2,618,155 2,651,994
Cash - restricted for tenants' security deposits 1,552,990 1,510,971
Mortgage escrow deposits (Notes 5 and 6) 11,055,072 10,523,258
Prepaid expenses and other assets (Note 8) 1,740,633 1,661,130
------------- -------------
Total assets $ 157,162,664 $ 165,610,335
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities
Mortgage notes payable (Note 6) $ 92,002,763 $ 94,374,639
Purchase money notes payable (Note 7) 83,670,532 89,795,242
Due to selling partners (Note 7) 99,414,749 97,169,422
Accounts payable, accrued expenses and other liabilities 3,370,928 3,620,602
Tenants' security deposits payable 1,441,410 1,451,411
Due to general partners of subsidiaries and their affiliates 1,737,269 2,380,398
Due to general partners and affiliates (Note 8) 2,507,375 1,403,448
------------- -------------
284,145,026 290,195,162
Minority interest (Note 2) 116,611 150,518
------------- -------------
Commitments and contingencies (Notes 6, 7, 8 and 11)
Partners' deficit
Limited partners (125,290,459) (122,950,467)
General partners (1,808,514) (1,784,878)
------------- -------------
(127,098,973) (124,735,345)
------------- -------------
Total liabilities and partners' deficit $ 157,162,664 $ 165,610,335
============= =============
See accompanying notes to consolidated financial statements.
-27-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 25
---------------------------------------------
1997 1996 1995*
------------ ------------ ------------
Revenues
Rentals, net $ 35,549,987 $ 35,554,772 $ 34,385,489
Other 1,785,723 1,774,414 1,568,023
Gain on sale of property (Note 10) 606,195 0 0
------------ ------------ ------------
Total revenue 37,941,905 37,329,186 35,953,512
------------ ------------ ------------
Expenses
Selling and renting 384,393 420,904 457,672
Administrative and management 5,107,007 4,960,853 4,802,606
Administrative and management-related parties (Note 8) 3,445,361 2,417,492 2,294,869
Operating 5,994,143 5,930,235 5,908,210
Repairs and maintenance 9,881,787 9,210,318 8,163,052
Taxes and insurance 4,530,276 4,721,099 4,561,058
Financial, principally interest 13,044,356 14,415,543 14,757,383
Depreciation 8,484,538 6,529,518 8,611,030
Provision for impairment of assets (Note 4) 939,612 4,343,215 0
------------ ------------ ------------
51,811,473 52,949,177 49,555,880
------------ ------------ ------------
Loss before minority interest and extraordinary item (13,869,568) (15,619,991) (13,602,368)
Minority interest in loss (income) of subsidiaries 3,063 (24,042) 3,705
------------ ------------ ------------
Loss before extraordinary item (13,866,505) (15,644,033) (13,598,663)
Extraordinary item-forgiveness of
indebtedness income 11,502,877 0 0
------------ ------------ ------------
Net loss $ (2,363,628) $(15,644,033) $(13,598,663)
============ ============ ============
Loss before extraordinary item-limited partners $(13,727,840) $(15,487,593) $(13,462,663)
Extraordinary item-limited partners 11,387,848 0 0
------------ ------------ ------------
Net loss - limited partners $ (2,339,992) $(15,487,593) $(13,462,663)
============ ============ ============
Number of limited partner units outstanding 12,074 12,074 12,074
============ ============ ============
Loss before extraordinary item per limited partner unit $ (1,137) $ (1,283) $ (1,115)
Extraordinary item per limited partner unit 943 0 0
------------ ------------ ------------
Net loss per limited partnership unit $ (194) $ (1,283) $ (1,115)
============ ============ ============
* Reclassified for comparative purposes
See accompanying notes to consolidated financial statements.
-28-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
Total Limited Partners General Partners
------------- ---------------- ----------------
Balance - March 26, 1994 $ (95,492,649) $ (94,000,198) $ (1,492,451)
Net loss (13,598,663) (13,462,676) (135,987)
------------- ------------- -------------
Balance - March 25, 1995 (109,091,312) (107,462,874) (1,628,438)
Net loss (15,644,033) (15,487,593) (156,440)
------------- ------------- -------------
Balance - March 25, 1996 (124,735,345) (122,950,467) (1,784,878)
Net loss (2,363,628) (2,339,992) (23,636)
------------- ------------- -------------
Balance - March 25, 1997 $(127,098,973) $(125,290,459) $ (1,808,514)
============= ============= =============
See accompanying notes to consolidated financial statements.
-29-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Year Ended March 25
----------------------------------------------
1997 1996* 1995*
------------ ------------ ------------
Cash flows from operating activities:
Net loss $ (2,363,628) $(15,644,033) $(13,598,663)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash provided
by operating activities:
Gain on sale of property (Note 10) (606,195) 0 0
Extraordinary item-forgiveness of indebtedness
income (Note 11) (11,963,912) 0 0
Depreciation 8,484,538 6,529,518 8,611,030
Loss on sale of property and equipment 43,057 27,236 508
Provision for impairment of assets 939,612 4,343,215 0
Minority interest in (loss) income of subsidiaries (3,063) 24,042 (3,705)
(Increase) decrease in assets:
Cash-restricted for tenants' security deposits (42,019) 14,414 (5,923)
Mortgage escrow deposits-real estate taxes,
insurance and other (347,746) (743,534) (234,935)
Prepaid expenses and other assets 276,378 (119,129) (135,979)
Increase (decrease) in liabilities:
Due to selling partners 9,670,592 10,984,742 11,007,205
Payments of interest to selling partners (1,744,254) (1,709,256) (2,039,912)
Accounts payable, accrued expenses and other liabilities 49,130 189,519 (759,194)
Tenants' security deposits payable (10,001) 9,987 13,939
Due to general partners of subsidiaries and their affiliates 131,154 242,872 118,403
Due to general partners of subsidiaries and their affiliates (86,812) (199,482) (300,564)
Due to general partners and affiliates 1,569,962 (162,396) 427,181
------------ ------------ ------------
Total adjustments 6,360,421 19,431,748 16,698,054
------------ ------------ ------------
Net cash provided by operating activities 3,996,793 3,787,715 3,099,391
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of property 1,700,000 0 0
Costs paid relating to sale of property (58,136) 0 0
Acquisitions of property and equipment (1,435,708) (1,656,763) (1,750,036)
(Increase) decrease in mortgage escrow deposits (184,068) (430,701) 207,890
------------ ------------ ------------
Net cash provided by (used in) investing activities 22,088 (2,087,464) (1,542,146)
------------ ------------ ------------
Net cash from operating and investing activities,
carried forward 4,018,881 1,700,251 1,557,245
* Reclassified for comparative purposes
See accompanying notes to consolidated financial statements.
-30-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(CONTINUED)
Year Ended March 25
------------------------------------------------
1997 1996 1995*
----------- ----------- -----------
Net cash from operating and investing activities,
brought forward 4,018,881 1,700,251 1,557,245
----------- ----------- -----------
Cash flows from financing activities:
Decrease in purchase money notes (1,650,000) 0 0
Principal payment of mortgage notes payable (2,371,876) (2,224,465) (4,329,914)
Proceeds from mortgage notes payable 0 0 2,355,444
Decrease in minority interest (30,844) (14,755) (38,519)
----------- ----------- -----------
Net cash used in financing activities (4,052,720) (2,239,220) (2,012,989)
----------- ----------- -----------
Net decrease in cash and cash equivalents (33,839) (538,969) (455,744)
Cash and cash equivalents at beginning of year 2,651,994 3,190,963 3,646,707
----------- ----------- -----------
Cash and cash equivalents at end of year $ 2,618,155 $ 2,651,994 $ 3,190,963
=========== =========== ===========
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 4,372,432 $ 4,972,715 $ 5,255,926
=========== =========== ===========
Supplemental disclosures of noncash investing and
financing activities:
Increase in purchase money notes payable due to
the capitalization of prepaid expenses and other
assets $ 355,881 $ 0 $ 0
Forgiveness of indebtedness:
Decrease in purchase money note payable (4,830,591) 0 0
Decrease in due to selling partners (5,681,011) 0 0
Decrease in due to general partners
of subsidiaries and their affiliates (687,471) 0 0
Decrease in due to general partners and affiliates (466,035) 0 0
Decrease in accounts payable, accrued
expenses and other liabilities (298,804) 0 0
Summarized below are the components of the gain on sale of property:
Decrease in property and equipment,
net of accumulated depreciation 1,035,669 0 0
* Reclassified for comparative purposes
See accompanying notes to consolidated financial statements.
-31-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 1 - Organization
Cambridge Advantaged Properties Limited Partnership (formerly Hutton
Advantaged Limited Partnership) (the "Partnership") was formed pursuant to the
laws of the State of Massachusetts on June 28, 1984. The Partnership invests, as
a limited partner, in other limited partnerships (referred to herein as "Local
Partnerships" or "subsidiary partnerships"), each of which owns and operates an
existing residential housing development (an "Apartment Complex") that is
financed and/or operated with some form of local, state or federal assistance,
including mortgage insurance, rental assistance payments, permanent mortgage
financing and/or interest reduction payments ("Government Assistance").
The General Partners of the Partnership are Assisted Housing Associates
Inc., (formerly Cambridge Assisted Housing Associates Inc.) (the "Assisted
General Partner"), a Delaware corporation and an affiliate of Lehman Brothers
Inc. ("Lehman"), Related Beta Corporation (the "Related General Partner"), an
affiliate of The Related Companies, L.P. ("Related"), a New York limited
partnership, and Cambridge/Related Associates Limited Partnership (formerly
Hutton/Related Associates Limited Partnership) ("Cambridge/Related"), a
Massachusetts limited partnership. The general partners of Cambridge/Related are
the Assisted General Partner and the Related General Partner. The General
Partners manage and control the affairs of the Partnership.
Pursuant to the public offering, the Partnership received $53,754,000 (net
of offering expenses and sales commissions of $6,615,700) from 4,452 investors
in 12,074 limited partnership interests. The offering was completed in March
1985 and no further issuance of initial limited partnership interests or
additional limited partnership interests is anticipated.
The Partnership holds an interest in 60 Local Partnerships, each of which
owns one Apartment Complex which receives Government Assistance. On May 2, 1996
the property owned by Bicentennial Associates, Ltd. ("Bicentennial") was sold to
a third party (see Note 10).
