March 28, 2000
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Boston Financial Apartments Associates, L.P.
Report on Form 10-KSB for Year Ended December 31, 1999
File Number 0-10057
Dear Sir/Madam:
Pursuant to the requirements of Rule 901(d) of Regulation S-T, filed herewith is
one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
BFA10KSB.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
---------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-10057
Boston Financial Apartments Associates, L.P.
(Exact name of registrant as specified in its charter)
Delaware 04-2734133
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
-------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(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 (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
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
K-3
Boston Financial Apartments Associates, L.P.
(A Limited Partnership)
ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED DECEMBER 31, 1999
TABLE OF CONTENTS
PART I
Item 1 Business K-2
Item 2 Properties K-5
Item 3 Legal Proceedings K-5
Item 4 Submission of Matters to a
Vote of Security Holders K-5
PART II
Item 5 Market for the Registrant's Units
and Related Security Holder Matters K-6
Item 6 Management's Discussion and Analysis
or Plan of Operation K-6
Item 7 Financial Statements and Supplementary Data K-7
Item 8 Disagreements on Accounting and Financial
Disclosure K-7
PART III
Item 9 Directors and Executive Officers of the
Registrant K-8
Item 10 Management Remuneration K-9
Item 11 Security Ownership of Certain Beneficial
Owners and Management K-9
Item 12 Certain Relationships and Related Transactions K-9
PART IV
Item 13 Exhibits, Financial Statement Schedules and
Reports on Form 8-K K-10
SIGNATURES K-12
<PAGE>
PART I
Item 1. Business
Boston Financial Apartments Associates, L.P. (the "Partnership") is a limited
partnership formed on July 21, 1981 under the Uniform Limited Partnership Act of
the State of Delaware. The Partnership raised $21,910,000 of equity ("Gross
Proceeds") through the sale of limited partnership interests of $1,000 per unit
with a minimum purchase of five units. Such amounts exclude five unregistered
units previously acquired for $1,000 each by the initial limited partner, an
affiliate of the general partners.
The Partnership has invested as a limited partner in other limited partnerships
("Local Limited Partnerships") which own and operate multi-family residential
properties ("Properties") which are assisted by federal, state or local
government agencies pursuant to programs which do not significantly restrict
distributions to owners or the rate of return on investments in such Properties.
The investment objectives of the Partnership include the following: (i) to
preserve and protect the Partnership's capital; (ii) to provide capital
appreciation through appreciation in value of the Properties; (iii) to provide
"tax losses" during the early years of the Partnership's operations which the
Limited Partner may use to offset income from other sources; (iv) to provide
annual cash distributions to Partners derived from distributions to the
Partnership from Local Limited Partnerships; and (v) to build additional equity
through reduction of mortgage loans of the Local Limited Partnerships. There can
be no assurance that the Partnership will attain any or all of these investment
objectives.
After completing its program of investment in Local Limited Partnerships during
1983, the Partnership purchased interests in 15 Local Limited Partnerships, each
of which owned a Property with first mortgage financing provided under the
Section 221(d)(4) insurance program of the United States Department of Housing
and Urban Development ("HUD"). The original cost of real estate owned by Local
Limited Partnerships, inclusive of equity payments by the Partnership, was
$86,660,000.
On December 31, 1993, the Partnership transferred its interest in Captain's
Landing Associates, Ltd. to an unrelated party for a nominal amount. Also, on
January 12, 1994, Oakwood Terrace Associates, Ltd. was sold in a foreclosure
auction conducted by HUD. As a result of the foreclosure, the Partnership
disposed of its interest in the property. The Managing General Partner of
Overland Station Investment Company sold the property on January 12, 1995. From
the sale, the Partnership received $1,274,833 which was used to pay down an
acquisition note payable and make a distribution. In addition, on March 24,
1996, the Local General Partner of Mountain View, Ltd. and Woodmeade South, Ltd.
placed both of the properties into Chapter 11 bankruptcy, which resulted in the
Partnership relinquishing its interests in these Local Limited Partnerships. On
June 3, 1997, the mortgagee for Oakdale Manor foreclosed on the property, which
resulted in the Partnership relinquishing its equity interest in this Local
Limited Partnership. On December 29, 1999, the Local General Partner of Westpark
Plaza Investors sold the property and the Partnership is expected to liquidate
its interest in early 2000. A more detailed discussion of these transactions is
contained under Property Dispositions in Item 2 of this Report on Form 10-KSB.
Table A on the following page lists the Local Limited Partnerships in which the
Partnership invested. Other significant information with respect to such Local
Limited Partnerships can be found in Item 2 of this Report on Form 10-KSB.
<PAGE>
<TABLE>
<CAPTION>
Table A
PARTNERSHIP DATA
(UNAUDITED)
Total
Original Equity % Total
Date Property and Debt -- Original
Local Limited Property Interest Completion Occupancy Number of Local Limited Equity
Partnerships (A) Location Acquired Date at 12/31/99 (B) Apt. Units Partnerships (C) and Debt
- ---------------- -------- -------- ---- --------------- ---------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Bear Creek Asheville, NC 08/25/83 1974 98% 140 $ 3,089,000 3.56%
Buttonwood Tree Wichita, KS 03/29/82 1982 91% 216 8,341,000 9.62%
Captain's Landing (D) Galveston, TX 10/14/82 1984 n/a 174 5,392,000 6.22%
Chelsea Village Indianapolis, IN 07/02/82 1983 90% 246 9,179,000 10.59%
Mountain View (D) Johnson City, TN 12/08/82 1983 n/a 60 2,249,000 2.60%
Oakdale Manor (D) Beaumont, TX 05/05/83 1981 n/a 152 4,905,000 5.66%
Oakwood Terrace (D) Chattanooga, TN 08/13/82 1983 n/a 100 3,254,000 3.75%
Overland Station (D) Boise, ID 02/24/82 1978 n/a 160 4,480,000 5.17%
Park Hill Lexington, KY 04/22/82 1980 94% 132 3,935,000 4.54%
Pheasant Ridge Moline, IL 07/07/82 1978 99% 216 5,526,000 6.38%
The Woods of Castleton Indianapolis, IN 05/28/82 1983 86% 260 9,824,000 11.34%
Westpark Plaza Chico, CA 04/05/82 1979 100% 240 7,519,000 8.68%
Woodbridge Bloomington, IN 07/09/82 1983 95% 140 5,321,000 6.14%
Woodmeade South (D) Knoxville, TN 04/07/82 1983 n/a 242 8,619,000 9.95%
Youngstoun Hagerstown, MD 02/18/83 1984 95% 120 5,027,000 5.80%
----- ------------ -------
2,598 $ 86,660,000 100.00%
===== ============ =======
</TABLE>
(A) The Partnership's interest in profits and losses of each Local Limited
Partnership arising from normal operations is approximately 99%, except
for Youngstoun, for which the percentage is approximately 97%. Profits
and losses arising from certain capital transactions are allocated in
accordance with the respective Local Limited Partnership Agreements.
(B) Property Occupancy is shown as of each Local Limited Partnership's
respective fiscal year end, which is December 31, 1999.
(C) Includes equity contributed to the Local Limited Partnership plus the
outstanding principal balance of its mortgage loan at the date of
purchase (or, in the case of new construction projects, at HUD Final
Endorsement) and any notes made by the Partnership as part of its
original purchase.
(D) The Partnership no longer holds an investment interest in Captain's
Landing, Mountain View, Oakwood Terrace, Overland Station, Woodmeade
South and Oakdale Manor as of December 31, 1999.
<PAGE>
As defined in the Partnership Agreement, Reserves were established to be used
for working capital of the Partnership and contingencies related to the
ownership of Local Limited Partnership interests. Approximately $1,022,000 of
the Gross Proceeds was originally designated as Reserves and invested in various
securities to fund the ongoing operations of the Partnership. As of December 31,
1999, the General Partner has designated approximately $1,013,000 as Reserves.
