UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee required)
For the fiscal year ended December 31, 1997
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee required)
For the transition period from to
COMMISSION FILE NUMBER 0-9608
E & J PROPERTIES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2763152
(State of Organization) (IRS Employer Identification No.)
2710 GATEWAY OAKS DRIVE, SUITE 300 SOUTH, SACRAMENTO, CALIFORNIA 95833
(Address of Principal Executive Offices)
(Zip Code)
REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE: (916) 925-6620
Securities registered pursuant to section 12(g) of the Act:
Units of Limited Partnership
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Number of units outstanding of issuer's limited partnership interests as of
December 31, 1997:
3,523,680 Units. There is no active market for these Units (see Item 5).
PART I
ITEM 1. BUSINESS
Registrant is a limited partnership formed on April 10, 1981 pursuant to the
Uniform Limited Partnership Act of the State of California in connection with
the complete liquidation of McKeon Liquidating Company (formerly McKeon
Construction) to hold, manage, build upon, lease, sell and otherwise develop
partnership property. The principal assets of Registrant are cash and cash
equivalents, short-term investments and the approximately 1,900 acre Elliott
Ranch South in Sacramento, California, a portion of which (approximately 439
acres) is zoned for urban uses, and the balance of which is zoned for open
space use; 560 acres of this open space land is subject to easements for
wetlands mitigation or avoidance.
Registrant is currently collecting rental income on the Elliott Ranch South and
earning interest income on its cash investments. Registrant sold no property
in 1997 and, therefore, recognized no gains on property sales. For the fiscal
year ended December 31, 1997, the Registrant had revenues of $87,611 and a net
loss of $144,588.
Registrant has no employees.
Registrant anticipates that it will continue to incur expenses with respect to
the Elliott Ranch South property. Furthermore, Registrant expects to incur
costs associated with marketing the property for sale (see Item 2.c.,
"Marketing"). Accordingly, Registrant believes that it is necessary to reserve
cash in order to remain in a position to meet these expenses. For these
reasons, Registrant has approximately $1,240,000 in cash and cash equivalents.
ITEM 2. PROPERTIES
Registrant sold 632 acres of the Elliott Ranch in 1989 and an additional 93
acres in 1990. After such sales, Registrant continues to own approximately
1,900 acres of land, which is the southern part of the Elliott Ranch, known as
Elliott Ranch South, located approximately 11 miles from downtown Sacramento,
California. Registrant has an undivided half-interest in the mineral rights to
such land, to the 632 and 93 acres sold in 1989 and 1990 (without surface
access rights), and to adjacent County/State land of approximately 2,300 acres
(with surface access rights). Easements for wetlands mitigation have been
granted on 560 acres of the Registrant's 1,900 acres of property.
A. SACRAMENTO COUNTY ACTIONS
In December of 1993, Sacramento County adopted a new General Plan for the
County designed to govern growth until the year 2010. Registrant participated
in this process and requested urban designations on approximately 439 acres
located in the northwest corner of the property. As a result of this effort,
the Board of Supervisors, as part of their action adopting the new General
Plan, designated said 439 acres as an "Urban Development Area" (UDA).
Designation as a UDA means that the 439 acres should receive entitlements to
urbanize during the life of the General Plan.
In January of 1992 Registrant filed an application with Sacramento County for
General Plan Amendment, Community Plan Amendment and Rezone for the project
called Elliott Ranch South. The application covered 1,759 acres of the
property. Approximately 439 acres located in the northwest corner of the
property was requested for urban designations (residential, commercial and
office). This is the same 439 acres which the Board of Supervisors, in
December of 1993, designated as "UDA". Of the remaining acreage, 560 acres
were subject to wetlands mitigation easements granted in connection with the
sale of property in 1989, and 760 acres were to be used for wetlands mitigation
and open space/flood detention and mitigation purposes for the approximately
439 acres of urban entitlements requested. On May 19, 1994, the Sacramento
County Board of Supervisors approved said General Plan Amendment. On August
10, 1994, the Board of Supervisors approved a Community Plan Amendment, Rezone
Agreement and a Development Agreement for said 439 acre portion of the property
(hereinafter, the Project).
On August 13, 1996, the Board of Supervisors for Sacramento County approved the
"Master Water Supply Plan" (MWSP) for the Project. Approval of this MWSP was a
condition of the above-described Rezone and Development Agreements.
