March 27, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Consolidated Capital Growth Fund
Form 10-KSB
File No. 0-8639
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
<PAGE>
FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from _________to _________
Commission file number 0-8639
CONSOLIDATED CAPTIAL GROWTH FUND
(Name of small business issuer in its charter)
California 94-2382571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interests
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
State issuer's revenues for its most recent fiscal year. $11,713,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Description of Business
Consolidated Capital Growth Fund (the "Partnership" or "Registrant") was
organized on December 20, 1976 as a limited partnership under the California
Uniform Limited Partnership Act. The general partner responsible for management
of the Partnership's business is ConCap Equities, Inc., a Delaware corporation
(the "General Partner" or "CEI"). The General Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO"). (See "Transfer of
Control"). The Partnership Agreement provides that the Partnership is to
terminate on December 31, 2006 unless terminated prior to such date.
The Registrant is engaged in the business of operating and holding real estate
properties for investment. Starting in 1977 through 1980, during its acquisition
phase, the Registrant acquired twenty-five existing properties. The Registrant
continues to own and operate four of these properties. All but one of these
properties, Breckinridge Square Apartments, were previously sold and have been
reacquired by the Partnership after the borrowers were unable to perform under
the terms of their note agreements. See "Item 2. Description of Properties".
Commencing February 25, 1977, the Partnership offered pursuant to a Registration
Statement filed with the Securities and Exchange Commission 50,000 Units of
Limited Partnership interest (the "Units") at a purchase price of $1,000 per
unit. The sale of Units closed on October 10, 1978, with 49,196 Units sold at
$1,000 each, or gross proceeds of approximately $49,196,000 to the Partnership.
Since its initial offering, the Registrant has not received, nor are limited
partners required to make, additional capital contributions.
Upon the Partnership's formation in 1976, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner
and Consolidated Capital Group ("CCG"), a California general partnership, was
the non-corporate general partner. In 1988, through a series of transactions,
Southmark Corporation ("Southmark") acquired controlling interest in CCEC. In
December 1988, CCEC filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan, CEI
acquired CCEC's general partner interests in the Partnership and in 15 other
affiliated public limited partnerships (the "Affiliated Partnerships") and CEI
replaced CCEC as managing general partner in all 16 partnerships. The selection
of CEI as the sole managing general partner was approved by a majority of the
limited partners in the Partnership and in each of the Affiliated Partnerships
pursuant to a solicitation of the Limited Partners dated August 10, 1990. As
part of this solicitation, the Limited Partners also approved an amendment to
the Partnership Agreement to limit changes of control of the Partnership and
approved conversion of the general partner interest of the non-corporate general
partner, CCG, to that of a special limited partner ("Special Limited Partner")
without voting and without other rights of a limited partner except to the
economic interest previously held as a general partner. Pursuant to an amendment
to the Partnership Agreement, the non-corporate general partner interest of CCG
was converted to that of a Special Limited Partner and CEI became the sole
general partner of the Partnership on December 31, 1991.
The Registrant has no employees. Management and administrative services are
performed by the General Partner and by agents retained by the General Partner.
An affiliate of the General Partner has been providing such property management
services.
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential properties because such properties
are susceptible to the impact of economic and other conditions outside of the
control of the Partnership.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed which resulted in no material adverse
conditions or liabilities. In no case has the Partnership received notice that
it is a potentially responsible party with respect to an environmental clean up
site.
The real estate business in which the Partnership is engaged is highly
competitive. There are other residential properties within the market area of
the Partnership's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the General Partner in
such market area, could have a material effect on the rental market for the
apartments at the Partnership's properties and the rents that may be charged for
such apartments. While the General Partner and its affiliates own and/or control
a significant number of apartment units in the United States, such units
represent an insignificant percentage of total apartment units in the United
States and competition for the apartments is local.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.
Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and Insignia
Properties Trust ("IPT") merged into AIMCO, a publicly traded real estate
investment trust with AIMCO being the surviving corporation (the "Insignia
Merger"). As a result, AIMCO acquired 100% ownership interest in the General
Partner. The General Partner does not believe that this transaction has had or
will have a material effect on the affairs and operations of the Partnership.
<PAGE>
Item 2. Description of Properties:
The following table sets forth the Partnership's investment in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Breckinridge Square Apartments 10/78 Fee ownership, subject to Apartment
Louisville, Kentucky first mortgage 294 units
Churchill Park Apartments 05/90 Fee ownership, subject to Apartment
Louisville, Kentucky first mortgage 384 units
The Lakes Apartments 05/88 Fee ownership, subject to Apartment
Raleigh, North Carolina first mortgage 600 units
Doral Springs Apartments
(formerly Tahoe Springs) 11/87 Fee ownership, subject to Apartment
Miami, Florida first mortgage 368 units
</TABLE>
Schedule of Properties:
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Breckinridge Square
Apartments $ 8,603 $ 6,411 5-22 yrs S/L $ 2,443
Churchill Park
Apartments 8,918 4,738 5-20 yrs S/L 4,333
The Lakes Apartments 15,280 9,081 5-19 yrs S/L 8,667
Doral Springs Apartments
(formerly Tahoe Springs) 12,402 6,650 5-20 yrs S/L 7,959
Total $45,203 $26,880 $23,402
</TABLE>
See "Note A" to the financial statements included in "Item 7. Financial
Statements" for a description of the Partnership's depreciation policy and "Note
H - Change in Accounting Principle".
