UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ________.
Commission File Number 0-7761
URBAN IMPROVEMENT FUND LIMITED 1973
(Exact name of registrant as specified in its charter)
California 95-6442510
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1201 Third Avenue, Suite 5400, Seattle, Washington 98101 3076
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code: (206) 622-9900
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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 and (2) has been subject
to such filing requirements for the past 90 days. Yes XX 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 Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant as of December 31, 1997: No
established market value.
<PAGE>
PART I
Item 1. Business
(a) General Development of Business Urban Improvement Fund
1973, a California limited partnership (the "Registrant"), was formed
in 1973 for the purpose of investing, through local real estate limited
partnerships (LLP's), in federally and state-assisted low and moderate
income housing projects. Units of Limited Partnership Interest were
sold in a public offering to investors who require tax shelter for
income from other sources. The Registrant acquired equity interests as
a limited partner in twenty-six (26) such projects. Six of these projects
were sold through trustee's sales (foreclosures). Edgewood II
Associates' property was sold through a resyndication in 1984. The
Edgewood II Associates partnership is still in existence with a note
receivable for the sales proceeds of the property. Ogo Associates of
Mountclef was sold during 1997. The remaining eighteen (18)
properties are described in Item 2 hereof.
(b) Financial Information about Industry Segment The Registrant is
engaged in only one line of business.
(c) Narrative Description of Business The real estate business is
highly competitive. The Registrant competes with numerous
established apartment owners and real estate developers of low-income
housing having greater financial resources. There is additional risk of
new construction occurring in areas where the Registrant has invested
in existing government-assisted housing projects.
<PAGE>
Moreover, the outlook for subsidized housing is not determinable,
given existing and proposed federal legislation.
(d) Financial information about foreign and domestic operations and
export sales - The Registrant's income is entirely dependent upon
distributions received from the limited partnerships in which it is a
limited partner. An investment in a government-assisted housing is
subject to significant regulations. These regulations limit, among
other things, the amount of return allowed on the initial equity
investment, the manner in which such properties may be sold, and the
persons to whom such properties may be sold. In 1987, fearing the
loss of affordable housing units, Congress passed emergency
legislation which prohibited prepayment of all FHA insured Section
236 or Section 221(d)(3) mortgages. Congress passed additional
legislation in 1990 known as LIHPRHA (the Low Income Housing
Preservation and Resident Homeownership Act). However, by 1995,
Congress had determined the program was too expensive to continue.
In March 1996, Congress changed the compensation program, severely
limited funding, and restored the property owners' right to prepay the
FHA mortgages and change the use of the properties under legislation
known as the Housing Opportunity Program Extension Act of 1996.
The General Partner of the Partnership has initiated steps to ensure that
the Local Limited Partnerships comply with the provisions of
LIHPRHA and subsequent legislation. See financial information in
Item 6, Selected Financial Data, in this report.
<PAGE>
Item 2. Properties.
The Registrant owns equity interests as a Limited Partner in the
following real estate projects as of December 31, 1997:
<TABLE>
<S> <C> <C> <C>
No. of Units 1997
Residential/ Percent of
Project Name Type Commercial Occupancy
Antonia Manor
San Francisco, CA 221(d)(3) Rehab. 133/2 96%
Brighton Gardens
Brighton, MA MHFA New* 62 99%
First Bedford
Pines Apts. I
Atlanta, Georgia 236 Rehab. 134 98%
Freedom Associates
Baltimore, MD 236 Rehab. 308 97%
Glenn Arms
Associates
Washington, D.C. 236 Rehab. 55 99%
Hedin Associates
Washington, D.C. 236 Rehab. 48/2 95%
Himbola Manor
Associates
Lafayette, LA 221(d)(3) New 136 99%
Maria Manor
Associates
San Francisco, CA 221(d)(3) Rehab. 119/1 98%
Marlton Manor
Associates
San Francisco, CA 221(d)(3) Rehab. 151/7 96%
Mystic Valley
Associates
Medford, MA MHFA New* 466 97%
Ogo Associates of
Los Arboles
Thousand Oaks, CA 236 New 43 97%
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
No. of Units 1997
Residential/ Percent of
Project Name Type Commercial Occupancy
RAP-UP II B
Roxbury, MA 236 Rehab. 51/4 99%
Sheridan Manor IV
Los Angeles, CA 236 Rehab. 48 90%
Sheridan Manor X
Los Angeles, CA 236 Rehab. 30 98%
The Alexander
San Francisco, CA 221(d)(3) Rehab. 179/1 95%
Wogo Associates of
Carondelet (WOGO II)
Los Angeles, CA 236 Rehab. 124 97%
Wogo Associates of
Fresno (Hotel
California)
Fresno, CA 221(d)(3) Rehab. 219/12 84%
W Street Associates
(Capital Manor)
Washington, D.C. 236 Rehab. 102 83%
</TABLE>
*Developed under auspices of Massachusetts Housing Finance Agency.
Mortgage indebtedness associated with each project is shown in
Schedule XI of this report.
The following is a description of each of the above-listed properties:
ANTONIA MANOR consists of 133 residential units and 2
commercial units located in downtown San Francisco, California. The
project consists of a nine-story rehabilitated structure.
<TABLE>
<S> <C> <C>
Number of Units Type
133 Studio
2 Commercial
</TABLE>
<PAGE>
BRIGHTON GARDENS consists of 62 residential units located in
Brighton, Massachusetts. The project originally consisted of four new
six-story buildings. On December 9, 1979, a fire destroyed two of the
four buildings of the project containing 62 units. The insurance
proceeds were used to reduce the mortgage.
<TABLE>
<S> <C> <C>
Number of Units Type
2 Studio
40 1 Bedroom
16 2 Bedroom
4 3 Bedroom
</TABLE>
FIRST BEDFORD-PINE APARTMENTS I consists of 134 residential units
located in the northeastern area of Atlanta, Georgia.
The project consists of thirteen two-story rehabilitated buildings
constructed of masonry and wood.
<TABLE>
<S> <C> <C>
Number of Units Type
14 Efficiency
72 1 Bedroom
48 2 Bedroom
</TABLE>
FREEDOM ASSOCIATES consists of 308 residential units located in
the northeastern section of Baltimore, Maryland. The project includes
eighteen two-story rehabilitated masonry and frame buildings.
<TABLE>
<S> <C> <C>
Number of Units Type
61 1 Bedroom
186 2 Bedroom
61 3 Bedroom
</TABLE>
GLENN ARMS ASSOCIATES consists of 55 residential units located in the
northeastern section of Washington, D.C. The project consists of two
rehabilitated brick buildings.
<TABLE>
<S> <C> <C>
Number of Units Type
13 Efficiency
30 1 Bedroom
10 2 Bedroom
2 3 Bedroom
</TABLE>
<PAGE>
HEDIN ASSOCIATES consists of 48 residential units and 2 commercial
units located in the northeastern area of Washington, D.C. The project
consists of a five-story rehabilitated structure.
<TABLE>
<S> <C> <C>
Number of Units Type
28 Efficiency
20 1 Bedroom
2 Commercial
</TABLE>
HIMBOLA MANOR consists of 136 residential units located in Lafayette,
Louisiana. The project consists of eleven new two-story structures.
<TABLE>
<S> <C> <C>
Number of Units Type
32 1 Bedroom
64 2 Bedroom
40 3 Bedroom
</TABLE>
MARIA MANOR consists of 119 residential units and 1 commercial
space located in downtown San Francisco, California. The project
consists of a six-story rehabilitated structure.
<TABLE>
<S> <C> <C>
Number of Units Type
119 Studio
1 Commercial
</TABLE>
MARLTON MANOR ASSOCIATES consists of 151 residential units and 7
commercial spaces located in downtown San Francisco, California.
The project consists of a six-story rehabilitated building.
<TABLE>
<S> <C> <C>
Number of Units Type
140 Studio
11 1 Bedroom
7 Commercial
</TABLE>
<PAGE>
MYSTIC VALLEY ASSOCIATES consists of 466 residential units located in
Medford, Massachusetts. The project consists of three fourteen-story
buildings.
<TABLE>
<S> <C> <C>
Number of Units Type
187 1 Bedroom
279 2 Bedroom
</TABLE>
OGO ASSOCIATES OF LOS ARBOLES consists of 43 residential units located
in the City of Thousand Oaks in Ventura County, California. The
project consists of ten two- story buildings with wood and stucco
exteriors.
<TABLE>
<S> <C> <C>
Number of Units Type
25 2 Bedroom
18 3 Bedroom
</TABLE>
RAP UP II B consists of 51 residential units and 4 commercial units
located in the Highland Park section of Roxbury, Massachusetts, a suburb
of Boston.
<TABLE>
<S> <C> <C>
Number of Units Type
7 Efficiency
13 1 Bedroom
20 2 Bedroom
4 3 Bedroom
7 4 Bedroom
4 Commercial
</TABLE>
SHERIDAN MANOR IV consists of 48 residential units located in the south
central section of Los Angeles, California. The project consists of
ten one and two-story rehabilitated buildings of wood and stucco
construction.
<TABLE>
<S> <C> <C>
Number of Units Type
18 Efficiency
27 1 Bedroom
3 2 Bedroom
</TABLE>
<PAGE>
SHERIDAN MANOR X consists of 30 residential units located in the south
central section of Los Angeles, California. The project consists
of a three-story rehabilitated structure with a wood and stucco exterior.
<TABLE>
<S> <C> <C>
Number of Units Type
30 Efficiency
</TABLE>
THE ALEXANDER consists of 179 residential units and 1 commercial unit
located in downtown San Francisco, California. The project consists
of an eleven-story rehabilitated building.
<TABLE>
<S> <C> <C>
Number of Units Type
132 Studio
47 1 Bedroom
1 Commercial
</TABLE>
WOGO ASSOCIATES OF CARONDELET (WOGO II) consists of 124 residential
units located in the south central section of Los Angeles, California.
The project includes eight one and two-story rehabilitated buildings.
