FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)
FORM 10-KSB
(Mark One)
[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, 1997
[ ] 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 0-10199
ANGELES PARK COMMUNITIES, LTD.
(Name of small business issuer in its charter)
California 95-3558497
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
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:
Limited Partnership Units
(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] [ ]
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 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 [X]
State issuer's revenues for its most recent fiscal year. $2,076,000
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 a specified date within the past 60 days. Market value
information for Registrant's partnership interests is not available. Should a
trading market develop for these interests, it is the Managing General Partner's
belief that the aggregate market value of the voting partnership interests would
not exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Angeles Park Communities, Ltd. (the "Partnership" or "Registrant") is a
publicly-held limited partnership organized under the California Uniform Limited
Partnership Act pursuant to a Certificate and Agreement of Limited Partnership
(the "Partnership Agreement") dated June 24, 1980, as amended. The managing
general partner of the Partnership is Angeles Realty Corporation, a California
corporation (the "Managing General Partner" or "ARC"). The Managing General
Partner is a wholly-owned subsidiary of MAE GP Corporation ("MAE GP"), an
affiliate of Insignia Financial Group, Inc. ("Insignia"). The Elliott
Accommodation Trust and the Elliott Family Partnership, Ltd., a California
limited partnership, are the non-managing general partners. The Managing
General Partner and the non-managing general partners are herein collectively
referred to as the "General Partners".
The Partnership, through its public offering of Limited Partnership Units, sold
15,112 units aggregating $15,112,000. The Managing General Partner contributed
capital in the amount of $1,000 for a 1% interest in the Partnership. The
Partnership is engaged in the business of investing in and operating
manufactured home and recreational vehicle park communities. The primary
objectives for its partners are the generation of cash flow and capital growth
through debt reduction and appreciation in property values, with a secondary
objective of generating tax advantages for its partners. Funds obtained by the
Partnership during the public offering period of its Limited Partnership Units
(November 20, 1980 through November 19, 1982), together with long-term
borrowings, were used to acquire nine operating manufactured home park
communities. Five of these manufactured home parks were sold in 1987 and two in
1992. The Partnership does not intend to sell additional Limited Partnership
Units. The term of the Partnership's Agreement extends to December 31, 2035,
subject to earlier termination in accordance with the Partnership Agreement. The
Partnership is intended to be self-liquidating and proceeds from the sale or
future refinancing of its operating properties will not be reinvested.
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. The non-managing general partners and
the limited partners have no right to participate in the management or conduct
of such business and affairs. Insignia Residential Group, L.P., an affiliate of
the Managing General Partner, provides day-to-day management services to the
Partnership's investment properties.
The business in which the Partnership is engaged is highly competitive, and the
Partnership is not a significant factor in its industry. The remaining
manufactured mobile home park community and recreational vehicle park, is
located in Brooksville, Florida and, accordingly, competes for rentals not only
with similar manufactured home communities and recreational vehicle parks, but
also with other types of housing and parks throughout the urban area. Such
competition is primarily on the basis of location, rents, services and
amenities. In addition, the Partnership competes with significant numbers of
individuals and organizations (including similar partnerships, real estate
investment trusts and financial institutions) with respect to the sale of
improved real properties, primarily on the basis of the prices and terms of such
transactions.
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 property
owned by the Partnership.
The Partnership monitors its property 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.
CHANGES IN CONTROL
Effective February 25, 1998, MAE GP was merged with Insignia Properties Trust
("IPT"), which is an affiliate of Insignia. Thus, the Managing General Partner
is now a wholly-owned subsidiary of IPT.
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the Managing
General Partner of the Partnership.
ITEM 2. DESCRIPTION OF PROPERTIES:
The following table sets forth the Partnership's investments in properties:
Date of
Property Purchase Type of Ownership Use
Cloverleaf Farms Mobile Home Park -
Mobile Home Park 11/10/81 Fee ownership, subject to 781 pads
and a first mortgage and
Cloverleaf Forest Recreational Vehicle
RV Park Park - 285 pads
SCHEDULE OF PROPERTIES (IN THOUSANDS):
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C> <C>
Cloverleaf Farms
and
Cloverleaf Forest $ 5,968 $ 4,617 5-15 yrs S/L $ 1,519
<FN>
See "Note A" of "Item 7. Financial Statements" for a description of the
Partnership's depreciation policy.
