UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
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 0-7771
URBAN IMPROVEMENT FUND LIMITED - 1973-II
(Exact name of registrant as specified in its charter)
California 95-6448384
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 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 Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant as of December 31, 1999: No established market value.
<PAGE>
PART I
Item 1. Business
(a) General Development of Business Urban Improvement Fund Limited
1973-II, a California limited partnership (the "Registrant"), was formed
in 1973 for the purpose of investing, through Local 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 required tax shelter for income from other sources.
The Registrant acquired equity interests as a limited partner in eleven (11)
such Local Limited Partnerships. One of these projects was sold in 1978
through a trustee's sale (foreclosure). Two of these properties, Mott Haven
Apartment VII and Mott Haven Apartments VIII were assigned to HUD in 1997
and sold through a trustee's sale (foreclosure) in 1999. One of the
Partnerships, 808 Memorial Drive, sold its interest in real estate during
July 1997 in a tax-free exchange. The Partnership also changed its name
to 808 Investments Limited Partnership and reinvested the proceeds in three
properties that are conventional, multi-family residential projects during
December 1997. The remaining eight (8) partnerships 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 finan-
cial resources. There are additional risks of new construction of low income
housing occurring in an area where the Registrant has invested in existing
government-assisted housing projects. Moreover, the outlook for subsidized
housing is not determinable, given existing and proposed federal legislation.
<PAGE>
(d) Financial information about foreign and domestic operations and export
sales - The Registrant's income is entirely dependent upon revenues received
from the limited partnerships in which it is a limited partner. Investment
in federal, state and local government-assisted housing is subject to signif-
icant regulation. 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 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 Homeowner-
ship Act). However, by 1995, Congress had determined the program was too
expensive to continue. In March 1996, Congress changed the compensation prog-
ram, severely limited funding, and restored the property owners' right to pre-
pay 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.
Item 2. Partnerships
The Registrant owns equity interests as a Limited Partner in the following
Partnership as of December 31, 1999:
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
1999
Partnership Name No. of Percent of
Real Estate Location Type Units Occupancy
Community Circle
Cleveland, Ohio 236 New 160 98%
Crowninshield Apartments
Peabody, MA MHFA Rehab.* 284 99%
Holly Street
Lawrence, MA MHFA Rehab.* 71 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
1999
Partnership Name No. of Percent of
Real Estate Location Type Units Occupancy
King Drive
Chicago, IL 236 New 315 94%
Met-Paca Section 1
New York, NY 236 Rehab. 37 98%
Morrisania II
New York, NY 236 Rehab. 161 100%
Southern Boulevard
Phase One
New York, NY 236 Rehab. 73 99%
808 Investment Limited Partnership:
Sedgefield Square
Greensboro, NC Conventional 124 N/A
Windsor Station
Dallas, TX Conventional 399 N/A
The Summit
Escondido, CA Conventional 128 N/A
</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:
COMMUNITY CIRCLE is a 160-unit project located in Cleveland, Ohio, consisting
of seven frame and brick two-story buildings and one masonry and pre-cast
concrete ten-story building. The project was constructed under Section 236 of
the National Housing Act.
<TABLE>
<CAPTION>
<S> <C> <C>
Type of Unit No. of Units
1 Bedroom 78
2 Bedroom 50
3 Bedroom 20
4 Bedroom 12
</TABLE>
<PAGE>
CROWNINSHIELD APARTMENTS consists of 284 rental units rehabilitated under
the auspices of the Massachusetts Housing Finance Agency. The project is
located in Peabody, Massachusetts.
<TABLE>
<CAPTION>
<S> <C> <C>
Type of Unit No. of Units
Studio 19
1 Bedroom 233
2 Bedroom 31
3 Bedroom 1
</TABLE>
HOLLY STREET is a 71-unit project located in the cities of Methuen and
Lawrence, Massachusetts, consisting of eleven two-, three- and four-story
buildings of frame and brick construction. The project was rehabilitated
pursuant to authority granted by the Massachusetts Housing Finance Agency,
with subsidy under Section 236 of the National Housing Act.