The terms of the Limited Partnership Agreement provide, among other things,
that profits and losses, in general, be shared 99% by the limited partners and
1% by the general partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Going Concern
The accompanying consolidated financial statements of Cambridge Advantaged
Properties Limited Partnership have been prepared assuming the Partnership will
continue as a going concern. As discussed in Note 7, the principal of and all
accrued interest on the purchase money notes are due at maturity, August through
December 1996 (unless extended by the Partnership for up to three years in
general). As of March 25, 1997, the maturity dates of each of the Purchase Money
Notes associated with the remaining properties owned by the subsidiary
partnerships were extended for one year. The Partnership expects that upon
maturity, it will be required to refinance or sell its investments in the
subsidiary partnerships in order to pay the purchase money notes and related
interest obligations. Based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is uncertain as to whether the proceeds from such sales will be sufficient to
meet the outstanding balances of the purchase money notes. In addition, as
discussed in Note 11, the auditors of seven (Fiscal 1996) subsidiary
partnerships modified their reports due to the uncertainty of these subsidiary
partnerships to continue in existence.
-32-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 2 - Summary of Significant Accounting Policies (Continued)
b) Basis of Consolidation
The consolidated financial statements include the accounts of the
Partnership and 61 subsidiary partnerships, one of which only has activity
through the date of sale of its property on May 2, 1996 (see Note 10). The
Partnership is a limited partner, with an ownership interest of 98.99% in each
of the subsidiary partnerships. Through the rights of the Partnership and/or an
affiliate of the General Partner, which affiliate has a contractual obligation
to act on behalf of the Partnership, to remove the general partner of the
subsidiary partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary partnerships.
For financial reporting purposes, the Partnership's fiscal year ends March
25. All subsidiaries have fiscal years ending December 31. Accounts of
subsidiaries have been adjusted for intercompany transactions from January 1
through March 25.
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority
interests' investment in a subsidiary have been charged to the Partnership. Such
losses aggregated $0, $54,476 and $54,614 for the years ended March 25, 1997,
1996 and 1995, respectively (the 1996, 1995 and 1994 Fiscal Years). The
Partnership's investment in each subsidiary is equal to the respective
subsidiary's partners' equity less minority interest capital, if any. In
consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.
c) Property and Equipment
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective March 26, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.
Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate disposition
of the property. Cost includes the purchase price, acquisition fees and
expenses, and any other costs incurred in acquiring the properties. As required
by SFAS No. 121 a provision for loss on impairment of assets is recorded when
estimated amounts recoverable through future operations and sale of the property
on an undiscounted basis or a property appraisal when deemed necessary are below
depreciated cost. Property investments themselves are reduced to estimated fair
value (generally using discounted cash flows) when the property is considered to
be impaired and the depreciated cost exceeds estimated fair value. For the year
ended March 25, 1996, the Partnership had recorded approximately $4,343,000 as a
provision for loss on impairment of assets relating to the property
-33-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 2 - Summary of Significant Accounting Policies (Continued)
owned by Bicentennial, which was sold on May 2, 1996 (see Note 10). For the year
ended March 25, 1997, the Partnership has recorded approximately $940,000 as a
provision for loss on impairment of assets.
d) Interest Subsidies
Interest expense has been reduced by interest subsidies (Note 6).
e) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and
investments in short-term highly liquid instruments purchased with original
maturities of three months or less.
f) Income Taxes
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the responsibility of the individual
partners. For income tax purposes, the Partnership has a fiscal year ending
December 31 (Note 9).
g) Loss Contingencies
The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated. In
addition, the Partnership evaluates the amount of a potential environmental
liability independently from any potential claim for recovery.
h) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
i) Reclassification of Financial Statement Presentation
Certain reclassifications have been made to the Fiscal 1994 financial
statements to conform with the Fiscal 1996 and 1995 financial statement
presentation. Such reclassifications had no effect on net loss as previously
reported.
-34-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments (all of which are held for non-trading
purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents, Cash-Restricted for Tenants' Security Deposits
and Mortgage Escrow Deposits
The carrying amount approximates fair value.
Mortgage Notes Payable
The fair value of mortgage notes payable is estimated, where practicable,
based on the borrowing rate currently available for similar loans.
The estimated fair values of the Partnership's mortgage note payable are as
follows:
March 25, 1997 March 25, 1996
------------------------- -------------------------
Carrying Carrying
Amount Fair Value Amount* Fair Value
----------- ----------- ----------- -----------
Mortgage Notes Payable for which it is:
Practicable to estimate fair value $43,722,772 $43,993,062 $44,682,658 $45,341,035
Not practicable to estimate
fair value $48,279,991 (a) $49,691,981 (a)
Purchase money notes
payable for which it is:
Not practicable to estimate
fair value $83,670,532 (b) $89,795,242 (b)
Due to selling partners for
which it is:
Not practicable to estimate
fair value $99,414,479 (b) $97,169,422 (b)
(a) Management believes it is not practical to estimate the fair value of
the mortgage notes payable because mortgage programs with similar
characteristics are not currently available to the partnerships.
(b) For the reasons discussed in Note 7 it is not practicable to estimate
the fair value of these notes, or accrued interest thereon.
*Reclassified for comparative purposes.
The carrying amount of other assets and liabilities reported on the
statement of financial position that require such disclosure approximates fair
value.
-35-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 4 - Property and Equipment
The components of property and equipment and their estimated useful lives
are as follows:
March 25
------------------------------ Estimated
1997 1996 Useful Lives
------------- ------------- -------------
Land $ 13,519,192 $ 13,820,896
Buildings and improvements 216,934,795 220,601,742 15-40 Years
Furniture and fixtures 9,630,659 9,495,438 5-10 Years
------------- -------------
240,084,646 243,918,076
Less: Accumulated depreciation (99,888,832) (94,655,094)
------------- -------------
$ 140,195,814 $ 149,262,982
============= =============
Property acquisition fees of $5,131,535 were earned by the General Partners
of the Partnership and have been capitalized as a cost of property and
equipment.
Depreciation expense for the 1996, 1995 and 1994 Fiscal Years amounted to
$8,484,538, $6,529,518 and $8,611,030, respectively.
As of December 31, 1995, Bicentennial had experienced significant cash flow
problems and was in default on the underlying mortgage and wraparound mortgage
note payable. Beal Bank, the holder of the underlying mortgage had provided
formal notice of their intent to foreclose. As a result of the 1995 loss
combined with a history of operating and cash flows losses, it was determined
that an impairment of property and equipment existed at December 31, 1995. The
impairment loss was determined to be $4,343,215 for the 1995 Fiscal Year. The
amount of the impairment loss was determined based on the difference in the
carrying value of property and equipment (net of depreciation) and the appraisal
provided by Beal Bank, the underlying mortgage holder. The appraisal was dated
January 29, 1996, in the amount of $1,050,000. On May 2, 1996 the property owned
by Bicentennial was sold to a third party (see Note 10).
Saraland is located on an EPA Superfund Cleanup Site. During the year ended
December 31, 1996, the tenants of Saraland were moved to temporary housing to
facilitate cleanup of the site. Rents continued to be collected by Saraland from
the tenants and HUD. However, as of February 1997, the EPA, along with other
agencies, determined that Saraland is unsafe to live in due to amounts of
Benzine and Aldrine found to be present in the air of some apartments. There
appears to be a substantial likelihood that the EPA will conclude that the
apartments will be torn down in order to remove the contamination that has been
found to exist underneath the buildings. As of April 1997, HUD stopped making
Housing Assistance Payments to Saraland and Saraland stopped making payments on
its mortgage (see Note 11). Accordingly, for the year ended March 25, 1997, an
impairment loss in the amount of $939,612 has been recognized in the financial
statements.
-36-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 5 - Mortgage Escrow Deposits
Mortgage escrow deposits consist of the following:
March 25
---------------------------
1997 1996
----------- -----------
Reserves for replacements $ 6,505,591 $ 6,321,523
Real estate taxes, insurance and other 4,549,481 4,201,735
----------- -----------
$11,055,072 $10,523,258
=========== ===========
NOTE 6 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of
approximately $688,000, including principal and interest at rates varying from
3% to 11.4% per annum, through June 2023. Each subsidiary partnerships mortgage
note payable is collateralized by the land and buildings of the respective
subsidiary partnership, the assignment of certain subsidiary partnership's rents
and leases and is without further recourse.
Under the terms of regulatory agreements with the Secretary of the U.S.
Department of Housing and Urban Development ("HUD"), subsidiary partnerships
with mortgage note balances aggregating approximately $68,800,000 and
$66,600,000 at December 31, 1996 and 1995, respectively, providing for interest
at rates ranging from 3.0% to 11.4% per annum, paid only that portion of the
monthly payments that would be required if the interest rate was in the range of
1% - 3% per annum; the balance was subsidized under Section 236 of the National
Housing Act.
In addition, one subsidiary partnership with mortgage note balances of
approximately $4,441,000 and $4,523,000 at December 31, 1996 and 1995,
respectively, entered into interest reduction subsidy agreements with the
Massachusetts Housing Finance Agency ("MHFA"), which effectively reduced the
interest rates on the mortgage note balances to 7.7%.
Annual principal payment requirements for each of the next five fiscal
years are as follows:
Year Ending December 31 Amount
----------------------- ------
1997 $ 2,572,043
1998 2,754,347
1999 2,958,756
2000 3,178,307
2001 3,413,791
Thereafter 77,125,519
-----------
Total $92,002,763
===========
The mortgage agreements require monthly deposits to replacements reserves
of approximately $186,000 and monthly deposits to escrow accounts for real
estate taxes, hazard, and mortgage insurance and other (Note 5).
-37-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 7 - Purchase Money Notes Payable
Purchase money notes in the original amount of $85,458,825 were issued to
the selling partners of the subsidiary partnerships as part of the purchase
price and are secured only by the interest in the subsidiary partnership to
which the note relates (the "Purchase Money Notes"). A portion of these notes,
in the original amount of $31,932,568 are obligations at the subsidiary
partnership level, whereas the remaining $53,526,257 is recorded at the
Partnership level On May 2, 1996 the property owned by Bicentennial was sold to
a third party and the associated purchase money note and accrued interest
thereon, which were obligations at the subsidiary partnership level, were
canceled (see Note 10). The Purchase Money Notes provided for compound interest
at rates which, in general, ranged from 9% to 10% per annum (except that the
Purchase Money Note with respect to Cabarrus Arms Associates bears interest at
12% per annum) through August 31, 1989. Thereafter, simple interest has accrued,
without further interest thereon, through maturity, August through December 1996
(unless extended by the Partnership for up to three years in general). As of
March 25, 1997, the maturity dates of each of the Purchase Money Notes
associated with the remaining properties owned by the subsidiary partnerships
were extended for one year (see below). Purchase money notes at March 25, 1997
and 1996 include $4,336,417 of interest accrued through August 31, 1989.
