SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year
ended December 31, 1996 Commission file number 0-12432
JMB INCOME PROPERTIES, LTD. - IX
(Exact name of registrant as specified in its charter)
Illinois 36-3126228
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
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:
LIMITED PARTNERSHIP INTERESTS
(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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K X
State the aggregate market value of the voting stock held by nonaffiliates
of the registrant. Not applicable.
Documents incorporated by reference: None
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . 3
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . 5
Item 4. Submission of Matters to a
Vote of Security Holders . . . . . . . . . . . . 5
PART II
Item 5. Market for the Partnership's Limited
Partnership Interests and
Related Security Holder Matters. . . . . . . . . 5
Item 6. Selected Financial Data. . . . . . . . . . . . . 6
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . 8
Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . . . 11
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . 31
PART III
Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . . . 31
Item 11. Executive Compensation . . . . . . . . . . . . . 34
Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . 35
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . . . 36
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . . . 36
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 38
i
PART I
ITEM 1. BUSINESS
All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.
The registrant, JMB Income Properties, Ltd.-IX (the "Partnership"),
was a limited partnership formed in 1981 and governed by the Revised
Uniform Limited Partnership Act of the State of Illinois to invest
primarily in improved income-producing commercial real property. The
Partnership sold $77,127,000 in Limited Partnership Interests (the
"Interests") commencing on April 14, 1982, pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (Registration No.
2-73991). A total of 77,127 Interests were sold to the public at $1,000
per Interest. The holders of 25,599 Interests were admitted to the
Partnership in fiscal 1982; the holders of 51,528 Interests were admitted
to the Partnership in fiscal 1983. The offering closed on May 10, 1983.
Included in the 77,127 Limited Partnership Interests subscribed and issued
were 382 Interests which belonged to an affiliate of the lead underwriter
in consideration of consulting services in connection with the organization
of the Partnership. No Limited Partner made any additional capital
contribution after such date. The Limited Partners of the Partnership
shared in their portion of the benefits of ownership of the Partnership's
real property investments according to the number of Interests held.
The Partnership was engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments were held through joint venture partnership interests.
The Partnership's real estate investments were located throughout the
nation and it had no real estate investments located outside the United
States. A presentation of information about industry segments, geographic
regions, raw materials or seasonality is not applicable and would not have
been material to an understanding of the Partnership's business taken as a
whole. The Partnership made a final liquidating distribution of
$12,328,192 on December 31, 1996 to the Holders of Interests including
$895,661 paid to a liquidating trust established for the benefit of the
Holders of Interests, and terminated its operations and dissolved the
Partnership effective December 31, 1996. At the sale of a particular
property, the proceeds, if any, were generally distributed or reinvested in
existing properties rather than invested in acquiring additional
properties. (Reference is also made to Item 7.)
The Partnership made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>
SALE OR
NAME, TYPE OF PROPERTY DATE OF DISPOSITION
AND LOCATION SIZE PURCHASE DATE TYPE OF OWNERSHIP
- - ---------------------- -------------- -------- ------------ ---------------------
<S> <C> <C> <C> <C>
Lynnhaven Mall
shopping center
Virginia Beach,
Virginia. . . . . . . . 567,000 sq. ft. 12-17-81 6-28-90 fee ownership of land
and improvements
(through joint venture
partnership)
Town & Country
Center
shopping center
Houston, Texas. . . . . 370,000 sq. ft. 2-16-83 12-5-95 fee ownership of land
g.l.a. and improvements
(through joint venture
partnerships) (b)
Blanchard Plaza
Building
office building
Seattle, Washington . . 237,000 sq. ft. 7-29-83 10-17-96 fee ownership of land
n.r.f. and improvements
(through joint venture
partnership) (a)
Towne Square
Mall
shopping center
Owensboro,
Kentucky. . . . . . . . 357,000 sq. ft. 3-1-84 8-13-87 fee ownership of land
g.l.a. and improvements
(through joint venture
partnerships)
<FN>
- - ---------------
(a) Reference is made to the Notes for a description of the joint venture partnership through which the
Partnership made this real property investment, for a description of the former long-term mortgage indebtedness
secured by this property, and the disposition of this property in October 1996.