<PAGE>
Schedule of Property Indebtedness
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1999 Rate Amortized Date Maturity (2)
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Breckinridge Square
Apartments
1st mortgage $ 6,000 6.95% (1) 12/1/05 $ 6,000
Churchill Park
Apartments
1st mortgage 6,450 6.95% (1) 12/1/05 6,450
The Lakes Apartments
1st mortgage 12,240 6.95% (1) 12/1/05 12,240
Doral Springs Apartments
(formerly Tahoe Springs)
1st mortgage 6,000 7.33% (1) 11/1/03 6,000
Total $ 30,690 $ 30,690
</TABLE>
(1) Interest only payments
(2) See "Item 7. Financial Statements - Note C" for information with respect
to the Registrant's ability to repay these loans and other specific
details about the loans.
Rental Rates and Occupancy:
The following table sets forth the average annual rental rates and occupancy for
1999 and 1998 for each property.
<TABLE>
<CAPTION>
Average Annual Average Annual
Rental Rates Occupancy
(per unit)
Property 1999 1998 1999 1998
<S> <C> <C> <C> <C>
Breckinridge Square Apartments $7,663 $7,420 95% 91%
Churchill Park Apartments 7,034 6,797 96% 92%
The Lakes Apartments 7,292 7,182 92% 91%
Doral Springs Apartments 8,046 7,912 95% 93%
(formerly Tahoe Springs)
</TABLE>
The General Partner attributes the increase in occupancy at Breckinridge Square
Apartments and Churchill Apartments to aggressive and effective marketing
campaigns during the latter part of 1998 and into 1999.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
residential apartment complexes in the area. The General Partner believes that
all of the properties are adequately insured. The properties are apartment
complexes which lease units for lease terms of one year or less. As of December
31, 1999, no tenant leases 10% or more of the available rental space. All of the
properties are in good condition, subject to normal depreciation and
deterioration as is typical for assets of this type and age.
Real Estate Taxes and Rates:
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing Rate
(in thousands)
Breckinridge Square Apartments $ 46 1.05%
Churchill Park Apartments 101 0.90%
The Lakes Apartments 170 1.33%
Doral Springs Apartments 306 2.16%
(formerly Tahoe Springs)
Capital Improvements:
Breckinridge Square Apartments: The Partnership completed approximately $455,000
in capital expenditures at Breckinridge Square Apartments as of December 31,
1999, consisting primarily of HVAC system upgrades, parking lot improvements,
roof improvements, appliances, electrical improvements and floor covering
replacements. These improvements were funded primarily from replacement reserves
and operations. The Partnership is currently evaluating the capital improvement
needs of the property for the upcoming year. The minimum amount to be budgeted
is expected to be $300 per unit or $88,200. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
Churchill Park Apartments: The Partnership completed approximately $389,000 in
capital expenditures at Churchill Park Apartments as of December 31, 1999,
consisting primarily of swimming pool improvements, electrical improvements, air
conditioning upgrades, appliances, interior and exterior building improvements,
and floor covering replacements. These improvements were funded primarily from
replacement reserves and operations. The Partnership is currently evaluating the
capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $300 per unit or $115,200. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
The Lakes Apartments: The Partnership completed approximately $744,000 in
capital expenditures at The Lakes Apartments as of December 31, 1999, consisting
primarily of air conditioning upgrades, major landscaping, roof replacements and
floor covering replacements. These improvements were funded primarily from
replacement reserves and operations. The Partnership is currently evaluating the
capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $300 per unit or $180,000. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
Doral Springs Apartments: The Partnership completed approximately $394,000 in
capital expenditures at Doral Springs Apartments as of December 31, 1999,
consisting primarily of swimming pool upgrades, major landscaping, parking lot
improvements, appliances, and floor covering replacements. These improvements
were funded primarily from replacement reserves and operations. The Partnership
is currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $110,400. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Item 3. Legal Proceedings
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature arising in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
During the quarter ended December 31, 1999, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.
<PAGE>
PART II
Item 5. Market for Partnership Equity and Related Partner Matters
The Partnership, a publicly-held limited partnership, offered and sold 49,196
limited partnership units aggregating $49,196,000. The Partnership currently has
2,331 holders of record owning an aggregate of 49,196 Units. Affiliates of the
General Partner owned 24,990.15 units or approximately 50.80% at December 31,
1999. No public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999, as well as for the subsequent period.
Distributions
Per Limited
Aggregate Partnership Unit
01/01/98 - 12/31/98 $ 4,313,000 (1) $76.77
01/01/99 - 12/31/99 1,491,000 (2) 30.00
01/01/00 - 03/01/00 1,010,000 (3) 20.33
(1) Consists of $3,976,000 ($3,444,000 to the limited partners or $70.00 per
limited partnership unit) from surplus funds and $337,000 ($333,000 to the
limited partners or $6.77 per limited partnership unit) from operations.
These amounts included $42,000 in withholding taxes paid by the
Partnership on behalf of the Partners.
(2) Distribution was made from operations ($1,476,000 to the limited partners
or $30.00 per limited partnership unit), and includes $26,000 in
withholding taxes paid by the Partnership on behalf of the Partners.
(3) Distribution was made from operations ($1,000,000 to the limited partners
or $20.33 per limited partnership unit).
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, and the timing of debt
maturities, refinancings, and/or property sales. The Partnership's distribution
policy is reviewed on a quarterly basis. There can be no assurance, however,
that the Partnership will generate sufficient funds from operations, after
required capital expenditures, to permit any additional distributions to its
partners in 2000 or subsequent periods. See "Item 2. Description of Properties -
Capital Improvements" for information relating to anticipated capital
expenditures at the properties.