</FN>
</TABLE>
SCHEDULE OF MORTGAGES (IN THOUSANDS):
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1997 Rate Amortized Date Maturity
<S> <C> <C> <C> <C> <C>
Cloverleaf Farms $4,872 9.1% 30 years 07/15/01 $ 4,692
</TABLE>
The mortgage note payable is nonrecourse and is secured by pledge of the
Partnership's rental property and by pledge of revenues from the respective
rental property. The note imposes prepayment penalties if repaid prior to
maturity.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average Annual Average
Rental Rates Occupancy
Property 1997 1996 1997 1996
Cloverleaf Farms Mobile Home Park $2,187/unit $2,065/unit 99% 99%
Cloverleaf Forest RV Park 1,494/unit 1,355/unit 75% 74%
Occupancy at Cloverleaf Forest typically averages in the 90% range during the
winter months. However, due to the seasonality of the business, occupancy drops
significantly during the summer months, causing annual occupancy to level out in
the 70's.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other mobile home park communities and recreational vehicle
parks in the area. The Managing General Partner believes that all of the
properties are adequately insured.
Real estate taxes (in thousands) and rates in 1997 for each property were:
1997 1997
Taxes Rate
Cloverleaf Farms Mobile Home Park $168 2.74%
Cloverleaf Forest RV Park 47 2.74%
ITEM 3. LEGAL PROCEEDINGS
The homeowners association of Cloverleaf Farms has filed a complaint against the
Partnership alleging improper assessment of utility pass-on charges and other
complaints. The Managing General Partner believes that the claims asserted are
without merit and intends to vigorously defend them.
The Partnership is unaware of any other pending or outstanding litigation that
is not routine in nature. The Managing General Partner of the Partnership
believes that all such pending or outstanding litigation will be resolved
without a material adverse effect upon the business, financial condition, or
operations of the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The unit holders of the Partnership did not vote on any matter during the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS
The Partnership, a publicly-held limited partnership, sold 15,112 Limited
Partnership Units aggregating $15,112,000. The Partnership currently has 15,044
units outstanding and 1,673 limited partners of record. There is no intention to
sell additional Limited Partnership Units nor is there an established public
market for these units.
The Partnership has discontinued making cash distributions from operations until
and unless the financial condition and other relevant factors warrant resumption
of distributions.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership's net income for the year ended December 31, 1997, was
approximately $183,000 versus a net loss of approximately $79,000 for the year
ended December 31, 1996. The increase in net income is primarily due to a
decrease in depreciation expense and an increase in rental income. The decrease
in depreciation expense is due to a major building and improvement at the
Cloverleaf Farms property becoming fully depreciated at December 1996. The
increase in rental income is primarily due to an increase in rental rates at the
Partnership's investment properties. There were no expenditures for major
repairs and maintenance during 1997 or 1996.
As part of the ongoing business plan of the Partnership, the Managing 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 the burden of
increases in expense. As part of this plan, the Managing 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 Managing General Partner will
be able to sustain such a plan.
Capital Resources and Liquidity
The Partnership had cash and cash equivalents of approximately $531,000 at
December 31, 1997, versus $347,000 at December 31, 1996. The net increase in
cash and cash equivalents for the year ended December 31, 1997, was
approximately $184,000 compared to an increase of approximately $167,000 for the
comparable period in 1996. The increase in cash provided by operating activities
is primarily due to an increase in other liabilities due to the receipt of
$100,000 from a cable provider for exclusive rights at the investment properties
for the next seven years. The increase in cash used in investing activities is
attributable to an increase in property improvements and replacements. Cash
used in financing activities remained relatively stable.
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 properties to adequately maintain the physical
assets and other operating needs of the Partnership. The mortgage indebtedness
of $4,872,000 consists of a first mortgage which is being amortized over 30
years with a balloon payment of $4,692,000 due on July 15, 2001. The Managing
General Partner received a purchase offer from the homeowners association of
Cloverleaf Farms. The Managing General Partner rejected the initial offer and
extended a counteroffer to the homeowners association. Negotiations are still
ongoing with regard to a possible sale of the Partnership's properties.