(b) The Partnership, through its unconsolidated joint venture investment, disposed of this property in
December 1995.
</TABLE>
The Partnership's former real property investments were subject to
competition from similar types of properties (including properties owned or
advised by affiliates of the General Partners) in the respective vicinities
in which they were located. Such competition was generally for the
retention of existing tenants. Additionally, the Partnership was in
competition for new tenants in markets where significant vacancies were
present. Approximate occupancy levels for the property owned in 1996 are
set forth in the table in Item 2 below to which reference is hereby made.
The Partnership maintained the suitability and competitiveness of such
properties on the basis of effective rents, tenant allowances and service
provided to tenants.
On October 17, 1996, the Partnership, through Plaza/Seattle Limited
Partnership, sold the Blanchard Plaza Office Building which was the last
remaining investment property of the Partnership. Reference is made to
Item 7 below and to the Notes for a further description of such
transaction.
The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Item 11 below to which
reference is hereby made for a description of such terms and transactions.
ITEM 2. PROPERTIES
The Partnership owned through joint venture partnerships the
properties or interests in the properties referred to under Item 1 above to
which reference is hereby made for a description of said properties.
The following is a listing of principal businesses or occupations
carried on in and approximate occupancy levels by quarter during fiscal
years 1996 and 1995 for the Partnership's investment property owned during
1996:
<TABLE>
<CAPTION>
1995 1996
------------------------- -------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Blanchard Plaza
Building
Seattle, Government
Washington. . . . . . . . . Agency 96% 95% 91% 92% 90% 92% 93% N/A
- - ----------
<FN>
An "N/A" indicates that the property was not owned by the Partnership at the end of the quarter.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
fiscal years 1996 and 1995.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
Immediately prior to the dissolution of the Partnership, there were
6,520 record holders of Interests in the Partnership. On December 31,
1996, the Partnership made a liquidating distribution to its limited
partners including amounts to a liquidating trust established for the
benefit of the Holders of Interests and subsequently terminated its
operations and dissolved the Partnership effective December 31, 1996.
There had been no public market for Interests and it had not been
anticipated that a public market for Interests would develop. Upon
request, the Managing General Partner provided information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price paid for the Interests, as well as any other economic
aspects of the transaction, was subject to negotiation by the investor.
Reference is made to Item 6 below for a discussion of cash
distributions made to the Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
YEAR ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1995, 1994, 1993 AND 1992
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1996 1995 1994 1993 1992
------------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . $ 2,714,503 3,578,414 3,471,957 3,507,814 3,734,975
============ =========== =========== ========== ===========
Operating earnings
(loss). . . . . . . . . . . $ (852,508) (785,583) (878,770) (804,134) (11,729,915)
Partnership's share
of earnings (loss)
from operations
of unconsolidated
venture . . . . . . . . . . -- (2,764,587) (805,364) (546,299) (592,110)
Venture partners'
share of ventures'
operations. . . . . . . . . -- -- -- -- 545,692
------------ ----------- ----------- ---------- -----------
Net operating
earnings (loss) . . . . . . (852,508) (3,550,170) (1,684,134) (1,350,433) (11,776,333)
Gain on sale of
investment property . . . . 7,415,169 -- -- -- --
Partnership's share of
gain from disposition
of unconsolidated
venture property. . . . . . -- 908,413 -- -- --
------------ ----------- ----------- ---------- -----------
Net earnings (loss). . . . . $ 6,562,661 (2,641,757) (1,684,134) (1,350,433) (11,776,333)
============ =========== =========== ========== ===========
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
YEAR ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1995, 1994, 1993 AND 1992 - CONTINUED
1996 1995 1994 1993 1992
------------- ------------ ----------- ------------ ------------
Net earnings (loss)
per Interest (b):
Net operating
earnings (loss) . . . . . $ (10.61) (44.19) (20.96) (16.81) (146.57)
Gain on sale of
investment property . . . 26.95 -- -- -- --
Partnership's share of
gain from disposition
of unconsolidated
venture property. . . . . -- 11.66 -- -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss). . . . . $ 16.34 (32.53) (20.96) (16.81) (146.57)
============ =========== =========== =========== ===========
Total assets . . . . . . . . $ 12,328,192 22,833,739 26,023,257 27,272,244 28,983,906
Long-term debt, less
current portion . . . . . . $ -- -- -- 15,870,048 15,981,566
Cash distributions
per Interest (c). . . . . . $ 25.00 -- -- 3.00 8.15
============ =========== =========== =========== ===========
<FN>
(a) The above selected financial data should be read in conjunction with the financial statements and
related notes appearing elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based on the number of Interests outstanding at the end of
each period (77,132).