Management believes that the investment income earned on the Reserves, along
with cash distributions received from Local Limited Partnerships, to the extent
available, will be sufficient to fund the Partnership's ongoing operations.
Reserves may be used to fund Partnership operating deficits if the Managing
General Partner deems funding appropriate.
Each Local Limited Partnership has, as its general partners ("Local General
Partners"), one or more individuals or entities not affiliated with the
Partnership or its General Partners. In accordance with the partnership
agreements under which such entities are organized ("Local Limited Partnership
Agreements"), the Partnership depends on the Local General Partners for the
management of each Local Limited Partnership. The following Local Limited
Partnerships represent more than 10% of the total original investment of the
Partnership in Local Limited Partnerships, exclusive of disposed properties,
having a common Local General Partner or affiliated group of Local General
Partners: (i) the Castleton, Chelsea and Woodbridge Local Limited Partnerships,
representing 42.74% of the total original investment, exclusive of disposed
properties, have affiliates of Gene B. Glick Company, Inc. as Local General
Partners; (ii) the Buttonwood Tree Local Limited Partnership, representing
12.24% of the total original investment, exclusive of disposed properties, has
Anderson Management Company as Local General Partner; (iii) the Bear Creek and
Youngstoun Apartments, Phase II Local Limited Partnerships, representing 14.30%
of the total original investment, exclusive of disposed properties, have Alco
Group Limited Partners as Local General Partners; and (iv) The Westpark Local
Limited Partnership, representing 15.24% of the total original investment,
exclusive of disposed properties, has affiliates of Federal Properties
Investment Company as the Local General Partner. The Local General Partners of
the other Local Limited Partnerships were identified in the Acquisition Reports.
In the event of bankruptcy or default of the Local General Partners, or other
conditions as expressed in the Local Limited Partnership Agreements, in certain
cases, an affiliate of the Partnership's Managing General Partner may elect to
become an additional Local General Partner.
The Properties owned by Local Limited Partnerships in which the Partnership has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The success of the Partnership
depends on many factors, most of which are beyond the control of the Partnership
and which cannot be predicted at this time. Such factors include general
economic and real estate market conditions, both on a national basis and in
those areas where the Properties are located, the availability and cost of
borrowed funds, real estate tax rates, operating expenses, energy costs and
government regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Partnership, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
overbuilding, a decrease in employment or adverse changes in real estate laws,
including building codes; and (iii) possible future adoption of rent control
legislation which would not permit the full amount of increased costs to be
passed on to the tenants in the form of rent increases or which would suppress
the ability of the Local Limited Partnerships to generate operating cash flow.
In particular, changes in federal and state income tax laws affecting real
estate ownership or limited partnerships could have a material and adverse
effect on the business of the Partnership.
The Partnership has invested in highly leveraged Local Limited Partnerships.
Since debt service is a fixed expenditure as well as a significant portion of
the operating expenses of a property, changing economic forces cause large
fluctuations in cash flow from operations; that is, highly leveraged investments
carry greater risk. As a result, break-even operations require higher revenues,
but cash flow from operations increases quickly as operations improve over
break-even. Conversely, deficits increase quickly as operations fall below
break-even.
The Partnership is managed by BFTG Residential Properties, Inc., the Managing
General Partner of the Partnership. To economize on direct and indirect payroll
costs, the Partnership, which does not have any employees, reimburses Lend Lease
Real Estate Investments, Inc. ("Lend Lease") an affiliate of the General
Partners, for certain expenses and overhead costs. A complete discussion of the
management of the Partnership is set forth in Item 9 of this Report on Form
10-KSB.
<PAGE>
Item 2. Properties
The Partnership owns limited partnership interests in nine Local Limited
Partnerships which own and operates multi-family residential properties. The
Partnership also owns investments in securities in which some of its Reserves
are held.
Four of the Local Limited Partnerships are operating at deficits (net loss
adjusted for depreciation, mortgage principal payments and replacement reserve
payments). In past years, the Local General Partners funded these deficits
either through non-interest bearing project expense loans or subordinated loans,
repayable only out of cash flow or proceeds from a sale or refinancing of the
given project. Once a project achieves break-even, substantial amounts of cash
flow derived from its operations will be used to repay project expense loans and
subordinated loans until the loans are repaid in full. To address current
deficits or other financial difficulties, Local General Partners are working to
increase rental income and reduce operating expenses, working with the lenders
to refinance property mortgages or seeking other sources of capital. Management
may make voluntary advances from the Partnership's Reserves to a Local Limited
Partnership encountering operating difficulties if it is deemed to be in the
best interest of the Partnership to provide such funds.
As previously reported, the Local General Partner for Westpark Plaza had been
reviewing the purchase offers from three different potential buyers. We are
pleased to report that effective December 29, 1999 the sale of Westpark Plaza
closed. The total investor distribution amount is $146.00 per unit ($1000 cost
per unit). The distribution itself is not taxable; however, the sale did create
a capital gain that will be reflected on your 1999 Schedule K-1. The capital
gain will create a tax due of $76.00 per unit. The distribution represents a
return of your original capital contribution. However, because Westpark Plaza is
located in California, the State of California requires a withholding of a
portion of the distribution for all investors. Your portion of this withholding
is $21.78 per unit. Therefore, the check mailed to you on February 22, 2000
reflects a cash distribution of $146 per unit less California withholding of
$21.78 per unit or a net of $124.24 per unit.
Property Dispositions
As previously reported, on December 31, 1993, the Partnership transferred its
interest in Captain's Landing to an unrelated purchaser for an amount equal to
the Partnership's costs associated with the transfer. The transfer of the
interest resulted in a capital gain which could be offset by passive losses,
both current and suspended.
As previously reported, HUD foreclosed on Oakwood Terrace on January 12, 1994.
The disposition of this interest did not have any effect on income for financial
reporting purposes, as the net investment balance of the interest is zero.
However, for tax purposes, a consequence of the foreclosure is that the
Partnership received allocations of capital gain and cancellation of debt
income. At the individual investor level, the capital gain and cancellation of
debt income could be offset by passive losses, both current and suspended.
The local general partner of Overland Station Investment Company sold the
property on January 12, 1995. From the sale, the Partnership has recognized
$2,067,424 of equity in income. This amount was offset by the recognition of
$18,627 of previously unrecognized equity in losses. Also, as a result of the
sale, the Partnership recognized a loss on the sale of Overland Station in the
amount of $773,964. This amount represented the remaining carrying value of the
Partnership's investment in the Local Limited Partnership.
<PAGE>
The Partnership received proceeds from the Overland sale in the amount of
$1,274,833. The Partnership used a portion of the sales proceeds to pay down
$624,833 of an acquisition note payable and accrued interest which totaled
$685,833. The $61,000 balance of these obligations was canceled and was recorded
as income on the Partnership's financial statements. The Partnership distributed
the balance of the sales proceeds plus accrued interest in the amount of
$657,450.
Bankruptcy plans for Woodmeade South Apartments and Mountain View Apartments
became effective on March 24, 1996. In order for the Partnership to retain an
equity interest in these properties, the bankruptcy plan required that the
Partnership make additional contributions. Management of the Partnership decided
that additional contributions would not be in the best interest of the
Partnership. Consequently, the Partnership relinquished its equity interest in
these two Local Limited Partnerships. These bankruptcies did not have an effect
on the Partnership for financial reporting purposes since the Partnership is a
limited partner and the two Local Limited Partnerships had a carrying value of
zero. However, the Partnership was precluded from realizing any residual value
of the properties upon liquidation.
The new mortgagee for Oakdale Manor foreclosed on the property on June 3, 1997.
The only effect on the Partnership was cancellation of indebtedness income
related to a purchase note payable and its associated accrued interest. No
obligation was due on the purchase note payable as the note was collateralized
only by the Partnership's interest in Oakdale Manor, which, at June 3, 1997, had
a carrying value of zero. For tax purposes, the consequence of the foreclosure
was that investors may have had a capital and/or ordinary gain and resulting
taxable income as a result of the disposal of this Local Limited Partnership.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal or administrative
proceeding, and to the best of its knowledge, no legal or administrative
proceeding is threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
<PAGE>
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that any public
market will develop.