On September 23, 1996, the Project Planning Commission for Sacramento County
approved a tentative subdivision map for a substantial portion of the Project.
This tentative subdivision map is subject to many "conditions of approval".
The effect of such conditions on the value or marketability of the Project
and/or the property is unknown. The tentative subdivision map expires on
September 23, 1999. While subject to extension, there is no guarantee that
Sacramento County would grant a request for extension.
In addition to the "conditions of approval", attached to the tentative
subdivision map, additional conditions were included in the above-described
Rezone and Development Agreements. Again, the effect of such conditions on the
value or marketability of the Project and/or property is unknown. For example,
one such condition requires the owner to identify, prior to development of the
Project, the entity (public or private) to which the 760 acre open space area
will be conveyed for perpetual open space ownership and management. Registrant
anticipates that together with the 760 acre area to be used for flood detention
and wetlands mitigation, Registrant's fee interest in the 560 acre area subject
to the wetlands mitigation easement and an additional 89 acre area (see Item
2.B., "Federal and State Actions") will be conveyed to such entity. Registrant
does not expect any compensation for such conveyances and, in fact, Registrant
believes that it may be necessary to pay an as yet unidentified sum (endowment)
to such entity in order to induce such entity to accept ownership, management
and maintenance obligations therefore. Preliminary negotiations with the U.S.
Fish and Wildlife Service as one entity which would possibly own and operate
the open space area have tentatively identified the endowment in the $150,000
range. However, no final agreement has been reached and therefore, the amount
of the final endowment could be significantly different.
Registrant may be required to implement one or more conditions of the Zoning
and Development Agreements, and Tentative Subdivision Map in order to vest or
otherwise protect Registrant's rights thereunder. For example, Registrant may
want to initiate the physical filling of wetlands on the property in order to
vest Registrant's rights under its Clean Water Act permit (see Item 2.B.,
"Federal and State Actions") and/or preserve the validity of such permit.
B. FEDERAL AND STATE ACTIONS
In a Record of Decision released by the U.S. Fish and Wildlife Service (USFWS)
in late 1992, all but approximately 40 acres of Registrant's property was
included within the boundary areas of the "Stone Lakes National Wildlife
Refuge". Although Registrant had opposed the establishment of the refuge and
the inclusion of its property in the refuge, Registrant was not successful in
that opposition. However, the establishment of the refuge did not prohibit
Sacramento County from approving the above-described urban entitlements for
said portion of the land within the refuge.
In 1993, Registrant prepared and filed with the U.S. Corps of Engineers
(USCOE), a Clean Water Act Section 404 Permit application to fill wetlands in
the project. Both the USFWS and the U.S. Environmental Protection Agency
initially expressed strong opposition to the granting of such permit.
On September 19, 1994, the USFWS listed four invertebrate species commonly
known as vernal pool fairy shrimp as endangered or threatened species under the
Federal Endangered Species Act. Vernal pool fairy shrimp have been found on
Registrant's property. Registrant entered into consultations with USFWS
regarding possible mitigation for development impacts of said species. These
consultations were successfully concluded during 1995, and Registrant gained
approval by the USCOE of its Clean Water Action Section 404 Permit to fill
wetlands on the project in early January 1996. The permit required that when
such wetlands are filled, compensation wetlands must be constructed in the 760
acre open space area (see Item 2.A. above, "Sacramento County Actions"), and
additional existing wetlands must be preserved in the 760 acre open space area
and in an additional 89 acre portion of the property not previously identified
as open space. This 89 acre area is also located within the Stone Lakes
National Wildlife Area and was not designated for development during the 20
year life of the County General Plan. It is impacted by existing wetlands, and
has been used, in part, for wetlands mitigation purposes for wetland impacts
associated with the portion of the property sold by Registrant in 1990.
Nevertheless, it was not required to be held in open space as part of the
County approval process. Its inclusion within the open space area was, in
Registrant's opinion, a necessary concession in order to secure the USFWS/USCOE
approvals.
Under the terms of the Clean Water Act Section 404 permit described above, work
described in the permit (filling of the wetlands and construction of
compensation wetlands) must be completed by September 30, 2000. While subject
to extension, there is no guarantee that the USCOE would grant a request for
extension.
Registrant has received informal approval from the California Department of
Fish and Game (CDFG) of Registrant's proposed Swainson's Hawk Mitigation Plan.