Currently, the homeowner association is trying to obtain additional financing.
Future cash distributions will depend on the levels of net cash generated from
operations, property sales and the availability of cash reserves. There were no
cash distributions in 1997 or 1996.
Year 2000
The Partnership is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are
not completed timely, the Year 2000 Issue could have a material impact on the
operations of the Partnership.
Other
Certain items discussed in this annual report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
forward-looking statements speak only as of the date of this annual report. The
Partnership expressly disclaims any obligation or undertaking to release
publicly any updates of revisions to any forward-looking statements contained
herein to reflect any change in the Partnership's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
ITEM 7. FINANCIAL STATEMENTS
ANGELES PARK COMMUNITIES, LTD.
LIST OF FINANCIAL STATEMENTS
Independent Auditors' Report
Consolidated Balance Sheet - December 31, 1997
Consolidated Statements of Operations - Years ended December 31, 1997 and 1996
Consolidated Statement of Changes in Partners' Deficit - Years ended December
31, 1997 and 1996
Consolidated Statements of Cash Flows - Years ended December 31, 1997 and 1996
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Park Communities, Ltd.
We have audited the accompanying consolidated balance sheet of Angeles Park
Communities, Ltd. as of December 31, 1997, and the related consolidated
statements of operations, changes in partners' deficit and cash flows for each
of the two years in the period ended December 31, 1997. 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 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 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 consolidated financial position of Angeles Park
Communities, Ltd. at December 31, 1997, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Greenville, South Carolina
February 25, 1998
except for Note H as to
which the date is March 17, 1998
ANGELES PARK COMMUNITIES, LTD.
CONSOLIDATED BALANCE SHEET
December 31, 1997
(in thousands, except unit data)
Assets
Cash and cash equivalents $ 531
Receivables and deposits 56
Other assets 215
Investment properties
Land $ 1,043
Buildings and related personal property 4,925
5,968
Less accumulated depreciation (4,617) 1,351
$ 2,153
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 34
Tenant security deposits payable 3
Other liabilities 259
Mortgage note payable 4,872
Partners' Deficit
General partners' $ (162)
Limited partners' (15,044 units issued
and outstanding) (2,853) (3,015)
$ 2,153
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARK COMMUNITIES, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996
<S> <C> <C>
Revenues:
Rental income $ 2,047 $ 1,977
Other income 29 26
Total revenues 2,076 2,003
Expenses:
Operating 929 868
General and administrative 179 181
Depreciation 71 324
Interest 495 499
Property taxes 219 210
Total expenses 1,893 2,082
Net income (loss) $ 183 $ (79)
Net income (loss) allocated to general partners (1%) $ 2 $ (1)
Net income (loss) allocated to limited partners (99%) 181 (78)
$ 183 $ (79)
Net income (loss) per limited partnership unit $ 12.03 $ (5.18)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
ANGELES PARK COMMUNITIES, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 15,112 $ 1 $ 15,112 $ 15,113
Partners' deficit at
December 31, 1995 15,093 $ (163) $ (2,956) $ (3,119)
Net loss for the year ended
ended December 31, 1996 -- (1) (78) (79)
Abandonment of partnership
units (Note F) (49) -- -- --
Partners' deficit at
December 31, 1996 15,044 (164) (3,034) (3,198)
Net income for the year ended
December 31, 1997 -- 2 181 183
Partners' deficit at
December 31, 1997 15,044 $ (162) $ (2,853) $ (3,015)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
ANGELES PARK COMMUNITIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 183 $ (79)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation 71 324
Amortization of loan costs 50 50
Bad debt recovery, net -- (10)
Change in accounts:
Receivables and deposits (11) 7
Other assets (30) 2
Accounts payable (19) 17
Tenant security deposit liabilities -- 1
Other liabilities 78 (33)
Net cash provided by operating
activities 322 279
Cash flows used in investing activities:
Property improvements and replacements (96) (74)
Cash flows used in financing activities:
Payments on mortgage notes payable (42) (38)
Net increase in cash and cash equivalents 184 167
Cash and cash equivalents at beginning of year 347 180
Cash and cash equivalents at end of year $ 531 $ 347
Supplemental disclosure of cash flow:
Cash paid for interest $ 446 $ 449
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
ANGELES PARK COMMUNITIES, LTD.