The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units, and the
Partnership does not currently obtain such appraisals or provide such estimates
of value.
The Second Amended and Restated Agreement and Certificate of Limited Partnership
of the Partnership, as amended (the "Partnership Agreement"), imposes certain
restrictions on the transfer of Units. For example, a transfer will not be
permitted if: (i) counsel for the Partnership is of the opinion that such
transfer would result, when considered with all other transfers within the
previous twelve months, in the Partnership's being considered to have been
terminated within the meaning of Section 708 of the Internal Revenue Code of
1986, as amended, or would result in the Partnership's being treated as a
corporation for Federal income tax purposes; (ii) counsel for the Partnership
shall determine that such transfer would violate any applicable federal or state
securities laws (including those pertaining to investor suitability standards);
or (iii) transferor or the transferee would thereafter hold less than five
Units, except for transfers by gift or inheritance, inter-family transfers,
transfers resulting from family dissolutions and certain other transactions. The
Partnership need not recognize any transfer of Units unless an instrument of
assignment complying with certain requirements set forth in the Partnership
Agreement is filed with the Partnership and recorded on the Partnership's books,
and the transferring parties reimburse the Partnership for any expenses incurred
by it in connection with the transfer. Limited Partners seeking to transfer
Units may also be subject to the securities laws of the state in which the
transfer is to take place, in that certain states have imposed restrictions on
the transfer of Units in the Partnership. For the years ended December 31, 1999
and 1998, a total of 123 and 839 Units, respectively, were transferred on the
resale market. There were 2,197 and 2,203 record holders of Units of the
Partnership at December 31, 1999 and 1998, respectively.
Cash distributions, when made, are paid annually. Cash available for
distribution has been and, in the future, will be derived almost exclusively
from distributions of cash flow from operations of the Local Limited
Partnerships. Such cash is not expected to be significant in 2000, and the
return on investment to Limited Partners will consist primarily of net losses
for federal income tax purposes used to offset Limited Partner passive income
from the Partnership and other sources.
Item 6. Management's Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources
At December 31, 1999, the Partnership had cash and cash equivalents of
$3,359,153, compared with $159,298 at December 31, 1998. The increase in cash
and cash equivalents is a result of cash distributions received from Westpark
Plaza from the sale of the property and cash distributions received from other
Local Limited Partnerships. These increases are offset by net cash used by
operations and the purchase of marketable securities in excess of proceeds from
the sale of marketable securities.
At December 31, 1999, approximately $1,013,000 has been designated as Reserves
and is partially invested in various securities. The Reserves, as defined in the
Partnership Agreement, were established to be used for working capital of the
Partnership and contingencies related to the ownership of Local Limited
Partnership interests. Reserves may be used to fund Partnership operating
deficits if the Managing General Partner deems funding appropriate in order to
protect its investment.
<PAGE>
Since the Partnership has invested as a limited partner, it has no contractual
duty to provide additional funds to Local Limited Partnerships beyond its
specified investment. The Partnership's contractual obligations have been fully
met. Thus, at December 31, 1999 and 1998, it did not have any contractual or
other obligation to any Local Limited Partnership which had not been paid or
provided for.
Future cash distributions will be derived almost exclusively from distributions
of net cash provided by operations of the Local Limited Partnerships. Such cash
is not expected to be significant in 2000 and therefore there is no assurance
that adequate cash will be available to warrant cash distributions in future
years.
Results of Operations
Fiscal year ended December 31, 1999 versus 1998
The Partnership's results of operations for the year ended December 31, 1999
resulted in net income of $3,572,935, as compared to net income of $128,162 in
1998. The significant increase is almost entirely attributable to equity in
income of Local Limited Partnership of $3,509,392 as a result of the sale of
Westpark Plaza. Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Partnerships for the two years ended December 31, 1999.
Other Development
Lend Lease Real Estate Investments, Inc., ("Lend Lease") the U.S. subsidiary of
Lend Lease Corporation and the leading U.S. institutional real estate advisor,
as ranked by assets under management, acquired The Boston Financial Group
Limited Partnership on November 3, 1999.
Headquartered in New York and Atlanta, Lend Lease has regional offices in 12
cities nationwide. The company ranks as the leading U.S. manager of tax-exempt
assets invested in real estate. Lend Lease is a subsidiary of Lend Lease
Corporation, an international real estate and financial services group listed on
the Australian Stock Exchange. Worldwide, Lend Lease Corporation operates from
more than 30 cities on five continents: North America, Europe, Asia, Australia
and South America. In addition to real estate investments, the Lend Lease group
operates in the areas of property development, project management and
construction, and capital services (infrastructure). Financial services
activities include funds management, life insurance, and wealth protection
Item 7. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report on Form 10-KSB. See Index to Financial Statements and Schedules on page
F-1 hereof.
Item 8. Disagreements on Accounting and Financial Disclosure
None.
<PAGE>
PART III
Item 9. Directors and Executive Officers of the Registrant
The managing general partner of the Partnership is BFTG Residential Properties,
Inc., a Massachusetts corporation (the "Managing General Partner" or "BFTG"),
and is an affiliate of Lend Lease Real Estate Investments, Inc. ("Lend Lease"),
a Massachusetts limited partnership. The names, positions and ages of the
executive officers and directors of BFTG are set forth below:
<TABLE>
<CAPTION>
Name Position Age
<S> <C> <C>
James D. Hart Principal, Member, Finance 42
Vincent J. Costantini Principal, Head of Multifamily Investment Group 43
Michael H. Gladstone Principal, Member, Legal 43
</TABLE>
The other general partner of the Partnership is Milk Street Housing Associates,
L.P., a Massachusetts limited partnership ("Milk Street"). Milk Street was
originally formed as Franklin Housing Associates, but its name was changed on
December 8, 1981 to enable it to qualify to do business in Delaware. Messrs. A.
Harold Howell and Fred N. Pratt, Jr. are general partners of Milk Street.
The Partnership is a party to an agreement with Lend Lease, pursuant to which
Lend Lease will provide day-to-day management services for the Partnership's
investments in Local Limited Partnerships. Lend Lease receives certain
compensation for these services as discussed in Item 12 of this Report.
There is no family relationship between any of the persons listed in this
section.
The business experience of each of the persons listed above is described below:
James D. Hart, age 42, Principal, Member, Finance - Responsible for financial
operations in Boston office. Joined Lend Lease through its 1999 acquisition of
Boston Financial. Started with Boston Financial 1997, prior to joining Boston
Financial, engaged in venture capital management on behalf of institutional
investor, including the negotiation and structuring of private equity and
mezzanine transactions as a Vice President of Interfid Ltd., and later in
operational management of venture-backed software company, as Managing Director
and Chief Financial Officer of Bitstream Inc., Served on Board of Directors of
several companies, including those that went on to complete initial public
offerings BA Trinity College; MBA Amos Tuck School at Dartmouth College.
Vincent J. Costantini, age 43, Principal, Head of Multifamily Investment Group -
Responsible for private investment services to tax-exempt clients. Joined Lend
Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial 1995. Formerly served as Senior Vice President at General Investment
and Developments Co., and President of its affiliate, Windsor Realty Advisors,
Inc., responsible for implementing strategy, sourcing pension fund capital for
firm and overseeing acquisition and asset management activity. Prior to joining
General Investment and Development Co., responsible for negotiating trade
finance and foreign exchange positions, managing international banking
relationships, tax accounting and financial operations departments of
Monaco-based Tampimex International Ltd., Ingram Group subsidiary. Began career
at PriceWaterhouse as Senior Auditor and Consultant, Director of National Multi
Housing Council, Board member, Greater Boston Real Estate Finance Association,
Member, Urban Land Institute (ULI) and Pension Real Estate Association (PREA),
BS St. Joseph's University.