The Purchase Money Notes, which provide for simple interest through
maturity during the period August through December 1996 (unless extended by the
Partnership), will not be in default during the basic term (generally twelve
years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note. Continued accrual of such
interest beyond the initial term, without payment, would reduce the effective
interest rate of 9%. The exact effect is not determinable inasmuch as it is
dependent on the actual future interest payments and ultimate repayment dates of
the notes. Unpaid interest of approximately $98,278,000 and $95,994,000 as of
March 25, 1997 and 1996, respectively, has been accrued and is included in due
to selling partners in the consolidated balance sheets. In general, the interest
on and the principal of each Purchase Money Note is also payable to the extent
of the Partnership's actual receipt of proceeds of the sale or refinancing of
the Apartment Complex, or in some cases the Local Partnership Interest to which
the Purchase Money Note relates.
The Partnership may elect, upon the payment of an extension fee of 1/2% per
annum of the outstanding principal amount, to extend the term of the Purchase
Money Notes for up to three additional years (four years with respect to three
subsidiary partnerships). As of March 25, 1997, the maturity dates of each of
the Purchase Money Notes associated with the remaining properties owned by the
subsidiary partnerships (ranging from August to December 1996) were extended for
one year and extension fees in the amount of $260,364 were incurred by the
Partnership. Of such fees incurred, $206,810 was accrued and added to the
Purchase Money Notes balance in accordance with the respective note agreements.
The extension fees are being amortized over the term of the extension. The
Partnership expects that upon maturity of the Purchase Money Notes, it will be
required to refinance or sell its investments in the Local Partnerships in order
to pay the Purchase Money Notes. The Partnership cannot sell or otherwise
liquidate its investments in those Local Partnerships which have subsidy
agreements with HUD during the period that such agreements are in existence
without HUD's approval. Based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is uncertain as to whether the proceeds from such sales will be sufficient to
meet the outstanding balances of principal, accrued interest and extension
fees. Management is working with the selling partners to restructure and/or
refinance the notes. No assurance can be given that management's efforts will be
successful. The Purchase Money Notes are without personal recourse to either the
Partnership or any of its partners and the sellers' recourse, in the event of
non-payment, would be to foreclose on the Partnership's interests in the
respective subsidiary partnerships.
-38-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 7 - Purchase Money Notes Payable (continued)
Distributions aggregating approximately $1,410,000, $1,390,000 and
$1,385,000 were made to the Partnership during each of the years ended March 25,
1997, 1996 and 1995, respectively, of which approximately $813,000, $834,000 and
$790,000, respectively, was used to pay interest on the Purchase Money Notes. In
addition, approximately $117,000, $105,000 and $124,000, for the 1996, 1995 and
1994 Fiscal Years, respectively, was paid as "additional" interest on the
purchase money notes. In addition, approximately $ , $1,709,000 and $1,126,000
was paid by the subsidiary partnerships as interest on purchase money notes
during the 1996, 1995, and 1994 Fiscal Years, respectively.
NOTE 8 - Related Party Transactions
The costs incurred to related parties were as follows:
Year Ended March 25,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
Partnership management fees (a) $1,142,000 $ 125,000 $ 125,000
Expense reimbursement (b) 172,515 146,205 168,093
Property management fees (c) 2,048,346 2,063,787 1,891,776
Local administrative fee (d) 82,500 82,500 110,000
---------- ---------- ----------
$3,445,361 $2,417,492 $2,294,869
========== ========== ==========
(a) After all other expenses of the Partnership are paid, an annual
partnership management fee of up to .5% of invested assets is payable to the
Partnership's general partners and affiliates. Partnership management fees owed
to the general partners amounting to $1,623,237 and $481,237 were accrued and
unpaid as of March 25, 1997 and 1996, respectively.
(b) The Partnership reimburses the General Partners and their affiliates
for actual Partnership operating expenses incurred by the General Partners and
their affiliates on the Partnership's behalf. The amount of reimbursement from
the Partnership is limited by the provisions of the Partnership Agreement.
Another affiliate of the Related General Partner performs asset monitoring for
the Partnership. These services include site visits and evaluations of the
subsidiary partnerships' performance. Expense reimbursements and asset
monitoring fees owed to the Related General Partner amounting to $141,498 and
$189,330 were accrued and unpaid as of March 25, 1997 and 1996, respectively.
(c) Property management fees incurred to affiliates of the subsidiary
partnerships amounted to $2,033,267, $2,016,617 and $1,847,331 for the 1996,
1995 and 1994 Fiscal Years, respectively. Property management fees incurred to
affiliates of the Partnership amounted to $15,079, $47,170 and $44,445 for the
1996, 1995 and 1994 Fiscal Years, respectively.
(d) H/R Special Partnership, the special limited partner, owning a .01%
interest, is entitled to receive a local administrative fee of up to $2,500 per
year from each subsidiary partnership.
-39-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 8 - Related Party Transactions (continued)
Due to local general partners and affiliates at December 31, 1996 and 1995
consists of the following:
December 31,
-----------------------------
1996 1995
---------- ----------
Operating advances (a) (b) $ 362,288 $1,085,068
Operating deficit loan (b) 455,550 455,550
Management and other fees 919,431 839,780
---------- ----------
$1,737,269 $2,380,398
========== ==========
(a) Operating advances include three loans payable to local general
partners and affiliates.
(b) These loans are unsecured, non-interest bearing and payable out of
available surplus cash of the respective subsidiary partnership or at the time
of sale or refinancing.
NOTE 9 - Income Taxes
A reconciliation of the financial statement net loss to the income tax loss
for the Partnership and its consolidated subsidiaries is as follows:
Years Ended December 31
--------------------------------------------
1996 1995 1994
------------ ------------ ------------
Financial statement net loss $ (2,363,628) $(15,644,033) $(13,598,663)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes (557,009) 8,678 (136,995)
Difference resulting primarily from depreciation and
amortization expense recorded for financial
reporting purposes and income tax purposes (2,427,826) (5,031,092) (2,736,134)
Provision for impairment of assets recorded for
financial reporting purposes 939,612 4,343,215 0
Difference between gain on sale of assets recorded
for financial reporting purposes and loss recorded
for income tax purposes (1,887,492) 0 0
Other, including accruals for financial reporting
purposes not deductible for tax purposes until paid 74,416 386,913 (55,016)
------------ ------------ ------------
Loss as shown on the income tax return for the
calendar year ended $ (6,221,927) $(15,936,319) $(16,526,808)
============ ============ ============
NOTE 10 - Sale of Property
On May 2, 1996, the property owned by Bicentennial was sold to a third
party for $1,700,000, resulting in a gain in the amount of $606,195 and
forgiveness of indebtedness income of $11,502,877 as a result of forgiveness of
the purchase money note payable and accrued interest thereon (which were
obligations at the subsidiary partnership level), amounts due to HUD, and
amounts due to general partners and affiliates.
-40-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies
a) Subsidiary Partnerships - Events of Default and Going Concern
The financial statements for seven subsidiary partnerships have been
prepared assuming each will continue as a going concern. The circumstances
described below raise substantial doubt about each subsidiary partnership's
ability to continue as a going concern. The auditors for these five subsidiary
partnerships modified their reports on the 1996 Fiscal Year financial statements
due to the uncertainty of each subsidiary partnership's ability to continue as a
going concern. These financial statements do not include any adjustments that
would be necessary in the event the subsidiary partnerships are unable to
continue as a going concern. The five subsidiary partnerships are Bellfort
Associates, Ltd. ("Bellfort"), Park of Pecan I, Ltd. ("Park of Pecan I"), Park
of Pecan II, Ltd. ("Park of Pecan II"), Westminster Manor Apartments
("Westminster"), Cranbrook Manor Apartments Limited Partnership ("Cranbrook"),
Saraland Apartments, Ltd. ("Saraland") and Valley Arms, Ltd. ("Valley Arms").
Bellfort
Bellfort has been in default on the required interest payments due on the
wraparound purchase note payable to Finger Companies since 1992. The original
maturity date of the note was the twelfth anniversary of the transaction date or
November 1, 1996. However, the debt agreement allows Bellfort the option to
extend the term of the note an additional year on the twelfth, thirteenth and
fourteenth anniversaries. On November 1, 1996, Bellfort was granted the option
to extend the term to November 1, 1997, at which time the principal plus
deferred interest is due. Accumulated deferred interest at December 31, 1996 and
1995 of approximately $3,417,000 and $3,096,000, respectively, is also subject
to 9% interest. The note is secured by a first lien on and security interest in
the Partnership's and Bellfort's special limited partner's rights, titles and
interests in Bellfort. Payments on this note cannot exceed the required payments
on the underlying Multifamily Mortgage Trust ("MMT") note described below.
The purchase money note wraps around an underlying mortgage note. The
underlying mortgage is collateralized by a deed of trust on the rental property.
In June 1996, the underlying mortgage note was sold by HUD, who had assumed the
underlying mortgage note in December 1991, to MMT.
Prior to August 1996, the underlying mortgage note was in default first
with HUD and then with MMT. In order to avoid any acceleration or other exercise
of remedies for the defaulted mortgage, MMT allowed the previous owners to bring
the underlying mortgage note current with a payment of approximately $294,000.
Upon making the underlying mortgage note current, the debt agreement for the
underlying mortgage note payable required monthly payments of approximately
$47,000 with $37,000 relating to principal and interest payments due on the
first of each month and such payments have been made as of December 31, 1996.
Bellfort's operations have not generated sufficient cash flows to service
its existing debt structure, and Bellfort's purchase note payable is due
November 1, 1997. Bellfort's forecasted cash flows for 1997 indicate a
significant shortfall of amounts needed to repay such note and the related
deferred interest. Bellfort will be required to renegotiate the terms of the
note or to obtain alternative financing to satisfy the holder. If unsuccessful,
Bellfort may be required to sell the rental property. Management of Bellfort
intends to request the extension of the note for an additional year; however,
there can be no assurance that such an extension will be granted.
The Partnership's investment in Bellfort has been reduced to zero by prior
years' losses. The minority interest balance was $0 at March 25, 1997 and 1996.
Bellfort's net loss after minority interest amounted to approximately $580,000,
$694,000 and $549,000 for the 1996, 1995 and 1994 Fiscal Years, respectively.
-41-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies(continued)
a) Subsidiary Partnerships - Events of Default and Going Concern(continued)
Park of Pecan I and Park of Pecan II
Park of Pecan I and II have experienced operating losses since inception
and as of December 31, 1996 have net capital deficiencies aggregating
approximately $4,910,000. Park of Pecan I and II previously funded their
operating losses by borrowing amounts pursuant to an operating deficit guaranty
agreement made in connection with the acquisition of the Apartment Complexes.