Notes to Consolidated Financial Statements
December 31, 1997
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
Angeles Park Communities, Ltd. (the "Partnership") is a California limited
partnership organized on June 24, 1980, to acquire and operate manufactured home
and recreational vehicle park communities. The Partnership's managing general
partner is Angeles Realty Corporation ("ARC" or the "Managing General Partner").
The Managing General Partner is a wholly-owned subsidiary of MAE GP Corporation
("MAE GP"), an affiliate of Insignia Financial Group, Inc. ("Insignia").
Effective February 25, 1998, MAE GP was merged with Insignia Properties Trust
("IPT"), which is an affiliate of Insignia. Thus, the Managing General Partner
is now a wholly-owned subsidiary of IPT. As of December 31, 1997, the
Partnership operates one mobile home park and one recreational vehicle park each
located in Brooksville, Florida.
Principles of Consolidation:
The consolidated financial statements of the Partnership include its 99% limited
partnership interest in Cloverleaf Farms, LP. The Partnership may remove the
general partner of Cloverleaf Farms, LP; therefore, the partnership is
controlled and consolidated by the Partnership. All significant
interpartnership balances have been eliminated. Minority interest is immaterial
and not shown separately in the financial statements.
Use 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.
Allocations to Partners:
Net income and losses (excluding those arising from the occurrence of sales or
dispositions) of the Partnership will be allocated 1% to the general partners
and 99% to the limited partners on an annual basis.
In accordance with the Partnership Agreement, any gain from the sale or other
disposition of Partnership assets will be allocated first to the Managing
General Partner to the extent of the amount of Incentive Distribution to which
the Managing General Partner is entitled. Any gain remaining after said
allocation will be allocated to the general partners and limited partners in
proportion to their interests in the Partnership.
Distributions of available cash, except as discussed below, are allocated among
the limited partners and general partners in accordance with the Agreement of
Limited Partnership.
Upon the sale or other disposition, or refinancing, of any asset of the
Partnership other than in connection with the dissolution of the Partnership,
the Distributable Net Proceeds, if any, thereof which the Managing General
Partner determines are not required for support of the operations of the
Partnership must be distributed: (i) first, to the general partners and the
limited partners in proportion to their interests in the Partnership, until all
limited partners have received distributions equal to their Original Capital
Investment applicable to the Disposition plus their 6% Cumulative Distribution;
(ii) second, to the Managing General Partner in an amount equal to 4% of the
aggregate sales price of the property; (iii) third, to the Managing General
Partner and the limited partners in proportion to their interests in the
Partnership until all limited partners have received their additional 4%
Cumulative Distribution; and (iv) thereafter the remaining proceeds of the
disposition shall be distributed 88% to the partners in proportion to their
interests in the Partnership, and 12% to the Managing General Partner.
Fair Value of Financial Instruments:
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 based on estimated borrowing
rates currently available, approximates its carrying balance.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with a maturity, when
purchased, of three months or less to be cash equivalents. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Security Deposits:
The Partnership requires security deposits for the recreational vehicle pads
until the lessee arrives. Such deposits are included in receivables and deposits
on the Partnership's consolidated balance sheet. The security deposits are
refunded when the tenant departs if there has been no damage to the pad.
Investment Properties:
Investment properties are stated at cost. Acquisition fees are capitalized as a
cost of real estate. 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.
Depreciation:
Depreciation is calculated by the straight-line method over the estimated lives
of the rental properties and related personal property ranging from 5 to 15
years.
Leases:
As of December 31, 1997, the Partnership had 250 lifetime leases at its mobile
home park with an average annual rent per lot of approximately $1,000. Such
leases, which are much less than the park's average annual rental per lot of
$2,187 in 1997, can only be increased upon move-out or death of the lessor. The
other leases are generally for twelve month terms.