Michael H. Gladstone, age 43, Principal, Member, Legal - Responsible for legal
work in the areas of affordable and conventional housing and investment products
and services. Joined Lend Lease through its 1999 acquisition of Boston
Financial, started with Boston Financial 1985 served as firm's General Counsel.
Prior to joining Boston Financial, associated with law firm of Herrick & Smith,
served on advisory board of Housing and Development Reporter. Lectured at
Harvard University on affordable housing matters, Member, The National Realty
Committee, Cornell Real Estate Council, National Association of Real Estate
Investment Managers and Massachusetts Bar, BA Emory University; JD & MBA Cornell
University.
<PAGE>
Item 10. Management Remuneration
Neither the directors and officers of BFTG nor any other individual with
significant involvement in the business of the Partnership receives any current
or proposed remuneration from the Partnership.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The equity securities registered by the Partnership under Section 12(g) of the
Act consist of 22,000 Units, of which 21,910 were sold to the public. Holders of
Units are permitted to vote on matters affecting the Partnership only in certain
unusual circumstances and do not generally have the right to vote on the
operation or management of the Partnership. No limited partner is known to the
Partnership to be the beneficial owner of more than 5% of the outstanding Units.
BFTG Property Ventures, Inc., an affiliate of the General Partners, owns five
(unregistered) Units.
Except as described in the preceding paragraph, neither BFTG, Milk Street, Lend
Lease nor any of their executive officers, directors, partners or affiliates is
the beneficial owner of any Units. None of the foregoing persons possesses a
right to acquire beneficial ownership of Units.
There exists no arrangement known to the Partnership, the operation of which may
at a subsequent date result in a change in control of the Partnership.
Item 12. Certain Relationships and Related Transactions
Information required under this Item is contained in Note 6 to the Financial
Statements included in this Report on Form 10-KSB. The affiliates of the
Managing General Partner which have received or may receive fee payments and
expense reimbursements from the Partnership are described below:
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Under an agreement between the Partnership and Lend Lease, Lend Lease provides
day-to-day management services in connection with the Partnership's investments
in Local Limited Partnerships and receives certain reimbursements for such
services. Currently, Lend Lease receives an annual fee (the "Management Fee")
equal to 10% of the Partnership's share of cash flow from Local Limited
Partnerships. However, the Management Fee is subject to certain limitations and
to reduction under certain circumstances and is non-cumulative and payable only
out of available Partnership funds. Since inception, Management Fees amounting
to $200,430 have been paid to Lend Lease.
Information concerning cash distributions and other fees paid or payable to the
Managing General Partner and its affiliates and expenses reimbursed or
reimbursable to Lend Lease and its affiliates during each of the two years ended
December 31, 1999 is presented below and in Note 6 to the Financial Statements
included in Item 7 of this Report on Form 10-KSB.
1999 1998
---------- ---------
Salaries and benefits expense reimbursement $ 62,410 $ 64,244
Management Fees 18,924 19,860
<PAGE>
PART IV
Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 13, the financial statements, financial
statement schedule and auditor's report relating thereto are submitted as a
separate section of this Report on Form 10-KSB. See Index to Financial
Statements and Schedules on page F-1 hereof.
The reports of other auditors relating to the audits of the financial statements
of Local Limited Partnerships, which were referred to and relied upon in the
report of independent certified public accountants and in the Partnership's
financial statements and financial statement schedule, appear in Exhibit (28)(a)
of this report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulation of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
<PAGE>
(a)(3) and (c) Exhibits
<TABLE>
<CAPTION>
<S> <C>
Page Number or
Number and Description in Accordance with Incorporation
Item 601 of Regulation S-K by Reference to
4. Instruments defining the rights of security
holders, including indentures
4.1 Second Amended and Restated Agreement Exhibit C to Report
and Certificate of Limited Partner- on Form 10-KSB for 1981
ship dated as of February 1, 1982
10.1.1 Management Agreement between Boston Exhibit 10A to Regis-
Financial Apartments Associates, L.P., tration Statement on
and Fund Service Corporation dated as Form S-11 [File No.
of August 31, 1981 2-73448] dated
August 31, 1981
10.1.2 Amendment No. 1, dated January 1 Exhibit 10A to
1982, to Management Agreement with Amendment No. 1 to
Fund Service Corporation dated as Registration State-
of August 31, 1981 ment on Form S-11
[File No. 2-73448]
dated October 14,
1981
</TABLE>
28. Additional Exhibits
(a) 28.1 Reports of Other Auditors
(b) Audited financial statements of Investee Local Limited
Partnerships
None
(c) Reports on Form 8-K
No Reports on Form 8-K were filed during the fourth quarter ended
December 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
By: BFTG Residential Properties, Inc.,
its Managing General Partner
By: /s/Michael H. Gladstone Date: March 28, 2000
-------------------------------
Michael H. Gladstone
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
By: /s/Fred N. Pratt, Jr. Date: March 28, 2000
------------------------------------
Fred N. Pratt, Jr.
Chief Executive Officer of Boston
Financial Group Limited Partnership
By: BFTG Residential Properties, Inc.,
its Managing General Partner
By: /s/Michael H. Gladstone Date: March 28, 2000
-------------------------------
Michael H. Gladstone
Director
<PAGE>
Item 14 (a). Financial Statements and Supplementary Data
<TABLE>
<CAPTION>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED DECEMBER 31, 1999
INDEX
<S> <C> <C>
Sequential
Page No. Page No.
Report of Independent Accountants F-2
Financial Statements:
Balance Sheet - December 31, 1999 F-3
Statements of Operations - For the Years Ended
December 31, 1999 and 1998 F-4
Statements of Partners' Equity - For the Years Ended
December 31, 1999 and 1998 F-5
Statements of Cash Flows - For the Years
Ended December 31, 1999 and 1998 F-6
Notes to the Financial Statements F-7
</TABLE>
All other schedules are omitted as they are not applicable or not required, or
the information is provided in the financial statements or the notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Boston Financial Apartments Associates, L.P.