However, such agreement expired December 31, 1989 and Park of Pecan I and II
have not made arrangements to obtain an extension or additional funds. If Park
of Pecan I and II continue to experience significant operating losses and are
unable to obtain additional funds they may be unable to continue operations. The
Partnership's investments in Park of Pecan I and II have been reduced to zero by
prior years' losses. Pecan I and Pecan II's minority interest balances were $0
at March 25, 1997 and 1996. Park of Pecan I's net loss after minority interest
amounted to approximately $158,000, $196,000 and $182,000 for the 1996, 1995 and
1994 Fiscal Years, respectively. Park of Pecan II's net loss after minority
interest amounted to approximately $170,000, $185,000 and $183,000 for the 1996,
1995 and 1994 Fiscal Years, respectively.
Westminster
In February, 1995, Westminster received an unsatisfactory physical
inspection report from HUD. In response to the inspection report, Westminster
submitted, for HUD approval, a Management Improvement Objective Plan (the "MIO
Plan") with an accompanying estimate of restorations and improvements and a
request for funding. Westminster does not have the working capital necessary to
cover the costs contained in the MIO Plan to cure the deficiencies.
The determination of whether the identified instances of noncompliance and
Westminster's lack of capital to fund the repair costs will ultimately effect
future cash flow cannot presently be determined. Accordingly, no provision for
any liability that may result has been recognized in Westminster's 1996
financial statements.
The inability of Westminster to satisfy the deficiencies sited in the
inspection report without approval of the funding request accompanying the MIO
Plan raises substantial doubt about Westminster's ability to continue as a going
concern. The financial statements do not include any adjustments that possibly
would be necessary in the event Westminster is unable to continue as a going
concern. The Partnership's investment in Westminster was approximately
$1,792,000 and $1,956,000 at March 25, 1997 and 1996, respectively and the
minority interest balance was $0 at each date. Westminster's net loss after
minority interest amounted to approximately $164,000, $257,000 and $212,000 for
the 1996, 1995 and 1994 Fiscal Years, respectively.
Cranbrook
During the year ended December 31, 1996 Cranbrook incurred a net loss of
approximately $223,000 and total liabilities exceeded total assets by
approximately $1,451,000 at December 31, 1996. In addition, Cranbrook receives
housing assistance payments and a mortgage interest subsidy from HUD under
provisions of Section 8 and Section 236, respectively, of the National Housing
Act. Cranbrook entered into housing assistance agreements (the "Section 8
agreements") with the FHA dated October 1, 1976, September 1, 1982 and November
1, 1991. The Section 8 agreements were renewed for one year, expiring on
September 30, 1997, August 31, 1997 and October 31, 1997, respectively.
Cranbrook 's cash flows may be insufficient to meet its current obligations in
the ordinary course of business. Should cash flows be insufficient, management
plans to pursue a workout agreement with HUD. There are no assurances that the
Section 8 agreement will be renewed under comparable economic
-42-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies (continued)
a) Subsidiary Partnerships - Events of Default and Going Concern (continued)
terms to Cranbrook upon the expiration of the agreement. As of December 31,
1996, it is not possible to estimate the effect of the potential loss of this
subsidy. However, the termination of reduction of the benefits under this
program by the government could have an adverse effect on the operations of
Cranbrook. These factors, among others, indicate that there is substantial doubt
about Cranbrook's ability to continue as a going concern for a reasonable period
of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
Cranbrook be unable to continue as a going concern. Cranbrook's continuation as
a going concern is dependent upon its ability to generate sufficient cash flow
to meet its obligations on a timely basis and to ultimately attain successful
operations. The Partnership's investment in Cranbrook has been reduced to zero
by prior years' losses. The minority interest balance was $0 at March 25, 1997
and 1996. Cranbrook's net loss after minority interest amounted to approximately
$223,000, $138,000 and $124,000 for the 1996, 1995 and 1994 Fiscal Years,
respectively.
Saraland
Saraland has been designated as a "Superfund" site on the National
Priorities List under the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"). On March 18, 1992, Redwing Carriers, Inc., a
trucking company which utilized the Saraland site prior to development of the
property as a low-income apartment complex, served an Amended Complaint on the
Partnership and H/R Special Partnership, among others, adding them to the
lawsuit previously commenced against Saraland and the general partners in the
United States District Court for the Southern District of Alabama. That lawsuit
seeks reimbursement for costs previously incurred by Redwing Carriers with
respect to the site, which at the time of the Amended Complaint totaled
approximately $2,000,000, as well as a declaration that each of the defendants
is jointly and severally liable for costs of response or damages resulting from
the release of hazardous substances, among other items of relief. In September
1996, the 11th Circuit Court of Appeals affirmed a lower court's decision
dismissing the Partnership and H/R Special Partnership from the case, and,
accordingly, the Partnership and H/R Special Partnership are no longer subject
to liability in the lawsuit brought by Redwing Carriers, Inc.
During March 1993, the Partnership was named by the United States
Environmental Protection Agency ("EPA") as a "Potentially Responsible Party"
under Superfund in connection with the Saraland Apartment Complex Site.
On July 16, 1993, Saraland, the local general partners (Roar Corporation
and the Estate of Robert Coit), the limited partners (the Partnership and H/R
Special Partnership), and five other parties were named as Respondents in a
unilateral administrative order (the "Order") issued under CERCLA by EPA,
directing the Respondents to implement the EPA-selected remedy for addressing
contamination by hazardous substances at the site. In December 1993, Saraland
and its general partners, the Partnership and H/R Special Partnership informed
EPA that they have "sufficient cause" to not comply with the Order. Redwing
Carriers, Inc. initially advised EPA that it would commence implementation of
the Order. It has recently, however, refused to do so and EPA has now begun
implementation of the remedy.
-43-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies(continued)
a) Subsidiary Partnerships - Events of Default and Going Concern (continued)
Since September 1993, EPA has not notified the Partnership whether it
intends to take further legal action. During the 1994 Fiscal Year, EPA
determined that cleanup for the project site could cost between six and ten
million dollars. In or around late 1996, EPA elected to vacate the apartment
complex and relocate all tenants. Given the fact that EPA has not informed the
Partnership whether or not it intends to pursue the Partnership through further
legal action, neither management nor management's counsel are in a position, at
this point, to evaluate the likelihood of an unfavorable outcome or range of any
potential loss. However, the dismissal of the Partnership and H/R Special
Partnership from the Redwing litigation (discussed above) should provide strong
grounds upon which to contest any attempt by EPA to visit liability for
undertaking and funding the remedy and/or relocation upon the Partnership. The
Partnership intends to present a vigorous defense and strongly contests any
further legal action brought by or on behalf of EPA to obtain from the
Partnership remedial funding and/or any other costs associated with this matter.
Litigation costs incurred to date by the Partnership total approximately
$275,000.
On May 13, 1997, a number of residents at the Saraland Apartments complex
served a purported class action complaint upon the Partnership and H/R Special
Partnership, as well as Redwing Carriers, Inc., Saraland, Saraland's general
partners and others alleging that all defendants are liable to the class members
for adverse health consequences and other expenses attendant to hazardous
substance exposure caused by the conduct of all defendants. The complaint
alleges causes of action under the following common law theories of recovery:
(1) Breach of Lease/Constructive Eviction; (2) Trespass to Real Property; (3)
Trespass to Personal Property; (4) Trespass to Persons; (5) Negligence and
Wantonness; (6) Ultra-hazardous or Abnormally Dangerous Activities; (7)
Nuisance; (8) Civil Conspiracy; and (9) Fraudulent Suppression. Given the early
stage of this proceeding, it is not possible to evaluate the likelihood of an
unfavorable outcome. Nonetheless, the Partnership intends to present a vigorous
defense and will strongly contest its liability for the claims made in this
action.
During the year ended December 31, 1996, the tenants of Saraland were moved
to temporary housing to facilitate cleanup of the site. Rents continued to be
collected by Saraland from the tenants and HUD. However, as of February 1997,
the EPA, along with other agencies, determined that Saraland is unsafe to live
in due to amounts of Benzine and Aldrine found to be present in the air of some
apartments. There appears to be a substantial likelihood that the EPA will
conclude that the apartments will be torn down in order to remove the
contamination that has been found to exist underneath the buildings. As of April
1, 1997, HUD stopped making Housing Assistance Payments to Saraland and Saraland
stopped making payments on its mortgage.
The above conditions raise substantial doubt about Saraland's ability to
continue as a going concern. These financial statements do not include any
adjustments, other than the impairment loss discussed in Note 4, that might
result from the outcome of these uncertainties. The Partnership's investment in
Saraland was reduced to $0 by prior and current years' losses and $504,000 at
March 25, 1997 and 1996, respectively, and the minority interest balance was
approximately $22,000 and $32,000 at each date, respectively. Saraland's net
loss after minority interest amounted to approximately $912,000, $42,000 and
$17,000 for the 1996, 1995, and 1994 Fiscal Years, respectively.
-44-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies (continued)
a) Subsidiary Partnerships - Events of Default and Going Concern (continued)
Valley Arms
During the year ended December 31, 1996, Valley Arms incurred a net loss of
approximately $99,000 and as of that date, Valley Arms' total current
liabilities exceeded its total current assets by approximately $150,000. As of
December 31, 1996, Valley Arms is three months delinquent on its mortgage
payment. These factors, among others, raise substantial doubt about Valley Arms'
ability to continue as a going concern. The financial statements do not include
any adjustments that might be necessary if Valley Arms is unable to continue as
a going concern. Valley Arms' continuation as a going concern is dependant upon
its ability to generate sufficient cash flow to meet its obligations on a timely
basis, to comply with the terms of its mortgage, to obtain additional capital
contributions from partners, and ultimately, to attain successful operations.
Management of Valley Arms is making all efforts possible to increase the
occupancy and the rental income of the project and to make the necessary
improvements to enhance the property, in an attempt to improve Valley Arms' cash
flow. Management of Valley Arms is also trying to refinance the mortgage and/or
repay the mortgage and also has been contacted about a sale of Valley Arms. The
Partnership's investment in Valley Arms was approximately $560,000 and $659,000
at March 25, 1997 and 1996, respectively, and the minority interest balance was
$0 at each date. Valley Arms' net loss after minority interest amounted to
approximately $99,000, $49,000 and $94,000 for the 1996, 1995 and 1994 Fiscal
Years, respectively.
b) Subsidiary Partnerships - Other
Northgate Townhouse Apartments
During November 1995, the Colorado Department of Public Health identified a
contamination problem on the Northgate Townhouse Apartments ("Northgate")
property. The complex hired environmental specialists and other contractors to
remedy the problem. During the 1996 and 1995 Fiscal Years, costs in the amount
of approximately $105,000 and $157,000, respectively, were incurred relating to
the work performed. Management anticipates that no additional costs will be
incurred relating to the contamination problem. After the work was completed,
the property was inspected, but no report has been sent. The Partnership's
investment in Northgate was approximately $1,425,000 and $1,670,000 at March 25,
1997 and 1996, respectively, and the minority interest balance was $0 at each
date. Northgate's net loss after minority interest amounted to approximately
$245,000, $412,000 and $238,000 for the 1996, 1995 and 1994 Fiscal Years,
respectively.