Several tender offers were made by various parties, including affiliates of the
General Partner, during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers, AIMCO and its affiliates currently own 24,990.15
limited partnership interest in the Partnership representing approximately
50.80% of the outstanding units. It is possible that AIMCO or its affiliates
will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters. When voting on matters,
AIMCO would in all likelihood vote the Units it acquired in a manner favorable
to the interest of the General Partner because of their affiliation with the
General Partner.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.
This item should be read in conjunction with the financial statements and other
items contained elsewhere in this report.
Results of Operations
The Partnership's net income for the year ended December 31, 1999 was
approximately $1,784,000 as compared to approximately $1,404,000 for the year
ended December 31, 1998. The increase in net income is due to an increase in
total revenues, which was partially offset by an increase in total expenses. The
increase in total revenues is attributable to an increase in rental income which
was partially offset by a decrease in other income. The increase in rental
income is primarily attributable to an increase in average rental rates and an
increase in occupancy at all four of the Partnership's properties. The decrease
in other income is due primarily to lower interest income as a result of a
decrease in the average amount of interest bearing cash balances as a result of
distributions paid during 1998 and 1999.
Total expenses increased primarily due to an increase in general and
administrative expenses, depreciation expense and to a lesser extent, an
increase in property tax expense. These increases were partially offset by a
decrease in operating expense. Operating expense decreased primarily due to
decreases in maintenance and insurance expenses. Maintenance expense decreased
due to interior and exterior building improvements which were incurred during
1998. Insurance expense decreased at all four of the investment properties due
to a change in the hazard insurance carrier during the third quarter of 1998.
The decrease in operating expense was slightly offset by an increase in
advertising costs incurred to increase occupancy at all four of the
Partnership's properties. The increase in depreciation expense resulted from an
increase in capital improvements performed at all of the investment properties
during the past two years to improve the overall appearance and quality of the
properties. The increase in property tax expense is due to increased tax
billings due to an increase in the assessed value of the properties by the
taxing authorities for Doral Springs Apartments and Churchill Park Apartments.
General and administrative expenses increased due to Partnership management fees
paid as a result of the increase in distributions from operations in 1999 as
compared to 1998, as required by the Partnership Agreement. Included in general
and administrative expense at both December 31, 1999 and 1998 are management
reimbursements to the General Partner allowed under the Partnership Agreement.
In addition, costs associated with the quarterly and annual communications with
investors and regulatory agencies and the annual audit required by the
Partnership Agreement are also included.
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the General Partner. The effect of the change in 1999 was to
increase net income by approximately $128,000 ($2.58 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods, is
not material. The accounting principle change will not have an effect on cash
flow, funds available for distribution or fees payable to the General Partner
and affiliates.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of this
plan, the General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At December 31, 1999, the Partnership had cash and cash equivalents of
approximately $1,988,000 compared to approximately $968,000 at December 31,
1998. The increase in cash and cash equivalents of approximately $1,020,000 is
primarily due to approximately $4,159,000 of cash provided by operating
activities, which was partially offset by approximately $1,648,000 of cash used
in investing activities and approximately $1,491,000 of cash used in financing
activities. Cash used in financing activities consisted of partner
distributions. Cash used in investing activities consisted primarily of property
improvements and replacements, which was partially offset by net withdrawals
from escrow accounts maintained by the mortgage lender and insurance proceeds
received as a result of hurricane damage at The Lakes Apartments. The
Partnership invests its working capital reserves in money market accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the investment properties to adequately maintain the
physical assets and other operating needs of the Registrant and to comply with
Federal, state, local, legal and regulatory requirements. The Partnership is
currently evaluating the capital improvement needs of the properties for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $493,800. Additional improvements may be considered and will depend on the
physical condition of the properties as well as replacement reserves and
anticipated cash flow generated by the properties.
The additional capital expenditures will be incurred only if cash is available
from operations and Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $30,690,000 requires monthly interest only
payments. These notes require balloon payments on November 1, 2003, and December
1, 2005. The General Partner may attempt to refinance such indebtedness and/or
sell the properties prior to such maturity date. If the properties cannot be
refinanced or sold for a sufficient amount, the Registrant will risk losing such
properties through foreclosure.
During the year ended December 31, 1999, cash distributions of approximately
$1,491,000 ($1,476,000 of which was paid to the limited partners, $30.00 per
limited partnership unit) were paid from operations. During the year ended
December 31, 1998, the Partnership distributed approximately $3,976,000
($3,444,000 to the limited partners or $70.00 per limited partnership unit) from
surplus funds and approximately $337,000 ($333,000 to the limited partners or
$6.77 per limited partnership unit) from operations. Payments were made by the
Partnership of $26,000 and $42,000 in 1999 and 1998, respectively, to the North
Carolina Department of Revenue for withholding taxes related to income generated
by the Partnership's investment properties located in these states. These
payments were treated as distributions to the partners and are included in the
distribution amounts above. Subsequent to December 31, 1999, the Partnership
declared and paid a distribution of approximately 1,010,000 ($1,000,000 of which
was paid to the limited partners, $20.33 per limited partnership unit) from
operations. Future cash distributions will depend on the levels of net cash
generated from operations, the availability of cash reserves and the timing of
debt maturities, refinancings, and/or property sales. The Registrant's
distribution policy is reviewed on a quarterly basis. There can be no assurance,
however, that the Partnership will generate sufficient funds from operations,
after required capital expenditures, to permit any additional distributions to
its partners in 2000 or subsequent periods.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the General Partner and its affiliates for management and
administrative services ("Managing Agent"). Any of the Managing Agent's computer
programs or hardware that had date-sensitive software or embedded chips might
have recognized a date using "00" as the year 1900 rather than the year 2000.