(c) Cash distributions from the Partnership were generally not equal to Partnership income (loss) for
either financial reporting or Federal income tax purposes. Each Partner's taxable income (loss) from the
Partnership in each year was equal to his allocable share of the taxable income (loss) of the Partnership, without
regard to the cash generated or distributed by the Partnership. Accordingly, cash distributions to the Limited
Partners since the inception of the Partnership have not resulted in taxable income to such Limited Partners.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As a result of the public offering of Interests as described in Item
1, the Partnership had approximately $68,000,000 (after deducting selling
expenses and other offering costs) with which to make investments in
income-producing commercial and residential real property, to pay legal
fees and other costs (including acquisition fees) related to such
investments and for working capital reserves. A portion of such proceeds
was utilized to acquire the properties described in Item 1 above.
During the second quarter of 1996 some of the Limited Partners in the
Partnership received from an unaffiliated third party an unsolicited tender
offer to purchase up to 3,379 Interests in the Partnership at between $50
and $60 per Interest. The Partnership recommended against acceptance of
this offer on the basis that, among other things, the offer price was
inadequate. In June, such offer expired with approximately 1,508 Interests
being purchased by such unaffiliated third party pursuant to such offer.
The board of directors of JMB Realty Corporation ("JMB") the managing
general partner of the Partnership, had established a special committee
(the "Special Committee") consisting of certain directors of JMB to deal
with all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender offers. The
Special Committee had retained independent counsel to advise it in
connection with any potential tender offers for Interests and had retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests.
In connection with the liquidation and termination of the Partnership,
the Managing General Partner formed a liquidating trust into which all of
the Partnership's remaining assets of $895,661, subject to liabilities,
were transferred by means of the final liquidating distribution on December
31, 1996. Such transferred amount represents the maximum estimated
potential obligation (including administrative costs) of the Partnership
due to certain representations and warranties issued to the buyer of the
Blanchard Plaza investment property. Although there can be no assurance,
the Partnership does not expect to incur any amounts in connection with
such representations and warranties. The initial trustees of the
liquidating trust are individuals who are officers of the Managing General
Partner. Each Holder of Interests in the Partnership is deemed to be the
beneficial owner of a comparable share of the aggregate beneficial
interests in the liquidating trust. It is anticipated that the liquidating
trust will permit the realization of substantial cost savings in
administrative and other expenses until the remaining funds are distributed
to the beneficial owners of the liquidating trust. The liquidating trust
is expected to be in existence for approximately one year (concurrent with
the scheduled expiration of the Blanchard sale representations and
warranties), subject to extension under certain circumstances.
PLAZA/SEATTLE (BLANCHARD PLAZA)
On October 17, 1996, the joint venture sold the Blanchard Plaza
investment property to an unaffiliated third party for $26,100,000, all of
which was received (less closing costs and prorations) in cash at closing.
After repayment in full of the outstanding mortgage loan secured by the
property, with a principal balance of approximately $15,166,000 at the date
of sale and the payment of closing costs related to the sale, the joint
venture received net sale proceeds of approximately $9,903,000. As a
result of the sale, the venture recognized in 1996 a gain of approximately
$7,415,000 and $16,222,000 for financial reporting and Federal income tax
purposes, respectively, substantially all of which has been allocated to
the Partnership pursuant to the venture agreement. In addition, pursuant
to the venture agreement, all of the net proceeds from the sale are
allocable to the Partnership. As this was the last investment property of
the Partnership, the Partnership made the final liquidating distribution of
$12,328,192 ($148.96 per Interest paid directly to the Holders of
Interests) in December 1996 and has terminated its affairs as of December
31, 1996.