<TABLE>
<S> <C> <C>
Number of Units Type
94 Efficiency
30 1 Bedroom
</TABLE>
WOGO ASSOCIATES OF FRESNO (HOTEL CALIFORNIA) consists of 219
residential units and 12 commercial units located in downtown
Fresno, California. The structure is an eight-story rehabilitated
brick and masonry building.
<TABLE>
<S> <C> <C>
Number of Units Type
180 Efficiency
39 1 Bedroom
12 Commercial
</TABLE>
W STREET ASSOCIATES (CAPITAL MANOR) consists of 102 residential
units located in the northeastern section of Washington, D.C.
The project includes three four-story rehabilitated structures.
<TABLE>
<S> <C> <C>
Number of Units Type
2 Efficiency
55 1 Bedroom
38 2 Bedroom
7 3 Bedroom
</TABLE>
<PAGE>
The registrant sold its equity interest as a Limited Partner in the following
real estate projects:
OGO ASSOCIATES OF MOUNTCLEF consists of 18 residential units located in
the City of Thousand Oaks in Ventura County, California. The project
consists of three one and two-story structures with wood and stucco
exteriors.
<TABLE>
<S> <C> <C>
Number of Units Type
12 2 Bedroom
6 3 Bedroom
</TABLE>
The property of OGO Associates of Mountclef was sold during 1997 for
$1,059,837 resulting in a gain of $793,525. Urban '73's share of
the distribution from the sale was $351,256. In addition, Urban
'73 received advance repayments of $57,105.
EDGEWOOD II ASSOCIATES consists of 258 residential units located
in the northeast area of Washington, D.C. The project consists of a new
eleven-story building.
<TABLE>
<S> <C> <C>
Number of Units Type
196 1 Bedroom
62 2 Bedroom
</TABLE>
The property of Edgewood II Associates was sold during 1984. The sales
price of $8,270,146 was composed of a cash payment of $1,215,000, the
assumption of the underlying mortgage of $4,855,146 and an installment
payment of $2,200,000 that is due on December 31, 1999 along with
accrued interest. Urban 73's share of the final installment is $1,650,000
with the balance due to the Local General Partner. Interest accrues at nine
and one-half percent per annum and is payable on the anniversary date of
the note to the extent of seventy-five percent of the property's distributable
cash flow, as defined.
<PAGE>
Item 3. Legal Proceedings.
There are no material legal proceedings pending, at this time, otherthan
ordinary routine litigation incidental to the Partnership's business,
including the Local Limited Partnerships in which the Partnership is a
Limited Partner.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders through the solicitation
of proxies or otherwise.
<PAGE>
PART II
Item 5. Market for the Registrant's Securities and Related Security
Holder Matters.
(a) Market Information - There is not a ready market for the transfer of
limited partnership interests. Limited partnership interests may be
transferred between individuals with the consent of the General Partner.
(b) Holders
<TABLE>
<S> <C> <C> <C>
Title of Name & Address of Amount and Nature of % of
Class Beneficial Owner Beneficial Ownership Class
General Partner Interfinancial Real 621 Units 100%
Interest Estate Management Co. ($621,316)
1201 Third Avenue,
Suite 5400
Seattle, Washington 98101 3076
Limited Partner Robert C. Johnson, Jr. 800 Units 6.773%
Interest Lubbock, Texas ($800,000)
667 Other Limited
Partners 11,011 Units
($11,011,000) 93.227%
100.000%
</TABLE>
The Registrant has no officers or directors. Interfinancial Real Estate
Management Company, the General Partner of the Registrant, is a corporation.
(c) Dividends - The Partnership paid a distribution of $223,794 in 1993
and $198,928 in 1994. No distributions were paid during 1995, 1996 or 1997.
Item 6. Selected Financial Data
These statements do not include all disclosures required under generally
accepted accounting principles; however, when read in conjunction with
the related financial statements and notes thereto included under Item 8,
the statements include all generally accepted accounting principles
disclosures for the last three years.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1997 1996 1995 1994 1993
Interest income $21,957 $9,159 $19,449 $19,916 $30,766
Operating expenses:
Professional fees 26,500 29,245 27,849 27,855 26,325
Management fees 133,770 88,387 92,017 115,297 69,392
Other expenses 794 11,272 2,318 2,204 8,275
Amortization of costs
of acquisition 12,359 10,099 9,452 8,639 8,639
173,423 139,003 131,636 153,995 112,631
Loss before equity in
income (loss) of
Local Limited
Partnerships (151,466) (129,844) (112,187) (134,079) (81,865)
Equity in income
Local Limited
Partnerships 1,785,081 1,305,678 1,190,208 684,090 776,514
Net income $1,633,615 $1,175,834 $1,078,021 $550,011 $694,649
Allocation of
net income:
Net income
allocated
to General
Partner $ 81,681 $ 58,792 $ 53,901 $ 27,501 $ 34,732
Net income
allocated
to Limited
Partners 1,551,934 1,117,042 1,024,120 522,510 659,917
$1,633,615 $1,175,834 $1,078,021 $ 550,011 $694,649
Net financial
reporting income
per units:
General partnership
units (621 units
outstanding
allocated to
General
Partner) $ 131 $ 95 $ 87 $ 44 $ 56
Limited
Partnership
units (11,811
units outstanding
allocated to
Limited
Partners) $ 131 $ 95 $ 87 $ 44 $ 56
Total assets $5,442,066 $3,741,448 $2,521,670 $1,455,073 $1,063,575
Long-term
obligations $ -0- $ -0- $ -0- $ -0- $ -0-
Cash dividends $ -0- $ -0- $ -0- $ 198,928 $ 223,794
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The Partnership has followed the practice of investing available funds, not
used in the purchase of properties or in operations, into short-term
investments. Interest income resulted from such short-term investments.
The Partnership is dependent upon interest earned and the distributions
and repayment of advances from Local Limited Partnerships for cash flow.
As shown in the table below, the Partnership has received distributions in
recent years (including interest payments from the sale of Edgewood II).
This trend is expected to continue. The Partnership has advanced funds
and received repayments of such advances from selected partnerships.
The General Partner does not believe these net advances will significantly
affect the operations of the Partnership.
<TABLE>
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
Urban's share
of distribution $ 672,510 $219,132 $172,610 $265,505 $151,258
Advances (made
to) repaid by
Local Limited
Partnerships $(378,938) $(1,754) $ 762 $ (7,605) $(32,650)
</TABLE>
Under the terms of the Limited Partnership Agreement, the Partnership is
required to pay the General Partner an annual management fee equal to
one-quarter of one percent of invested assets or $133,770. (The fee will
not be more than fifty percent of the Partnership's annual net cash flow as
defined, subject to an annual minimum of $60,000.) The Partnership
recorded management fee expense of $133,770, $88,387, $92,017, $115,297
and $69,392 during 1997, 1996, 1995, 1994 and 1993, respectively. The
Partnership will also pay the General Partner a liquidation fee for the
sale of projects. The liquidation fee is the lesser of (i) ten percent
of the net proceeds to the Partnership from the sale of a project(s) or
(ii) one percent of the sales price plus three percent of the net
proceeds after deducting an amount sufficient to pay long-term capital
gains taxes. No part of such fee shall accrue or be paid unless: (i) the
Limited Partners' share of the proceeds has been distributed to them, (ii)
the Limited Partners shall have first received an
<PAGE>
amount equal to their invested capital attributable to the project(s) sold,
and (iii) the Limited Partners have received an amount sufficient to pay
long-term capital gains taxes from the sale of the project(s), if any,
calculated at the maximum rate then in effect.
Other operating expenses have maintained a consistent level.
At December 31, 1997, the Partnership had investments in eighteen active
real estate limited partnerships as a Limited Partner. The Partnership
carries such investments on the equity method of accounting. The
Partnership discontinues recording losses for financial reporting purposes
when its investment in a particular Local Limited Partnership is reduced to
zero, unless the Partnership intends to commit additional funds to the
Local Limited Partnership. The equity in income of Local Limited
Partnerships resulted from either Local Limited Partnerships, whose
investments have not been reduced to zero, reporting income from
operations or Local Limited Partnerships, whose investments have been
reduced to zero, who paid distributions or repaid an advance. Additional
advances to Local Limited Partnerships, after an investment is reduced to
zero, are recorded as losses. The real estate of OGO of Mountclef
Associates was sold during 1997. The real estate of Edgewood II
Associates was sold during 1984. The Partnership holds a note receivable
that accrues interest from the sale of Edgewood II Associates.
<PAGE>
The components of the Partnerships' equity in net income of the Local
Limited Partnerships for 1997, 1996 and 1995 is summarized as follows:
<TABLE>
<S> <C> <C> <C>
For the Year Ended
December 31,
1997 1996 1995
Net repayment from (advances to)
Local Limited Partnerships with
zero investments:
Los Arboles $ 12,759 $ 9,907 $ 17,071
Sheridan X 1,750 (1,754) 4,368
Mountclef 49,264 (3,102) (18,973)
WOGO of Carondelet -0- (6,694) (842)
WOGO of Fresno (32,000) (12,257) -0-
W Street Associates -0- (3,500) -0-
Distributions received from Partnerships
with zero investments:
Mystic Valley 163,727 131,877 136,584
Sheridan X 23,488 -0- 4,183
Los Arboles 4,698 -0- -0-
Mountclef 384,132 -0- -0-
Income (loss) from Partnerships
with non-zero investments:
Alexander 431,482 350,632 322,680
Antonia Manor 242,085 221,936 143,633
Hedin House 50,647 47,695 12,778
Maria Manor 264,988 259,026 211,459
Marlton Manor 177,547 224,127 318,017
Sheridan IV 35,617 55,895 39,250
Glenn Arms 126,049 31,890 -0-
WOGO of Carondelet (151,152) -0- -0-
Equity in income
(loss) of Local
Limited Partnerships $1,785,081 $1,305,678 $1,190,208
Interest received from Edgewood II
included in interest income: $ 5,838 $ -0- $ 15,462
</TABLE>
The actual combined losses of Local Limited Partnerships will generally
decrease as depreciation and interest decreases and the Partnerships
achieve stable operations. The distributions to the Partnership from Local
Limited Partnerships are the result of the profitable operations of these
Partnerships.