<TABLE>
<CAPTION>
<S> <C> <C>
Type of Unit No. of Units
Studio 6
1 Bedroom 20
2 Bedroom 28
3 Bedroom 11
4 Bedroom 5
5 Bedroom 1
</TABLE>
KING DRIVE APARTMENTS is a 315-unit project located in Chicago, Illinois. It
is a 22-story building of concrete construction. The building contains space
for two commercial shops. The project was constructed under Section 236 of
the National Housing Act.
<TABLE>
<CAPTION>
<S>
<C> <C>
Type of Unit No. of Units
Studio 21
1 Bedroom 168
2 Bedroom 126
</TABLE>
MET-PACA I consists of 37 units in four buildings rehabilitated under Section
236 of the National Housing Act. This project is located in New York City,
New York.
<TABLE>
<CAPTION>
<S>
<C> <C>
Type of Unit No. of Units
1 Bedroom 4
2 Bedroom 18
3 Bedroom 15
</TABLE>
<PAGE>
MORRISANIA II ASSOCIATES is a 161-unit project located at 1104-1148 Clay
Avenue, Bronx, New York, consisting of twelve five-story buildings of brick
construction. The development was rehabilitated under Section 236 of the
National Housing Act.
<TABLE>
<CAPTION>
<S>
<C> <C>
Type of Unit No. of Units
1 Bedroom 68
2 Bedroom 24
3 Bedroom 36
4 Bedroom 33
</TABLE>
SOUTHERN BOULEVARD REHAB PHASE I is a 73-unit project located in the Bronx,
New York, consisting of two six-story, wood joist and brick exterior buildings.
The project is located in the same area as Mott Haven 7. The project was
rehabilitated under Section 236 of the National Housing Act.
<TABLE>
<CAPTION>
<S>
<C> <C>
Type of Unit No. of Units
1 Bedroom 27
2 Bedroom 23
3 Bedroom 13
4 Bedroom 10
</TABLE>
808 INVESTMENTS LIMITED PARTNERSHIP owned a 301-unit project located
in Cambridge, Massachusetts, consisting of two buildings of steel and brick
construction and a five-level parking structure. The buildings are eleven
and twenty stories and they are centrally air-conditioned. The project has
two small landscaped plazas. There is approximately 57,000 square feet of
commercial space and 2,000 square feet of retail spaces. The project was
constructed under the auspices of the Massachusetts Housing Finance Agency.
<TABLE>
<CAPTION>
<S>
<C> <C>
Type of Unit No. of Units
1 Bedroom 128
2 Bedroom 139
3 Bedroom 30
4 Bedroom 4
</TABLE>
<PAGE>
During July 1997, the Partnership sold its real estate project located in
Cambridge, Massachusetts in a tax free exchange. During December 1997, the
Partnership purchased a 124 unit project located in Greensboro, North Carolina,
a 399 unit project in Dallas, Texas and a 128 unit project in Escondido,
California. These projects were financed with conventional mortgages which
are not insured by HUD or any state agency.
Item 3. Legal Proceedings.
There are no material pending legal proceedings at this time, other than
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) 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>
<CAPTION>
<S>
<C> <C> <C> <C>
Title of Name & Address of Amount and Nature of % of
Class Beneficial Owner Beneficial Ownership Class
General Partner Interfinancial Real 100 Units 100%
Interest Estate Management Co. ($95,000)
1201 Third Avenue, Suite 5400
Seattle, Washington 98101 3076
Limited Partner 629 Limited Partners 11,335 Units 100%
Interest ($11,335,000)
</TABLE>
The Registrant has no officers or directors. Interfinancial Real Estate
Management Company, the General Partner of the Registrant, is a corporation.
(c) There have been no distributions to partners during the five year period
ending December 31, 1999.
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 latest three years.