The Blanchard Plaza investment property had been operating at a small
deficit. This deficit resulted from a modification of the property's
mortgage note which provided for an annual cash flow payment to the lender
which reduced the principal balance of the loan. The Partnership had used
a portion of the remaining proceeds from the sale of the Lynnhaven Mall to
cover these operating deficits.
TOWN AND COUNTRY CENTER
During December 1995, the lender realized upon its security for its
non-recourse loan, which included the land, buildings and related
improvements of the Town and Country Center.
RESULTS OF OPERATIONS
The increase in cash and cash equivalents at December 31, 1996 as
compared to December 31, 1995 is primarily due to the retention of the net
proceeds from the sale of the Blanchard Plaza office building in October
1996 for the final liquidating distribution to the Holders of Interests
including amounts to the liquidating trust as described above.
The decrease in interest, rents and other receivables, land, buildings
and improvements, accumulated depreciation, deferred expenses, accrued
rents receivable, accounts payable, accrued interest, current portion of
long-term debt, and tenant security deposits at December 31, 1996 as
compared to December 31, 1995 is due to the October 1996 sale of the
Blanchard Plaza Office Building.
The decrease in rental income, mortgage and other interest, property
operating expenses, and amortization of deferred expenses for the year
ended December 31, 1996 as compared to the years ended December 31, 1995
and 1994 is due to the October 1996 sale of the Blanchard Plaza Office
Building as described above. The decrease in property operating expenses
for 1996 was partially offset by higher real estate taxes (partially
recoverable from tenants) and certain expenses related to the settlement of
the rent dispute with a major tenant as discussed further in the Notes.
The increase in interest income for the years ended December 31, 1996
and 1995 as compared to the year ended December 31, 1994 is primarily due
to the increase in average balances of U.S. Government obligations held by
the Partnership during 1996 and 1995.
The decrease in depreciation expense for the year ended December 31,
1996 as compared to the years ended December 31, 1995 and 1994 is primarily
due to the suspension of depreciation as of July 1, 1996 on the Blanchard
Plaza investment property, as such property was classified as held for sale
as of July 1, 1996 and was subsequently sold in October 1996.
The increase in amortization of deferred expenses for the year ended
December 31, 1995 as compared to the year ended December 31, 1994 is
primarily due to the 1995 amortization of lease commissions previously
deferred at the Blanchard Plaza office building in December 1994.
The increase in general and administrative expenses for the year ended
December 31, 1996 as compared to the year ended December 31, 1995 is
primarily due to higher costs associated with procedures required to
facilitate the termination of the Partnership and the engaging of
independent third parties to perform certain administrative services for
the Partnership beginning in October 1995. The increase in general and
administrative expenses for the year ended December 31, 1995 as compared to
the year ended December 31, 1994 is attributable primarily to an increase
in reimbursable costs to affiliates of the General Partners in 1995 and the
recognition of certain additional prior year reimbursable costs to such
affiliates.
The decrease for 1996 as compared to 1995 and the increase for 1995 as
compared to 1994 in Partnership's share of loss from operations of
unconsolidated venture and the Partnership's share of gain from the
disposition of unconsolidated venture property is due to the lender
realizing upon its security for its non-recourse loan related to the Town &
Country Center investment property in December 1995.
The gain on sale of investment property at December 31, 1996 is due to
the October 1996 sale of the Blanchard Plaza Office Building as described
above.
INFLATION
Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1996 (immediately prior
to the final liquidating distribution) and December 31, 1995
Consolidated Statements of Operations, year ended December 31,
1996 (immediately prior to the final liquidating distribution),
and years ended December 31, 1995 and 1994
Consolidated Statements of Partners' Capital Accounts (Deficits),
year ended December 31, 1996 (immediately prior to the final liquidating
distribution), and years ended December 31, 1995 and 1994
Consolidated Statements of Cash Flows, year ended December 31,
1996 (immediately prior to the final liquidating distribution),
and years ended December 31, 1995 and 1994
Notes to Consolidated Financial Statements
Schedules not filed:
All schedules have been omitted as the required information is
inapplicable or the information is presented in the consolidated financial
statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
JMB INCOME PROPERTIES, LTD. - IX:
We have audited the consolidated financial statements of JMB Income
Properties, Ltd. - IX (a limited partnership) and Consolidated Venture as
listed in the accompanying index. These consolidated financial statements
are the responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
JMB Income Properties, Ltd. - IX and Consolidated Venture as of December
31, 1996 (immediately prior to the final liquidating distribution) and
1995, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1996, in conformity
with generally accepted accounting principles.