<PAGE>
Liquidity
The Partnership is dependent upon distributions from its investments in
Local Limited Partnership for cash flow. The Partnership may not be able
to generate sufficient cash flow from operations or from distributions from
its interests in Local Limited Partnerships to pay future obligations as they
become due without additional financing or advances from the General
Partner. The General Partner is under no obligation to advance additional
funds to the Partnership. The General Partner, however, anticipates it will
receive adequate distributions from the Local Limited Partnerships to
maintain operations.
Capital Resources
The General Partner believes that situations may arise where it would be
advantageous to the Partnership to exchange properties in a tax-free
transaction. The Partnership's basis in its properties has been reduced
through depreciation deductions and other losses to levels substantially
below the amount of debt secured by the Properties. Additionally, the
rental properties owned and operated by the Local Limited Partnerships
have typically computed depreciation for financial reporting purposes
using the straight-line method over the estimated economic useful life of
the property. For income tax reporting purposes, depreciation generally
has been computed over the same or shorter periods using accelerated
methods. As a result, the carrying values of the Partnership's investments
in Local Limited Partnerships are substantially greater for financial
reporting purposes than for income tax reporting purposes. Upon sale or
other disposition of a property by the Local Limited Partnership, the gain
recognized by the Partnership for income tax reporting purposes may be
substantially greater than the gain recorded for financial reporting
purposes. Accordingly, if the Properties are sold, the Partners may
recognize taxable gain in excess of the cash available for distribution. If
sale proceeds are reinvested in a manner which permits the original sale to
be treated
<PAGE>
as a like-kind exchange, the Partners can defer this gain until the new
property is sold. Additionally, the Partnership will receive the benefit
of any cash flow or appreciation in value of the new property. If
reinvestments were made, it is likely that the acquired properties would be
conventional, multi-family residential projects. The Partnership has had
inquiries about the sale or exchange of properties in its portfolio, but no
offers have been made.
The partnership has made no material commitments for capital expenditures.
Item 8. Financial Statements and Supplementary Data
The response to this item is submitted in a separate section of this report.
Item 9. Change In and Disagreements with Accountants on Accounting
and Financial Disclosure
There have been no disagreements on any matters of accounting principles
or practices of financial statement disclosure.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
(a) The General Partner of the Registrant is Interfinancial Real
Estate Management Company. The Registrant does not have directors as
such. The following is a listing of the Directors of the General Partner
of the Registrant. These Directors are elected to serve one-year terms
and until their successors are duly elected and qualified as directors.
<TABLE>
<S> <C> <C> <C>
Name Age Office
Paul H. Pfleger 62 Director/President
John M. Orehek 43 Director/Senior Vice President
</TABLE>
(b) The General Partner of the Registrant is Interfinancial Real Estate
Management Company. The Registrant does not have executive officers
as such. The following is a listing of the executive officers of the General
Partner of the Registrant. These executive officers are elected to serve
one-year terms and will continue to serve until their successors are duly
elected and qualified as executive officers.
<TABLE>
<S> <C> <C> <C>
Name Age Office
Paul H. Pfleger 62 Chairman of the Board
John M. Orehek 43 Senior Vice President
Michael Fulbright 43 Secretary
</TABLE>
(c) The Registrant has no employees.
(d) There are no family relationships between any directors or executive
officers.
(e) The principal occupation and employment of each of the executive
officers and directors of the General Partner are as follows:
<PAGE>
Paul H. Pfleger, President/Director. Mr. Pfleger organized and was
Chairman of the Board of Security Properties Inc. (formerly Security
Pacific, Inc.) from 1969 to the present, except for a period between
1984 and 1986. Farmers Savings acquired Security Properties Inc. as a
wholly-owned subsidiary during 1984 and sold the company back to the
original owners during 1987. The major line of business of Security
Properties Inc. is the administration of previously syndicated, subsidized
multifamily residential real estate. Mr. Pfleger was first elected an
officer and director of the General Partner, Interfinancial Real Estate
Management Company, in July 1981 and has maintained his dual status since
that time.
Mr. Pfleger is the General Partner in more than 280 properties with
approximately 38,000 housing units throughout the United States.
John M. Orehek, Senior Vice President. Mr. Orehek is the Chief
Executive Officer and President of Security Properties Investment Inc.
From 1982 to 1987, he was employed by Security Properties Inc. (SPI) as
President of First Columbia Corporation, its affiliated broker/dealer, and
Senior Vice President of SPI. From 1987 to 1991, when he rejoined SPI,
he was President of Hallmark Capital Partners, Ltd., a Seattle real estate
development corporation. From 1979 to 1982 he was a member of the tax
department in the Cleveland, Ohio and Seattle, Washington offices of
Arthur Andersen & Co., Certified Public Accountants. He received a B.S.
degree in Economics from Allegheny College, Meadville, Pennsylvania
and a law degree from Case Western Reserve University School of Law.
Mr. Orehek was first elected a director of the General Partner,
Interfinancial Real Estate Management Company, during 1992.
<PAGE>
Michael Fulbright, Secretary. Mr. Fulbright is General Counsel for
Security Properties Inc. (SPI). He joined the Company in 1989 as Special
Counsel responsible for new development activities and sales and
financing transactions in the syndication portfolio. Prior to joining SPI,
he was a partner at Tousley Brain, a Seattle law firm that specializes in
commercial real estate matters. His practice there included representation
of lenders, institutional investors and commercial developers. He received
a Masters of Business Administration degree from Texas A&M and a law
degree from the University of Washington. He is a member of the
Washington State Bar Association. Mr. Fulbright was first elected an
officer of the General Partner, Interfinancial Real Estate Management
Company, during 1994.
<PAGE>
Item 11. Executive Compensation
(a) The Registrant does not pay any salary or other remuneration to the
officers of the General Partner of the Registrant.
(b) The Registrant has no plan or arrangement to pay any salary or other
remuneration to the officers in the future.
(c) There are no options, warrants, rights or any other such remuneration
available to the General Partner of the Registrant.
(d) The Registrant will not pay any salary or other remuneration to the
directors of the General Partner of the Registrant.
(e) There are no retirement benefit plans or other remuneration that
would result from the resignation, retirement, termination or any other
change in control of any officer or director of the General Partner of the
Registrant.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
<TABLE>
<S> <C> <C> <C> <C>
(b) Holders
Title of Name & Address of Amount and Nature of % of
Class Beneficial Owner Beneficial Ownership Class
General Partner Interfinancial Real 621 Units 100%
Interest Estate Management Co. ($621,316)
1201 Third Avenue,
Suite 5400
Seattle, Washington 98101 3076
</TABLE>
(b) No officers or directors of the general partner of the registrant own
a Partnership interest.
(c) No change in control of the registrant is anticipated.
<PAGE>
Item 13. Certain Relationships and Related Transactions
(a) There are no transactions in which the directors or officers of the
General Partner or security holder of the registrant have a material interest.
(b) There are no transactions in which the directors of the General
Partner have a material interest.
(c) There is no indebtedness of the management of the General Partner
of the registrant to the registrant.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.
(a) 1. Financial Statements:
Report of independent certified public accountants.
Balance Sheets at December 31, 1997 and 1996.
Statements of Income for the years ended December 31, 1997, 1996
and 1995.
Statements of Changes in Partners' Capital for the years ended
December 31, 1997, 1996 and 1995.
Statements of Cash Flows for the years ended December 31, 1997,
1996 and 1995.
Notes to Financial Statements.
(a) 2. Financial Statement Schedules:
IV Indebtedness of and to Related Parties
XI Real Estate and Accumulated Depreciation and Amortization of
Local Limited Partnerships.
All other schedules are omitted because they are not applicable or the
required information is included in the financial statements or the notes
thereto.
FINANCIAL STATEMENTS OF UNCONSOLIDATED SUBSIDIARIES
FIFTY PERCENT OWNED PERSONS OR OTHER UNCONSOLIDATED PERSONS
ACCOUNTED FOR ON THE EQUITY METHOD
Separate financial statements of the nineteen limited partnerships
accounted for on the equity method have been omitted because combined
financial statements are included in Note 4 to the financial statements.
(a) 3. Exhibits
1.A. Form of proposed Selling Brokers' Agreement,
incorporated by reference from Registration
Statement on Form S-11 filed March, 1973.
3.A. Amended Certificate and Agreement of Limited
Partnership, incorporated by reference from
Registration Statement on Form S-11 filed
March 1973.
<PAGE>
3.B. Amendment to Certificate of Limited
Partnership, incorporated by reference from
Registration Statement on Form S-11 filed
March 1973.
3.C. Amendment to Certificate of Limited
Partnership. Incorporated by reference from
proxy statement filed September 18, 1991.
4.A. Subscription agreement for use prior to
effective date of Registration Statement,
incorporated by reference from Registration
Statement on Form S-11 filed March, 1973.
4.B. Application form to subscribe for Units,
incorporated by reference from Registration
Statement on Form S-11 filed March, 1973.
5.A. Opinion and Consent of Counsel, incorporated by
reference from Registration Statement on Form
S-11 filed March 1973.
8.A. Opinion and Consent of Tax Counsel,
incorporated by reference from Registration
Statement on Form S-11 filed March, 1973.
8.B-1 Tax Ruling from the Internal Revenue Service
dated August 8, 1973, incorporated by reference
from Post-Effective Amendment No. 1 to
Registration Statement on Form S-11 filed
September 1973.
10.A. Copy of Agreement between Registrant, the
General Partner and Income-Equities Corporation
with respect to certain commitments made on
behalf of the Registrant, incorporated by
reference from Registration Statement on Form S-
11 filed September 1973.
10.B. Copy of Management Agreement between the
Registrant and Income-Equities Corporation
incorporated by reference from Registration
Statement on Form S-11 filed March 1973.
10.C. Second Amendment to the Limited Partnership
Agreement and Certificate of Antonia Manor, a
limited partnership, incorporated by reference
from Form 8-K filed April 1975.
<PAGE>
10.D. Second Amendment to the Limited Partnership
Agreement and Certificate of The Alexander, a
limited partnership, incorporated by reference
from Form 8-K filed April 1975.