The Swainson's Hawk is a State (California) listed endangered species known to
forage on the property. A recent opinion from the CDFG counsel states that,
under current law, no formal approval from CDFG may be required. Registrant
has submitted said Plan to the County of Sacramento for administrative
approval. While Registrant believes such approval will be forthcoming, there
is no guarantee of a favorable result at this time.
C. MARKETING
On February 25, 1998, Registrant entered into an agreement to sell
approximately 1,850 acres of Elliott Ranch South to AKT Development Corporation
(Buyer), a California corporation. Buyer has made an initial deposit of
$200,000 under the agreement.
Under the terms of the sale agreement, the Buyer has until May 26, 1998 to
conduct feasibility studies of the property to be purchased. If, on or before
May 26, 1998, the Buyer determines for any reason that it does not want to
consummate the purchase, it may cancel the sale and receive full refund of its
deposit. If, on or before May 26, 1998, the Buyer notifies Registrant that it
has decided to consummate the purchase, then the Buyer is obligated to close
escrow on or before June 25, 1998. The purchase price is $12,825,000, payable
in cash at close of escrow. E & J Properties, Ltd. is represented in the sale
by Doug Elmore of Brown, Stevens, Elmore and Sparre, commercial real estate
brokers. E & J Properties, Ltd. will pay a brokerage commission to Mr. Elmore
upon close of escrow.
Should this sale be consummated, Registrant's remaining real estate holdings
will consist of approximately fifty (50) acres of agricultural property in
Sacramento County, adjacent to the Elliott Ranch, together with various mineral
rights reserved from prior real estate sales as described in Item 2 above.
ITEM 3. LEGAL PROCEEDINGS
There are no known proceedings pending against Registrant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S UNITS AND RELATED SECURITY HOLDER MATTERS
There is very little trading activity for these units but sales of the security
were made in the price range of $1.75 to $3.25 per unit during the year. The
number of unit holders of record as of December 31, 1997 is 876.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data for each of the five years ended December 31, is as
follows:
1997 1996 1995 1994 1993
Revenues $ 87,611 101,595 122,476 104,862 88,529
Net loss (144,588) (130,546) (110,396) (128,326) (145,055)
Net loss per unit (0.04) (0.04) (0.03) (0.04)
(0.04)
Total assets 4,403,840 4,553,858 4,691,448 4,799,607 4,936,957
Equity:
Limited partners 4,309,461 4,452,441 4,581,535 4,690,702 4,817,601
General partner 70,328 71,936 73,388 74,617
76,044
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The cash and cash equivalents held by the Limited Partnership at December 31,
1997 of $1,239,738 is considered sufficient to meet future liquidity and
capital needs. Operations currently consist of interest and rental income,
capital expenditures, property taxes, and general and administrative expenses.
Operations for the year ended December 31, 1997 compared to the prior year:
Revenues were down 14% (from $101,595 to $87,611) primarily because the cash
funds that generate interest income were down 22% (interest rates were slightly
higher). Expenses were approximately the same each year ($232,199 in 1997 and
$232,141 in 1996).
Operations for the year ended December 31, 1996 compared to the prior year:
Revenues were down 17% (from $122,476 to $101,595) primarily because the cash
funds that generate interest income went down 19% (interest rates were slightly
higher). Expenses were approximately the same each year ($232,141 in 1996 and
$232,872 in 1995).
ITEM 8. FINANCIAL STATEMENTS
See Item 14(a) (1-2) of this Form 10-K for the index to the financial
statements and explanation of why schedules have been omitted.
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements on accounting and financial disclosure.
Independent Auditors' Report
General Partner
E & J Properties, Ltd.:
We have audited the accompanying balance sheets of E & J Properties, Ltd. (the
Partnership) as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity, and cash flows for each of the years in the
three-year 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 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 E & J Properties, Ltd. as of
December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1997,
in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Sacramento, California
March 6, 1998
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Balance Sheets
December 31, 1997 and 1996
Assets 1997 1996
Cash and cash equivalents (note 2) $ 1,239,738
1,593,823
Elliott Ranch - Sacramento, California
less accumulated depreciation of $86,000
in 1997 and 1996 (held for sale ) (note 3) 3,092,928
2,886,201
Other assets 71,174 73,834
Total assets $ 4,403,840 4,553,858
Liabilities and Partners' Equity
Liabilities - accrued expenses and other liabilities $ 24,051 29,481
Partners' equity:
Units of Limited Partnership; authorized
3,924,635 units, issued 3,523,680 units
in 1997 and 1996 4,309,461 4,452,441
Units of General Partnership; issued
39,643 units in 1997 and 1996 70,328 71,936
Total partners' equity 4,379,789 4,524,377
Commitments and contingencies (note 3)
Total liabilities and partners' equity $ 4,403,840
4,553,858
See accompanying notes to financial statements.