This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
<PAGE>
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership have not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
<PAGE>
Item 7. Financial Statements
CONSOLIDATED CAPTIAL GROWTH FUND
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Balance Sheet - December 31, 1999
Statements of Operations - Years ended December 31, 1999 and 1998
Statements of Changes in Partners' Deficit - Years ended December 31,
1999 and 1998
Statements of Cash Flows - Years ended December 31, 1999 and 1998
Notes to Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Consolidated Capital Growth Fund
We have audited the accompanying balance sheet of Consolidated Capital Growth
Fund as of December 31, 1999, and the related statements of operations, changes
in partners' deficit and cash flows for each of the two years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consolidated Capital Growth
Fund at December 31, 1999, and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.
As discussed in Note H to the financial statements, the Partnership changed its
method of accounting to capitalize the cost of exterior painting and major
landscaping effective January 1, 1999.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
February 24, 2000
<PAGE>
CONSOLIDATED CAPITAL GROWTH FUND
BALANCE SHEET
(in thousands, except unit data)
December 31, 1999
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 1,988
Receivables and deposits 394
Restricted escrows 359
Other assets 510
Investment properties (Notes C and E):
Land $ 4,610
Buildings and related personal property 40,593
45,203
Less accumulated depreciation (26,880) 18,323
$ 21,574
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 267
Tenant security deposit liabilities 241
Accrued property taxes 23
Other liabilities 434
Mortgage notes payable (Note C) 30,690
Partners' Deficit
General partner $ (4,779)
Limited partners (49,196 units issued and
outstanding) (5,302) (10,081)
$ 21,574
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CONSOLIDATED CAPTIAL GROWTH FUND
STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
<S> <C> <C>
Revenues:
Rental income $11,066 $10,554
Other income 647 694
Total revenues 11,713 11,248
Expenses:
Operating 4,294 4,564
General and administrative 536 351
Depreciation 2,227 2,098
Interest 2,234 2,234
Property taxes 638 597
Total expenses 9,929 9,844
Net income (Note F) $ 1,784 $ 1,404
Net income allocated to general partner (1%) $ 18 $ 14
Net income allocated to limited partners (99%) 1,766 1,390
$ 1,784 $ 1,404
Net income per limited partnership unit $ 35.90 $ 28.25
Distributions per limited partnership unit $ 30.00 $ 76.77
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CONSOLIDATED CAPTIAL GROWTH FUND
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 49,196 $ 1 $ 49,196 $ 49,197
Partners' deficit
at December 31, 1997 49,196 $ (4,260) $ (3,205) $ (7,465)
Distribution to partners -- (536) (3,777) (4,313)
Net income for the year ended
December 31, 1998 -- 14 1,390 1,404
Partners' deficit at
December 31, 1998 49,196 (4,782) (5,592) (10,374)
Distribution to partners -- (15) (1,476) (1,491)
Net income for the year
ended December 31, 1999 -- 18 1,766 1,784
Partners' deficit
at December 31, 1999 49,196 $ (4,779) $ (5,302) $(10,081)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CONSOLIDATED CAPITAL GROWTH FUND
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,784 $ 1,404
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 2,227 2,098
Amortization of loan costs 78 78
Loss on disposal of property -- 18
Casualty gain (29) --
Bad debt 123 158
Changes in assets and liabilities:
Receivables and deposits 131 4
Other assets (47) 17
Accounts payable 103 34
Tenant security deposit liabilities (70) 20
Accrued property taxes (152) 16
Other liabilities 11 73
Net cash provided by operating activities 4,159 3,920
Cash flows used in investing activities:
Property improvements and replacements (1,982) (1,090)
Net withdrawals from (deposits to) restricted
escrows 286 (42)
Insurance proceeds received 48 --
Net cash used in investing activities (1,648) (1,132)
Cash flows used in financing activities:
Distributions to partners (1,491) (4,313)
Net cash used in financing activities (1,491) (4,313)
Net increase (decrease) in cash and cash equivalents 1,020 (1,525)
Cash and cash equivalents at beginning of period 968 2,493
Cash and cash equivalents at end of period $ 1,988 $ 968
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,156 $ 2,156
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CONSOLIDATED CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
Note A - Organization and Significant Accounting Policies
Organization: Consolidated Capital Growth Fund (the "Partnership" or
"Registrant") was organized on December 20, 1976 as a limited partnership under
the California Uniform Limited Partnership Act. The general partner responsible
for management of the Partnership's business is ConCap Equities, Inc., a
Delaware corporation (the "General Partner" or "CEI"). The General Partner is a
subsidiary of Apartment Investment and Management Company ("AIMCO"). See "Note B
- - Transfer of Control". The director and officers of the General Partner also
serve as executive officers of AIMCO. The Partnership Agreement provides that
the Partnership is to terminate on December 31, 2006 unless terminated prior to
such date. The Partnership commenced operations in 1977 and completed its
acquisition of apartment properties in 1980. The Partnership operates four
apartment properties located in the southern United States.
Uses of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents: Includes cash on hand and in banks and money market
accounts. At certain times, the amount of cash deposited at a bank may exceed
the limit on insured deposits.
Restricted Escrows:
Replacement Reserve Account - At the time of the December 15, 1995,
refinancing, approximately $357,000 of the proceeds were designated for a
"replacement reserve fund" for certain capital replacements (as defined in the
Replacement Reserve Agreement) at Breckinridge Square Apartments, Churchill Park
Apartments, and The Lakes Apartments. At December 31, 1999, the balance was
approximately $359,000.