10.E. Second Amendment to the Limited Partnership
Agreement and Certificate of Marlton Manor
Associates, a limited partnership, incorporated
by reference from Form 8-K filed April 1975.
10.F. Second Amendment to the Limited Partnership
Agreement and Certificate of Maria Manor, a
limited partnership, incorporated by reference
from Form 8-K filed April 1975.
10.G. First Amendment to the Limited Partnership
Agreement and Certificate of Sheridan Manor IV,
a limited partnership, incorporated by reference
from Form 8-K filed April 1975.
10.H. First Amendment to the Limited Partnership
Agreement and Certificate of Glen Arms
Associates, a limited partnership, incorporated
by reference from Form 8-K filed April 1975.
10.I. Second Amendment to the Limited Partnership
Agreement and Certificate of Sheridan Manor X,
a limited partnership, incorporated by reference
from Form 8-K filed April 1975.
10.J. Agreement of Purchase and Sale of Partnership
Interests and Agreement for Investment in
Limited Partnership dated August 30, 1984 among
Edgewood II Associates, Mid-City Financial
Corporation, the Registrant and Real Estate
Associates VII, incorporated by Reference from
Form 8-K filed June 1990.
10.K. First Amendment to Agreement of Purchase and
Sale of Partnership Interests and Agreement for
Investment in Limited Partnership dated August
31, 1984, incorporated by reference.
10.L. Second Amendment to Agreement of Purchase and
Sale of Partnership Interests and Agreement for
Investment in Limited Partnership dated August
31, 1984, incorporated by reference.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last quarter of 1997.
<PAGE>
(c) Exhibits:
Form 12b-25
(d) Financial Statement Schedules:
IV Indebtedness of and to Related Parties
XI Real Estate and Accumulated Depreciation and Amortization of
Local Limited Partnerships.
All other schedules are omitted because they are not applicable or the
required information is included in the financial statements or the notes
thereto.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed, on its behalf by the undersigned, thereunto duly authorized.
(REGISTRANT) URBAN IMPROVEMENT FUND LIMITED 1973
BY: INTERFINANCIAL REAL ESTATE MANAGEMENT COMPANY
Date: July 29, 1998 By: Paul H. Pfleger
President
Interfinancial Real Estate
Management Company
Date: July 29, 1998 By: John M. Orehek
Senior Vice President
Interfinancial Real Estate
Management Company
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: Paul H. Pfleger, Director Date: July 29, 1998
Interfinancial Real Estate
Management Company
By: John M. Orehek, Director Date July 29, 1998
Interfinancial Real Estate
Management Company.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973
SEATTLE, WASHINGTON
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) AND (2) AND ITEM 14(d)
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
LIST OF FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES
YEAR ENDED December 31, 1997
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
Form 10-K Items 14(a)(1) and (2)
Form 10-K Item 14(d)
INDEX TO FINANCIAL STATEMENTS
The following financial statements of Urban Improvement Fund
Limited 1973 are
included in Item 8, Item 14(a)(1)
Independent auditors' report . . . . . . . . . . . . . . . . . . F-3
Balance sheets at December 31, 1997 and 1996 . . . . . . . . . . F-4
Statements of income
for the years ended December 31, 1997, 1996 and 1995. . . . . F-5
Statements of changes in partners' capital
for the years ended December 31, 1997, 1996 and 1995. . . . . F-6
Statements of cash flows
for the years ended December 31, 1997, 1996 and 1995. . . . . F-7
Notes to financial statements. . . . . . . . . F-8
The following financial statement schedules of Urban Improvement
Fund Limited 1973 are included in Item 14(a)(2) and 14(d):
IV. Indebtedness of and to Related Parties. . . . .F-24
XI. Real Estate and Accumulated Depreciation of
Local Limited Partnerships. . . . . . . . . . . . . .F-25
All other schedules are omitted because they are not applicable
or required information is shown in the financial statements or notes
thereto.
FINANCIAL STATEMENTS OF UNCONSOLIDATED
SUBSIDIARIES FIFTY PERCENT OWNED PERSONS
OR OTHER UNCONSOLIDATED PERSONS
ACCOUNTED FOR ON THE EQUITY METHOD
Separate financial statements of the nineteen limited partnerships
accounted for on the equity method have been omitted because combined
financial statements are included in Note 4 to the financial statements.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Partners
Urban Improvement Fund Limited - 1973
We have audited the accompanying balance sheets of Urban Improvement
Fund Limited - 1973 (a Limited Partnership), as of December 31, 1997 and
1996, and the related statements of income, changes in partners' capital
and cash flows for the years ended December 31, 1997, 1996 and 1995,
and the related schedules listed in Item 14(a)(2) of the annual report on
Form 10-K of Urban Improvement Fund Limited - 1973 for the years
ended December 31, 1997, 1996 and 1995. These financial statements and
financial statement schedules are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.
We did not audit the financial statements of four of Urban Improvement
Fund Limited - 1973's investments in local limited partnerships whose
combined financial statements are included in Note 4. These statements
were audited by other auditors whose reports have been furnished to us,
and our opinion, to the extent it relates to the amounts included for these
local limited partnership investments, is based solely on the reports of the
other auditors. Urban Improvement Fund Limited - 1973's investment in
these Partnerships were reduced to zero at December 31, 1997 and 1996.
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
and the reports of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Urban Improvement Fund Limited - 1973
as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years ended December 31, 1997, 1996 and 1995,
in conformity with generally accepted accounting principles. In addition,
in our opinion, based upon our audits and the report of other auditors, the
financial statement schedules referred to above, when considered in
relation to the basic financial statements taken as a whole, present fairly,
in all material respects, the information required therein.
Atlanta, Georgia
May 29, 1998
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1973
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<S> <C> <C>
December 31,
1997 1996
Cash and cash equivalents $ 21,310 $ 271,692
Distribution receivable 441,237 -0-
Investments in and
advances to Local
Limited Partnerships
accounted for on
the equity method - Note 4
(Schedules IV and XI) 4,948,930 3,469,756
$5,411,477 $3,741,448
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ -0- $ 556
Due to affiliate 25,322 -0-
Distribution payable 1,634 1,634
Management fee payable
(Schedule IV) 102,158 90,510
129,114 92,700
Partners' capital - Note 2
General Partner - 621
Partnership units
authorized, issued and
outstanding 264,097 182,416
Limited partners - 11,811
Partnership units
authorized, issued
and outstanding 5,018,266 3,466,332
5,282,363 3,648,748
Commitments and
contingent liabilities -
Notes 3 and 5
$5,411,477 $3,741,448
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1973
(A Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<S> <C> <C> <C>
Year ended December 31,
1997 1996 1995
Interest income $ 21,957 $ 9,159 $ 19,449
Expenses:
Professional fees 26,500 29,245 27,849
Management fees - Note 3 133,770 88,387 92,017
Other expenses 794 11,272 2,318
Amortization of
costs of acquisition 12,359 10,099 9,452
173,423 139,003 131,636
Loss before equity in
income of Local Limited
Partnerships (151,466) (129,844) (112,187)
Equity in income of Local
Limited Partnerships -
Note 4 1,785,081 1,305,678 1,190,208
Net income $1,633,615 $1,175,834 $1,078,021
Allocation of net income:
Net income
allocated to
General Partner $ 81,681 $ 58,792 $ 53,901
Net income allocated to
Limited Partners 1,551,934 1,117,042 1,024,120
$1,633,615 $1,175,834 $1,078,021
Net financial reporting
income per units:
General partnership
units (621 units
outstanding allocated
to General Partner) $ 131 $ 95 $ 87
Limited partnership
units (11,811 units
outstanding allocated
to Limited Partners) $ 131 $ 95 $ 87
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1973
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
S> <C> <C> <C>
General Limited
Partner Partners Total
Partners' capital at
January 1, 1995 $ 69,723 $1,325,170 $1,394,893
Net income - 1995 53,901 1,024,120 1,078,021
Partners' capital at
December 31, 1995 123,624 2,349,290 2,472,914
Net income - 1996 58,792 1,117,042 1,175,834
Partners' capital at
December 31, 1996 182,416 3,466,332 3,648,748
Net income - 1997 81,681 1,551,934 1,633,615
Partners' capital at
December 31, 1997 $ 264,097 $5,018,266 $5,282,363
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1973
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
Year ended December 31,
1997 1996 1995
Net income $ 1,633,615 $ 1,175,834 $ 1,078,021
Adjustments to reconcile
net income to net cash
used by operating activities:
Increase in distribution
receivable (441,237) -0- -0-
Amortization of costs
of acquisition 12,359 10,099 9,452
Equity in income
of local limited
partnerships (1,785,081) (1,305,678) (1,190,208)
Increase (decrease)
in management
fee payable and
accounts payable 11,068 43,944 (8,174)
Increase in due
to affiliate 25,322 -0- -0-
(2,177,569) (1,251,635) (1,188,930)
Net cash used by
operating activities (543,954) (75,801) (110,909)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Current year distributions 672,510 219,132 172,609
Net advances repaid by
(paid to) local
limited partnerships (378,938) (1,754) 762
Net cash provided by
investing activities 293,572 217,378 173,371
CASH FLOWS FROM
FINANCING ACTIVITIES:
Increase (decrease) in
distribution payable -0- -0- (3,248)
Net cash used by
financing activities -0- -0- (3,248)
NET INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS (250,382) 141,577 59,214
CASH BALANCE
AT BEGINNING
OF YEAR 271,692 130,115 70,901
CASH BALANCE
AT END OF YEAR $ 21,310 $ 271,692 $ 130,115
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Note 1 - Organization and Accounting Policies
Organization
Urban Improvement Fund Limited 1973 (the Partnership) was formed
under the California Uniform Limited Partnership Act on February 2,
1973, for the principal purpose of investing in other limited partnerships
(Local Limited Partnerships), which own federal and state-assisted
housing projects. The Partnership issued 11,811 units of limited
partnership interest pursuant to a public offering of such units which
terminated in October 1973. The General Partner, Interfinancial Real
Estate Management Company, invested $621,316.