Bonnie Doone Apartments, Ltd.
Bonnie Doone Apartments, Ltd. ("Bonnie Doone") relies on continuance of the
Section 8 rent subsidy contracts which represent 59% of gross income. The
current contracts expire on July 31, 1997 and renewal is uncertain. Management
of Bonnie Doone intends to actively pursue renewal of the rental subsidy
contract with HUD. The Partnership's investment in Bonnie Doone was
approximately $416,000 and $485,000 at March 25, 1997 and 1996, respectively,
and the minority interest balance was $0 at each date. Bonnie Doone's net loss
after minority interest amounted to approximately $69,000, $22,000 and $20,000
for the 1996, 1995 and 1994 Fiscal Years, respectively.
-45-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies (continued)
b) Subsidiary Partnerships - Other (continued)
Dickens Ferry Apartments, Ltd.
Dickens Ferry Apartments, Ltd. ("Dickens Ferry") relies on continuance of
the Section 8 rent subsidy contract which represents 65% of gross income. The
current contracts expire on September 30, 1997 and renewal is uncertain.
Management of Dickens Ferry intends to actively pursue renewal of the rental
subsidy contract with HUD. The Partnership's investment in Dickens Ferry was
approximately $596,000 and $578,000 at March 25, 1997 and 1996, respectively,
and the minority interest balance was $0 at each date. Dickens Ferry's net
(income) loss after minority interest amounted to approximately ($18,000),
$37,000 and $38,000 for the 1996, 1995 and 1994 Fiscal Years, respectively.
c) Management Agreement
The subsidiary partnerships have entered into management agreements of
which some are with affiliates of the subsidiaries' general partners, which
require annual fees ranging from approximately 4% to 15% of gross rental
revenues. Such management fees amounted to $2,697,022, $2,683,574 and $2,477,439
for the 1996, 1995 and 1994 Fiscal Years, respectively.
d) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") up to $100,000. As of March 25, 1997, uninsured cash and
cash equivalents approximated $211,000.
e) Housing Assistance Payments Contracts
HUD previously released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based Section 8 subsidy payments and an attendant reduction in debt on
properties that were supported by the Section 8 payments. The ACPA calls for a
transition during which the project-based Section 8 would be converted to a
tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market", that is revalued in light of the reduced income stream, if
any.
Several industry sources have already commented to HUD and Congress that in
the event the ACPA was fully enacted in its present form, the reduction in
mortgage indebtedness would be considered taxable income to limited partners in
the Partnership. Legislative relief has been proposed to exempt
"marked-to-market" debt from cancellation of indebtedness income treatment. At
present, there are several bills pending in Congress to address this tax relief
issue. Additionally, in the interim, HUD has agreed to annual extensions of any
expiring project-based Section 8 contracts, but there is no guarantee that such
extension will be available in the future.
-46-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 25, 1997
NOTE 11 - Commitments and Contingencies (continued)
f) Sale of Subsidiary Partnerships
Six of the Local Partnerships have entered into contracts of sale (Villa
Apollo and Villa Apollo #2, Carlton Terrace, Cranbrook Manor, Oakbrook Villa and
Lancaster Manor) for an aggregate selling price of approximately $48,000,000.
The net proceeds will be used to satisfy the existing mortgage debt of
approximately $17,946,000. The balance of the proceeds will be used to settle
the purchase money notes and accrued interest with the balance, if any,
available for Partnership purposes. HUD has not yet approved the sale of these
properties. No assurance can be given that the transactions contemplated will
close.
g) Other
The Partnership is subject to the risks incident to potential losses
arising from the management and ownership of improved real estate. The
Partnership can also be affected by poor economic conditions generally, however
no more than 25% of the properties are located in any single state. There are
also substantial risks associated with owning properties receiving government
assistance, for example the possibility that Congress may not appropriate funds
to enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owners equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence, without HUD's approval. Furthermore there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.
NOTE 12 - Subsequent Events
On May 7, 1997, the properties and the related assets and liabilities of
Knollwood I, Ltd., Knollwood II, Ltd., Knollwood III, Ltd., and Knollwood IV,
Ltd. were sold to a third party for $20,750,000, which took title subject to the
principal balance of the associated Purchase Money Notes in the amount of
approximately $6,027,000, resulting in a gain in the amount of approximately
$5,500,000. No proceeds were used to settle the accrued interest on the
associated Purchase Money Notes which amounted to approximately $6,000,000,
resulting in forgiveness of indebtedness income. For tax purposes, the entire
gain to be realized by the Partnership is anticipated to be approximately
$19,900,000.
On June 30, 1997, the property and related assets and liabilities of
Parklane II, Ltd. were sold to a third party for $3,450,000 which took title
subject to the principal balance of a portion of the associated Purchase Money
Notes which amounted to approximately $1,254,000, resulting in a gain in the
amount of approximately $700,000. The Partnership used $400,000 of the net
proceeds to settle the remaining principal balance of the Purchase Money Notes
and accrued interest thereon which amounted to approximately $2,900,000,
resulting in forgiveness of indebtedness income of approximately $2,500,000. For
tax purposes, the entire gain to be realized by the Partnership is anticipated
to be approximately $4,800,000.
-47-
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partners.
The Assisted General Partner is an affiliate of Lehman Brothers Inc.
("Lehman"). The Related General Partner is an affiliate of Related. The general
partner of Related is The Related Realty Group, Inc., of which Stephen M. Ross
is president, director and a stockholder. The General Partners will manage and
control the affairs of the Partnership directly and by engaging other affiliates
of Related and Lehman.
Certain information concerning the directors and executive officers of the
General Partners is set forth below.
Assisted Housing Associates Inc.
Assisted Housing Associates Inc. was incorporated in Delaware on June 25,
1985. The Assisted General Partner was acquired by Lehman, and consequently the
original executive officers and directors have been replaced. As described
below, several of the executive officers and directors of the Assisted General
Partner have had significant experience in the real estate business. The
Assisted General Partner reviews the operations, budgets and financial results
of the Partnership and Local Partnerships on an ongoing basis. The Assisted
General Partner and/or its affiliates, through participation on the Investment
Committee or otherwise, may provide consultation and advice with respect to
proposed sales and refinancings of the Partnership's investments in appropriate
circumstances. The Assisted General Partner also assists in the preparation of,
and reviews and comments upon, all filings required to be made by the
Partnership with the Securities and Exchange Commission, the Internal Revenue
Service, and any other federal or state government body, and communications with
and reports to Investors.
The directors and executive officers of the Assisted General Partner are as
follows:
Name Position
- - ---- --------
Paul L. Abbott Chairman of the Board, President Chief Executive
Officer and Chief Financial Officer
Donald E. Petrow Vice President
PAUL L. ABBOTT, 51, is President of the Assisted General Partner and the
Managing Director of Lehman Brothers. Mr. Abbott joined Lehman in August 1988,
and is responsible for investment management of residential, commercial and
retail real estate. Prior to joining Lehman, Mr. Abbott was a real estate
consultant and a senior officer of a privately held company specializing in the
syndication of private real estate limited partnerships. From 1974 to 1983, Mr.
Abbott was an officer of two life insurance companies and a director of an
insurance agency subsidiary. Mr. Abbott received his formal education in the
undergraduate and graduate schools of Washington University in St. Louis.
-48-
DONALD E. PETROW, 40, is a Vice President of the Assisted General Partner
and First Vice President of Lehman Brothers. From March 1989, he has been
responsible for the investment management and restructuring of mortgage and
equity investments secured by multi-family apartments and government assisted
housing. From November 1981 to February 1989, Mr. Petrow, as a Vice President of
Lehman, was involved in investment banking activities relating to commercial
real estate direct investments. Prior to joining Lehman, Mr. Petrow was employed
in accounting and equipment leasing firms. Mr. Petrow holds a B.S. Degree in
accounting from Saint Peters College and an M.B.A. in Finance from Pace
University.
-49-
Related Beta Corporation
Related Beta Corporation was incorporated in Delaware on January 23, 1984.
The directors and executive officers of the Related General Partner are as
follows:
Name Position
---- --------
Stephen M. Ross Director
J. Michael Fried President and Director
Alan P. Hirmes Vice President
Stuart J. Boesky Vice President
Richard A. Palermo Treasurer
Lynn A. McMahon Secretary
STEPHEN M. ROSS, 57, is a Director of the Related General Partner. Mr. Ross
is also President, Director and shareholder of The Related Realty Group, Inc.,
the General Partner of The Related Companies, L.P. He graduated from the
University of Michigan School of Business Administration with a Bachelor of
Science degree and from Wayne State University School of Law with a Juris Doctor
degree. Mr. Ross then received a Master of Laws degree in taxation from New York
University School of Law. He joined the accounting firm of Coopers & Lybrand in
Detroit as a tax specialist and later moved to New York, where he worked for two
large Wall Street investment banking firms in their real estate and corporate
finance departments. Mr. Ross formed the predecessor of The Related Companies,
L.P. in 1972 to develop, manage, finance and acquire subsidized and conventional
apartment developments.
J. MICHAEL FRIED, 53, is President and a Director of the Related General
Partner. Mr. Fried is President, a Director and a principal shareholder of
Related Capital Corporation ("Capital"), a real estate finance and acquisition
affiliate of Related. In that capacity, he is the chief executive office of
Capital, and is responsible for initiating and directing all of Capital's
syndication, finance, acquisition and investor reporting activities. Mr. Fried
practiced corporate law in New York City with the law firm of Proskauer Rose
Goetz & Mendelsohn from 1974 until he joined Capital in 1979. Mr. Fried
graduated from Brooklyn Law School with a Juris Doctor degree, magna cum laude;
from Long Island University Graduate School with a Master of Science degree in
Psychology; and from Michigan State University with a Bachelor of Arts degree in
History.
ALAN P. HIRMES, 42, is a Senior Vice President of the Related General
Partner. Mr. Hirmes has been a Certified Public Accountant in New York since
1978. Prior to joining Capital in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree.
STUART J. BOESKY, 41, is a Vice President of the Related General Partner.