Repair Escrow Account - In addition to the Replacement Reserve Account,
approximately $542,000 of the refinancing proceeds were designated for a "repair
escrow" to cover necessary repairs and replacements to be completed at
Breckinridge Square Apartments, Churchill Park Apartments, and The Lakes
Apartments within one year of closing. Additionally, at the time of the November
13, 1996, financing of Doral Springs Apartments, approximately $58,000 of the
proceeds were also designated for a "repair escrow". During 1999 the remaining
balance in this account was returned to the properties as all required capital
improvements had been completed.
Depreciation: Depreciation is provided by the straight-line method over the
estimated lives of the apartment properties and related personal property. For
Federal income tax purposes, the accelerated cost recovery method is used (1)
for real property over 15 years for additions prior to March 16, 1984, 18 years
for additions after March 15, 1984, and before May 9, 1985, and 19 years for
additions after May 8, 1985, and before January 1, 1987, and (2) for personal
property over 5 years for additions prior to January 1, 1987. As a result of the
Tax Reform Act of 1986, for additions after December 31, 1986, the modified
accelerated cost recovery method is used for depreciation of (1) real property
additions over 27 1/2 years and (2) personal property additions over 5 to 15
years.
Effective January 1, 1999 the Partnership changed its method to capitalize the
cost of exterior painting and major landscaping (see Note H).
Loan Costs: Loan costs of approximately $695,000, less accumulated amortization
of approximately $292,000 are included in other assets and are being amortized
on a straight-line basis over the life of the loans.
Tenant Security Deposits: The Partnership requires security deposits from
lessees for the duration of the lease and such deposits are included in
receivables and deposits. The security deposits are refunded when the tenant
vacates, provided the tenant has not damaged its space and is current on its
rental payments.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
the General Partner's policy is to offer rental concessions during particularly
slow months or in response to heavy competition from other similar complexes in
the area. Concessions are charged against rental income as incurred.
Partners' Capital (Deficit): The Limited Partnership Agreement ("Agreement")
provides that net income and net losses from operations for both financial and
tax reporting purposes shall be allocated 99% to the Limited Partners and 1% to
the General Partner. Net income per limited partnership unit for both 1999 and
1998 was computed as 99% of net income divided by 49,196 units outstanding.
All distributions other than Surplus Funds distributions (as defined in the
Agreement) are allocated 99% to the Limited Partners and 1% to the General
Partner. Distributions of Surplus Funds were allocated 100% to the Limited
Partners until 1986 when the Limited Partners had received a return of their
capital contributions plus a 10% cumulative return. Pursuant to the provisions
of the Agreement, the General Partner has been entitled to 14% of Surplus Fund
distributions since 1986. However, in connection with a settlement agreement
between CEI and two affiliated partnerships, a portion of the General Partner's
interest in the Partnership was assigned to the two affiliated partnerships. The
two affiliated partnerships received distributions of approximately $12,000 and
$424,000 from the Partnership during 1999 and 1998, respectively.
The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999, as well as for the subsequent period.
Distributions
Per Limited
Aggregate Partnership Unit
01/01/98 - 12/31/98 $ 4,313,000 (1) $76.77
01/01/99 - 12/31/99 1,491,000 (2) 30.00
01/01/00 - 03/01/00 1,010,000 (3) 20.33
(1) Consists of $3,976,000 ($3,444,000 to the limited partners or $70.00 per
limited partnership unit) from surplus funds and $337,000 ($333,000 to the
limited partners or $6.77 per limited partnership unit) from operations.
These amounts included $42,000 in withholding taxes paid by the
Partnership on behalf of the Partners.
(2) Distribution was made from operations ($1,476,000 to the limited partners
or $30.00 per limited partnership unit) and includes $26,000 in
withholding taxes paid by the Partnership on behalf of the Partners.
(3) Distribution was made from operations ($1,000,000 to the limited partners
or $20.33 per limited partnership unit).
Investment Properties: Investment properties consist of four apartment complexes
and are stated at cost. Acquisition fees are capitalized as a cost of real
estate. In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of", the Partnership records impairment losses on
long-lived assets used in operations when events and circumstances indicate that
the assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of those assets.
Costs of apartment properties that have been permanently impaired have been
written down to appraised value. No adjustments for impairment of value were
recorded in the years ended December 31, 1999 and 1998.
Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information" established standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. (See "Note G" for segment disclosures.)
Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising costs of approximately $181,000 and $127,000 for the years ended
December 31, 1999 and 1998, respectively, were charged to operating expense as
incurred.
Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value
of Financial Instruments", as amended by SFAS No. 119, "Disclosures about
Derivative Financial Instruments and Fair Value of Financial Instruments",
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's long term debt, after
discounting the scheduled loan payments to maturity approximates its carrying
balance.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the General Partner. The General Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.
<PAGE>
Note C - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1999 Interest Rate Date Maturity
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Breckinridge Square
Apartments
1st mortgage $ 6,000 $ 35 6.95% 12/1/05 $ 6,000
Churchill Park
Apartments
1st mortgage 6,450 37 6.95% 12/1/05 6,450
The Lakes Apartments
1st mortgage 12,240 71 6.95% 12/1/05 12,240
Doral Springs Apartments
(formerly Tahoe Springs)
1st mortgage 6,000 37 7.33% 11/1/03 6,000
Total $ 30,690 $180 $ 30,690
</TABLE>
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's rental properties and by pledge of revenues from the respective
rental properties. Certain of the notes impose prepayment penalties if repaid
prior to maturity and prohibit resale of the properties subject to existing
indebtedness.
