SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 21, 1997
Capital Properties, Inc.
(Exact name of registrant as specified in its charter)
Rhode Island 0-3960 05-0386287
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
One Hospital Trust Plaza, Suite 920, Providence, Rhode Island 02903
(Address of principal executive offices) (Zip Code)
(401) 331-0100
(Registrant's telephone number, including area code)
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Item 5. Other Events
As previously reported, the Company has received from the City of
Providence property tax bills for taxes assessed as of December 31, 1996
reflecting an unexpected 200% increase in the assessed valuation of a majority
of the Company's parcels in the Capital Center area, resulting in an annual
increase in property tax expense of approximately $1.37 million. The Company is
challenging this increase which was not part of a city-wide valuation.
On August 21, 1997, the Company received from the City of Providence real
property tax bills purporting to assess taxes for assessment years ending
December 31, 1990 through December 31, 1995, based upon a $42 million
retroactive increase in the assessed valuation of these same properties. The
aggregate amount of such taxes as billed is approximately $7.1 million, which
amount does not include any interest. The bills state that " interest will be
applied" to these taxes. The City of Providence has asserted that the parcels
subject to the retroactive assessment were underassessed in the prior assessment
periods. The City's claim is based on the previously announced $6.1 million
condemnation award to the Company which related to the valuation of other
property in the Capital Center area in 1987. The State of Rhode Island is
appealing the condemnation award.
The Company believes that the assessments for these prior periods are
illegal and intends to vigorously challenge them. The Company, upon consultation
with counsel, believes that its position with respect to these assessments will
be sustained; however, such proceedings can be protracted and costly, and there
can be no assurance that the Company will be successful in having the 1997
increase or these retroactive assessments overturned.
As previously reported, the Company has appealed certain of its City of
Providence 1995 and 1996 property tax assessments, which appeals are still
pending. The Company intends to accrue and pay property taxes based on the 1995
and 1996 assessed valuation while it challenges the previously reported 1997
increase and these retroactive assessments. The failure of the Company to
prevail in proceedings contesting these retroactive assessments would have a
material adverse effect on the Company's results of operations and financial
condition and, while the Company believes the likelihood of such failure to be
remote, if a court requires the Company to pay these retroactive assessments,
the Company could be forced to seek the protection of the bankruptcy courts.
This Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements represent the Company's expectations or
beliefs concerning the retroactive tax assessments and the Company's challenge
thereto. The Company cautions that these statements involve risks and
uncertainties inherent in any proceeding involving a disputed tax assessment
that could cause actual results to differ materially from those set forth in the
forward-looking statements.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Capital Properties, Inc.
(Registrant)
Date: August 22, 1997 By: /s/ Barbara J. Dreyer
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Barbara J. Dreyer,
President and Treasurer