The Urban Improvement Fund Limited 1973 prospectus, dated June 27,
1973, specified that the General Partner has approximately a five percent
interest in profits, losses and special allocations, and the limited
partners will share the remainder of the interest in profits, losses and
special allocations in proportion to their respective units of limited
partnership interests.
Investment in and Advances to Local Limited Partnerships
As of December 31, 1997, the Partnership has investments in eighteen
active real estate limited partnerships (Local Limited Partnerships)
which are accounted for on the equity method (Notes 4 and 5). The
investment account represents the sum of the capital investments,
advances and unamortized cost of acquisition less the Partnership's
share in losses since the date of acquisition. The Partnership
discontinues recognizing losses and amortizing cost of acquisition
when the investment in a particular Local Limited Partnership is
reduced to zero, unless the Partnership intends to commit additional
funds to the Local Limited Partnership. Repayment of advances and
cash distributions by the Local Limited Partnerships, after the
Partnership investment has been reduced to zero, are recognized as
income by the Partnership in the year received. Additional advances
to a Local Limited Partnership, after an investment is reduced to
zero, are recognized as losses.
Initial and rent-up fees paid by the Partnership to the General Partner,
deducted when paid for income tax purposes, are capitalized as costs of
acquisition of the Local Limited Partnerships for financial reporting
purposes. These costs and other costs of acquisition are amortized using
the straight-line method over the useful lives (forty years) of the Local
Limited Partnership's properties. Amortization is discontinued when the
investment is reduced to zero.
<PAGE>
Note 1 - Organization and Accounting Policies - Continued
The Partnership has an investment in one limited partnership that sold
its real estate during 1984 (Note 5). This partnership, Edgewood II
Associates, holds a note receivable for a portion of the sales proceeds.
The Partnerships' equity in income of the Local Limited Partnerships is
summarized as follows:
<TABLE>
<S> <C> <C> <C>
For the Year Ended
1997 1996 1995
Net repayment from
(advances to) Local
Limited Partnerships
with zero investments: $ 31,773 $ (17,400) $ 762
Distributions received
from Local Limited
Partnerships with
zero investments: 576,045 131,877 140,767
Income from Local
Limited Partnerships
with non-zero
investments: 1,177,263 1,191,201 1,048,679
Equity in income
of Local Limited
Partnerships $1,784,081 $1,305,678 $1,190,208
</TABLE>
Significant accounting policies followed by the Local Limited
Partnerships are summarized in Note 4.
Taxes on Income
No provision for taxes on income has been recorded, since all taxable
income or loss of the Partnership is allocated to the partners for inclusion
in their respective tax returns.
Fair Value of Financial Instruments and Use of Estimates
The Partnership estimates that the aggregate fair value of all financial
instruments at December 31, 1997 does not differ materially from the
aggregate carrying values of its financial instruments recorded in the
balance sheet. These estimates are not necessarily indicative of the
amounts that the Partnership could realize in a current market exchange.
The preparation of financial statements requires the use of estimates and
assumptions. Actual results could differ from those estimates.
<PAGE>
Note 1 - Organization and Accounting Policies - Continued
Cash Equivalents
Marketable securities that are highly liquid and have maturities of three
months or less at the date of purchase are classified as cash equivalents.
Note 2 - Reconciliation Between Net Income and Partners' Capital (Deficit)
of the Partnership For Financial Reporting Purposes and Income
Tax Purposes
A reconciliation of the Partnership's net income for financial reporting
purposes and the Partnership's net income for income tax reporting
purposes follows:
<TABLE>
<S> <C> <C> <C>
For the Year Ended December 31,
1997 1996 1995
Net income for financial
reporting purposes $1,633,615 $1,175,834 $1,078,021
Amortization of initial
and rent-up fees
and other costs of
acquisition capitalized
for financial reporting
purposes and previously
deducted for income tax
reporting purposes 12,359 10,099 9,452
Equity in income of
Local Limited
Partnerships for
income tax
reporting purposes
in excess of that
recognized under
the equity method
for financial
reporting purposes. 1,202,597 1,024,353 1,108,707
Other accrual
adjustments 22,212 44,161 (23,744)
Net income as
reported on the
federal income
tax return $2,870,783 $2,254,447 $2,172,436
</TABLE>
A reconciliation of the partners' capital for financial reporting purposes
and the partners' capital (deficit) for income tax purposes follows:
<PAGE>
Note 2 - Reconciliation Between Net Income and Partners' Capital
(Deficit) of the Partnership For Financial Reporting Purposes
and Income Tax Purposes - Continued
<TABLE>
<S> <C> <C> <C>
Year Ended December 31,
1997 1996 1995
Partners' capital for
financial reporting
purposes $ 5,282,363 $ 3,648,748 $ 2,472,914
Commissions and
offering expenses
capitalized for
income tax purposes
and charged to
capital for financial
reporting purposes 1,250,836 1,250,836 1,255,630
Unamortized portion
of initial and rent-up
fees and other costs of
acquisition capitalized
for financial reporting
purposes and previously
deducted for income tax
reporting purposes (984,010) (996,369) (986,918)
Equity in cumulative
losses of Local Limited
Partnerships for income
tax purposes, in excess
of losses for financial
reporting purposes (12,447,203) (13,655,264) (14,703,961)
Other accrual
adjustments 113,495 91,283 47,122
Partners' capital
(deficit) as reported
on the federal
income tax return $ (6,784,519) $(9,660,766) $(11,915,213)
</TABLE>
The Partnership has received a ruling from the Internal Revenue Service
that the basis of the limited partners' interests in the Partnership will
include the Partnership's allocable share of basis resulting from mortgage
debt of the Local Limited Partnerships under Section 752 of the Internal
Revenue Code.
<PAGE>
Note 2 - Reconciliation Between Net Income and Partners' Capital
(Deficit) of the Partnership For Financial Reporting Purposes
and Income Tax Purposes - Continued
For tax purposes, the Partnership uses the accrual method of accounting.
The Partnership deducted initial and rent-up fees when paid and takes into
account its share of tax losses of the Local Limited Partnerships. The
Local Limited Partnerships use the accrual method of accounting for tax
purposes and, during the construction years of 1972 through 1975,
deducted property taxes, interest and other carrying costs during
construction as well as substantial amounts of payments to the respective
general partners for various services rendered and costs incurred by the
general partners of the Local Limited Partnerships.
Note 3 - Management of Urban Improvement Fund Limited - 1973
Under the terms of the Limited Partnership Agreement, the Partnership is
required to pay the General Partner an annual management fee equal to
one-quarter of one percent of invested assets or $133,770. (The fee will
not be more than fifty percent of the Partnership's annual net cash flow
as defined, subject to an annual minimum of $60,000.) The Partnership
recorded management fee expense of $133,770 during 1997, $88,387 during
1996 and $92,017 during 1995. The Partnership will also pay the General
Partner a liquidation fee for the sale of projects. The liquidation fee
is the lesser of (i) ten percent of the net proceeds to the Partnership
from the sale of a project(s) or (ii) one percent of the sales price plus
three percent of the net proceeds after deducting an amount sufficient
to pay long-term capital gains taxes. No part of such fee shall accrue
or be paid unless: (i) the Limited Partners' share of the proceeds has
been distributed to them, (ii) the Limited Partners shall have first
received an amount equal to their invested capital attributable to the
project(s) sold, and (iii) the Limited Partners have received an amount
sufficient to pay long-term capital gains taxes from the sale of the
project(s), if any, calculated at the maximum rate then in effect.
The General Partner of the partnership is a corporation which Paul H.
Pfleger has a majority interest. Partnership Services, Inc. (PSI), another
corporation in which Paul H. Pfleger is a majority shareholder, has
contracted with the General Partner and the Partnership to provide certain
management and other services to any projects in which the Partnership
has an interest. No fees were paid to PSI during 1996, 1995 or 1994. In
addition, as shown in the following table, PSI has become the General
Partner in fourteen of the Local Limited Partnerships in which the
Partnership has investments:
<PAGE>
Note 3 - Management of Urban Improvement Fund Limited - 1973 - Continued
<TABLE>
<S> <C> <C>
Date PSI Became
Local Limited Partnerships General Partner
Antonia Manor April 1975
Glenn Arms Associates April 1975
Hedin House Associates December 1978
Himbola Manor January 1980
Maria Manor April 1975
Marlton Manor Associates April 1975
OGO Associates of Los Arboles August 1976
OGO Associates of Mountclef August 1976
Sheridan Manor IV March 1975
Sheridan Manor X March 1975
The Alexander April 1975
WOGO Associates of Carondelet August 1976
WOGO Associates of Fresno August 1976
W Street Associates December 1977
</TABLE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method
The Partnership has seventy-seven percent to ninety-nine percent interests
in profits and losses of the nineteen Local Limited Partnerships accounted
for on the equity method. Investments in these Local Limited Partnerships
were made in installments based typically on the stages of completion
and/or occupancy.