Note D - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership Agreement provides for (i) certain payments to affiliates for
services and (ii) reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership. The following amounts were paid or accrued to the
General Partner and affiliates during the years ended December 31, 1999 and
1998:
1999 1998
(in thousands)
Property management fees (included in
operating expense) $ 598 $ 572
Reimbursement for services of affiliates (included in
investment properties, operating expense and
general and administrative expense) 229 198
Partnership management fees (included in general and
administrative expense) 131 30
During the years ended December 31, 1999 and 1998, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $598,000 and $572,000 for the
years ended December 31, 1999 and 1998, respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $229,000 and $198,000 for the
years ended December 31, 1999 and 1998, respectively.
The Partnership Agreement provides for a fee equal to 9% of the total
distributions made to the limited partners from "cash available for
distribution" (as defined in the Agreement) to be paid to the General Partner
for executive and administrative management services. During the years ended
December 31, 1999 and 1998, the General Partner received $131,000 and $30,000,
respectively, for providing these services.
Several tender offers were made by various parties, including affiliates of the
General Partner, during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers, AIMCO and its affiliates currently own 24,990.15
of limited partnership interest in the Partnership representing approximately
50.80% of the outstanding units. It is possible that AIMCO or its affiliates
will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters. When voting on matters,
AIMCO would in all likelihood vote the Units it acquired in a manner favorable
to the interest of the General Partner because of their affiliation with the
General Partner.
<PAGE>
Note E - Investment Properties and Accumulated Depreciation
Initial Cost
To Partnership
(in thousands)
<TABLE>
<CAPTION>
Buildings Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Breckinridge Square
Apartments
Louisville, Kentucky $ 6,000 $ 641 $ 4,720 $ 3,242
Churchill Park Apartments
Louisville, Kentucky 6,450 566 6,510 1,842
The Lakes Apartments
Raleigh, North Carolina 12,240 946 9,605 4,729
Doral Springs Apartments
(formerly Tahoe Springs)
Miami, Florida 6,000 2,848 8,492 1,062
Totals $30,690 $ 5,001 $29,327 $10,875
</TABLE>
<TABLE>
<CAPTION>
Gross Amount At Which
Carried
At December 31, 1999
(in thousands)
Buildings
And Related
Personal Accumulated Date of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Breckinridge Square
Apartments
Louisville, Kentucky $ 641 $7,962 $ 8,603 $6,411 1971 10/78 5-22
ChurchillPark
Apartments
Louisville, Kentucky 566 8,352 8,918 4,738 1970 05/90 5-20
The Lakes Apartments
Raleigh, North 946 14,334 15,280 9,081 1973 05/88 5-19
Carolina
Doral Springs
Apartments
(formerly Tahoe
Springs)
Miami, Florida 2,457 9,945 12,402 6,650 1972 - 1975 11/87 5-20
Totals $4,610 $40,593 $45,203 $26,880
</TABLE>
Reconciliation of "Investment Properties and Accumulated Depreciation":
Years Ended December 31,
1999 1998
(in thousands)
Real Estate
Balance at beginning of year $43,307 $42,258
Property improvements 1,982 1,090
Disposals of property (86) (41)
Balance at end of Year $45,203 $43,307
Accumulated Depreciation
Balance at beginning of year $24,705 $22,630
Additions charged to expense 2,227 2,098
Disposals of property (52) (23)
Balance at end of year $26,880 $24,705
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $42,596,000 and $40,656,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998, is approximately $19,194,000 and $17,390,000.
Note F - Income Taxes
The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.
The following is a reconciliation of reported net income and Federal taxable
income (in thousands, except per unit data):
1999 1998
Net income as reported $1,784 $1,404
Add (deduct):
Fixed asset write-offs and
casualty gain (29) 19
Depreciation differences 418 457
Prepaid rent (41) 14
Other 19 28
Federal taxable income $2,151 $1,922
Federal taxable income per
limited partnership unit $43.28 $38.68
The tax basis of the Partnership's assets and liabilities is approximately
$10,959,000 greater than the assets and liabilities as reported in the financial
statements.
Note G - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consist of four apartment complexes
located in Florida, Kentucky (2), and North Carolina. The Partnership rents
apartment units to tenants for terms that are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in the summary of significant accounting
policies.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
is managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the years 1999 and 1998 is shown in the tables below.
The "Other" column includes partnership administration related items and income
and expense not allocated to the reportable segment.
1999
Residential Other Totals
(in thousands)
Rental income $11,066 $ -- $11,066
Other income 628 19 647
Interest expense 2,234 -- 2,234
Depreciation 2,227 -- 2,227
General and administrative expense -- 536 536
Segment profit (loss) 2,301 (517) 1,784
Total assets 21,375 199 21,574
Capital expenditures for investment
properties 1,982 -- 1,982
1998
Residential Other Totals
(in thousands)
Rental income $10,554 $ -- $10,554
Other income 582 112 694
Interest expense 2,234 -- 2,234
Depreciation 2,098 -- 2,098
General and administrative expense -- 351 351
Segment profit (loss) 1,643 (239) 1,404
Total assets 20,775 614 21,389
Capital expenditures for investment
properties 1,090 -- 1,090
Note H - Change in Accounting Principle
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the General Partner. The effect of the change in 1999 was to
increase net income by approximately $128,000 ($2.58 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods, is
not material. The accounting principle change will not have an effect on cash
flow, funds available for distribution or fees payable to the General Partner
and affiliates.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The Registrant has no officers or directors. The General Partner is ConCap
Equities, Inc. The names and ages of, as well as the position and offices held
by, the present executive officers and director of the General Partner are set
forth below. There are no family relationships between or among any officers or
directors.