(A Limited Partnership)
In our opinion, based upon our audits and the reports of other auditors, the
accompanying balance sheet and the related statements of operations, partners'
equity, and cash flows present fairly, in all material respects, the financial
position of Boston Financial Apartments Associates, L.P. (a limited partnership)
(the "Partnership") as of December 31, 1999, and the results of their operations
and their 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. 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. The Partnership accounts for its investments in
Local Limited Partnerships, as discussed in Note 2 of the notes to the financial
statements, using the equity method of accounting. As of December 31, 1999 and
for the years December 31, 1999 and 1998, 100 percent of the Partnership's
Investment in Local Limited Partnerships, and equity in income (losses)
reflected in the financial statements of the Partnership, relates to investments
in Local Limited Partnerships for which we did not audit the financial
statements. The financial statements of these Local Limited Partnerships were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to those investments in Local Limited
Partnerships in 1999 and 1998, is based solely upon the reports of other
auditors. We conducted our audits of the financial statements in accordance with
auditing standards generally accepted in the United States which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits and the reports of other
auditors provide a reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
March 17, 2000
Boston, Massachusetts
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
BALANCE SHEET
December 31, 1999
Assets
<S> <C>
Cash and cash equivalents $ 3,359,153
Interest receivable 12,664
Marketable securities, at fair value (Note 3) 1,055,252
Investment in Local Limited Partnerships (Note 4) 246,883
-----------
Total Assets $ 4,673,952
===========
Liabilities and Partners' Equity
Liabilities:
Accounts payable to affiliate (Note 6) $ 7,156
Accounts payable and accrued expenses 37,180
-----------
Total Liabilities 44,336
Partners' Equity 4,629,616
-----------
Total Liabilities and Partners' Equity $ 4,673,952
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999 and 1998
1999 1998
----------- -----------
Revenue:
<S> <C> <C> <C>
Distribution income (Note 2) $ 126,726 $ 198,606
Investment 63,439 53,747
Other 1,955 7,825
----------- -----------
Total Revenue 192,120 260,178
----------- -----------
Expenses:
General and administrative expenses (includes
reimbursements to affiliates in the amounts of
$62,410 and $64,244, respectively) (Note 6) 109,653 112,156
Management Fees, related party (Note 6) 18,924 19,860
----------- -----------
Total Expenses 128,577 132,016
----------- -----------
Income before equity in income of Local
Limited Partnerships and loss on disposition 63,543 128,162
Equity in income of Local Limited
Partnerships (Note 4) 3,509,392 -
----------- -----------
Net Income $ 3,572,935 $ 128,162
=========== ===========
Net Income allocated:
To General Partners $ 38,271 $ 6,408
To Limited Partners 3,534,664 121,754
----------- -----------
$ 3,572,935 $ 128,162
=========== ===========
Basic income before equity in income of Local Limited
Partnership and loss on disposition of Interest
allocated to the Limited Partners per
Limited Partnership Unit (21,915 Units) $ 2.75 $ 5.56
=========== ============
Equity income and loss on disposition of interest
allocated to the Limited Partners per Limited
Partnership Unit (21,915 Units) $ 158.54 $ -
=========== ===========
Basic Net Income per Limited Partnership
Unit (21,915 Units) $ 161.29 $ 5.56
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
For the Years Ended December 31, 1999 and 1998
Net
Unrealized
General Limited Gains
Partners Partners (Losses) Total
<S> <C> <C> <C> <C>
Balance at December 31, 1997 $ (857,752) $ 1,791,991 $ 325 $ 934,564
------------- ------------- ---------------- -------------
Comprehensive Income:
Net change in net unrealized
gains on marketable securities
available for sale - - 6,785 6,785
Net Income 6,408 121,754 - 128,162
------------- ------------- ---------------- -------------
Comprehensive Income 6,408 121,754 6,785 134,947
------------- ------------- ---------------- -------------
Balance at December 31, 1998 $ (851,344) $ 1,913,745 $ 7,110 $ 1,069,511
Comprehensive Income (Loss):
Net change in net unrealized
gains on marketable securities
available for sale - - (12,830) (12,830)
Net Income 38,271 3,534,664 - 3,572,935
------------- ------------- ---------------- -------------
Comprehensive Income (Loss) 38,271 3,534,664 (12,830) 3,560,105
------------- ------------- ---------------- -------------
Balance at December 31, 1999 $ (813,073) $ 5,448,409 $ (5,720) $ 4,629,616
============= ============= ================ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999 and 1998
1999 1998
------------- -------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 3,572,935 $ 128,162
Adjustments to reconcile net income
to net cash used for operating activities:
Equity in income of Local Limited Partnerships (3,509,392) -
Distribution income included in cash distributions
received from Local Limited Partnerships (126,726) (198,606)
Gains on sales of marketable securities (846) (821)
Increase (decrease) in cash arising from changes in
operating assets and
liabilities:
Interest receivable (1,306) 1,834
Other assets 1,475 51
Accounts payable to affiliates 1,943 103
Accounts payable and accrued expenses 4,255 (1,950)
------------- -------------
Net cash used for operating activities (57,662) (71,227)
------------- -------------
Cash flows from investing activities:
Purchases of marketable securities (1,096,704) (1,124,016)
Proceeds from sales and maturities of
marketable securities 964,986 1,013,095
Cash distributions received from Local
Limited Partnerships 3,389,235 198,606
------------- -------------
Net cash provided by investing activities 3,257,517 87,685
------------- -------------
Net increase in cash and cash equivalents 3,199,855 16,458
Cash and cash equivalents, beginning 159,298 142,840
------------- -------------
Cash and cash equivalents, ending $ 3,359,153 $ 159,298
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Organization
Boston Financial Apartments Associates, L.P. (the "Partnership") is a limited
partnership formed on July 21, 1981 under the Uniform Limited Partnership Act of
the State of Delaware. The Partnership was organized to invest, as a limited
partner, in other limited partnerships ("Local Limited Partnerships") which own
and operate multi-family residential properties.
BFTG Residential Properties, Inc. (the "Managing General Partner") is an
affiliate of Lend Lease Real Estate Investments, Inc. ("Lend Lease"). Milk
Street Housing Associates, L.P. (originally organized under the name
Franklin Housing Associates), the other general partner, is a limited
partnership of which the partners are employees or former employees of Lend
Lease. The initial limited partner is BFTG Property Ventures, Inc., an
affiliate of Lend Lease.
During 1981 and 1982, the Partnership sold limited partnership units producing
gross offering proceeds of $21,910,000. Such amounts exclude five unregistered
units previously acquired for $1,000 each by the initial limited partner.
Profits and losses are generally allocated 95% to the Limited Partners and 5% to
the General Partners. In the case of certain events defined in the Partnership
Agreement, the allocation of the related profits and losses would be different
from that described above. Profits and losses arising from a sale or refinancing
are generally allocated 99% to the Limited Partners and 1% to the General
Partners.
Cash Available for Distribution, as defined in the Partnership Agreement, is
allocated 95% to the Limited Partners and 5% to the General Partners.
Sale or Refinancing Proceeds, as defined in the Partnership Agreement, will be
allocated first to the Limited Partners in the amount of their Adjusted Capital
Contribution, as defined, and then 85% to the Limited Partners and 15% to the
General Partners, after adjustment for certain priority distributions.
As defined in the Partnership Agreement, Reserves were established to be used
for working capital of the Partnership and contingencies related to the
ownership of Local Limited Partnership interests. At December 31, 1999, the
General Partner has designated approximately $1,013,000 as Reserves. Such
Reserves may be increased or decreased as deemed appropriate from time to time
by the Managing General Partner. Substantially all of these Reserves are
invested for the purpose of providing revenue to the Partnership for ongoing
operations and contingencies.
2. Significant Accounting Policies
The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting. Under the equity method, the investment is
carried at cost, adjusted for the Partnership's share of net income or loss and
for cash distributions from the Local Limited Partnerships; equity in income or
loss of the Local Limited Partnerships is included currently in the
Partnership's operations. Under the equity method, a Local Limited Partnership
investment will not be carried below zero. To the extent that equity in losses
are incurred when the Partnership's carrying value of the respective Local
Limited Partnership has been reduced to a zero balance, the losses will be
suspended and offset against future income. Income from Partnership investments
where cumulative equity in losses plus cumulative distributions have exceeded
the total investment in Local Limited Partnerships will not be recorded until
all of the related unrecorded losses have been offset. To the extent that a
Local Limited Partnership with a carrying value of zero distributes cash to the
Partnership, that distribution is recorded as income on the books of the
Partnership and is presented as "Distribution Income" in the accompanying
financial statements.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
To the extent that the Partnership's investment in a Local Limited Partnership
exceeded the Partnership's share of fair value of net assets at the time of such
investment, such amounts were being amortized over the life of the principal
assets of the Local Limited Partnership (39 years). Such amortization was
included in the equity in losses of the Local Limited Partnerships but was
suspended when the related asset carrying values were reduced to zero.
Cash and cash equivalents consist of short-term money market instruments with
original maturities of ninety days or less.
Marketable securities consists primarily of U.S. Treasury Notes, mortgage-backed
and various other asset-backed investment vehicles. The Partnership's marketable
securities are classified as "Available for Sale" securities and reported at
fair value as reported by the brokerage firm at which the securities are held.
All marketable securities have fixed maturities. Realized gains or losses from
the sales of securities are based on the specific identification method.
Unrealized gains and losses are excluded from earnings and reported as separate
components of partners' equity.
The preparation of financial statements in conformity with accounting principles
generally accepted within the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
No provision for income taxes has been made as the liability for such taxes is
an obligation of the partners of the Partnership.