<PAGE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
Year Ended December 31,
1999 1998 1997 1996 1995
Operating Income:
Interest income $ 1,151 $ 861 $ 214 $ 796 $ 765
Other income -0- -0- -0- 6,250 8,125
1,151 861 214 7,046 8,890
Expenses:
Professional fees 18,450 19,448 18,492 16,623 18,409
Management fee 70,000 70,000 70,000 70,000 70,000
Incentive management
fee 11,867 8,724 22,349 -0- 23,501
Amortization expense 16,863 16,863 16,863 -0- -0-
Other expenses 1,930 836 6,813 250 313
119,110 115,871 134,517 86,873 112,223
Loss before equity in
income (loss) of Local
Limited Partnerships (117,959) (115,010) (134,303) (79,827) (103,333)
Equity in income
(loss) of Local
Limited Partnerships 207,980 (121,454) 4,009,902 (2,500) 48,765
Net income (loss) $ 90,021 $ (236,464) $3,875,599 $(82,327) $(54,568)
Allocation of net
income (loss):
Net loss allocated
to General Partner 4,501 (11,823) 193,780 (4,116) (2,728)
Net loss allocated
to Limited Partners 85,520 (224,641) 3,681,819 (78,211) (51,840)
$ 90,021 $(236,464) $3,875,599 $(82,327) $(54,568)
Net financial reporting
income (loss) per unit:
General Partnership
units (100 units
outstanding
allocated to
General Partner) $ 45 $ (118) $ 1,938 $ (41) $ (27)
Limited Partnership
units (11,335 units
outstanding
allocated to
Limited Partners) $ 8 $ (20) $ 325 $ (7) $ (5)
Total assets $4,080,419 $4,239,930 $4,624,029 $ 4,876 $ 34,577
Long term
obligations $ -0- $ -0- $ -0- $ -0- $ -0-
Cash dividends $ -0- $ -0- $ -0- $ -0- $ -0-
</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, in 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. This trend is
expected to continue. The Partnership has advanced funds to and received
repayments of such advances from selected Local Limited Partnerships. The
General Partner believes these net advances will not significantly affect the
operations of the Partnership.
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Urban's share of
distribution $274,871 $248,974 $ 79,570 $ -0- $ 68,247
Advances (made to)
repaid by
Local Limited
Partnerships $ 59,842 $ 32,107 $ 883,027 $ (2,500) $ (19,482)
</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 $136,548. (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 $70,000.) The Partnership recorded management
fee expense of $70,000 per year from 1995 through 1999. 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 suf-
ficient 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
<PAGE>
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.
During the period 1995 to 1999, the Partnership paid incentive management
fees to the General Partner of a Local Limited Partnership. These fees were
paid from distributions received from this Local Limited Partnership.
At December 31, 1999, the Partnership had investments in eight active real
estate limited partnerships as a Limited Partner. The Partnership carries
such investments on the equity method of accounting. The Partnership discon-
tinues recording losses for financial reporting purposes when its investment
in a particular Local Limited Partnership is reduced to zero, unless the Part-
nership intends to commit additional funds to the Local Limited Partnership.
At year-end, all of the investments were reduced to zero except for 808. The
equity in income in Local Limited Partnerships resulted from either Local
Limited Partnerships, whose investments have not been reduced to zero, report-
ing income from operations and 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.
<PAGE>
The components of the Partnership's equity in net income (loss) of the Local
Limited Partnerships for 1999, 1998 and 1997 is summarized as follows:
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
1999 1998 1997
Income (loss) from
Partnerships
with non-zero
investments:
808 Investments
Limited Partnership $ 88,146 $ (194,200) $3,930,332
Repayment of
advances from
(advances to)
Partnerships with
zero investments:
Community Circle 59,842 32,107 -0-
Distributions received
from Partnerships
with zero investments:
Crowninshield -0- 40,639 79,570
Southern Blvd. 23,735 -0- -0-
Community Circle 36,257 -0- -0-
$ 207,980 $ (121,454) $4,009,902
</TABLE>
The net income from 808 Investments Limited Partnership was a result of the
sale of real estate and represents Urban's share of the sales proceeds which
were reinvested in the tax-free exchange.
The actual combined losses of Local Limited Partnerships will generally
decrease as depreciation and interest decreases and the projects achieve
stable operations. The distributions to the Partnership from Local Limited
Partnerships are the result of positive cash flow from the operations of
these projects.
Liquidity
The Partnership is dependent upon distributions from its investments in Local
Limited Partnerships for cash flow. The Partnership may not be able to gen-
erate 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 is monitoring the operations of the Local
Limited Partnerships to ensure that sufficient cash will be received from the
Local Limited Partnerships to sustain operations. The General Partner antic-
ipates it will receive adequate distributions from the Local Limited Partner-
ships to maintain operations.