Mr. Boesky practiced real estate and tax law in New York City with the law firm
of Shipley & Rothstein from 1984 until February 1986 when he joined Capital.
From 1983 to 1984 Mr. Boesky practiced law with the Boston law firm of Kaye,
Fialkow Richard & Rothstein (which subsequently merged with Strook & Strook &
Lavan) and from 1978 to 1980 was a consultant specializing in real estate at the
accounting firm of Laventhol & Horwath. Mr. Boesky graduated from Michigan State
University with a Bachelor of Arts degree and from Wayne State School of Law
with a Juris Doctor degree. He then received a Master of Laws degree in Taxation
from Boston University School of Law.
-50-
RICHARD A. PALERMO, 37, is Treasurer of the Related General Partner. Mr.
Palermo has been a Certified Public Accountant in New York since 1985. Prior to
joining Related in September 1993, Mr. Palermo was employed by Sterling Grace
Capital Management from October 1990 to September 1993, Integrated Resources,
Inc. from October 1988 to October 1990 and E.F. Hutton & Company, Inc. from June
1986 to October 1988. From October 1982 to June 1986, Mr. Palermo was employed
by Marks Shron & Company and Mann Judd Landau, certified public accountants. Mr.
Palermo graduated from Adelphi University with a Bachelor of Business
Administration Degree.
LYNN A. McMAHON, 41, is Secretary of the Related General Partner. Since
1983, she has served as Assistant to the President of Capital. From 1978 to 1983
she was employed at Sony Corporation of America in the Government Relations
Department.
-51-
Item 11. Executive Compensation.
The Partnership has no officers or directors. The Partnership does not pay
or accrue any fees, salaries or other forms of compensation to directors or
officers of the General Partners for their services. However, under the terms of
the Amended and Restated Agreement of Limited Partnership of the Partnership,
the General Partners and their affiliates are entitled to receive compensation
from the Partnership in consideration of certain services rendered to the
Partnership by such parties. In addition, the General Partners collectively hold
a 1% interest in all profits, losses and distributions attributable to
operations and a subordinated 15% interest in such items attributable to sales
and refinancings. See Note 8 to the Financial Statements in Item 8 above, which
information is incorporated herein by reference thereto. Certain directors and
officers of the General Partners receive compensation from the General Partner
and their affiliates for services performed for various affiliated entities
which may include services performed for the Partnership.
Tabular information concerning salaries, bonuses and other types of
compensation payable to executive officers has not been included in this annual
report. As noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partners and/or their affiliates is limited
by the terms of the Partnership Agreement and may not be increased therefrom on
a discretionary basis.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The General Partners own all of the outstanding general partnership
interests in the Partnership. The General Partners have a 1% interest in all
profits, losses and distributions of the Partnership from operations and a
subordinated 15% interest in such items from sale or refinancing proceeds.
Except as aforesaid, no person is known to own beneficially in excess of 5% of
the outstanding partnership interests.
At March 25, 1997, security ownership by the General Partners and their
affiliates is as listed:
Name of Percentage of Outstanding
Title of Class Beneficial Owner Amount General Partner Interest_
-------------- ---------------- ------ -------------------------
General Partnership Assisted Housing
Interest in the Associates Inc. $10 13.2%
Partnership
Related Beta Corporation 6 19.8%
Cambridge/Related Associates
Associates Limited Partnership 4 67.0%
------
100.0%
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with
the General Partners and their affiliates, as discussed below and in Item 11
above and also Note 8 to the Financial Statements in Item 8 above, which is
incorporated herein by reference. However, there have been no direct financial
transactions between the Partnership and the directors and officers of the
General Partners.
H/R Special Partnership is the special limited partner of each Local
Partnership, with a .01% interest in profits, losses and distributions from such
Local Partnerships. As set forth in Item 1, H/R Special Partnership has been
admitted to the Local Partnerships for the purpose of monitoring the Local
Partnerships and exercising certain rights under the Local Partnership
Agreements on behalf of the Partnership.
No director or executive officer of any General Partner owns any Initial
Limited Partnership Interests or Additional Limited Partnership Interests.
-52-
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Sequential
Page
----------
(a)1. Financial Statements
Independent Auditors' Report ............................... 25
Consolidated Balance Sheets at March 25, 1997 and 1996 ..... 168
Consolidated Statements of Operations for the Years Ended
March 25, 1997, 1996 and 1995 .............................. 169
Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 25, 1997, 1996 and 1995 .......... 170
Consolidated Statements of Cash Flows for the Years Ended
March 25, 1997, 1996 and 1995 .............................. 171
Notes to Consolidated Financial Statements ................. 173
(a)2. Financial Statement Schedules
Independent Auditors' Report ............................... 199
Schedule I - Condensed Financial Information of Registrant.. 200
Schedule III - Real Estate and Accumulated Depreciation .... 203
The remaining schedules are omitted because the required
information is included in the financial statements and
notes thereto, or they are not applicable or not required.
(a)3. Exhibits
(3) Amended and Restated Agreement and Certificate of Limited
Partnership as filed with the Secretary of State of the
State of the Commonwealth of Massachusetts.**
(10A) Form of Escrow Agreement**
(21) Subsidiaries of the Registrant ............................. 195
(27) Financial Data Schedule (filed herewith) ................... 205
** Incorporated by reference to exhibits filed with Amendment
No. 1 to Cambridge Advantaged Properties L.P.'s
Registration Statement on Form S-11 Registration File No.
2-91993.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
-53-
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K. (Continued)
(c) Subsidiaries of the Registrant (Exhibit 21)
Jurisdiction
of Formation
------------
Knollwood I, LTD AL
Knollwood II, LTD AL
Knollwood III, LTD AL
Knollwood IV, LTD AL
Parklane II, LTD AL
Cedar Bay, LTD AL
Northwoods III Apts. LTD AL
Westminster Manor Apts. MI
North Gate Townhouse Apts. MI
Hackley Village Associates MI
Huntley Associates #1 MI
Huntley Associates #2 MI
Seymour O'Brien Manor Apts. MI
Washington Highland Apts. MI
Vincennes Niblack Apts. MI
Casa Ramon Apartments NY
Nu-Elm Apartments MI
Pebble Creek LDHA MI
Buttonwood Acres at New Bedford MA
Rockdale West at New Bedford MA
Solemar at South Dartmouth L.P. MA
Decatur Apartments, LTD TX
Florence Apartments, LTD TX
Saraland Apartments, LTD TX
University Garden Apts. LTD TX
Southside Village Apts., LTD TX
Dickens Ferry Apartments, LTD TX
Bonnie Doone Apartments, LTD TX
Conifer 208 WA
Conifer 307 WA
Conifer 317 WA
Bellfort Associates, LTD TX
Cloisters Associates, LTD GA
Cabarrus Arms Associates, LTD GA
Summer Arms Apts. LTD GA
Lexington Village Company GA
Ware Manor Associates GA
Nottingham Woods Apts., LTD GA
Hathaway Court Associates GA
-54-
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K. (Continued)
(c) Subsidiaries of the Registrant (Exhibit 21) (Continued)
Jurisdiction
of Formation
------------
Tall Pines Associates GA
Shelton Beach Apts., LTD AL
Northpointe II, LTD AL
Caroline Forest Apts. VA
Park of Pecan I, LTD TX
Park of Pecan II, LTD TX
Villa Apollo Associates LTD Ptns. MI
Carlton Terrace Apartments LTD Ptns. MI
Cranbrook Manor Apartments LTD Ptns. MI
Oakbrook Villa Apartments LTD Ptns. MI
Villa Apollo No. 2 LTD Ptns. MI
Greenwood Manor, LTD AR
Malvern Manor AR
Hereford Manor, LTD AR
Henslee Heights, LTD AR
Oakwood Manor, LTD AR
West Scenic Apartments, LTD AR
Robindale East Apartments, LTD AR
Southwest Apartments, LTD AR
Valley Arms, LTD AR
Lancaster Manor Associates, LTD OH
(d) Not applicable
-55-
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
below on its behalf by the undersigned, thereunto duly authorized.
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
(Registrant)
By: RELATED BETA CORPORATION
a General Partner
Date: July 2, 1997
By: /s/J. Michael Fried
------------------------------
J. Michael Fried
President and Director
By: ASSISTED HOUSING ASSOCIATES, INC.
a General Partner
Date: July 2, 1997
By: /s/Paul L. Abbott
------------------------------
Paul L. Abbott
President
-56-
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- - -------------------------- -------------------------------------- ------------
/s/J. Michael Fried President and Chief Executive Officer
- - -------------------------- (principal executive officer) and
J. Michael Fried Director of Related Beta Corporation July 2, 1997
/s/Alan P. Hirmes
- - -------------------------- Vice President (principal financial
Alan P. Hirmes officer)of Related Beta Corporation July 2, 1997
/s/Richard A. Palermo
- - -------------------------- Treasurer (principal accounting
Richard A. Palermo officer) of Related Beta Corporation July 2, 1997
/s/Stephen M. Ross
- - ------------------------- Director of Related Beta
Stephen M. Ross Corporation July 2, 1997
/s/Paul L. Abbott Chairman of the Board, President, Chief
- - ------------------------- Executive Officer (principal executive
Paul L. Abbott officer)and Director of Assisted
Housing Associates, Inc. July 2, 1997
-57-
[LETTERHEAD OF TRIEN, ROSENBERG, ROSENBERG, WEINBERG, CIULLO & FAZZARI, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Cambridge Advantaged Properties
Limited Partnership and Subsidiaries
In connection with our audits of the consolidated financial statements of
Cambridge Advantaged Properties Limited Partnership and Subsidiaries included in
the Form 10-K as presented in our opinion dated July 8, 1997 on pages 25 and 26,
and based on the reports of other auditors, we have also audited supporting
Schedule I for the 1996, 1995 and 1994 Fiscal Years and Schedule III at March
25, 1997. In our opinion, and based on the reports of the other auditors
(certain of which were modified due to the uncertainty of these partnerships'
abilities to continue in existence), these consolidated schedules present
fairly, when read in conjunction with the related consolidated financial
statements, the financial data required to be set forth therein.
As discussed in Note 11(a), the consolidated financial statements include
the financial statements of nine subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. The
auditors of seven (Fiscal 1996) subsidiary partnerships modified their reports
due to the uncertainty of these subsidiary partnerships' abilities to continue
in existence. These seven subsidiary partnerships' net losses aggregated
$2,344,287, $1,560,375 and $1,361,542 for the 1996, 1995 and 1994 Fiscal Years,
respectively, and their assets aggregated $22,987,155 and $23,704,766 at March
25, 1997 and 1996.