Loan Costs:
Loan costs of approximately $350,000 are included in other assets in the
accompanying consolidated balance sheet and are being amortized on a straight-
line basis over the life of the loan. At December 31, 1997, accumulated
amortization is approximately $175,000. Amortization of loan costs is included
in interest expense.
Income taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Reclassifications:
Certain reclassifications have been made to the 1996 balances to conform to the
1997 presentation.
NOTE B - MORTGAGE NOTE PAYABLE
The principle terms of the mortgage note payable are as follows (in thousands):
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1997 Interest Rate Date Maturity
<S> <C> <C> <C> <C> <C>
Cloverleaf Farms $4,872 $41 9.1% 07/15/01 $4,692
</TABLE>
The mortgage note payable is nonrecourse and is secured by pledge of the
Partnership's rental property and by pledge of revenues from the respective
rental property. The note imposes prepayment penalties if repaid prior to
maturity.
Scheduled principal payments on the mortgage note payable subsequent to December
31, 1997, are as follows:
1998 $ 46
1999 50
2000 55
2001 4,721
$4,872
NOTE C - INCOME TAXES
The following is a reconciliation of reported net income (loss) and Federal
taxable income (loss) (in thousands except unit data):
1997 1996
Net income (loss) as reported $ 183 $ (79)
Add (deduct):
Depreciation differences 11 47
Unearned income 30 3
Bad debt -- (10)
Deferred revenue 65 --
Miscellaneous (17) (5)
Federal taxable income (loss) $ 272 $ (44)
Federal taxable income (loss)
per limited partnership unit $ 17.90 $ (2.90)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net liabilities as reported $ (3,015)
Land and buildings 230
Accumulated depreciation (62)
Syndication and distribution costs 1,724
Prepaid rent 187
Other 73
Net liabilities - Federal tax basis $ (863)
NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were incurred by
the Managing General Partner and affiliates during the twelve month periods
ended December 31, 1997 and 1996 (in thousands):
1997 1996
Property management fees (included in
operating expense) $ 103 $ 99
Reimbursement for services of affiliates
(included in general and administrative
expenses) 134 133
For the period of January 1, 1996 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the master
policy. The agent assumed the financial obligations to the affiliate of the
Managing General Partner who receives payments on these obligations from the
agent. The amount of the Partnership's insurance premiums accruing to the
benefit of the affiliate of the Managing General Partner by virtue of the
agent's obligations is not significant.
Effective February 25, 1998, MAE GP was merged with Insignia Properties Trust
("IPT"), which is an affiliate of Insignia. Thus, the Managing General Partner
is now a wholly-owned subsidiary of IPT.
NOTE E - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
(in thousands)
Initial Cost
To Partnership
Buildings Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Cloverleaf Farms &
Cloverleaf Forest $4,872 $1,043 $3,844 $1,081
<TABLE>
<CAPTION>
Gross Amount at Which Carried
At December 31, 1997
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C>
Cloverleaf Farms &
Cloverleaf Forest $ 1,043 $4,925 $5,968 $4,617 11/10/81 5-15
</TABLE>
Reconciliation of Investment Properties and Accumulated Depreciation:
Years Ended December 31,
1997 1996
Balance at beginning of year $5,872 $5,798
Property improvements 96 74
Balance at end of year $5,968 $5,872
Accumulated Depreciation
Balance at beginning of year $4,546 $4,222
Additions charged to expense 71 324
Balance at end of year $4,617 $4,546
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1997 and 1996, was $6,198,000 and $6,101,000, respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1997 and 1996, was $4,679,000 and $4,619,000, respectively.
NOTE F - LIMITED PARTNERSHIP UNITS
In 1996, the number of Limited Partnership Units decreased by 49 units due to
limited partners abandoning their units. In abandoning his or her Limited
Partnership Units, a limited partner relinquishes all right, title and interest
in the Partnership as of the date of abandonment. However, during the year of
abandonment, the Limited Partner will still be allocated his or her share of the
income or loss for that entire year. The net income (loss) per limited
partnership unit in the accompanying consolidated statements of operations is
calculated based on the number of units outstanding at the beginning of the
year.