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
Investments in and advances to the Local Limited Partnerships, accounted
for on the equity method, are as follows:
<TABLE>
<S> <C> <C> <C>
Equity In
Capital Income
Contributions (Losses) Subtotal
December 31, 1997:
Antonia Manor. . . . . $ 119,765 $ 721,871 $ 841,636
Brighton Gardens
Apartments (Note 5) . 370,000 (1,597,626) (1,227,626)
First Bedford-Pine
Apts., Ltd. . . . 275,485 (1,782,682) (1,507,197)
Freedom Associates
(Note 5). . . . 514,000 (2,487,176) (1,973,176)
Glenn Arms
Associates. . . . . 223,877 (184,889) 38,988
Hedin Associates . . . . (20,710) 181,725 161,015
Himbola Manor, Ltd.. .. . 42,919 (384,469) (341,550)
Maria Manor. . . . . . . . 104,365 726,577 830,942
Marlton Manor
Associates . . . 142,783 667,313 810,096
Mystic Valley Towers
Associates (Note 5) 516,588 (2,987,850) (2,471,262)
OGO Associates
of Los Arboles. . . 98,218 (231,221) (133,003)
OGO Associates
of Mountclef. . . . (343,088) 343,088 -0-
RAP-UP II B. . . . . . 190,757 (787,780) (597,023)
Sheridan Manor IV. . . 99,363 (90,219) 9,144
Sheridan Manor X . .. . . 59,595 (124,073) (64.478)
The Alexander. . . . . 149,903 1,501,778 1,651,681
WOGO Associates
of Carondelet. 267,549 (557,968) (290,419)
WOGO Associates
of Fresno . .. . . . 549,531 (1,218,502) (668,971)
W Street Associates. . . 305,500 (535,244) (229,744)
Total. . . . . $ 3,666,400 $ (8,827,347) $(5,160,947)
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Losses Not Costs of
Recorded Acquisition Investment
(Note 1) Advances (Note 1) Net
December 31, 1997:
Antonia Manor. . . .$ -0- $ -0- $ 14,496 $ 856,132
Brighton Gardens
Apartments (Note 5) 1,160,491 -0- 67,135 -0-
First Bedford-Pine
Apts., Ltd. . . . . 1,449,455 -0- 57,742 -0-
Freedom Associates
(Note 5). . . 1,856,741 -0- 116,435 -0-
Glenn Arms
Associates -0- 78,292 18,102 135,382
Hedin Associates . -0- -0- 13,979 174,994
Himbola Manor, Ltd.. . 288,836 -0- 52,714 -0-
Maria Manor. -0- -0- 15,124 846,066
Marlton Manor
Associates . -0- -0- 47,458 857,554
Mystic Valley Towers
Associates (Note 5). 2,198,460 -0- 272,802 -0-
OGO Associates
of Los Arboles. 99,495 11,689 21,819 -0-
OGO Associates
of Mountclef. -0- -0- -0- -0-
RAP-UP II B 566,987 -0- 30,036 -0-
Sheridan Manor IV. -0- 119,703 13,830 142,677
Sheridan Manor X . 30,828 21,549 12,101 -0-
The Alexander. -0- -0- 38,528 1,690,209
WOGO Associates
of Carondelet. -0- 493,402 42,933 245,916
WOGO Associates
of Fresno 390,892 192,083 85,996 -0-
W Street Associates. 60,081 135,583 34,080 -0-
Total. . . . . $8,102,266 $1,052,301 $ 955,310 $4,948,930
</TABLE>
<TABLE>
<S> <C>
Reconciliation to combined
statement of partners equity
(deficit) Urban Improvement
Fund Limited - 1973 capital
contributions less equity
in losses $ (5,160,947)
Flexible subsidy contributed
by HUD 1,168,171
Urban Improvement Fund - 1973's
share of combined equity of
Local Limited Partnerships
per the accompanying statement $ (3,992,776)
</TABLE>
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
<TABLE>
<S> <C> <C> <C>
Equity In
Capital Income
Contributions (Losses) Subtotal
December 31, 1996:
Antonia Manor. . . $ 145,612 $ 479,786 $ 625,398
Brighton Gardens
Apartments (Note 5) 370,000 (1,463,164) (1,093,164)
First Bedford-Pine
Apts., Ltd. . . . 275,485 (1,726,357) (1,450,872)
Freedom Associates
(Note 5). . . . . 514,000 (2,385,046) (1,871,046)
Glenn Arms Associates . 223,877 (310,938) (87,061)
Hedin Associates . .. . (8,524) 131,078 122,554
Himbola Manor, Ltd. . . 42,920 (524,911) (481,991)
Maria Manor. . . . . . 114,699 461,589 576,288
Marlton Manor
Associates .. . 169,820 489,766 659,586
Mystic Valley Towers
Associates (Note 5) 680,314 (3,272,111) (2,591,797)
OGO Associates
of Los Arboles. . 102,916 (265,085) (162,169)
OGO Associates of
Mountclef. . . 41,044 (125,704) (84,660)
RAP-UP II B. . . . . . 190,757 (864,695) (673,938)
Sheridan Manor IV. . . 102,867 (125,836) (22,969)
Sheridan Manor X . . . 83,082 (140,998) (57,916)
The Alexander. . . . . 167,436 1,070,296 1,237,732
WOGO Associates
of Carondelet. . 267,549 (565,178) (297,629)
WOGO Associates
of Fresno . . . . . 549,531 (1,330,445) (780,914)
W Street Associates. .. 305,500 (578,845) (273,345)
Total.. . . $ 4,338,885 $(11,046,798) $(6,707,913)
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Losses Not Costs of
Recorded Acquisition
(Note 1) Advances (Note 1) Total
December 31, 1996:
Antonia Manor. $ -0- $ 222 $ 15,463 $ 641,083
Brighton Gardens
Apartments (Note 5) 1,026,029 -0- 67,135 -0-
First Bedford-Pine
Apts., Ltd. . . 1,393,130 -0- 57,742 -0-
Freedom Associates
(Note 5). . . . 1,754,611 -0- 116,435 -0-
Glenn Arms Associates . -0- 78,292 18,749 9,980
Hedin Associates . .. -0- -0- 14,911 137,465
Himbola Manor, Ltd. . 429,277 -0- 52,714 -0-
Maria Manor. -0- -0- 16,132 592,420
Marlton Manor
Associates . -0- -0- 50,622 710,208
Mystic Valley Towers
Associates (Note 5) 2,318,995 -0- 272,802 -0-
OGO Associates
of Los Arboles 115,902 24,448 21,819 -0-
OGO Associates of
Mountclef. . 26,247 49,264 9,149 -0-
RAP-UP II B 643,902 -0- 30,036 -0-
Sheridan Manor IV. -0- 108,098 14,644 99,773
Sheridan Manor X . 22,516 23,299 12,101 -0-
The Alexander. . . -0- -0- 41,095 1,278,827
WOGO Associates
of Carondelet. 158,362 94,074 45,193 -0-
WOGO Associates
of Fresno . . . 534,835 160,083 85,996 -0-
W Street Associates. 103,682 135,583 34,080 -0-
Total.. . . $8,527,488 $673,363 $ 976,818 $3,469,756
</TABLE>
<TABLE>
<S> <C>
Reconciliation to combined
statement of partners
equity (deficit) Urban
Improvement Fund
Limited - 1973 capital
contributions less equity
in losses $(6,707,913)
Flexible subsidy contributed
by HUD 1,168,171
Urban Improvement Fund - 1973's
share of combined equity of
Local Limited Partnerships
per the accompanying statement $(5,539,742)
</TABLE>
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
The combined balance sheets of the Local Limited Partnerships, accounted
for on the equity method at December 31, 1997 and 1996 and the related
combined statements of income, partners' capital (deficit) and cash flows
and selected footnote disclosures from the audited financial statements for
the years ended December 31, 1997, 1996 and 1995 are summarized as
follows:
COMBINED BALANCE SHEETS OF LOCAL LIMITED PARTNERSHIPS
Assets
<TABLE>
<S> <C> <C>
1997 1996
Cash $ 1,418,561 $ 1,564,135
Cash in escrow and
other restricted funds 8,261,304 7,337,467
Accounts receivable 585,691 173,287
Notes receivable 235,000 470,000
Prepaid expenses 236,378 259,042
Other assets 173,010 157,688
10,909,944 9,961,619
Property on the basis of cost:
Land 3,170,114 3,191,991
Buildings and improvements 59,518,971 57,045,930
62,689,085 60,237,921
Less - accumulated depreciation (40,789,787) (39,340,633)
21,899,298 20,897,288
$ 32,809,242 $ 30,858,907
Liabilities and Partners' Capital (Deficit)
Mortgage notes payable $ 32,076,435 $ 33,196,352
Accounts payable and
accrued expenses 2,485,629 2,232,774
Advances from Urban
Improvement Fund
Limited - 1973 1,052,301 673,363
Advances from general partners 227,948 227,948
Notes payable 2,381,134 1,466,624
Advances from and payable to affiliates 28,425 60,425
Tenants' security and other deposits 541,270 556,775
38,793,142 38,414,261
Partners' capital (deficit) per
accompanying statements (5,983,900) (7,555,354)
$ 32,809,242 $ 30,858,907
</TABLE>
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
COMBINED STATEMENTS OF INCOME OF LOCAL LIMITED PARTNERSHIPS
<TABLE>
<S> <C> <C> <C>
December 31,
1997 1996 1995
Revenue:
Net rental income $16,255,054 $16,257,311 $16,073,536
Financial 929,657 189,824 202,730
Other 483,421 306,244 659,587
Total Revenue 17,668,132 16,753,379 16,935,853
Expenses:
Administrative 3,396,404 3,269,904 3,296,771
Utilities 2,343,109 2,382,845 2,362,187
Operating 4,299,664 4,070,141 3,835,220
Taxes and insurance 1,874,438 1,963,446 2,019,568
Total Operating
Expenses 11,913,615 11,686,336 11,513,746
Net Operating
Income 5,754,517 5,067,043 5,422,107
Non-operating expenses:
Financial expenses 1,874,465 1,238,098 1,352,108
Depreciation and
amortization 1,792,116 1,739,991 1,670,080
Other expenses 255,766 288,325 377,513
3,922,347 3,266,414 3,399,701
Net income before
gain on sale
of property 1,832,170 1,800,629 2,022,406
Gain on sale of
property 793,525 -0- -0-
Net income $ 2,625,695 $1,800,629 $2,022,406
Amortization of capitalized interest amounted to $80,861 in 1997, 1996
and 1995.