As discussed in Note 7, the principal of and all accrued interest on the
purchase money notes are due at maturity which will occur during 1997. The
Partnership expects that upon maturity it will be required to refinance or sell
its investments in the subsidiary partnerships in order to pay the purchase
money notes and related interest obligations. It is uncertain as to whether the
proceeds from such sales will be sufficient to meet the outstanding balances of
the purchase money notes.
The accompanying consolidated financial statements of Cambridge Advantaged
Properties Limited Partnership and Subsidiaries have been prepared assuming that
the consolidated entity and its subsidiary partnerships will continue as going
concerns. As discussed in the two preceding paragraphs and in the notes to the
financial statements, the consolidated entity and its subsidiary partnerships
have significant contingencies which raise substantial doubt about their ability
to continue as going concerns. Management's plans in regard to these matters are
also described in Note 11(a). The consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties or the matters referred to in the preceding paragraphs.
TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP
New York, New York
July 8, 1997
-58-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships)
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
ASSETS
March 25,
------------------------------
1997 1996
------------- -------------
Cash and cash equivalents $ 304,186 $ 200,922
Investment in subsidiary partnerships 35,508,089 39,205,061
Other assets 142,039 5,000
------------- -------------
Total assets $ 35,954,314 $ 39,410,983
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Purchase money notes payable $ 53,733,067 $ 53,526,257
Due to general partner and affiliates 1,970,501 875,210
Due to selling partners 78,578,234 72,984,041
Other liabilities 28,998 20,064
------------- -------------
Total liabilities 134,310,800 127,405,572
Partners' deficit (98,356,486) (87,994,589)
------------- -------------
Total liabilities and partners' deficit $ 35,954,314 $ 39,410,983
============= =============
Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly, partners' deficit on the consolidated balance sheet will differ
from partners' deficit shown above.
-59-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
Year Ended March 25
1997 1996 1995
------------ ------------ ------------
Revenues
Other income $ 5,788 $ 11,380 $ 66,140
------------ ------------ ------------
Total Revenues $ 5,788 $ 11,380 $ 66,140
============ ============ ============
Expenses
Administrative and management 276,068 203,899 164,980
Administrative and management-related parties 1,314,515 271,205 293,093
Financial, principally interest 6,524,391 7,450,320 7,450,320
------------ ------------ ------------
Total Expenses 8,114,974 7,925,424 7,908,393
------------ ------------ ------------
Loss from operations (8,109,186) (7,914,044) (7,842,253)
Distribution income of subsidiary partnerships
in excess of investments 162,340 0 68,170
Equity in (loss) income of subsidiary partnerships (a) (2,415,051) 453,824 (1,957,149)
------------ ------------ ------------
Net Loss $(10,361,897) $ (7,460,220) $ (9,731,232)
============ ============ ============
(a) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to $12,415,216.
-60-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
Year Ended March 25
--------------------------------------------
1997 1996 1995
------------ ------------ ------------
Cash flows from operating activities:
Net loss $(10,361,897) $ (7,460,220) $ (9,731,232)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in loss of subsidiary partnerships 2,415,051 (453,824) 1,957,149
(Increase) decrease in other assets (137,039) 0 325,247
Increase (decrease) in liabilities:
Due to general partners and affiliates 1,095,291 (25,566) (71,874)
Due to selling partners 6,524,391 7,450,320 7,450,320
Payments to selling partners (930,198) (939,195) (914,087)
Other liabilities 8,934 (185,218) 91,135
------------ ------------ ------------
Total adjustments 8,976,430 5,846,517 8,837,890
------------ ------------ ------------
Net cash (used in) provided by operating activities (1,385,467) (1,613,703) (893,342)
------------ ------------ ------------
Cash flows from investing activities:
Distributions from subsidiaries 1,281,921 1,389,614 1,316,998
------------ ------------ ------------
Cash flows from financing activities:
Increase in purchase money notes payable 206,810 0 0
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents 103,264 (224,089) 423,656
Cash and cash equivalents, beginning of year 200,922 425,011 1,355
------------ ------------ ------------
Cash and cash equivalents, end of year $ 304,186 $ 200,922 $ 425,011
============ ============ ============
-61-
CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 25, 1997
Cost (a)
Initial Cost to Partnership Capitalized
--------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- - --------------------------------------------- ------------ ---- ------------ ------------
(10) Pebble Creek $4,225,735 $266,942 $4,968,283 $726,297
(1) Knollwood I 4,821,276 311,807 5,924,337 158,695
(1) Knollwood II 4,860,483 310,663 5,902,600 93,484
(1) Knollwood III 4,789,775 310,257 5,899,971 134,632
(1) Knollwood IV 3,354,890 210,423 3,998,047 82,292
(1) Parklane II 3,542,356 228,684 4,344,999 100,077
(1) Cedarbay 2,863,381 184,523 3,505,947 7,963
(6) Northwoods III 3,029,553 183,789 3,492,002 1,139
(1) Northpointe I(Shelton Beach) 2,357,674 156,968 2,982,380 152,664
(1) Northpointe II 1,846,891 118,651 2,254,361 44,589
(9) Rockdale West 7,096,668 610,192 8,240,035 674,461
(9) Buttonwood Acres 3,554,067 382,930 4,392,292 387,059
(9) Solemar I 6,249,650 567,644 7,359,738 526,734
(2) West Scenic 2,682,803 201,556 3,893,464 272,243
(2) Greenwood Manor 1,274,303 84,416 1,603,982 7,187
(2) Henslee Heights 1,576,676 107,068 2,035,034 14,106
(2) Hereford Manor 959,608 70,391 1,319,817 10,683
(2) Oakwood Manor 4,335,268 295,312 5,627,044 487,806
(2) Robindale East 1,723,408 121,808 2,314,340 150,186
(12) Valley Arms 2,190,497 257,254 2,648,264 19,408
(2) Malvern Manor 1,075,470 73,494 1,396,388 3,738
(2) Southwest 959,990 68,995 1,310,896 14,288
(3) Lancaster Manor Associates 5,490,143 392,991 7,476,427 26,220
(16) Caroline Apartments 1,336,368 122,239 1,804,976 438,385
(1) Florence Apartments 2,014,098 135,644 2,533,694 244,896
(1) Saraland Apartments 1,114,313 79,104 1,487,507 (1,565,473)
(1) Bonnie Doone 1,289,963 89,034 1,649,278 22,016
(13) Pinewood Village (Conifer 317) 935,760 110,658 1,229,121 196,087
(17) Conifer Village (Conifer 208) 1,122,272 83,189 1,569,170 134,872
(13) Fircrest Manor (Conifer 307) 1,122,333 133,179 1,479,049 99,119
(4) Westminster Manor 6,595,748 457,575 8,662,800 131,925
(4) Northgate Townhouse 5,164,398 336,820 6,280,710 50,574
(15) Pecan Park I 3,234,291 193,864 3,682,091 6,638
(15) Pecan Park II 3,115,500 187,760 3,481,597 6,138
(15) Bicentennial Square(d) 0 1,147,629 6,576,179 (7,723,808)
(15) Bellfort Arms 7,035,000 1,130,077 6,996,265 1,139
(8) Hathaway Court 3,137,798 217,960 4,157,713 188,583
(5) Lexington Village 1,920,078 133,830 2,580,297 137,045
(5) Ware Manor 1,531,361 108,955 2,079,603 116,889
(14) Summer Arms 1,750,903 123,135 2,381,092 1,457
(12) Cabarrus Arms 1,310,700 102,987 1,850,151 126,316
(1) Sundown Apts.(Cloister) 4,038,688 357,930 5,134,467 279,616
(5) Tall Pines 1,934,269 166,974 2,657,152 222,016
(1) Nottingham Woods 2,607,665 185,145 3,556,877 78,004
(7) Seymour O'Brien Manor 1,128,713 77,893 1,483,726 267,871
(7) Washington Highlands 1,153,257 79,571 1,508,983 318,255
(7) Vincennes Niblack 2,605,921 184,718 3,502,697 689,403
(10) Nu Elm 1,454,368 100,552 1,913,293 305,407
Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnership's Residential Property Land Improvements Total Depreciation
- - --------------------------------------------- ------------ ------------ ------------ ------------
(10) Pebble Creek $266,942 $5,694,580 $5,961,522 $1,965,911
(1) Knollwood I 311,807 6,083,032 6,394,839 2,450,002
(1) Knollwood II 310,663 5,996,084 6,306,747 2,442,099
(1) Knollwood III 310,257 6,034,603 6,344,860 2,438,891
(1) Knollwood IV 210,423 4,080,339 4,290,762 1,654,148
(1) Parklane II 228,684 4,445,076 4,673,760 1,798,283
(1) Cedarbay 184,523 3,513,910 3,698,433 1,442,056
(6) Northwoods III 183,789 3,493,141 3,676,930 1,426,358
(1) Northpointe I(Shelton Beach) 156,968 3,135,044 3,292,012 1,249,469
(1) Northpointe II 118,651 2,298,950 2,417,601 925,564
(9) Rockdale West 610,192 8,914,496 9,524,688 5,496,846
(9) Buttonwood Acres 382,930 4,779,351 5,162,281 2,969,889
(9) Solemar I 567,644 7,886,472 8,454,116 2,651,680
(2) West Scenic 201,556 4,165,707 4,367,263 1,729,741
(2) Greenwood Manor 84,416 1,611,169 1,695,585 677,392
(2) Henslee Heights 107,068 2,049,140 2,156,208 731,902
(2) Hereford Manor 70,391 1,330,500 1,400,891 501,926
(2) Oakwood Manor 295,312 6,114,850 6,410,162 2,559,766
(2) Robindale East 121,808 2,464,526 2,586,334 998,489
(12) Valley Arms 257,254 2,667,672 2,924,926 875,252
(2) Malvern Manor 73,494 1,400,126 1,473,620 507,183
(2) Southwest 68,995 1,325,184 1,394,179 554,569