As discussed in the Notes to the consolidated financial statements, in
1996, the Partnership and its consolidated venture changed its method of
accounting for long-lived assets and long-lived assets to be disposed of to
conform with Statement of Financial Accounting Standards No. 121.
KPMG PEAT MARWICK LLP
Chicago, Illinois
February 14, 1997
<TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION) AND DECEMBER 31, 1995
ASSETS
------
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . $ 12,328,192 4,183,046
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . -- 60,125
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 12,328,192 4,243,171
------------ -----------
Investment property at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 899,298
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . -- 26,075,228
------------ -----------
-- 26,974,526
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . -- 13,726,829
------------ -----------
Total investment property net of accumulated depreciation. . . . -- 13,247,697
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 740,785
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . -- 4,602,086
------------ -----------
$ 12,328,192 22,833,739
============ ===========
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1996 1995
------------ -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . $ -- 15,565,705
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 521,551
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 136,200
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . -- 16,223,456
Tenant security deposits.. . . . . . . . . . . . . . . . . . . . . . . . . -- 66,982
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . -- 16,290,438
------------ -----------
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . 683,741 1,000
Cumulative net earnings (losses) . . . . . . . . . . . . . . . . . . . 1,279,237 (4,023,132)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . (1,962,978) (1,962,978)
------------ -----------
-- (5,985,110)
------------ -----------
Limited partners (77,132 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . 68,210,848 68,210,848
Cumulative net earnings (losses) . . . . . . . . . . . . . . . . . . . 40,536,579 39,276,287
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . (96,419,235) (94,958,724)
------------ -----------
12,328,192 12,528,411
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . . 12,328,192 6,543,301
------------ -----------
$ 12,328,192 22,833,739
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1995 AND 1994
<CAPTION>
1996 1995 1994
----------- ------------ -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 2,501,349 3,347,348 3,289,697
Interest income. . . . . . . . . . . . . . . . . . . . 213,154 231,066 182,260
----------- ------------ -----------
2,714,503 3,578,414 3,471,957
----------- ------------ -----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . 1,300,361 1,625,277 1,665,300
Depreciation . . . . . . . . . . . . . . . . . . . . . 499,772 998,577 970,404
Property operating expenses. . . . . . . . . . . . . . 1,320,618 1,338,538 1,373,742
Professional services. . . . . . . . . . . . . . . . . 105,751 86,633 119,198
Amortization of deferred expenses. . . . . . . . . . . 89,838 151,519 109,246
General and administrative . . . . . . . . . . . . . . 250,671 163,453 112,837
----------- ------------ -----------
3,567,011 4,363,997 4,350,727
----------- ------------ -----------
Operating earnings (loss). . . . . . . . . . . (852,508) (785,583) (878,770)
Partnership's share of earnings (loss) from
operations of unconsolidated venture. . . . . . . . . . -- (2,764,587) (805,364)
----------- ------------ -----------
Net operating earnings
(loss) . . . . . . . . . . . . . . . . . . . (852,508) (3,550,170) (1,684,134)
----------- ------------ -----------
Partnership's share of gain from
disposition of unconsolidated
venture property. . . . . . . . . . . . . . . . . . . . -- 908,413 --
Gain on sale of investment property. . . . . . . . . . . 7,415,169 -- --
----------- ------------ -----------
Net earnings (loss). . . . . . . . . . . . . . $ 6,562,661 (2,641,757) (1,684,134)
=========== ============ ===========
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1996 1995 1994
----------- ------------ -----------
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss) . . . . . . . . $ (10.61) (44.19) (20.96)
Gain on sale of property or
disposition of unconsolidated
venture property. . . . . . . . . . . . . . 26.95 11.66 --
----------- ------------ -----------
Net earnings (loss) . . . . . . . . . . . $ 16.34 (32.53) (20.96)
=========== ============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEAR ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1995 AND 1994
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (77,132 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit) at
December 31,