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DEFICIT) OF LOCAL LIMITED PARTNERSHIPS - CONTINUED
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Urban
Improvement Other
Fund Limited Limited General
1973 Partners Partners Total
Partners'
capital
(deficit) at
January 1,
1995 $(8,746,422) $(1,005,123) $(1,136,645) $(10,888,190)
Cash
distributions (188,073) (10,799) (31,023) (229,895)
Net income -
1995 1,921,451 18,277 82,678 2,022,406
Partners'
capital
(deficit) at
December 31,
1995 (7,013,044) (997,645) (1,084,990) (9,095,679)
Cash
distributions (219,132) (10,276) (30,896) (260,304)
Net income -
1996 1,692,434 20,986 87,209 1,800,629
Partners'
capital
(deficit) at
December 31,
1996 (5,539,742) (986,935) (1,028,677) (7,555,354)
Cash
distributions (672,510) (12,886) (368,845) (1,054,241)
Net income -
1997 2,219,451 27,967 378,277 2,625,695
Partners'
capital
(deficit) at
December 31,
1997 $ (3,992,801) $(971,854) $(1,019,245) $(5,983,900)
</TABLE>
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
December 31,
1997 1996 1995
Net income $2,625,695 $1,800,629 $2,022,406
Adjustments to
reconcile net
income to net
cash provided
by operating activities:
Depreciation and
amortization 1,792,116 1,739,991 1,670,080
Decrease (increase)
in escrows,
restricted deposits
and receivables,
prepaid expenses
and other assets (1,093,899) (169,795) (754,119)
Increase (decrease)
in accounts payable,
accrued expenses,
tenant security deposit
liability and other
liabilities (105,610) (212,088) (36,364)
Total adjustments 592,607 1,358,108 879,597
Net cash provided
by operating
activities 3,218,302 3,158,737 2,902,003
CASH FLOWS FROM
INVESTING ACTIVITIES:
Net capital
expenditures (2,451,164) (1,660,621) (1,940,192)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Mortgage principal
payments (1,119,917) (743,503) (797,413)
Distributions paid (1,054,243) (260,304) (229,895)
Advances from
(repayments
to) affiliates 346,938 (3,274) (508,293)
Proceeds from issuance
of notes payable 914,510 3,734 472,092
Net cash used
by financing
activities (912,712) (1,003,347) (1,063,509)
NET INCREASE
(DECREASE) IN
CASH AND
CASH EQUIVALENTS (145,574) 494,769 (101,698)
CASH BALANCE AT
BEGINNING OF YEAR 1,564,135 1,069,366 1,171,064
CASH BALANCE AT
END OF YEAR $1,418,561 $1,564,135 $1,069,366
SUPPLEMENTAL INFORMATION
REGARDING INTEREST
PAYMENTS IS AS FOLLOWS:
Interest paid, net
of subsidy $ 999,360 $ 990,930 $1,034,167
</TABLE>
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
A reconciliation between combined income for financial reporting
purposes and the combined income for income tax purposes follows:
<TABLE>
<S> <C> <C> <C>
December 31,
1997 1996 1995
Combined net income
for financial
reporting purposes $2,625,695 $1,800,629 $2,022,406
Equity in deductions
taken by Local
Limited Partnerships
for tax purposes
in excess of loss
for financial
reporting purposes 530,882 581,931 536,325
Accrual adjustments
for financial
reporting purposes 261,083 145,394 (105,653)
Combined income
for income tax
purposes $3,417,660 $2,527,954 $2,453,078
</TABLE>
A reconciliation of combined partners' capital (deficit) for financial
reporting purposes and combined partners' capital (deficit) for income tax
purposes follows:
<TABLE>
<S> <C> <C> <C>
December 31,
1997 1996 1995
Combined partners'
capital (deficit)
for financial
reporting purposes $ (5,983,900) $(7,555,354) $ (9,095,679)
Carrying costs during
construction capitalized
for financial reporting
purposes, excess of
depreciation for tax
purposes and accrual
adjustments for financial
reporting purposes (4,530,570) (5,447,227) (6,141,240)
Combined partners'
capital (deficit) for
income tax purposes
as reported on the
federal income
tax returns $(10,514,470) $(13,002,581) $(15,236,919)
</TABLE>
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
Cost of Buildings
For financial statement purposes, the Local Limited Partnerships generally
capitalized all project costs, including payments to the general partners,
interest, taxes, carrying costs and operating expenses offset by incidental
rental income, up to the cutoff date for cost certification purposes. For
income tax purposes, certain of these amounts were deducted when paid.
Depreciation and Amortization
For financial statement purposes, depreciation is computed using the
straight-line and various accelerated methods over useful lives of twenty
to forty years from the date of completion of the building or rehabilitation.
For income tax purposes, buildings are depreciated over twenty to forty
years using various accelerated methods, and certain rehabilitation costs
are amortized on the straight-line method over sixty months under the
provisions of section 167(k) of the Internal Revenue Code.
Certain expenses related to obtaining permanent financing for the
partnerships have been deferred and are being amortized for financial
statement purposes using the straight-line method over periods of twenty
to forty years.
Mortgage Notes Payable
The Partnerships have mortgages which are payable to or are insured by
the Department of Housing and Urban Development (HUD) and the
Massachusetts Housing Finance Agency (MHFA) totaling $32,076,435 at
December 31, 1997 ($19,209,853 by HUD and $12,866,582 by MHFA)
and $33,196,352 at December 31, 1996 ($20,062,663 by HUD and
$13,133,689 by MHFA). The mortgage notes payable are secured by
deeds of trust on rental property and bear interest at rates from 6.9
percent to 8.5 percent per annum. The mortgages are payable in monthly
installments of principal and interest aggregating approximately $264,000
over periods of forty years. HUD will make interest reduction payments
on the mortgages of eight Local Limited Partnerships which have mortgages
insured under Section 236 in amounts which will reduce the mortgage
payments to those required for mortgages carrying a one percent interest
rate. The scheduled principal reductions for the next five years are
as follows:
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
<TABLE>
<S> <C> <C>
Year Ended December 31, Amount
1998 $ 895,662
1999 960,577
2000 1,029,388
2001 1,106,477
2002 1,188,848
Beyond 26,895,483
$32,076,435
</TABLE>
National Housing Act Subsidies and Restrictions
Under terms of the regulatory agreement with HUD and MHFA, the Local
Limited Partnerships cannot make cash distributions to partners of the
Local Limited Partnerships in excess of six percent per annum of stated
equity in the respective partnerships. Such distributions are cumulative
but can only be paid from "surplus cash," as defined in the agreements.
The Local Limited Partnerships must deposit all cash in excess of the
distributable amounts into residual receipts funds which are under the
control of the mortgagees, and from which disbursements must be
approved by HUD. As of December 31, 1997, approximately $2,977,553
could be paid to partners of the Local Limited Partnerships as surplus
cash becomes available.
Under terms of the regulatory agreements, the Local Limited Partnerships
are required to make monthly deposits into replacement funds which are
under the control of the mortgagees. Such deposits commence with the
initial principal payments on the mortgage loans. Expenditures from the
replacement funds must be approved by HUD.
Five Local Limited Partnerships (LLP's) entered into flexible subsidy
contracts with HUD. Under the terms of the contracts, HUD contributed
$1,226,162 to the Local Limited Partnerships between 1980 and 1982.
These amounts were allocated $1,168,171 to Urban Improvement Fund
Limited - 1973 and $57,989 to other partners. The partners contributed
$138,805 in 1981 and 1980 to the capital of the LLP's. Such funds were
used for improving LLP properties.
<PAGE>
Note 4 - Investments in and Advances to Local Limited Partnerships
Accounted for on the Equity Method - Continued
All of the Local Limited Partnerships have entered into rent supplement
and/or Section 8 contracts with HUD or state agencies to provide financial
assistance to qualified tenants of the apartment units. Under terms of
these contracts, HUD will pay a portion of the rent on behalf of qualified
tenants. The maximum dollar amount of these payments is limited by
HUD. A substantial portion of rental income is collected through these
contracts. During 1997, 1996 and 1995, the Local Limited Partnerships
received approximately $7,929,000, $7,877,000 and $7,643,000,
respectively, in rent supplement and Section 8 funds.
Substantially all notes payable represent residual receipts notes payable by
several Local Limited Partnerships. These notes are payable to the former
general partners upon sale of the property after a provision for income
taxes resulting from the gain from such sales and the return of contributed
capital and advances plus interest to the Partnership. The residual receipt
notes payable totaled $1,307,694 at December 31, 1997 and $1,309,646 at
December 31, 1996.
Management
The Local Limited Partnerships have entered into property management
contracts with various agents under which the agents are paid property
management fees of approximately five percent to fifteen percent of the
gross revenues of the respective projects. Most of the management agents
are affiliated with or are the general partners of the Local Limited
Partnerships.
Note 5 - Sale of the Assets of Edgewood II Associates
The property of Edgewood II Associates was sold during 1984. The sales
price of $8,270,146 was composed of a cash payment of $1,215,000, the
assumption of the underlying mortgage of $4,855,146 and an installment
payment of $2,200,000 that is due on December 31, 1999 along with accrued
interest. Urban 73's share of the final installment is $1,650,000 with
the balance due to the Local General Partner. Interest accrues at nine
and one-half percent per annum and is payable on the anniversary date of
the note to the extend of seventy five percent of the property's distributable
cash flow. The gain on the sale of the real estate is recognized on the cost
recovery method to first recognize the recovery of the asset value, then
recognize the gain as the proceeds are received. For the years ended
December 31, 1997, 1996 and 1995, the Partnership received and recorded
as interest income of $5,838, zero and $15,462, respectively.
Note 6 - Sale of the Assets of OGO of Mountclef Associates
The property of OGO Associates of Mountclef was sold during 1997 for
$1,059,837 resulting in a gain of $793,525, Urban '73's share of the
distribution from the sale was $351,256. In addition, Urban '73 received
advance repayments of $57,105.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
Schedule IV
INDEBTEDNESS OF RELATED PARTIES
<TABLE>
<S> <C> <C> <C> <C> <C>
December 31,
1997 Change 1996 Change 1995
Advances to
(repayments
from) Local
Limited
Partnerships:
Antonia Manor $ -0- $ (222) $ 222 $ 222 $ -0-
Glenn Arms 78,292 -0- 78,292 (21,263) 99,555
OGO of Los
Arboles 11,689 (12,759) 24,448 (9,907) 34,355
OGO of
Mountclef -0- (49,264) 49,264 3,102 46,162
Sheridan Manor IV 119,703 11,605 108,098 5,395 102,703
Sheridan Manor X 21,549 (1,750) 23,299 1,754 21,545
WOGO of
Carondelet 493,402 399,328 94,074 6,694 87,380
WOGO of Fresno 192,083 32,000 160,083 12,257 147,826
W-Street
Associates 135,583 -0- 135,583 3,500 132,083
$1,052,301 $ 378,938 $ 673,363 $ 1,754 $ 671,609
</TABLE>
All advances are included in the balance sheet caption "Investments in and
advances to Local Limited Partnerships accounted for on the equity
method." See Note 4 to financial statements.