(3) Lancaster Manor Associates 392,991 7,502,647 7,895,638 3,118,266
(16) Caroline Apartments 122,239 2,243,361 2,365,600 1,176,059
(1) Florence Apartments 135,644 2,778,590 2,914,234 1,117,778
(1) Saraland Apartments 0 0 0 0
(1) Bonnie Doone 89,034 1,671,294 1,760,328 706,420
(13) Pinewood Village (Conifer 317) 128,622 1,407,244 1,535,866 582,170
(17) Conifer Village (Conifer 208) 81,264 1,705,967 1,787,231 757,696
(13) Fircrest Manor (Conifer 307) 133,179 1,578,168 1,711,347 662,465
(4) Westminster Manor 457,575 8,794,725 9,252,300 3,666,647
(4) Northgate Townhouse 336,820 6,331,284 6,668,104 2,682,329
(15) Pecan Park I 193,864 3,688,729 3,882,593 1,530,085
(15) Pecan Park II 187,760 3,487,735 3,675,495 1,447,729
(15) Bicentennial Square(d) 0 0 0 0
(15) Bellfort Arms 1,130,077 6,997,404 8,127,481 2,924,945
(8) Hathaway Court 217,960 4,346,296 4,564,256 2,648,352
(5) Lexington Village 133,830 2,717,342 2,851,172 1,609,210
(5) Ware Manor 108,955 2,196,492 2,305,447 1,308,206
(14) Summer Arms 123,135 2,382,549 2,505,684 1,462,122
(12) Cabarrus Arms 102,987 1,976,467 2,079,454 1,147,028
(1) Sundown Apts.(Cloister) 357,930 5,414,083 5,772,013 3,203,029
(5) Tall Pines 166,974 2,879,168 3,046,142 1,686,504
(1) Nottingham Woods 184,312 3,635,714 3,820,026 2,141,092
(7) Seymour O'Brien Manor 77,893 1,751,597 1,829,490 650,858
(7) Washington Highlands 79,571 1,827,238 1,906,809 614,852
(7) Vincennes Niblack 184,718 4,192,100 4,376,818 1,363,794
(10) Nu Elm 100,552 2,218,700 2,319,252 828,074
Life on which
Depreciation in
Latest Income
Date of Statement is
Subsidiary Partnership's Residential Property Construction Acquired Computed (b)(c)
- - --------------------------------------------- ------------ ------------ ---------------
(10) Pebble Creek (c) Nov. 1984 27.5
(1) Knollwood I (c) Sept. 1984 30
(1) Knollwood II (c) Sept. 1984 30
(1) Knollwood III (c) Sept. 1984 30
(1) Knollwood IV (c) Sept. 1984 30
(1) Parklane II (c) Sept. 1984 30
(1) Cedarbay (c) Sept. 1984 30
(6) Northwoods III (c) Oct. 1984 30
(1) Northpointe I(Shelton Beach) (c) Nov. 1984 30
(1) Northpointe II (c) Nov. 1984 30
(9) Rockdale West (c) Oct. 1984 15-27
(9) Buttonwood Acres (c) Oct. 1984 20
(9) Solemar I (c) Oct. 1984 15-27
(2) West Scenic (c) Dec. 1984 30
(2) Greenwood Manor (c) Dec. 1984 30
(2) Henslee Heights (c) Dec. 1984 35
(2) Hereford Manor (c) Dec. 1984 35
(2) Oakwood Manor (c) Dec. 1984 30
(2) Robindale East (c) Dec. 1984 30
(12) Valley Arms (c) Dec. 1984 35
(2) Malvern Manor (c) Dec. 1984 35
(2) Southwest (c) Dec. 1984 30
(3) Lancaster Manor Associates (c) Dec. 1984 30
(16) Caroline Apartments (c) Nov. 1984 28
(1) Florence Apartments (c) Oct. 1984 27.5 - 40
(1) Saraland Apartments (c) Oct. 1984 30
(1) Bonnie Doone (c) Nov. 1984 30
(13) Pinewood Village (Conifer 317) (c) Nov. 1984 15 - 30
(17) Conifer Village (Conifer 208) (c) Nov. 1984 20 - 30
(13) Fircrest Manor (Conifer 307) (c) Nov. 1984 20 - 30
(4) Westminster Manor (c) Oct. 1984 30
(4) Northgate Townhouse (c) Oct. 1984 30
(15) Pecan Park I (c) Dec. 1984 30
(15) Pecan Park II (c) Dec. 1984 25 - 30
(15) Bicentennial Square(d) (c) Dec. 1984 30 - 40
(15) Bellfort Arms (c) Nov. 1984 30
(8) Hathaway Court (c) Nov. 1984 20
(5) Lexington Village (c) Nov. 1984 12 - 27.5
(5) Ware Manor (c) Nov. 1984 15 - 27.5
(14) Summer Arms (c) Nov. 1984 20
(12) Cabarrus Arms (c) Nov. 1984 20
(1) Sundown Apts.(Cloister) (c) Nov. 1984 15 - 20
(5) Tall Pines (c) Nov. 1984 20
(1) Nottingham Woods (c) Nov. 1984 20
(7) Seymour O'Brien Manor (c) Oct. 1984 27.5
(7) Washington Highlands (c) Oct. 1984 27.5
(7) Vincennes Niblack (c) Oct. 1984 27.5
(10) Nu Elm (c) Oct. 1984 27.5
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CAMBRIDGE ADVANTAGED PROPERTIES LIMITED PARTNERSHIP AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral (Continued)
MARCH 25, 1997
Cost (a)
Initial Cost to Partnership Capitalized
--------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- - --------------------------------------------- ------------ ---- ------------ ------------
(3) Casa Ramon 1,797,115 121,197 2,318,916 273,940
(10) Hackley Village 1,078,498 80,562 1,530,639 3,791
(10) Huntley Associates I 1,760,679 125,087 2,376,634 275,104
(10) Huntley Associates II 1,334,453 98,140 1,864,671 190,740
(1) Decatur 1,985,213 135,554 2,531,304 40,365
(1) Dickens Ferry 1,576,029 108,914 2,058,001 134,599
(15) University Gardens 1,788,125 127,004 2,288,254 36,097
(15) Southside Villages 1,977,175 135,624 2,508,705 18,324
(10) Carlton Terrace 7,921,213 755,304 8,627,605 116,679
(10) Apollo Villa 2,633,557 229,304 2,903,658 46,834
(10) Apollo Villa II 6,542,845 577,304 7,260,975 151,018
(10) Cranbrook Manor 3,386,919 261,948 3,510,485 575,766
(10) Oakbrook Villa 8,377,144 411,597 9,143,169 2,569,197
------------ ----------- ------------ -----------
$175,673,295 $14,730,719 $222,052,152 $ 3,301,775
============ =========== ============ ===========
Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnership's Residential Property Land Improvements Total Depreciation
- - --------------------------------------------- ------------ ------------ ------------ ------------
(3) Casa Ramon 121,197 2,592,856 2,714,053 1,059,614
(10) Hackley Village 80,562 1,534,430 1,614,992 560,781
(10) Huntley Associates I 125,087 2,651,738 2,776,825 941,636
(10) Huntley Associates II 98,140 2,055,411 2,153,551 735,802
(1) Decatur 135,554 2,571,669 2,707,223 1,081,470
(1) Dickens Ferry 108,914 2,192,600 2,301,514 887,187
(15) University Gardens 127,004 2,324,351 2,451,355 1,173,874
(15) Southside Villages 135,624 2,527,029 2,662,653 1,260,480
(10) Carlton Terrace 755,304 8,744,284 9,499,588 4,542,932
(10) Apollo Villa 229,304 2,950,492 3,179,796 1,536,570
(10) Apollo Villa II 577,304 7,411,993 7,989,297 3,868,694
(10) Cranbrook Manor 261,948 4,086,251 4,348,199 1,372,005
(10) Oakbrook Villa 411,597 11,713,504 12,125,101 3,784,661
----------- ------------ ------------ -----------
$13,519,192 $226,565,454 $240,084,646 $99,888,832
=========== ============ ============ ===========
Life on which
Depreciation in
Latest Income
Date of Statement is
Subsidiary Partnership's Residential Property Construction Acquired Computed (b)(c)
- - --------------------------------------------- ------------ ------------ ---------------
(3) Casa Ramon (c) Oct. 1984 27.5
(10) Hackley Village (c) Oct. 1984 27.5
(10) Huntley Associates I (c) Oct. 1984 5 - 27.5
(10) Huntley Associates II (c) Oct. 1984 5 - 27.5
(1) Decatur (c) Oct. 1984 30
(1) Dickens Ferry (c) Nov. 1984 15 - 30
(15) University Gardens (c) Nov. 1984 25
(15) Southside Villages (c) Nov. 1984 25
(10) Carlton Terrace (c) Dec. 1984 25
(10) Apollo Villa (c) Dec. 1984 25
(10) Apollo Villa II (c) Dec. 1984 25
(10) Cranbrook Manor (c) Dec. 1984 40
(10) Oakbrook Villa (c) Dec. 1984 40
(a) No carrying costs have been capitalized since all properties were acquired
after completion of construction.
(b) Furniture and fixtures, included in buildings and improvements, are
depreciated primarily by the straight line method over the estimated useful
lives ranging from 5 to 15 years.
(c) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight line method over the estimated useful
lives determined by the Partnership at date of acquisition.
(d) On May 2, 1996 the property and the related assets and liabilities owned by
Bicentennial were sold to a third party. See Note10 in Item 8, Financial
Statements and Supplementary Data.
Geographic Locations: (1) Alabama, (2) Arkansas, (3) California, (4) Colorado,
(5) Georgia, (6) Florida, (7) Indiana, (8) Kentucky, (9) Massachusetts, (10)
Michigan, (11) Missouri, (12) North Carolina, (13) Oregon, (14) South Carolina,
(15) Texas, (16) Virginia, (17) Washington.
Cost of Property and Equipment Accumulated Depreciation
------------------------------------------------ -------------------------------------------
Year Ended March 25,
------------------------------------------------------------------------------------------------
1997 1996 1995 1997 1996 1995
------------ ------------ ------------ ----------- ----------- -----------
Balance at beginning of period $243,918,076 $246,741,642 $245,188,485 $94,655,094 $88,235,454 $79,820,795
Additions during period:
Improvements 1,435,708 1,656,763 1,750,036
Depreciation expense 8,484,538 6,529,518 8,611,030
Deductions during period:
Dispositions 3,701,188 137,114 196,879 2,622,462 109,878 196,371
Provision for impairment 1,567,950 4,343,215 0 628,338 0 0
------------ ------------ ------------ ----------- ----------- -----------
Balance at close of period $240,084,646 $243,918,076 $246,741,642 $99,888,832 $94,655,094 $88,235,454
============ ============ ============ =========== =========== ===========
At the time the local partnerships were acquired by Cambridge Advantaged
Properties Limited Partnership, the entire purchase price paid by Cambridge
Advantaged Properties Limited Partnership was pushed down to the local
partnerships as property and equipment with an offsetting credit to capital.
Since the projects were in the construction phase at the time of acquisition,
the capital accounts were insignificant at the time of purchase. Therefore,
there are no material differences between the original cost basis for tax and
GAAP.
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