3. Marketable Securities
A summary of marketable securities at December 31, 1999 is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by the US
<S> <C> <C> <C> <C>
Treasury and other US government
agencies $ 999,067 $ 156 $ (6,308) $ 992,915
Mortgage backed securities 61,905 432 - 62,337
----------- --------- -------- -----------
Balance at December 31, 1999 $ 1,060,972 $ 588 $ (6,308) $ 1,055,252
=========== ========= ======== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
The contractual maturities at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in less than one year $ 699,663 $ 696,665
Due in one year to five years 299,404 296,250
Mortgage backed securities 61,905 62,337
----------- -----------
$ 1,060,972 $ 1,055,252
=========== ===========
</TABLE>
Actual maturities for asset backed securities may differ from contractual
maturities because some borrowers have the right to call or prepay obligations.
Proceeds from the sales of marketable securities were approximately $273,000 and
$426,000 during the years ended December 31, 1999 and 1998, respectively.
Proceeds from the maturities of marketable securities were approximately
$692,000 and $587,000 during the years ended December 31, 1999 and 1998,
respectively. Included in investment income are gross gains of $846 that were
realized on the sales in 1999 and gross gains of $2,293 and gross losses of
$1,472 that were realized on the sales in 1998.
4. Investment in Local Limited Partnerships
As of December 31, 1999 the Partnership's Investment in Local Limited
Partnerships are as follows:
<TABLE>
<CAPTION>
Capital Contribu- Net Equity Cash
tions and Related in Income Distributions
Local Limited Acquisition Costs (Losses) Received Net
Partnerships (Cumulative) (Cumulative) (Cumulative) (1) Investment
- ----------------------------- ----------------- ------------ ----------------- ----------
<S> <C> <C> <C> <C>
Bear Creek $ 796,556 $ 173,739 $ (970,295) $ -
Buttonwood Tree 1,482,996 (1,415,154) (67,842) -
Captain's Landing 1,057,682 (1,057,682) - -
Chelsea Village 2,076,589 (2,076,589) - -
Mountain View 422,593 (422,593) - -
Oakdale Manor 1,522,621 (1,522,621) - -
Oakwood Terrace 614,643 (614,643) - -
Overland Station 1,232,286 816,511 (1,274,833) 773,964
Park Hill 825,501 (687,453) (138,048) -
Pheasant Ridge 1,050,237 (924,712) (125,525) -
The Woods of Castleton 2,025,681 (2,025,681) - -
Westpark Plaza 1,846,469 2,414,589 (4,014,175) 246,883
Woodbridge 1,077,161 (1,044,146) (33,015) -
Woodmeade South 1,619,452 (1,619,452) - -
Youngstoun 935,861 (935,861) - -
-------------- ------------- -------------- ------------
Subtotal 18,586,328 (10,941,748) (6,623,733) 1,020,847
Less dispositions:
Mountain View (422,593) 422,593 - -
Woodmeade South (1,619,452) 1,619,452 - -
Overland Station (1,232,286) (816,511) 1,274,833 (773,964)
Captain's Landing (1,057,682) 1,057,682 - -
Oakwood Terrace (614,643) 614,643 - -
Oakdale Manor (1,522,621) 1,522,621 - -
-------------- ------------- -------------- ------------
Subtotal (6,469,277) 4,420,480 1,274,833 (773,964)
Balance at
December 31, 1999 $ 12,117,051 $ (6,521,268) $ (5,348,900) $ 246,883
============== ============= =============== ============
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
4. Investment in Local Limited Partnerships (continued)
(1) Included in cash distributions received is cumulative distribution
income of $1,469,221 which was received from six Local Limited
Partnerships with carrying values of zero.
Summarized financial information from the combined financial statements of all
Local Limited Partnerships in which the Partnership has invested at December 31,
1999 and 1998 is as follows:
Summarized Balance Sheets - as of December 31
<TABLE>
<CAPTION>
1999 1998
------------- --------------
Assets:
<S> <C> <C>
Investment property, net $ 21,359,484 $ 22,650,326
Current assets 2,252,136 2,475,074
Other assets 1,604,270 1,921,778
------------- --------------
Total Assets $ 25,215,890 $ 27,047,178
============= ==============
Liabilities and Partners' Deficiency:
Long-term debt $ 37,009,697 $ 40,603,410
Current liabilities 2,081,551 2,434,004
Other liabilities 3,508,783 4,835,197
------------- --------------
Total Liabilities 42,600,031 47,872,611
Partners' Deficiency (17,384,141) (20,825,433)
------------- --------------
Total Liabilities and Partners' Deficiency $ 25,215,890 $ 27,047,178
============= ==============
Summarized Income Statements
For the Twelve Months Ended December 31
1999 1998
------------- --------------
Rental and other income $ 10,903,185 $ 10,726,359
------------- --------------
Expenses:
Operating expenses 6,572,215 5,980,596
Interest expense 3,457,167 3,492,736
Depreciation and amortization 1,603,735 1,448,407
------------- --------------
Total Expenses 11,633,117 10,921,739
------------- --------------
Net Loss before gain on sale (729,932) (195,380)
Gain on sale of real estate 7,627,449 -
------------- --------------
Net income (loss) $ 6,897,517 $ (195,380)
============= ==============
Partnership's share of net income (loss) $ 7,067,541 $ (191,604)
============= ==============
Other partners' share of net income (loss) $ (170,024) $ (3,776)
============= ==============
</TABLE>
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
4. Investment in Local Limited Partnerships (continued)
The Partnership has not recognized equity losses of $906,638 and $390,210 in the
years ended December 31, 1999 and 1998, respectively. These unrecognized losses
relate to Local Limited Partnerships whose cumulative equity in losses and
cumulative distributions have exceeded their total investment. In addition,
during the year ended December 31, 1999, the Partnership recognized $2,005,036
of previously unrecognized losses due to the sale of Westpark Plaza.
5. Federal Income Taxes
The following schedule reconciles the reported financial statement income to
the income reported on Form 1065, US. Partnership Return of Income:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Income (loss) per financial statements $ 3,572,935 $ 128,162
Distribution income recognized for
book purposes (126,726) (198,606)
Equity in losses not recognized
currently for book purposes 776,253 (191,604)
Net gain on disposition of Westpark for tax
purposes in excess of gain for book purposes -
Additional depreciation and
amortization for tax purposes - 597,166
Other differences, net 90,443 -
------------ ------------
Income per tax return $ 7,943,080 $ 335,118
============ ============
</TABLE>
The carrying value of the Partnership's Investment in Local Limited Partnerships
for financial reporting purposes was approximately $31,213,000 greater than the
carrying value of such assets for tax purposes in 1999. The difference was
partially a result of the fact that, for financial reporting purposes, the
Partnership does not recognize equity losses from a Local Limited Partnership
once a Local Limited Partnership's carrying value has been reduced to zero. Such
unrecognized losses totaled approximately $15,162,000 at December 31, 1999. The
remaining differences were mainly due to accelerated depreciation taken for tax
purposes. The carrying value of all other assets and liabilities was the same
for financial reporting and tax purposes.
6. Transactions with Affiliates
Included in general and administrative expenses are amounts that the Partnership
has paid or are payable to an affiliate of the Managing General Partner for
reimbursement of salaries and benefits.
In accordance with the Partnership Agreement, Lend Lease currently receives a
Management Fee equal to 10% of the Partnership's share of Cash Flow from Local
Limited Partnerships. However, the fee is subject to certain limitations and
adjustments under certain circumstances. The fee is non-cumulative and is
payable only from available Partnership funds. Management Fees totaling $18,924
and $19,860 were incurred during 1999 and 1998, respectively, which relate to
cash distributions received in those years.
<PAGE>
BOSTON FINANCIAL APARTMENTS ASSOCIATES, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
7. Disposition of Investments in Local Limited Partnership
The Local General Partner of Westpark Plaza Investors sold the property on
December 29, 1999. The local limited partnership received proceeds in the amount
of $8,250,000 and used a portion of the sales proceeds to pay off the mortgage,
in the amount of $4,848,793. After the mortgage payoff, approximately $3,200,000
of the remaining proceeds was distributed to the Partnership during 1999. The
Partnership expects to liquidate its interest in Westpark in early 2000 and
expects to receive approximately $247,000 in final distributions.