NOTE G - CONTINGENCY
The homeowners association of Cloverleaf Farms has filed a complaint against the
Partnership alleging improper assessment of utility pass-on charges and other
complaints. The Managing General Partner believes that the claims asserted are
without merit and intends to vigorously defend them. In addition, the Managing
General Partner is negotiating with the homeowners association regarding the
possible sale of the investment properties.
NOTE H - SUBSEQUENT EVENT
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the Managing
General Partner of the Partnership.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND
FINANCIAL DISCLOSURES
There were no disagreements with Ernst & Young, LLP regarding the 1997 or 1996
audits of the Partnership's financial statements.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The managing general partner of Angeles Park Communities, Ltd. (the
"Partnership") is Angeles Realty Corporation ("ARC" or the "Managing General
Partner"). The Managing General Partner was a wholly-owned subsidiary of MAE GP
Corporation ("MAE GP"), an affiliate of Insignia Financial Group, Inc.
("Insignia"), at December 31, 1997.
The names of the directors and executive officers of ARC, as of January 29,
1998, their ages and the nature of all positions with ARC presently held by them
are as follows:
Name Age Position
Carroll D. Vinson 57 President and Director
Robert D. Long, Jr. 30 Vice President and
Chief Accounting
Officer
William H. Jarrard, Jr. 51 Vice President
Daniel M. LeBey 32 Secretary
Kelley M. Buechler 40 Assistant Secretary
Carroll D. Vinson has been President and Director of the Managing General
Partner and President of Metropolitan Asset Enhancement, L.P. ("MAE"), and
subsidiaries since August 1994. He has acted as Chief Operating Officer of
Insignia Properties Trust ("IPT"), an affiliate of the Managing General Partner,
since May 1997. During 1993 to August 1994, Mr. Vinson was affiliated with
Crisp, Hughes & Co. (regional CPA firm) and engaged in various other investment
and consulting activities which included portfolio acquisitions, asset
dispositions, debt restructurings and financial reporting. Briefly, in early
1993, Mr. Vinson served as President and Chief Executive Officer of Angeles
Corporation, a real estate investment firm. From 1991 to 1993, Mr. Vinson was
employed by Insignia in various capacities including Managing Director -
President during 1991.
Robert D. Long, Jr. has been Vice President of the Managing General Partner
since August 1994. Mr. Long joined MAE, an affiliate of Insignia, in September
1993. Since 1994 he has acted as Vice President and Chief Accounting Officer of
the MAE subsidiaries. Mr. Long was an accountant for Insignia until joining MAE
in 1993. Prior to joining Insignia, Mr. Long was an auditor for the State of
Tennessee and was associated with the accounting firm of Harsman Lewis and
Associates.
William H. Jarrard, Jr. has been Vice President of the Managing General Partner
since January 1993. He has acted as Senior Vice President of IPT, an affiliate
of the Managing General Partner, since May 1997. Mr. Jarrard previously acted
as Managing Director - Partnership Administration of Insignia from January 1991
through September 1997 and served as Managing Director - Partnership
Administration and Asset Management of Insignia from July 1994 until January
1996.
Daniel M. LeBey has been Vice President and Secretary of the Managing General
Partner since January 29, 1998, and Insignia's Assistant Secretary since April
30, 1997. Since July 1996 he has also served as Insignia's Associate General
Counsel. From September 1992 until June 1996, Mr. LeBey was an attorney with
the law firm of Alston & Bird LLP, Atlanta, Georgia.
Kelley M. Buechler has been Assistant Secretary of the Managing General Partner
since January 1993 and Assistant Secretary of Insignia since 1991.
No family relationships exist among any of the officers or directors of the
Managing General Partner.
ITEM 10. EXECUTIVE COMPENSATION
No direct form of compensation or remuneration was paid by the Partnership to
any officer or director of ARC. The Partnership has no plan, nor does the
Partnership presently propose a plan, which will result in any remuneration
being paid to any officer or director upon termination of employment. However,
reimbursements and other payments have been made to the Partnership's Managing
General Partner and its affiliates, as described in "Item 12. Certain
Relationships and Related Transactions" below.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 1997, no person owned of record more than 5% of Limited
Partnership Units of the Partnership nor was any person known by the Partnership
to own of record and beneficially, or beneficially only, more than 5% of such
securities.