1993 . . . . $1,000 (3,822,845) (1,962,978) (5,784,823) 68,210,848 43,401,891 (94,958,724) 16,654,015
Net earnings
(loss). . . . -- (67,365) -- (67,365) -- (1,616,769) -- (1,616,769)
------- ---------- ---------- ---------- ---------- --------- ------------ ----------
Balance
(deficit) at
December 31,
1994. . . . . 1,000 (3,890,210) (1,962,978) (5,852,188) 68,210,848 41,785,122 (94,958,724) 15,037,246
Net earnings
(loss). . . . -- (132,922) -- (132,922) -- (2,508,835) -- (2,508,835)
------- ---------- ---------- ---------- ---------- --------- ----------- ----------
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS (77,132 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
Balance
(deficit) at
December 31,
1995. . . . . 1,000 (4,023,132) (1,962,978) (5,985,110) 68,210,848 39,276,287 (94,958,724) 12,528,411
Capital con-
tributions. . 682,741 -- -- 682,741 -- -- -- --
Cash distri-
butions . . . -- -- -- -- -- -- (1,460,511) (1,460,511)
Net earnings
(loss). . . . -- 5,302,369 -- 5,302,369 -- 1,260,292 -- 1,260,292
------- ---------- ---------- ---------- ---------- --------- ----------- ----------
Balance
(deficit) at
December 31,
1996. . . . . 683,741 1,279,237 (1,962,978) -- 68,210,848 40,536,579 (96,419,235) 12,328,192
======= ========== ========== ========== ========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1995 AND 1994
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . $ 6,562,661 (2,641,757) (1,684,134)
Items not requiring (providing) cash
or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . 499,772 998,577 970,404
Amortization of deferred expenses. . . . . . . . . . 89,838 151,519 109,246
Partnership's share of loss from
operations of unconsolidated venture. . . . . . . . -- 2,764,587 805,364
Partnership's share of gain from
disposition of unconsolidated
venture property. . . . . . . . . . . . . . . . . . -- (908,413) --
Gain on sale of investment property. . . . . . . . . (7,415,169) -- --
Changes in:
Interest, rents and other receivables. . . . . . . . 60,125 17,442 48,273
Accrued rents receivable . . . . . . . . . . . . . . 365,182 267,963 282,490
Accounts payable . . . . . . . . . . . . . . . . . . (53,654) (292,499) 630,470
Accrued interest . . . . . . . . . . . . . . . . . . (136,200) (20,038) (1,726)
Tenant security deposits . . . . . . . . . . . . . . (66,982) (16,632) 3,672
----------- ----------- -----------
Net cash provided by (used in)
operating activities . . . . . . . . . . . . (94,427) 320,749 1,164,059
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities of
short-term investments. . . . . . . . . . . . . . . . -- 2,176,462 2,567,558
Additions to investment property . . . . . . . . . . . (392,299) (52,076) (420,997)
Partnership's contributions to
unconsolidated venture. . . . . . . . . . . . . . . . -- (262,764) (542,810)
Cash proceeds from sale of investment
property. . . . . . . . . . . . . . . . . . . . . . . 9,903,102 -- --
Payment of deferred expenses . . . . . . . . . . . . . (93,966) (132,779) (448,910)
----------- ----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . 9,416,837 1,728,843 1,154,841
----------- ----------- -----------
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995 1994
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . (399,494) (218,592) (197,269)
Distributions to limited partners. . . . . . . . . . . (1,460,511) -- --
Contributions by general partners. . . . . . . . . . . 682,741 -- --
----------- ----------- -----------
Net cash provided by (used in)
financing activities . . . . . . . . . . . . (1,177,264) (218,592) (197,269)
----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents . . . . . . . . . . . . 8,145,146 1,831,000 2,121,631
Cash and cash equivalents
beginning of year. . . . . . . . . . . . . . 4,183,046 2,352,046 230,415
----------- ----------- -----------
Cash and cash equivalents
end of year. . . . . . . . . . . . . . . . . $12,328,192 4,183,046 2,352,046
=========== =========== ===========
Supplemental disclosure of
cash flow information:
Cash paid for mortgage and
other interest. . . . . . . . . . . . . . . . . . . . $ 1,418,436 1,645,315 1,667,026
=========== =========== ===========
Non-cash investing and financing
activities:
Total proceeds from sale of investment
property, net of closing costs . . . . . . . . . $25,069,313 -- --
Repayment of mortgage debt . . . . . . . . . . . . (15,166,211) -- --
----------- ----------- -----------
Net cash proceeds from sale
of investment property . . . . . . . . . . . $ 9,903,102 -- --
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 (IMMEDIATELY PRIOR
TO FINAL LIQUIDATING DISTRIBUTION), AND
YEARS ENDED DECEMBER 31, 1995 AND 1994
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership held (through a joint venture) an equity investment in
an office building in Seattle, Washington. Business activities consisted
of rentals to a governmental agency and a variety of commercial companies,
and the ultimate sale of such real estate.