Name Age Position
Patrick J. Foye 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the General
Partner since October 1, 1998. Mr. Foye has served as Executive Vice President
of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a partner in the
law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998 and was
Managing Partner of the firm's Brussels, Budapest and Moscow offices from 1992
through 1994. Mr. Foye is also Deputy Chairman of the Long Island Power
Authority and serves as a member of the New York State Privatization Council. He
received a B.A. from Fordham College and a J.D. from Fordham University Law
School.
Martha L. Long has been Senior Vice President and Controller of the General
Partner and AIMCO since October 1998, as a result of the acquisition of Insignia
Financial Group, Inc. From June 1994 until January 1997, she was the Controller
for Insignia, and was promoted to Senior Vice President - Finance and Controller
in January 1997, retaining that title until October 1998. From 1988 to June
1994, Ms. Long was Senior Vice President and Controller for The First Savings
Bank, FSB in Greenville, South Carolina.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant under Rule 16a-3(e) during the Registrant's most recent fiscal
year and Forms 5 and amendments thereto furnished to the Registrant with respect
to its most recent fiscal year, the Registrant is not aware of any director,
officer, beneficial owner of more than ten percent of the units of limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms, reports required by section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years except as follows:
AIMCO and its joint filers failed to timely file a Form 4 with respect to its
acquisition of Units.
Item 10. Executive Compensation
None of the directors and officers of the General Partner received any
remuneration from the Registrant.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
Except as noted below, no person or entity was known by the Registrant to own of
record or beneficially more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1999.
Entity Number of Units Percentage
AIMCO Properties, LP 2,989.50 6.08%
(an affiliate of AIMCO)
Madison River Properties LLC 2,690.00 5.47%
(an affiliate of AIMCO)
Insignia Properties LP 19,310.65 39.25%
(an affiliate of AIMCO)
Insignia Properties, L.P. and Madison River Properties LLC are indirectly
ultimately owned by AIMCO. Their business address is 55 Beattie Place,
Greenville, SC 29602.
AIMCO Properties, LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, CO 80222.
(b) Beneficial Owners of Management
No director or officer of the General Partner owns any units of the Partnership
of record or beneficially.
(c) Change in Control
Beneficial Owners of CEI
As of December 31, 1999, an affiliate of the General Partner was the sole
shareholder of its common stock:
Number of Percent
Name and Address Units Of Total
Insignia Properties Trust
55 Beattie Place
Greenville, SC 29602 100,000 100%
<PAGE>
Item 12. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership Agreement provides for (i) certain payments to affiliates for
services and (ii) reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership. The following amounts were paid or accrued to the
General Partner and affiliates during the years ended December 31, 1999 and
1998:
1999 1998
(in thousands)
Property management fees $ 598 $ 572
Reimbursement for services of affiliates 229 198
Partnership management fees 131 30
During the years ended December 31, 1999 and 1998, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $598,000 and $572,000 for the
years ended December 31, 1999 and 1998, respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $229,000 and $198,000 for the
years ended December 31, 1999 and 1998, respectively.
The Partnership Agreement provides for a fee equal to 9% of the total
distributions made to the limited partners from "cash available for
distribution" to the limited partners (as defined in the Agreement) to be paid
to the General Partner for executive and administrative management services.
During the years ended December 31, 1999 and 1998, the General Partner received
$131,000 and $30,000, respectively, for providing these services.
Several tender offers were made by various parties, including affiliates of the
General Partner, during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender offers, AIMCO and its affiliates currently own 24,990.15
limited partnership interest in the Partnership representing approximately
50.80% of the outstanding units. It is possible that AIMCO or its affiliates
will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters. When voting on matters,
AIMCO would in all likelihood vote the Units it acquired in a manner favorable
to the interest of the General Partner because of their affiliation with the
General Partner.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 18, Independent Accountants' Preferability Letter for Change
in Accounting Principle, is filed as an exhibit to this report.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed during the fourth quarter of fiscal year
1999:
None.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL GROWTH FUND
By: ConCap Equities, Inc.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date:
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities on the date
indicated.
/s/Patrick J. Foye Executive Vice President Date:
Patrick J. Foye and Director
/s/Martha L. Long Senior Vice President and Date:
Martha L. Long Controller
<PAGE>
EXHIBIT INDEX
Exhibit
2.1 Agreement and Plan of Merger, dated as of October 1, 1998 between
AIMCO and IPT.
3 Certificate of Limited Partnership, as amended to date.
10.1 Property Management Agreement No. 201 dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September 30,
1990).
10.2 Property Management Agreement No. 302 dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September 30,
1990).
10.3 Property Management Agreement No. 401 dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September 30,
1990).
10.4 Bill of Sale and Assignment dated October 23, 1990, by and between
CCEC and ConCap Services Company (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September 30,
1990).
10.5 Assignment and Assumption Agreement dated October 23, 1990, by and
between CCEC and ConCap Management Limited Partnership ("CCMLP")
(Incorporated by reference to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 1990).
10.6 Assignment and Agreement as to Certain Property Management Services
dated October 23, 1990, by and between CCMLP and ConCap Capital
Company (Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.7 Assignment and Assumption Agreement dated October 23, 1990, by and
between CCMLP and Horn-Barlow Companies (200 Series of Property
Management Contracts), (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).
10.8 Assignment and Assumption Agreement dated October 23, 1990, by and
between CCMLP and Metro ConCap, Inc. (300 Series of Property
Management Contracts), (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).
<PAGE>
EXHIBIT INDEX
10.9 Assignment and Assumption Agreement dated October 23, 1990, by and
between CCMLP and R&B Realty Group (400 Series of Property Management
Contracts) (Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1999).