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Statements of Operations
Years Ended December 31, 1997, 1996 and 1995
1997 1996 1995
Revenues:
Interest income $ 74,561 88,995 111,180
Rental income 13,050 12,600 11,296
87,611 101,595 122,476
Expenses:
Property taxes 33,697 33,241 33,127
Depreciation - 1,911 5,733
General and administrative 198,502 196,989 194,012
232,199 232,141 232,872
Net loss $(144,588) (130,546) (110,396)
Net loss per unit $ (0.04) (0.04) (0.03)
Units outstanding 3,563,323 3,563,323 3,563,323
See accompanying notes to financial statements.
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Statements of Partners' Equity
Years Ended December 31, 1997, 1996, and 1995
Limited Partners' General Partner's
Interest Interest
Units Amount Units Amount
Balance, December 31, 1994 3,523,680 $ 4,690,702 39,643 $ 74,617
Net loss - (109,167) - (1,229)
Balance, December 31, 1995 3,523,680 4,581,535 39,643 73,388
Net loss - (129,094) - (1,452)
Balance, December 31, 1996 3,523,680 4,452,441 39,643 71,936
Net loss - (142,980) - (1,608)
Balance, December 31, 1997 3,523,680 $4,309,461 39,643 $70,328
See accompanying notes to financial statements.
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Statements of Cash Flows
Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
Net cash flows from operating activities:
Net loss $ (144,588) (130,546) (110,396)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation - 1,911 5,733
Change in other assets 2,660 (12,452)
13,180
Change in accrued expenses and other liabilities (5,430)
(7,044) 2,237
Net cash used in operating activities (147,358) (148,131)
(89,246)
Cash flows from investing activities:
Capital expenditures for Elliott Ranch (206,727) (217,824)
(145,679)
Maturity of short-term investments - -
2,106,499
Net cash (used in) provided by investing activities (206,727)
(217,824) 1,960,820
Net (decrease) increase in cash and cash equivalents (354,085)
(365,955) 1,871,574
Cash and cash equivalents, beginning of year 1,593,823 1,959,778
88,204
Cash and cash equivalents, end of year $1,239,738 1,593,823 1,959,778
See accompanying notes to financial statements.
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Notes to Financial Statements
December 31, 1997, 1996, and 1995
(1) Summary of Partnership Organization and Significant Accounting Policies
(a) Organization and Partnership Agreement
E & J Properties, Ltd., a California limited partnership, (Partnership) was
formed April 10, 1981 in connection with the complete liquidation of McKeon
Construction (Company) to hold for investment, operate and liquidate certain
assets of the Company, and generally to pay and discharge certain liabilities
of the Company.
Profits, losses and cash distributions from operations for financial and income
tax reporting purposes are allocated based on ownership percentages and cost
basis of ownership interest in accordance with the Partnership Agreement.
Basis of ownership interest is historical cost for limited partners and fair
market value at the time the Company was purchased by the Partnership for
general partners.
(b) Income Taxes
The Partnership received a ruling from the Internal Revenue Service that it is
classified as a partnership for federal income tax purposes. This
classification will result in the reporting of all items of income, gain, loss
and deductions and credits by the individual partners or assignees in their
respective income tax returns.
(c) General Partner
The General Partner is responsible for managing the business and affairs of the
Limited Partnership and receives $50,000 per annum for such services.
(d) Statement of Cash Flows
For purposes of the statement of cash flows, the Partnership considers all
short-term investments with a maturity, at date of purchase, of three months or
less to be cash equivalents.
(e) Use of Estimates
Management of the Partnership has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.
(f) Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of
Long-lived assets to be held and used by an entity are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to future
net cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceed the fair value of the
assets. Additionally, this statement requires that long-lived assets to be
disposed of be reported at the lower of the carrying amount or fair value less
cost to sell.
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Notes to Financial Statements
(2) Cash and Cash Equivalents
At December 31, 1997, cash equivalents are comprised of three short-term
investments totaling $1,135,433. The yields on these investments range from
5.06% to 5.26% and mature between January 7, 1998 and March 18, 1998. The
carrying value of these short-term investments approximates fair value based on
current market conditions and due to the short-term maturities of these
investments. Uninvested cash is maintained in an interest bearing depository
account earning an annualized yield of approximately 4.54%.