The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned consolidated venture,
Plaza/Seattle Limited Partnership ("Plaza/Seattle"). The effect of all
transactions between the Partnership and the consolidated venture has been
eliminated in the consolidated financial statements. The equity method of
accounting had been applied in the accompanying consolidated financial
statements with respect to the Partnership's venture interest in T&C-JMB
Partners ("T&C"). Accordingly, the accompanying consolidated financial
statements do not include the accounts of T&C and T&C's venture, H&M
Associates, Ltd. - Houston ("Town & Country").
The Partnership's records were maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to reflect the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the venture as described above.
Such GAAP and consolidation adjustments are not recorded on the records of
the Partnership. The net effect of these items for the years ended
December 31, 1996 (immediately prior to the final liquidating distribution
to its limited partners and establishment of a liquidating trust for the
benefit of the Holders of Interests) and the year ended December 31, 1995
is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
(UNAUDITED) (UNAUDITED)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . $12,328,192 12,328,192 22,833,739 19,474,759
Partners' capital accounts
(deficits):
General partners . . . . . . . . . . -- -- (5,985,110) (4,858,232)
Limited partners . . . . . . . . . . 12,328,192 12,328,192 12,528,411 13,768,000
Net earnings (loss):
General partners . . . . . . . . . . 5,302,369 4,175,491 (132,922) (68,705)
Limited partners . . . . . . . . . . 1,260,292 20,703 (2,508,835) 977,334
Net earnings (loss) per
limited partnership interest. . . . . 16.34 .27 (32.53) 12.67
============ ========== =========== ===========
</TABLE>
The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests outstanding at the end of each
period (77,132). Also, because net earnings are computed immediately prior
to dissolution, Holders of Interests may have on dissolution, an additional
capital gain or loss depending on the Holders' basis for Federal income tax
purposes.
The preparation of financial statements in accordance with GAAP
required the Partnership to make estimates and assumptions that affected
the reported or disclosed amount of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results may have differed from those
estimates.
Certain amounts in the 1994 and 1995 consolidated financial statements
have been reclassified to conform with the 1996 presentation.
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from its unconsolidated venture were considered
cash flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. The Partnership recorded amounts held in
U.S. Government obligations at cost, which approximated market. For the
purposes of these statements, the Partnership's policy was to consider all
such amounts held with original maturities of three months or less (none
and $3,719,182 at December 31, 1996 and 1995, respectively) as cash
equivalents with any remaining amounts (generally with original maturities
of one year or less) reflected as short-term investments being held to
maturity.
Deferred expenses consisted primarily of loan fees and lease
commissions which were amortized over the terms stipulated in the related
agreements or over the terms of the related leases using the straight-line
method.
Although certain leases of the Partnership provided for tenant
occupancy during periods for which no rent was due and/or increases in
minimum lease payments over the term of the lease, the Partnership accrued
prorated rental income for the full period of occupancy on a straight-line
basis.