10.10Assignment and Assumption Agreement dated September 1, 1991, by and
between the Partnership and CCGF Associates, Ltd. (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 1991).
10.11Construction Management Cost Reimbursement Agreement dated January 1,
1991, by and between the Partnership and Horn-Barlow Companies (the
"Horn-Barlow Construction Management Agreement"). (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 1991).
10.12Assignment and Assumption Agreement dated September 1, 1991, by and
between the Partnership and CCGF Associates, Ltd. (Horn-Barlow
Construction Management Agreement). (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31, 1991).
10.13Construction Management Cost Reimbursement Agreement dated January 1,
1991, by and between the Partnership and Metro ConCap, Inc.
(Incorporated by reference to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.14Construction Management Cost Reimbursement Agreement dated January 1,
1991, by and between the Partnership and R&B Apartment Management
Company, Inc. (Incorporated by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.15Investor Services Agreement dated October 23, 1990, by and between
the Partnership and CCEC (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).
10.16Assignment and Assumption Agreement (Investor Services Agreement)
dated October 23, 1990, by and between CCEC and ConCap Services
Company (Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1990).
10.17Letter of Notice dated December 20, 1991, from Partnership Services,
Inc. ("PSI") to the Partnership regarding the change in ownership and
dissolution of ConCap Services Company whereby PSI assumed the
Investor Services Agreement. (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991).
10.18Financial Services Agreement dated October 23, 1990, by and between
the Partnership and CCEC (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).
EXHIBIT INDEX
10.19Assignment and Assumption Agreement (Financial Service Agreement)
dated October 23, 1990, by and between CCEC and ConCap Capital Company
(Incorporated by reference to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 1990).
10.20Letter of Notice dated December 20, 1991, from PSI to the Partnership
regarding the change in ownership and dissolution of ConCap Captial
Company whereby PSI assumed the Financial Services Agreement
(Incorporated by reference to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.21Property Management Agreement No. 414 dated May 13, 1993, by and
between the Partnership and Coventry Properties, Inc. (Incorporated by
reference to the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993).
10.22Assignment and Assumption Agreement (Property Management Agreement
No. 414) dated May 13, 1993, by and between Coventry Properties, Inc.,
R&B Apartment Management Company, Inc., and Partnership Services, Inc.
(Incorporated by reference to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 1993).
10.23Assignment Agreement as to Certain Property Management Services dated
May 13, 1993, by and between Coventry Properties, Inc. and Partnership
Services, Inc. (Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993).
10.24Property Management Agreement No. 506 dated June 1, 1993, by and
between the Partnership and Coventry Properties, Inc.
10.25Assignment and Assumption Agreement as to Certain Property Management
Services dated November 17, 1993, by and between Coventry Properties,
Inc. and Partnership Services, Inc.
10.27Assignment and Assumption Agreement as to Certain Property Management
Services dated November 17, 1993, by and between Coventry Properties,
Inc. and Partnership Services, Inc.
10.28Multifamily Note dated November 30, 1995 between Consolidated Capital
Growth Fund, a California limited partnership, and Lehman Brothers
Holdings Inc. d/b/a Lehman Capital, A Division of Lehman Brothers
Holdings, Inc.
10.29Multifamily Note dated November 30, 1995 between Consolidated Capital
Growth Fund, a California limited partnership, and Lehman Brothers
Holdings Inc. d/b/a Lehman Capital, A Division of Lehman Brothers
Holdings, Inc.
10.30Multifamily Note dated November 30, 1995 between Consolidated Capital
Growth Fund, a California limited partnership, and Lehman Brothers
Holdings Inc. d/b/a Lehman Capital, A Division of Lehman Brothers
Holdings, Inc.
10.31Multifamily Note dated November 1, 1996 between Consolidated Capital
Growth Fund, a California limited partnership, and Lehman Brothers
Holdings Inc. d/b/a Lehman Capital, A Division of Lehman Brothers
Holdings, Inc.
11 Statement regarding computation of Net Income per Limited Partnership
Unit (Incorporated by reference to Note A of Item 7 - Financial
Statements of this Form 10-K).
16 Letter, dated August 12, 1992, from Ernst & Young to the Securities
and Exchange Commission regarding change in certifying accountant.
(Incorporated by reference to Form 8-K dated August 6, 1992).
18 Independent Accountants' Preferability Letter for Change in Accounting
Principle.
27 Financial Data Schedule.
<PAGE>
Exhibit 18
February 7, 2000
Mr. Patrick J. Foye
Executive Vice President
ConCap Equities, Inc.
General Partner of Consolidated Capital Growth Fund
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
Dear Mr. Foye:
Note H of Notes to the Financial Statements of Consolidated Capital Growth Fund
included in its Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. You have
advised us that you believe that the change is to a preferable method in your
circumstances because it provides a better matching of expenses with the related
benefit of the expenditures and is consistent with policies currently being used
by your industry and conforms to the policies of the General Partner.
There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting for exterior painting and major landscaping is to an acceptable
alternative method which, based on your business judgment to make this change
for the reasons cited above, is preferable in your circumstances.
Very truly yours,
/s/Ernst & Young LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Growth Fund 1999 Fourth Quarter 10-KSB and is qualified in its entirety
by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000201529
<NAME> Consolidated Capital Growth Fund
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,988
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 45,203
<DEPRECIATION> 26,880
<TOTAL-ASSETS> 21,574
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 30,690
0
0
<COMMON> 0
<OTHER-SE> (10,081)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 11,713
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,929
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,234
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,784
<EPS-BASIC> 35.90 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