8. Subsequent Event
On February 22, 2000, the Partnership distributed the majority of the Westpark
sales proceeds to the Limited Partners. In total, $3,200,000 was distributed.
Any remaining proceeds from Westpark will be retained by the Partnership and
added to Reserves.
Rhea & Ivy, P.L.C.
Memphis, TN 38119-3971
<PAGE>
Independent Auditors' Report
To the Partners of
Bear Creek Apartments Associates:
We have audited the accompanying balance sheet of Bear Creek Apartments
Associates (a Limited Partnership), FHA Project No. 053-11082-PM as of December
31, 1999, and the related statements of profit and loss, changes in partners'
deficit, and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 Bear Creek Apartments
Associates (a Limited Partnership), FHA Project No. 053-11082-PM at December 31,
1999, and the results of its operations, changes in partners' deficit, and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 21, 2000 on our
consideration of the project's internal control, and reports dated January 21,
2000 on its compliance with specific requirements applicable to major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
11 and 12 is presented for the purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statement, and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
January 21, 2000
/s/Rhea & Ivy, P.L.C.
<PAGE>
Rhea & Ivy, P.L.C.
Memphis, TN 38119
Independent Auditors' Report
To the Partners of
Bear Creek Apartments Associates:
We have audited the accompanying balance sheet of Bear Creek Apartments
Associates (a Limited Partnership), FHA Project No. 053-11082-PM as of December
31, 1998, and the related statements of profit and loss, changes in partners'
deficit, and cash flows for the year then ended. 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 audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. These 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 audit provides 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 Bear Creek Apartments
Associates (a Limited Partnership), FHA Project No. 053-11082-PM at December 31,
1998, and the results of its operations, changes in partners' deficit, and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 25, 1999, on our
consideration of the project's internal control and reports dated January 25,
1999, on its compliance with specific requirements applicable to major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supporting data included in the report on pages
11 and 12 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in our audit of the basic financial statements,
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
January 25, 1999
/s/Rhea & Ivy, P.L.C.
<PAGE>
Grant Thornton
Wichita, KS 67226
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The General Partner
Buttonwood Tree Apartments, Ltd.
We have audited the accompanying balance sheet of Buttonwood Tree Apartments,
Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1999, and the related
statements of profit and loss, (For, HUD - 92410) changes in partners' deficit
and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These 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 audit provides 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 Buttonwood Tree Apartments,
Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1999, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report
dated January 11, 2000 on our consideration of Buttonwood Tree Apartments, Ltd.,
HUD Project No. 102-35166-L8-PM's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grants.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information (shown on
pages 12 to 15) is presented for the purposes of additional analysis and is not
a required part of the basic financial statements of Buttonwood Tree Apartments,
Ltd. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/Grant Thorton LLP
Wichita, Kansas
January 11, 2000
<PAGE>
Grant Thornton
Wichita, KS 67202
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The General Partner
Buttonwood Tree Apartments, Ltd.
We have audited the accompanying balance sheet of Buttonwood Tree Apartments,
Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1998, and the related
statements of profit and loss, changes in partners' deficit and cash flows for
the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These 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 audit provides 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 Buttonwood Tree Apartments,
Ltd., HUD Project No. 102-35166-L8-PM as of December 31, 1998, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issue a report
dated January 14, 1999 on our consideration of Buttonwood Tree Apartments, Ltd.,
HUD Project No. 102-35166-L8-PM's internal controls and reports dated January
14, 1999 on its compliance with specific requirements applicable to its major
HUD - assisted program.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information (shown on
pages 12 to 15) is presented for the purposes of additional analysis and are not
a required part of the basic financial statements of Buttonwood Tree Apartments,
Ltd. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/Grant Thorton LLP
Wichita, Kansas
January 14, 1999
<PAGE>
Ernst & Young LLP
Indianapolis, Indiana 46204
Report of Independent Auditors
To the Partners
Chelsea Village
We have audited the accompanying balance sheet of Chelsea Village, a limited
partnership, as of December 31, 1999, and the related statements of profit and
loss, partners' capital deficit and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 Chelsea Village at December 31,
1999, and the results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data listed on the contents page is
presented for purposes of additional analysis and is not a required part of the
financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in our audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Ernst & Young LLP
Indianapolis, Indiana
January 22, 2000
<PAGE>
Ernst & Young
Indianapolis, Indiana 46204
Report of Independent Auditors
To the Partners
Chelsea Village, L.P.
We have audited the accompanying balance sheet of Chelsea Village, a limited
Partnership, as of December 31, 1998, and the related statements of profit and
loss, partners' capital deficit and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 Chelsea Village at December 31,
1998, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supporting data listed on the contents page is
presented for the purpose of additional analysis and is not a required part of
the financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in our audit of the financial statements, and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/Ernst & Young LLP
January 22, 1999
<PAGE>
MDC
Mc Curry, Downe & Cline, CPA, PC
Johnson City, TN 37601
January 20, 2000
Independent Auditors' Report - Unqualified Opinion
Park Hill Associates
Lexington, Kentucky
We have audited the accompanying balance sheet of Park Hill Associates, HUD
Project No. 083-35147-PM (a limited partnership), as of December 31, 1999, and
the related statements of income, changes in partners' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of 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 management, as well as evaluating the overall financial statement
presentation. We believe that out audit provides 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 Park Hill Associates at
December 31, 1999, and the results of its operations, changes in partner's
capital and cash flow for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 2000 on our
consideration of Park Hill Associates' internal control, and reports dated
January 20, 2000, on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.
McCurry, Downer and Cline, CPA, PC
Johnson City, Tennessee
EIN 62-1337124
Engagement Partner/Officer
/s/Kenneth W. McCurry
401 Elm Street
Johnson City, TN 37601
(423) 926-4784
<PAGE>
M & A
Mc Curry & Associates, CPA, PC
Johnson City, TN 37601
January 19, 1999
Independent Auditors' Report - Unqualified Opinion
Park Hill Associates
Lexington, Kentucky
We have audited the accompanying balance sheet of Park Hill Associates, HUD
Project No. 083-35147-PM (a limited partnership), as of December 31, 1998, and
the related statements of income, changes in partners' equity, and cash flow for
the year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of 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 management, as well as evaluating the overall financial statement
presentation. We believe that out audit provides 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 Park Hill Associates at
December 31, 1998, and the results of its operations, changes in partner's
equity, and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 19, 1999, on our
consideration of Park Hill Associates' internal control, and reports dated
January 19, 1999, on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.
McCurry, Downer & Cline, CPA, PC
Johnson City, Tennessee
EIN 62-1337124
Engagement Partner/Officer
/s/Kenneth W. McCurry
401 Elm Street
Johnson City, TN 37601
(423) 926-4784
<PAGE>
Haran & Associates Ltd
Wilmette, Illnois 60091
INDEPENDENT AUDITORS' REPORT
To the Partners HUD Field Office Director
PHEASANT RIDGE LIMITED PARTNERSHIP Chicago, Illinois
Moline, Illinois
We have audited the accompanying balance sheet of PHEASANT RIDGE LIMITED
PARTNERSHIP, Project No. 071-35240, as of December 31, 1999, and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of PHEASANT
RIDGE LIMITED PARTNERSHIP, as of December 31, 1999, and its profit or loss,
changes in partners' equity, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 7, 2000 on our consideration of PHEASANT RIDGE LIMITED
PARTNERSHIP'S internal control structure and reports dated January 7, 2000 on
its compliance with specific requirements applicable to Major HUD Programs,
specific requirements applicable to Affirmative Fair Housing and specific
requirements applicable to Nonmajor HUD Programs.