<TABLE>
<S> <C> <C> <C> <C> <C>
December 31,
1997 Change 1996 Change 1995
Payable to affiliate:
Management fee
payable to
General Partners $102,158 $ 11,648 $ 90,510 $ 43,388 $ 47,122
</TABLE>
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1973
(A Limited Partnership)
Schedule XI
REAL ESTATE AND ACCUMULATED DEPRECIATION OF
LOCAL LIMITED PARTNERSHIPS
December 31, 1997
<TABLE>
<S> <C> <C> <C>
Outstanding
Description Mortgage
Partnership/location No. of Units Balance Land
Antonia Manor 133 apartment
San Francisco, CA 2 commercial $ 1,127,206 $ 175,557
Brighton Gardens Apts
Brighton, MA 62 apartment 1,273,588 322,929
First Bedford-Pine Apts
Atlanta, GA 134 apartment 1,614,865 43,491
Freedom Associates
Baltimore, MD 308 apartment 2,377,241 298,637
Glenn Arms Associates
Washington, DC 55 apartment 737,592 125,898
Hedin Associates 48 apartment
Washington, DC 1 commercial 572,516 38,600
Himbola Manor
LaFayette, LA 136 apartment 1,477,632 111,000
Maria Manor 119 apartment
San Francisco, CA 1 commercial 1,162,421 285,140
Marlton Manor Assoc. 151 apartment
San Francisco, CA 7 commercial 1,477,825 258,373
Mystic Valley Towers
Medford, MA 466 apartment 11,592,994 487,159
OGO Associates of
Los Arboles
Thousand Oaks, CA 43 apartment 707,687 84,716
</TABLE>
<TABLE>
<S> <C> <C> <C>
Description Building &
Partnership/location No. of Units Improvement(B) Total
Antonia Manor 133 apartment
San Francisco, CA 2 commercial $ 2,733,052 $ 2,908,609
Brighton Gardens Apts
Brighton, MA 62 apartment 1,830,882 2,153,811
First Bedford-Pine Apts
Atlanta, GA 134 apartment 2,414,932 2,458,423
Freedom Associates
Baltimore, MD 308 apartment 3,995,723 4,294,360
Glenn Arms Associates
Washington, DC 55 apartment 1,466,313 1,592,211
Hedin Associates 48 apartment
Washington, DC 1 commercial 1,210,789 1,249,389
Hiimbola Manor
LaFayette, L 136 apartment 2,730,487 2,841,487
Maria Manor 119 apartment
San Francisco, CA 1 commercial 2,478,845 2,763,985
Marlton Manor Assoc. 151 apartment
San Francisco, CA 7 commercial 3,191,098 3,449,471
Mystic Valley Towers
Medford, MA 466 apartment 18,534,961 19,022,120
OGO Associates of
Los Arboles
Thousand Oaks, CA 43 apartment 1,231,871 1,316,587
</TABLE>
<TABLE>
<S> <C> <C> <C>
Date of
Description Accumulated Completion
Partnership/location No. of Units Depreciation of Construction
Antonia Manor 133 apartment
San Francisco, CA 2 commercial $ (1,558,888) 1974
Brighton Gardens Apts
Brighton, MA 62 apartment (1,432,404) 1975
First Bedford-Pine Apts
Atlanta, GA 134 apartment (2,406,611) 1974
Freedom Associates
Baltimore, MD 308 apartment (3,583,009) 1974
Glenn Arms Associates
Washington, DC 55 apartment (961,076) 1975
Hedin Associates 48 apartment
Washington, DC 1 commercial (646,551) 1974
Himbola Manor
LaFayette, LA 136 apartment (2,006,679) 1974
Maria Manor 119 apartment
San Francisco, CA 1 commercial (1,460,809) 1974
Marlton Manor Assoc. 151 apartment
San Francisco, CA 7 commercial (1,639,396) 1974
Mystic Valley Towers
Medford, MA 466 apartment (13,219,939) 1975
OGO Associates of
Los Arboles
Thousand Oaks, CA 43 apartment (833,213) 1974
</TABLE>
<TABLE>
<S> <C> <C> <C>
Depreciation
in Latest
Description Date Income Statement
Partnership/location No. of Units Acquired is Computed
Antonia Manor 133 apartment
San Francisco, CA 2 commercial 1973 7-40 years
Brighton Gardens Apts
Brighton, MA 62 apartment 1973 5-40 years
First Bedford-Pine Apts
Atlanta, GA 134 apartment 1973 25 years
Freedom Associates
Baltimore, MD 308 apartment 1973 7-25 years
Glenn Arms Associates
Washington, DC 55 apartment 1973 3-25 years
Hedin Associates 48 apartment
Washington, DC 1 commercial 1973 5-30 years
Himbola Manor
LaFayette, LA 136 apartment 1973 3-25 years
Maria Manor 119 apartment
San Francisco, CA 1 commercial 1973 5-40 years
Marlton Manor Assoc. 151 apartment
San Francisco, CA 7 commercial 1973 5-40 years
Mystic Valley Towers
Medford, MA 466 apartment 1973 5-40 years
OGO Associates of
Los Arboles
Thousand Oaks, CA 43 apartment 1973 7-30 years
</TABLE>
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
Schedule XI Continued
REAL ESTATE AND ACCUMULATED DEPRECIATION OF
LOCAL LIMITED PARTNERSHIPS
December 31, 1997
<TABLE>
<S> <C> <C> <C>
Outstanding
Description Mortgage
Partnership/location No. of Units Balance Land
RAP-UP II B 51 apartment
Roxbury, MA 4 commercial 826,034 23,097
Sheridan Manor IV
Los Angeles, CA 48 apartment 476,590 96,827
Sheridan Manor X
Los Angeles, CA 30 apartment 298,778 16,105
The Alexander 179 apartment
San Francisco, CA 1 commercial 1,648,372 195,999
WOGO Associates of
Carondelet
Los Angeles, CA 124 apartment 1,186,732 154,552
WOGO Associates
of Fresno 219 apartment
Fresno, CA 12 commercial 2,183,614 395,680
W-Street Associates
Washington, D.C. 102 apartment 1,334,748 56,354
$32,076,435 $3,170,114
</TABLE>
<TABLE>
<S> <C> <C> <C>
Description Building &
Partnership/location No. of Units Improvement(B) Total
RAP-UP II B 51 apartment
Roxbury, MA 4 commercial 1,321,416 1,344,513
Sheridan Manor IV
Los Angeles, CA 48 apartment 905,436 1,002,263
Sheridan Manor X
Los Angeles, CA 30 apartment 570,190 586,295
The Alexander 179 apartment
San Francisco, CA 1 commercial 4,124,480 4,320,479
WOGO Associates of
Carondelet
Los Angeles, CA 124 apartment 3,455,718 3,610,270
WOGO Associates
of Fresno 219 apartment
Fresno, CA 12 commercial 4,342,788 4,738,468
W-Street Associates
Washington, D.C. 102 apartment 2,979,990 3,036,344
$59,518,971 $62,689,085
$(40,789,787)
</TABLE>
<TABLE>
<S> <C> <C> <C>
Date of
Description Accumulated Completion
Partnership/location No. of Units Depreciation of Construction
RAP-UP II B 51 apartment
Roxbury, MA 4 commercial (1,095,731) 1974
Sheridan Manor IV
Los Angeles, CA 48 apartment (694,263) 1975
Sheridan Manor X
Los Angeles, CA 30 apartment (459,033) 1975
The Alexander 179 apartment
San Francisco, CA 1 commercial (2,436,652) 1974
WOGO Associates of
Carondelet
Los Angeles, CA 124 apartment (1,493,380) 1974
WOGO Associates
of Fresno 219 apartment
Fresno, CA 12 commercial (2,981,150) 1974
W-Street Associates
Washington, D.C. 102 apartment (1,881,003) 1975
$(40,789,787)
</TABLE>
<TABLE>
<S> <C> <C> <C>
Depreciation
in Latest
Description Date Income Statement
Partnership/location No. of Units Acquired is Computed
RAP-UP II B 51 apartment
Roxbury, MA 4 commercial 1973 7-20 years
Sheridan Manor IV
Los Angeles, CA 48 apartment 1973 5-25 years
Sheridan Manor X
Los Angeles, CA 30 apartment 1973 7-25 years
The Alexander 179 apartment
San Francisco, CA 1 commercial 1973 5-30 years
WOGO Associates of
Carondelet
Los Angeles, CA 124 apartment 1973 5-30 years
WOGO Associates
of Fresno 219 apartment
Fresno, CA 12 commercial 1973 5-30 years
W-Street Associates
Washington, D.C. 102 apartment 1973 5-30 years
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Building & Total Accumulated
Land Improvement Cost Depreciation
Balance at
January 1, 1996 $ 3,191,991 $55,385,308 $58,577,299 $37,607,483
Additions during
year -0- 1,660,622 1,660,622 1,733,150
Balance at
December 31,
1996 3,191,991 57,045,930 60,237,921 39,340,633
Additions during
year -0- 2,959,508 2,959,508 1,792,116
Deletions during
year (21,877) (486,467) (508,344) (342,962)
Balance at
December 31,
1997 $ 3,170,114 $59,518,971 $62,689,085 $40,789,787
</TABLE>
NOTE: Capital improvements since original construction or
rehabilitation are not material to the combined financial
statements and, as such, are not disclosed separately. The
financial statement category of buildings and improvements is
composed substantially of cost plus the initial renovation upon
acquisition. Total cost of land and building for federal income
tax purposes amounts to approximately $53,800,000.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 21,310
<SECURITIES> 0
<RECEIVABLES> 441,237
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,411,477
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,411,477
<CURRENT-LIABILITIES> 129,114
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,282,363
<TOTAL-LIABILITY-AND-EQUITY> 5,411,477
<SALES> 0
<TOTAL-REVENUES> 1,807,038
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 173,423
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,633,615
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,633,615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,633,615
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