<PAGE>
Capital Resources
The General Partner believes that additional situations may arise where it
would be advantageous to the Partners 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 Partnership, in all likelihood, would 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 as a like-kind
exchange, the Partnership 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,
multifamily residential projects.
The Partnership has made no material commitments for capital expenditures.
<PAGE>
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 or 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>
<CAPTION>
<S>
<C> <C> <C>
Name Age Office
Paul H. Pfleger 64 Director/President
John M. Orehek 45 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>
<CAPTION>
<S>
<C> <C> <C>
Name Age Office
Paul H. Pfleger 64 Director/President
John M. Orehek 45 Director/Senior Vice President
Michael Fulbright 45 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 prev-
iously 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 main-
tained his dual status since that time.
Mr. Pfleger is the General Partner in over 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 corpor-
ation. From 1979 to 1982 he was a member of the tax department in the Cleve-
land, 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, institu-
tional investors and commercial developers. He received a Masters of Busi-
ness Administration degree from Texas A&M and a law degree from the Uni-
versity of Washington. He is a member of the Washington State Bar Associa-
tion. Mr. Fulbright was first elected an officer of the General Partner,
Interfinancial Real Estate Management Company, during 1994.
(f) Section 20 of the Amended Certificate and Agreement of Limited Partner-
ship of the Registrant provides for the indemnification of the General Partner
and its designees and nominees against liability resulting from errors in
judgment or any acts or omissions, whether or not disclosed, unless caused by
a breach of fiduciary duty of such parties to the Registrant or its Limited
Partners. None of the officers or directors of the General Partner of the
Registrant have filed a petition under the federal bankruptcy laws or any
state insolvency act, nor have they been engaged in any acts over the past
five years that would impair their ability or integrity as directors or
executive officers of the General Partner of the Registrant.
<PAGE>
Item 11. Executive Compensation
(a) The Registrant will not pay directly 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 directly any salary or
other remuneration to the officers in the future.
(c) There are no such options, warrants, rights or any other remuneration
available to the General Partner of the Registrant.
(d) The Registrant will not pay directly any salary or other remuneration to
the directors of the General Partner of the Registrant.
(e) There are no such 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>
Title of Name & Address of Amount and Nature of % of
Class Beneficial Owner Beneficial Ownership Class
General Partner Interfinancial Real 100 Units 100%
Interest Estate Management Co. ($95,000)
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.
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, Exhibits and Reports on
Form 8-K.
(a) 1. Financial Statements:
Report of independent certified public accountants.
Balance Sheets at December 31, 1999 and 1998.
Statements of Income (Loss) for the years ended December 31,
1999, 1998 and 1997.
Statements of Changes in Partners' Capital for the years ended
December 31, 1999, 1998 and 1997.
Statements of Cash Flows for the years ended December 31, 1999,
1998 and 1997.
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 eight 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 August, 1973.
<PAGE>
3.A. Amended Certificate and Agreement of Limited
Partnership, incorporated by reference from
Registration Statement on Form S-11 filed August,
1973.
3.B. Amendment to Certificate of Limited Partnership,
incorporated by reference from Registration Statement
on Form S-11 filed August, 1973.
3.C. Amendment to certificate of Limited Partnership.
Incorporated by reference from proxy statement filed
September 18, 1991.
4.A. Subscription agreement incorporated by reference from
Registration Statement on Form S-11 filed August,
1973.
5.A. Opinion and Consent of Counsel, incorporated by
reference from Pre-Effective Amendment No. 1 to
Registration Statement on Form S-11 filed October,
1973.
8.A. Opinion and Consent of Tax Counsel, incorporated by
reference from Pre-Effective Amendment No. 1 to
Registration Statement on Form S-11 filed October,
1973.
8.B. Tax Ruling request, incorporated by reference from
Pre-Effective Amendment No. 1 to Registration
Statement on Form S-11 filed October, 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 Pre-
Effective Amendment No. 1 to Registration Statement
on Form S-11 filed October, 1973.