(3) Elliott Ranch
Property and building of Elliott Ranch is recorded at the historical cost of
the asset purchased by or transferred to the Partnership from McKeon
Construction plus additions at cost. Depreciation of $1,911 in 1996 and $5,733
in 1995 is provided on the building based on an estimated useful life of 15
years using the straight-line method. The depreciable assets were fully
depreciated at December 31, 1996. Therefore, no depreciation expense was
recognized in the current year. When parcels of the property are sold, the
original cost basis of the land is allocated pro-rata to the acreage sold. In
addition to the pro-rata basis assigned to acreage sold, any direct costs
incurred with respect to this acreage is also taken into consideration in the
determination of gain or loss on sale.
In 1994, the Sacramento County Board of Supervisors approved a Rezone Agreement
and a Development Agreement related to the property. The agreements are
subject to conditions which require the owner to identify, prior to development
of the property, an entity to which a 760 acre open space area will be conveyed
for perpetual open space ownership and management. The effect of such
conditions on the value or marketability of the property is unknown.
On September 23, 1996, the Project Planning Commission for Sacramento County
approved a tentative subdivision map for a substantial portion of the Project.
This tentative subdivision map is subject to many "conditions of approval".
The effect of such conditions on the value or marketability of the Project
and/or the property is unknown. The tentative subdivision map expires on
September 23, 1999. While subject to extension, there is no guarantee that
Sacramento County would grant a request for extension.
In addition to the "conditions of approval", attached to the tentative
subdivision map, additional conditions were included in the above-described
Rezone and Development Agreements. The effect of such additional conditions on
the value or marketability of the Project and/or property is also unknown. For
example, one such condition requires the owner to identify, prior to
development of the Project, the entity (public or private) to which the 760
acre open space area will be conveyed for perpetual open space ownership and
management. Registrant anticipates that together with the 760 acre area to be
used for flood detention and wetlands mitigation, Registrant's fee interest in
the 560 acre area subject to the wetlands mitigation easement and an additional
89 acre area will be conveyed to such entity. Registrant does not expect any
compensation for such conveyances and, in fact, Registrant believes that it may
be necessary to pay an as yet unidentified sum (endowment) to such entity in
order to induce such entity to accept ownership, management and maintenance
obligations therefore. Preliminary negotiations with the U.S. Fish and
Wildlife Service as one entity which would possibly own and operate the open
space area have tentatively identified the endowment in the $150,000 range.
However, no final agreement has been reached and therefore, the amount of the
final endowment could be significantly different.
E & J PROPERTIES, LTD.
(A California Limited Partnership)
Notes to Financial Statements
The U.S. Fish and Wildlife Service (the USFWS) has included substantially all
of the Partnership's remaining real property within the boundary areas of the
"Stone Lakes National Wildlife Refuge" (Refuge). The Partnership was opposed
to the inclusion of the property in the Refuge. Partnership management
believes the establishment of the Refuge does not prohibit Sacramento County
from providing for an urban designation for a portion of the land within the
refuge. In 1993 the County designated 439 acres as an Urban Development area,
which means that such land could be developed over the next 20 years.
In the opinion of the Partnership's management, the ultimate disposition of
this matter is not expected to have a material adverse effect on the
accompanying financial statements.
During 1994, the USFWS listed four invertebrate species, commonly know as
vernal pool shrimp, as endangered species under the Federal Endangered Species
Act. Vernal pool shrimp have been found on the Partnership's property.
Partnership management entered into consultations with USFWS regarding possible
mitigation for development impacts of said species. These consultations were
successfully concluded during 1995, and the Partnership gained approval by the
U.S. Corps of Engineers (USCOE) of its Clean Water Action Section 404 Permit
to fill wetlands on the project in early January 1996. The permit required
that when such wetlands are filled, compensation wetlands must be constructed
in the 760 acre open space area, and additional existing wetlands must be
preserved in the 760 acre open space area and in an additional 89 acre portion
of the property not previously identified as open space. This 89 acre area is
also located within the Stone Lakes National Wildlife Area and was not
designated for development during the 20 year life of the County General Plan.