The Partnership knows of no contractual arrangements, the operation of the terms
of which may, at a subsequent date, result in a change in control of the
Partnership, except as follows: Article 12.1 of the Agreement, which provides
that upon a vote of the Limited Partners holding more than 50% of the then
outstanding Limited Partnership Units, the General Partners may be expelled from
the Partnership upon 90 days written notice. In the event that successor
general partners have been elected by Limited Partners holding more than 50% of
the then outstanding Limited Partnership Units and if said Limited Partners
elect to continue the business of the Partnership, the Partnership is required
to pay in cash to the expelled General Partners an amount equal to the accrued
and unpaid management fee described in Article 10 of the Agreement and to
purchase the General Partners' interest in the Partnership on the effective date
of the expulsion, which shall be an amount equal to the difference between i)
the balance of the General Partners' capital account and ii) the fair market
value of the share of Distributable Net Proceeds to which the Managing General
Partner would be entitled. Determination of the fair market value of the share
of Distributable Net Proceeds is defined in Article 12.2 (b) of the Agreement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transactions have occurred between the Partnership and any officer or
director of ARC.
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were incurred by
the Managing General Partner and affiliates during the twelve month periods
ended December 31, 1997 and 1996 (in thousands):
1997 1996
Property management fees $ 103 $ 99
Reimbursement for services of
affiliates 134 133
For the period of January 1, 1996 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the master
policy. The agent assumed the financial obligations to the affiliate of the
Managing General Partner who receives payments on these obligations from the
agent. The amount of the Partnership's insurance premiums accruing to the
benefit of the affiliate of the Managing General Partner by virtue of the
agent's obligations is not significant.
Effective February 25, 1998, MAE GP was merged with Insignia Properties Trust
("IPT"), which is an affiliate of Insignia. Thus, the Managing General Partner
is now a wholly-owned subsidiary of IPT.
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the Managing
General Partner of the Partnership.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1997: None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARK COMMUNITIES, LTD.
By: Angeles Realty Corporation
Its Managing General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President and Director
Date: March 24, 1998
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 and on the
dates indicated.
Signature/Name Title Date
/s/Carroll D. Vinson President and March 24, 1998
Carroll D. Vinson Director
/s/Robert D. Long, Jr. Vice President and March 24, 1998
Robert D. Long, Jr. Chief Accounting Officer
EXHIBIT INDEX
Exhibit Number Description of Exhibit
3.1 Amended Certificate and Agreement of the Limited
Partnership dated June 24, 1980, filed in form 10-K
dated October 31, 1982, incorporated herein by
reference.
10.1 Purchase and Sale Agreement with Exhibits -
Cloverleaf Farms, filed in Form 8-K dated November
13, 1981, incorporated herein by reference.
10.2 Promissory Note - Cloverleaf, filed in Form 10-Q
dated April 30, 1987, incorporated herein by
reference.
10.3 Stock Purchase Agreement dated November 24, 1992
showing the purchase of 100% of the outstanding stock
of Angeles Realty Corporation II by IAP GP
Corporation, a subsidiary of MAE GP Corporation,
filed in form 8-K dated December 31, 1992, which is
incorporated herein by reference.
27 Financial Data Schedule
99.1 Agreement of Limited Partnership for Angeles Park
Communities GP Limited Partnership and Angeles Park
Communities, Ltd. entered into on September 15, 1993.
99.2 Agreement of Limited Partnership for Cloverleaf Farms
Limited Partnership between Angeles Park Communities
GP Limited Partnership and Angeles Park Communities,
Ltd. entered into on September 15, 1993.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Park Communities, Ltd. 1997 Year-End 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000317969
<NAME> ANGELES PARK COMMUNITIES, LTD.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 531
<SECURITIES> 0
<RECEIVABLES> 56
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 5,968
<DEPRECIATION> 4,617
<TOTAL-ASSETS> 2,153
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 4,872
0
0
<COMMON> 0
<OTHER-SE> (3,015)
<TOTAL-LIABILITY-AND-EQUITY> 2,153
<SALES> 0
<TOTAL-REVENUES> 2,076
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,398
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 495
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 183
<EPS-PRIMARY> 12.03<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