The accompanying supplementary information (shown on pages 13 to 18) is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statement and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Haran & Associates, Ltd
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Certification No. 36-3097692
Audit Partner: W. Garrett Heinl (847) 853-2576
January 7, 2000
<PAGE>
Haran & Associates Ltd
Wilmette, Illnois 60091
INDEPENDENT AUDITORS' REPORT
To the Partners of HUD Field Office Director
PHEASANT RIDGE LIMITED PARTNERSHIP Chicago, Illinois
Moline, Illinois
We have audited the accompanying balance sheet of PHEASANT RIDGE LIMITED
PARTNERSHIP, Project No. 071-35240, as of December 31, 1998, and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of PHEASANT
RIDGE LIMITED PARTNERSHIP, as of December 31, 1998, and its profit or loss,
changes in partners' equity, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 8, 1999 on our consideration of PHEASANT RIDGE LIMITED
PARTNERSHIP'S internal control structure and reports dated January 8, 1999 on
its compliance with specific requirements applicable to Major HUD Programs,
specific requirements applicable to Affirmative Fair Housing and specific
requirements applicable to Nonmajor HUD Programs.
The accompanying supplementary information (shown on pages 13 to 18) is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statement and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/Haran & Associates, Ltd
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Certification No. 36-3097692
Audit Partner: W. Garrett Heinl (847) 853-2576
January 8, 1999
<PAGE>
Reznick Fedder & Silverman
INDEPENDENT AUDITORS REPORT
To the Partners
Westpark Plaza Investors
We have audited the accompanying balance sheet of the Westpark Plaza Investors
as of December 31, 1999, and the related statements of operations, partners'
equity (deficit) and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 Westpark Plaza Investors as of
December 31, 1999, and the results of its operations, the changes in partner's
equity (deficit) and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
February 11, 2000
<PAGE>
Reznick Fedder & Silverman
INDEPENDENT AUDITOR'S REPORT
To the Partners
Westpark Plaza Investors
We have audited the accompanying balance sheet of the Westpark Plaza Investors
as of December 31, 1998 and the related statements of operations and partners'
equity (deficit) and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits 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 audit provides 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 Westpark Plaza Investors as of
December 31, 1998, and the results of its operations, the changes in partner's
equity (deficit) and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 23
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs" we have also issued reports dated January 15,
1999 on our consideration of Westpark Plaza Investors' internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 15, 19999
Taxpayer Identification Number: 52-1088612
Lead Auditor: Renee G. Scruggs
<PAGE>
Ernst & Young LLP
Indianapolis, Indiana 46204
Report of Independent Auditors
To the Partners
Woodbridge Apts. of Bloomington II, L.P.
We have audited the accompanying balance sheet of Woodbridge Apartments of
Bloomington II L.P., a limited partnership--Project No. 073-35520-PM, as of
December 31, 1999, and the related statements of profit and loss, partners'
capital deficit and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. These 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 audit provides 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 Woodbridge Apartments of
Bloomington II, L.P. at December 31, 1999, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, for the year ended December
31, 1999, we have issue a report dated January 22, 2000, on our consideration of
the Partnership's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations and contracts.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data listed on the contents page is
presented for the purposes of additional analysis and is not a required part of
the financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in the audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
Indianapolis, Indiana
January 22, 2000
/s/Ernst & Young LLP
<PAGE>
Ernst & Young LLP
Indianapolis, Indiana 46204
Report of Independent Auditors
To the Partners of
Woodbridge Apts. of Bloomington II, L.P.
We have audited the accompanying balance sheet of Woodbridge Apartments of
Bloomington, II L.P., a limited partnership--Project No. 073-35520-PM, as of
December 31, 1998, and the related statements of profit and loss, partners'
capital deficit and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 Woodbridge Apartments of
Bloomington II, L.P. at December 31, 1998, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
entitled "Independent Auditors' Report on Compliance and on Internal Control
over Financial Reporting, Based on an Audit of the Financial Statements in
accordance with Government Auditing Standards" dated January 22, 1999 on our
consideration of the Partnership's internal control over financial reporting and
our tests on its compliance with certain provisions of laws, regulations and
contracts.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data listed on the contents page is
presented for the purposes of additional analysis and is not a required part of
the financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in the audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
January 22, 1999
/s/Ernst & Young LLP
<PAGE>
Ernst & Young LLP
Indianapolis, Indiana 46204
REPORT OF INDEPENDENT AUDITORS
To the Partners
The Woods of Castleton
We have audited the accompanying balance sheet of The Woods of Castleton, a
limited partnership, as of December 31, 1999, and the related statements of
profits and loss, partners' capital deficit and cash flows for the year then
ended. 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 audit.
We conducted our audit 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 audit 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 The Woods of Castleton at
December 31, 1999, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data listed on the contents page is
presented for purposes of additional analysis and is not a required part of the
financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in our audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Ernst & Young LLP
Indianapolis, Indiana
January 22, 2000
<PAGE>
Ernst & Young LLP
Indianapolis, Indiana 46204
REPORT OF INDEPENDENT AUDITORS
To the Partners
The Woods of Castleton
We have audited the accompanying balance sheet of The Woods of Castleton, a
limited partnership, as of December 31, 1998, and the related statements of
profits and loss, partners' capital deficit and cash flows for the year then
ended. 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 The Woods of Castleton at
December 31, 1998, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data listed on the contents page is
presented for purposes of additional analysis and is not a required part of the
financial statements of the Partnership. Such data has been subjected to the
auditing procedures applied in our audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Ernst & Young LLP
January 22, 1999
<PAGE>
Rhea & Ivy, P.L.C.
Memphis, TN 38119
Independent Auditors' Report
To the Partners of
Youngstoun Apartments, Phase II:
We have audited the accompanying balance sheet of Youngstoun Apartments, Phase
II (a Limited Partnership), FHA Project No. 052-35323-PM-L8, as of December 31,
1999, and the related statements of profit and loss, changes in partners'
deficit, and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 Youngstoun Apartments, Phase II
(a Limited Partnership), FHA Project No. 052-35323-PM-L8, at December 31, 1999,
and the results of its operations, changes in partners' deficit, and cash flows
for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 24, 2000 on our
consideration of the project's internal control and reports dated January 24,
2000 on its compliance with specific requirements applicable to major HUD
programs, and specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD program
transactions.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
11 and 12 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements,
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
/s/Rhea & Ivy, P.L.C.
January 24, 2000
<PAGE>
Rhea & Ivy, P.L.C.
Memphis, TN 38119
Independent Auditors' Report
The Partners
Youngstoun Apartments, Phase II:
We have audited the accompanying balance sheet of Youngstoun Apartments, Phase
II (a Limited Partnership), FHA Project No. 052-35323-PM-L8, as of December 31,
1998, and the related statements of profit and loss, changes in partners'
deficit, and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 Youngstoun Apartments, Phase II
(a Limited Partnership), FHA Project No. 052-35253-PM-L8 at December 31, 1998,
and the results of its operations, changes in partners' deficit and cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 25, 1999 on our
consideration of the project's internal control and reports dated January 25,
1999 on its compliance with specific requirements applicable to Fair Housing and
Non- Discrimination, and specific requirements applicable to nonmajor HUD
program transactions.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
12 and 13 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in our audit of the basic financial statements,
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
/s/Rhea & Ivy, P.L.C.
January 25, 1999
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,359,153
<SECURITIES> 1,055,252
<RECEIVABLES> 12,664
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,673,952<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 4,629,616
<TOTAL-LIABILITY-AND-EQUITY> 4,673,952<F2>
<SALES> 0
<TOTAL-REVENUES> 192,120<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 128,577<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 63,543
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,572,935<F5>
<EPS-BASIC> 161.29
<EPS-DILUTED> 0
<FN>
<F1>Includes Investments of Local Limited Partnerships of $246,883.
<F2>Includes Accounts payable to affiliate of $7,156 and Accounts payable and accrued expenses of $37,180.
<F3>Includes Distribution income of $126,726, Investment income of $63,439 and Other income of $1,955.
<F4>Includes General and administrative expenses of $109,653 and Management fees of $18,924.
<F5>Includes Equity in income of local limited partnerships of $3,509,392.
</FN>
</TABLE>