10.B. Copy of the Management Agreement between the
Registrant and Income-Equities Corporation,
incorporated by reference from Registration Statement
on Form S-11 filed August, 1973.
10.C. Correspondence between the Management Company on
behalf of the General Partner, with various
developers, constituting agreements to invest in
Local Limited Partnerships, incorporated by reference
from Pre-Effective Amendment No. 1 to Registration
Statement on Form S-11 filed October, 1973.
<PAGE>
10.D. Copy of form of Limited Partnership Agreement between
the Registrant and Local Limited Partnerships in
which it becomes a limited partner, incorporated by
reference from Registration Statement on Form S-11
filed August, 1973.
28.A. Letters dated August 2, 1974 and August 15, 1974 to
investors from the General Partner and Management
Company regarding tax information matters,
incorporated by reference from Form 8-K filed August,
1974.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last quarter of 1999.
(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-II
BY: INTERFINANCIAL REAL ESTATE MANAGEMENT COMPANY
Date: September 26, 2000 By: Paul H. Pfleger
Paul H. Pfleger
President
Interfinancial Real Estate Management Company
Date: September 26, 2000 By: John M. Orehek
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 September 26, 2000
Paul H. Pfleger, Director Date
Interfinancial Real Estate Management Company
By: John M. Orehek September 26, 2000
John M. Orehek, Director Date
Interfinancial Real Estate Management Company.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1973-II
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, 1999
<PAGE>
Form 10-K - Items 14(a)(1) and (2)
Form 10-K - Item 14(d)
Urban Improvement Fund Limited 1973-II
(A Limited Partnership)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following financial statements of Urban Improvement Fund Limited 1973-II
are included in Item 8 and Item 14(a)(1)
Independent Auditors' Report . . . . . . . . . . . . . . . . . . F-3
Balance sheets at December 31, 1999 and 1998 . . . . . . . . . . F-4
Statements of income (loss) for the years ended
December 31, 1999, 1998 and 1997. . . . . . . . . . . . . F-5
Statements of changes in partners' capital (deficit)
for the years ended December 31, 1999, 1998 and 1997. .. . .F-5
Statements of cash flows for the years ended
December 31, 1999, 1998 and 1997. . . . . . . . . . . . . F-6
Notes to financial statements. . . . . . . . . . . . . . . . . . F-7
The following financial statement schedules of Urban Improvement Fund
Limited 1973-II are included in Item 14(a)(2) and 14(d):
IV. Indebtedness of and to Related Parties. . . . . . . . . . .F-22
XI. Real Estate and Accumulated Depreciation
of Local Limited Partnerships. . . . . . . . . . . . .F-23
All other schedules are omitted because they are not applicable. 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 eight 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-II
We have audited the accompanying balance sheets of Urban Improvement
Fund Limited 1973-II (a Limited Partnership) as of December 31, 1999 and
1998, and the related statements of income (loss), changes in partners' capital
(deficit) and cash flows for the years ended December 31, 1999, 1998 and
1997, and the related schedules listed in Item 14(a)(2) of the annual report
on Form 10-K of Urban Improvement Fund Limited 1973-II for the years ended
December 31, 1999, 1998 and 1997. 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 five in
1999, 1998 and 1997 of the financial statements of Urban Improvement Fund
Limited - 1973-II's Local Limited Partnership investments whose combined
financial statements are shown 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 Partner-
ship investments, is based solely on the reports of the other auditors. Urban
Investment Fund Limited 1973-II's investment in these partnerships has been
reduced to zero.