It is impacted by existing wetlands, and has been used, in part, for wetlands
mitigation purposes for wetland impacts associated with the portion of the
property sold by the Partnership in 1990. Nevertheless, it was not required to
be held in open space as part of the County approval process. Its inclusion
within the open space area was, in the Partnership's opinion, a necessary
concession in order to secure the USFWS/USCOE approvals.
On February 25, 1998, the Partnership entered into an agreement to sell
approximately 1,850 acres of Elliott Ranch for a price of $12,825,000. The
Buyer has until May 26, 1998 to conduct feasibility studies of the property and
on or before May 26, 1998 must determine whether to consummate the purchase.
(4) Tax Basis of Partnership Assets
For federal income tax purposes, the assets of the Limited Partnership were
reported at their fair market value as of April 10, 1981, the date of
distribution by the Company. The fair market value for Elliott Ranch,
determined by independent appraisal at the date of distribution, was $5,000,000
for the original 2,576 acres. This valuation per acre plus subsequent
improvements to the property results in the remaining acres being valued by
approximately $3,181,000 in excess of the recorded book value.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Elaine McKeon is the sole general partner of Registrant. For five years prior
to its liquidation (April 1982), she served as Chairman of the Board and/or a
director of McKeon Construction.
ITEM 11. EXECUTIVE COMPENSATION
For her services in managing the business and affairs of the Limited
Partnership, the General Partner received $50,000 in 1997, 1996, and 1995 and
will receive $50,000 per annum in future years.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 1997, the following persons owned of record, or were known
by Registrant to own beneficially five percent (5%) or more of Registrant's
Limited Partnership units.
Amount and
Name and Address Nature of Percent of
Title of Class of Beneficial Owner Beneficial Ownership Class
Units of Limited Elaine McKeon 1,060,550 units 30.1%
Partnership 2710 Gateway Oaks Dr. (Owner of record)
Suite 300 South
Sacramento, CA 95833
Units of Limited Eileen M. Michael 413,250 units 11.7%
Partnership 2710 Gateway Oaks Dr. (Owner of record)
Suite 300 South
Sacramento, CA 95833
Units of Limited Catherine M. Topham 546,500 units 15.5%
Partnership 2710 Gateway Oaks Dr. (Owner of record)
Suite 300 South
Sacramento, CA 95833
Units of Limited Cede & Co. 238,274 units 6.8%
Partnership PO Box 20 (Owner of record
Bowling Green Station as Nominee)
New York, NY 10004
As of December 31, 1997, the General Partner was known to own of record or
beneficially the following units:
Amount and Nature of
Title and Class Beneficial Ownership Percent of Class
Units of Limited Partnership 1,060,550 units 30.1%
Units of General Partnership 39,643 units 100%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no transactions which require disclosure under this item.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1-2) The following is the index to financial statements filed as part of
this report:
Page
1. Independent Auditors' Report 7
2 . Balance Sheets at December 31, 1997 and 1996 8
3. Statements of Operations, Years Ended December 31,
1997, 1996, and 1995. 9
4 . Statements of Partners' Equity, Years Ended December 31,
1997, 1996, and 1995. 10
5 . Statements of Cash Flows, Years Ended December 31,
1997, 1996, and 1995. 11
6 . Notes to Financial Statements. 12 - 15
Schedules are omitted because they are not required or because the information
required is set forth in the financial statements.
(a)(3) Exhibits
1. E & J Properties, Ltd., Limited Partnership Agreement
(filed as Exhibit 3 to S-14 Registration Statement No. 2-70422 of E &
J Properties, Ltd.)
(b) Two reports on Forms 8-K were filed in the last quarter of 1997 regarding
the potential sale of substantially all of the Elliott Ranch.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
E & J PROPERTIES, LTD.
(Registrant)
by/s/ Elaine McKeon
Elaine McKeon
General Partner
DATE: March 23, 1998
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS PURSUANT TO SECTION 15(d)
OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.
The Partnership has not sent an annual report or proxy statements to the
Limited Partners and does not intend to send a proxy statement to the Limited
Partners. The Partnership will send the Limited Partners an annual report and
will furnish the Commission with copies of the annual report on or before April
30, 1998.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 1,239,738
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,403,840
<CURRENT-LIABILITIES> 24,051
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 4,379,789
<TOTAL-LIABILITY-AND-EQUITY> 4,403,840
<SALES> 0
<TOTAL-REVENUE> 87,611
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 232,199
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (144,588)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (144,588)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
[TEXT]
