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): July 31, 2000
JMB INCOME PROPERTIES, LTD. - VII
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(Exact name of registrant as specified in its charter)
Illinois 0-9555 36-2999384
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(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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WESTDALE MALL
Cedar Rapids, Iowa
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. JMB Income Properties, Ltd.
- VII (the "Partnership"), an Illinois limited partnership, was a 64.7%
partner with an unaffiliated venture partner, Rouse-Westdale, LLC, a
Maryland limited liability company (the "Venture Partner") in Westdale
Associates ("Westdale Associates"), an Illinois limited partnership, which
owns a shopping center located in Cedar Rapids, Iowa commonly known as the
Westdale Mall (the "Property").
The Partnership began negotiations with the Venture Partner to sell
its interest in the venture in the second quarter of 2000. On July 31,
2000, the Partnership sold its interest in the Westdale Mall to the Venture
Partner for $2,000,000 in cash, subject to closing costs, broker
commissions and prorations. This amount approximates the sales proceeds
the Partnership would have received if the Property had been sold for a
price of approximately $30,700,000 and the existing debt of approximately
$22,800,000 and a ground lease obligation of approximately $5,900,000 had
been paid. Though nominally a 64.7% partner in Westdale Associates,
preference levels under the Partnership Agreement provide that 100% of the
net proceeds would have been distributed to the Partnership at a deemed
selling price of $30,700,000. The Partnership received cash proceeds from
this sale of approximately $1,612,000 (after closing costs and broker
commissions, but before prorations of approximately $240,000). The
Property was approximately 87% occupied at the date of sale. The
Partnership has no liability for any representations, warranties or
covenants in connection with the sale of its interest in Westdale
Associates. The Property was classified as held for sale as of April 1,
2000, and therefore, has not been subject to continued depreciation as of
that date for financial reporting purposes. The Partnership expects to
recognize a gain on sale of approximately $10,100,000 and $8,500,000 for
financial reporting and Federal income tax purposes, respectively, in 2000.
The Partnership Agreement provides that the General Partners, subject
to certain limitations, shall receive as a distribution from the sale of a
real property by the Partnership an amount equal to 3% of the selling
price, and that the remaining proceeds (net after expenses and retained
working capital) be distributed 85% to the Limited Partners and 15% to the
General Partners. However, the Limited Partners shall receive 100% of such
net sale proceeds until the Limited Partners (i) have received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership
and (ii) have received cumulative cash distributions from the Partnership's
operations which, when combined with sale or refinancing proceeds
previously distributed, equal a 6% annual return on the Limited Partners'
average capital investment for each year (their initial capital investment
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as reduced by sale or refinancing proceeds previously distributed)
commencing with the fourth fiscal quarter of 1980. Two-thirds of the 3%
distribution to the General Partners discussed above is further
subordinated to the Limited Partners receiving out of sales proceeds an
amount equal to 110% of their initial capital investment in the
Partnership. The Limited Partners have received cash distributions that
satisfied the requirements in (i) and (ii) above. Also, the Limited
Partners have received an amount equal to 110% of their initial capital
investment which was satisfied by the August 1993 cash distribution.
Therefore, the proceeds from the sale of the Partnership's interest in the
Property will be distributed first to the General Partners in an amount
equal to 3% (approximately $920,000) of the deemed selling price of
$30,700,000, and then the remaining proceeds (net after expenses and
retained working capital) will be distributed 85% to the Limited Partners
and 15% to the General Partners.
Due to the sale of the Partnership's interest in its last remaining
investment property, the affairs of the Partnership are expected to be
wound up as soon as practicable, which is currently expected to be no later
than December 31, 2000, barring unforseen developments. However, there can
be no assurance that this will occur.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. Not Applicable
(b) Proforma financial information - Narrative
As a result of the sale of the Partnership's interest, after July 31,
2000, there will be no further rental income, interest income, mortgage and
other interest, depreciation, property operating expenses, amortization of
deferred expenses or venture partner's share of venture's operations
recorded for the Property in the consolidated financial statements of the
Partnership, which for the Partnership's most recent fiscal year (the year
ended December 31, 1999) were approximately $8,560,000, $64,000,
$2,374,000, $5,516,000, $4,372,000, $150,000 and $1,337,000, respectively.
For the six months ended June 30, 2000, the Partnership's consolidated
financial statements reflected rental income, interest income, mortgage and
other interest, depreciation, property operating expenses, amortization of
deferred expenses and venture partner's share of venture's operations of
approximately $3,596,000, $38,000, $1,146,000, $461,000, $2,198,000,
$73,000, and $86,000, respectively. Also, as a result of the sale of the
Partnership's interest, there will be no further assets and liabilities
related to the Property in the Partnership's consolidated financial
statements, which at June 30, 2000, consisted of cash and other current
assets of approximately $1,714,000, investment property held for sale or
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disposition of approximately $8,838,000, deferred expenses of approximately
$768,000, accrued rents receivable of approximately $856,000, venture
partner's deficit in venture of approximately $684,000, current liabilities
of approximately $2,541,000, long-term debt, less current portion, of
approximately $18,780,000 and tenant security deposits of approximately
$26,000. The Partnership's future operations are expected to consist
primarily of interest income and administrative expenses until the
Partnership's winding up and termination as the property was the
Partnership's last remaining investment property.
(c) Exhibits
10.1 Partnership Interest Purchase Agreement between JMB Income
Properties, Ltd. - VII and Rouse-Westdale, LLC, a Maryland limited
liability company dated July 31, 2000.
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SIGNATURES
Pursuant to the requirements 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.
JMB INCOME PROPERTIES, LTD. - VII
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull
Senior Vice President and
Principal Accounting Officer
Date: August 11, 2000