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, 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-II
as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years ended December 31, 1999, 1998 and 1997, in conformity
with generally accepted accounting principles. In addition, in our opinion,
based upon our audits and the reports of other auditors, the financial state-
ment 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
July 31, 2000
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973-II
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
<S>
<C> <C> <C>
December 31,
1999 1998
Cash and cash equivalents $ 30,204 $ 47,049
Accounts receivable - Urban 1972 930 -0-
Distributions receivable 40,271 -0-
Investments in and
advances to Local
Limited Partnerships
accounted for on
the equity method -
Note 4 (Schedule IV
and XI) 4,009,014 4,192,881
$ 4,080,419 $4,239,930
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Management fee
payable - Note 3
(Schedule IV) $1,208,167 $1,138,167
Accounts payable 1,250 8,200
Advance from
general partner 194,506 507,088
1,403,923 1,653,455
Partners' capital
(deficit) - Note 2
General Partner -
100 Partnership
units authorized,
issued and outstanding (342,674) (347,175)
Limited partners -
11,335 Partnership
units authorized,
issued and outstanding 3,019,170 2,933,650
2,676,496 2,586,475
$4,080,419 $4,239,930
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973-II
(A Limited Partnership)
STATEMENTS OF INCOME (LOSS)
<TABLE>
<S>
<C> <C> <C> <C>
Year Ended December 31,
1999 1998 1997
Interest income $ 1,151 $ 861 $ 214
Expenses:
Professional Fees 18,450 19,448 18,492
Management fees - Note 3 70,000 70,000 70,000
Incentive management fee 11,867 8,724 22,349
Amortization expense 16,863 16,863 16,863
Other expenses 1,930 836 6,813
119,110 115,871 134,517
Loss before equity
in income (loss)
of Local Limited
Partnerships (117,959) (115,010) (134,303)
Equity in income
(loss) of Local
Limited Partnerships -
Note 4 207,980 (121,454) 4,009,902
Net income (loss) $ 90,021 $ (236,464) $3,875,599
Allocation of net
income (loss):
Net income (loss)
allocated to
General Partner $ 4,501 $ (11,823) $ 193,780
Net income (loss)
allocated to
Limited Partners 85,520 (224,641) 3,681,819
$ 90,021 $ (236,464) $3,875,599
Net financial
reporting income
(loss) per unit:
General partnership
units (100 units
outstanding allocated
to General Partner) $ 45 $ (118) $ 1,938
Limited partnership
units (11,335 units
outstanding allocated
to Limited Partners) $ 8 $ (20) $ 325
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
General Limited
Partner Partners Total
Partners' capital (deficit)
at January 1, 1998 $ (335,352) $3,158,291 $2,822,939
Net income 1998 (11,823) (224,641) (236,464)
Partners' capital (deficit)
at December 31, 1998 (347,175) 2,933,650 2,586,475
Net income - 1999 4,501 85,520 90,021
Partners' capital (deficit)
at December 31, 1999 $ (342,674) $3,019,170 $2,676,496
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973-II
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<S>
<C> <C> <C> <C>
Year Ended December 31,
1999 1998 1997
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 90,021 $ (236,464) $ 3,875,599
Adjustments to
reconcile net loss
to net cash used by
operating activities:
Amortization of costs
of acquisition 16,863 16,863 16,863
Equity in net loss
(income) of Local
Limited Partnerships (207,980) 121,454 (4,009,902)
Increase in accounts
receivable (930) -0- -0-
Increase (decrease)
in accounts
payable (6,950) 8,200 (126)
Increase in accrued
management fees 70,000 70,000 35,000
Total adjustments (128,997) 216,517 (3,958,165)
Net cash used
by operating
activities (38,976) (19,947) (82,566)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Current year distributions 274,871 248,974 79,570
Contributions -0- -0- (1,581,837)
Net advances to
Local Limited Partnerships 59,842 32,107 883,027
Net cash provided
(used) by
investing activities 334,713 281,081 (619,240)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Advances from (repayments
to) General Partner (312,582) (225,835) 708,680
NET INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS (16,845) 35,299 6,874
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR 47,049 11,750 4,876
CASH AND CASH
EQUIVALENTS AT
END OF YEAR $ 30,204 $ 47,049 $ 11,750
</TABLE>
<TABLE>
NONCASH:
A distribution receivable in the amount of $40,271 was recorded in 1999.
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1973-II
(A Limited Partnership)
Notes to Financial Statements
Note 1 - Organization and Accounting Policies
Organization
Urban Improvement Fund Limited - 1973-II (the Partnership) was formed under
the California Uniform Limited Partnership Act on July 1, 1973, for the prin-
cipal purpose of investing in other limited partnerships (Local Limited Part-
nerships), which own federal and state-assisted housing projects. The Partner-
ship issued 11,335 units of limited partnership interests pursuant to a public
offering of such units which terminated on December 31, 1973. The Partnership
also issued 100 units of general partnership interests to Interfinancial Real
Estate Management Company (the General Partner).
The Urban Improvement Fund Limited - 1973-II prospectus, dated October 24,
1973, specified that the General Partner has a five percent interest in
profits, losses and special allocations, and the limited partners will share
the remaining 95 percent interest in profits, losses and special allocations
in proportion to their respective units of limited partnership interests.
Investment in Local Limited Partnerships
As of December 31, 1999, the Partnership has investments in eight active real
estate limited partnerships (Local Limited Partnerships), which are accounted
for on the equity method (Note 4). The investment account represents the sum
of the capital investment and unamortized cost of acquisition less the Part-
nership's share in losses since the date of acquisition. The Partnership
discontinues recognizing losses and amortizing cost of acquisition under the
equity method 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 rent-up fees paid by the Partnership to the General Partner, deducted
when paid for income tax reporting purposes (Note 2), are capitalized as costs
of acquisition of the Local Limited Partnerships for financial reporting pur-
poses. These costs and other costs of acquisition are amortized using the
straight-line method over the lives (fifteen to forty years) of the Local
Limited Partnerships' properties. Amortization is disLE>
<CAPTION>
<S>
<C> <C> <C> <C>
Buildings
and
Partnership/Location Land Improvement(B) Total
Community Circle, Ltd.
Cleveland, OH $ 240,000 $ 4,335,694 $ 4,575,694
Crowninshield Apartments
Associates, Peabody, MA 128,109 6,883,435 7,011,544
Holly Street Associates
Lawrence and Matheun, MA 28,353 2,243,841 2,272,194
King Drive Apartments
Assoc., Chicago, IL 340,494 6,844,934 7,185,428
Met-Paca I Associates
New York, New York 83,642 1,163,487 1,247,129
Morrisania II Associates
New York, New York 91,956 5,475,112 5,567,068
Southern Boulevard
Partners, Bronx, NY 19,219 2,794,787 2,814,006
808 Investments Limited
Partnership:
Sedgefield 550,000 3,762,531 4,312,531
Summit 1,790,000 6,675,056 8,465,056
Windsor 1,500,000 9,702,264 11,202,264
$4,771,773 $49,881,141 $54,652,914
</TABLE>
<TABLE>
<S>
<C> <C> <C> <C> <C>
Depreciation
in Latest
Date of Income
Accumulated Completion of Date Statement
Partnership/Location Depreciation Construction Acquired is Computed
Community Circle, Ltd.
Cleveland, OH $ (2,933,585) 1974 1973 3-40 years
Crowninshield Apartments
Associates, Peabody, MA (6,220,989) 1975 1973 10-20 years
Holly Street Associates
Lawrence and Matheun, MA (1,793,679) 1975 1973 22-40 years
King Drive Apartments
Assoc., Chicago, IL (6,172,614) 1974 1973 12-20 years
Met-Paca I Associates
New York, New York (1,011,192) 1974 1973 5-20 years
Morrisania II Associates
New York, New York (5,358,110) 1975 1973 10 25 years
Southern Boulevard
Partners, Bronx, NY (2,394,909) 1974 1973 20-25 years
808 Investments Limited
Partnership:
Sedgefield (304,241) 1988 1997 7-27.5 years
Summit (524,083) 1987 1997 7-27.5 years
Windsor (787,889) 1986 1997 7-27.5 years
$(27,501,291)
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Balance at January
1, 1998 $4,771,773 $48,478,092 $53,249,865 $24,498,269
Additions during
year -0- 808,263 808,263 -0-
Disposals during year -0- -0- -0- -0-
Depreciation expense -0- -0- -0- 1,524,600
Balance at December 31,
1998 4,771,773 49,286,355 54,058,128 26,022,869
Additions during year -0- 594,786 594,786 -0-
Disposals during year -0- -0- -0- -0-
Depreciation expense -0- -0- -0- 1,478,422
Balance at December
31, 1999 $4,771,773 $49,881,141 $54,652,914 $27,501,291
</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 renova-
tion upon acquisition. Total cost of land and building for federal
income tax purposes amounts to approximately $46,176,000.
<PAGE>