No provision for State or Federal income taxes had been made as the
liability for such taxes is that of the partners rather than the
Partnership. However, in certain instances, the Partnership had been
required under applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to partners.
The Partnership had acquired, through joint ventures, three shopping
centers and one office building as investments. All the properties have
been sold or disposed of by the Partnership at December 31, 1996. The cost
of the investment properties represented the total cost to the Partnership
and its ventures plus miscellaneous acquisition costs.
Depreciation on the properties had been provided over the estimated
useful lives of the various components as follows:
YEARS
-----
Buildings and improvements (new or used)
-- straight-line. . . . . . . . . . . . . . . . 5-30
Personal property (new or used)
-- straight-line . . . . . . . . . . . . . . . 5-10
====
Maintenance and repair expenses were charged to operations as
incurred. Significant betterments and improvements were capitalized and
depreciated over their estimated useful lives.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. SFAS 121 required that the Partnership record an
impairment loss on its properties to be held for investment whenever their
carrying value cannot be fully recovered through estimated undiscounted
future cash flows from their operations and sale. The amount of the
impairment loss to be recognized would be the difference between the
property's carrying value and the property's estimated fair value. The
Partnership's policy was to consider a property to be held for sale or
disposition when the Partnership has committed to a plan to sell such
property and active marketing activity has commenced or is expected to
commence in the near term. In accordance with SFAS 121, any properties
identified as "held for sale or disposition" were no longer depreciated.
Adjustments for impairment loss for such properties (subsequent to the date
of adoption of SFAS 121) were made in each period as necessary to report
these properties at the lower of carrying value or fair value less costs to
sell. The adoption of SFAS 121 did not have any effect on the
Partnership's financial position, results of operations or liquidity.
The Partnership was a party to one operating joint venture agreement
during 1996. Pursuant to such agreement, the Partnership made initial
capital contributions of approximately $30,739,000 (before legal and other
acquisition costs and its share of operating deficits as discussed below).
Under certain circumstances, either pursuant to the venture agreements or
due to the Partnership's obligations as a general partner, the Partnership
may have been required to make additional cash contributions to the
venture.
TOWN AND COUNTRY
On December 5, 1995, the lender realized upon its security for its
non-recourse loan, which included the land, buildings and related
improvements of the Town and Country Center as further described below. As
a result, Town and Country was terminated effective December 31, 1995.
In February 1983, the Partnership acquired, through an existing joint
venture partnership with an investor and the developer of Town and Country,
an interest in an enclosed shopping center in Houston, Texas. The
Partnership acquired its interest through a joint venture partnership
("T&C") with JMB Income Properties, Ltd.- VIII ("JMB-VIII"), a partnership
sponsored by the Managing General Partner of the Partnership.
The Partnership acquired an interest in T&C for a purchase price of
$11,000,000 (31.43%) of a total of $35,000,000 invested in T&C by the
Partnership and JMB - VIII. On December 30, 1992, the T&C venture and the
developer each purchased 50% of the investor's interest in Town and Country
for $150,000 each. The property was subject to a first mortgage note in
the original amount of $33,390,000.
The terms of the T&C partnership agreement provided that all of T&C's
share of the Town & Country's annual cash flow, net proceeds from sale or
refinancing, profits and losses and tax items were allocated between the
Partnership and JMB - VIII based upon the ratio of capital contributions
made by each partner (31.43% by the Partnership and 68.57% by JMB - VIII).
The T&C partnership was allocated 73.07% of Town and Country's operating
profits and losses.
Town & Country's net cash flow was distributable as follows: first,
T&C was entitled to receive the cumulative deficiency in its preferred cash
return through 1992; next, the developer was entitled to receive a
cumulative amount equal to its unreimbursed capital contributions used to
fund operating deficits incurred with respect to the property and T&C's
preferential return in prior years; finally, any cash flow in excess of
these preferred amounts was to be distributable 73.07% to T&C and 26.93% to
the developer. The Partnership did not receive any distributions from T&C
in 1995 or 1994. Any operating deficits were funded by contributions to
the venture by the venture partners in the ratio of their respective
residual ownership percentages.
Upon sale of the shopping center, T&C was entitled to a preferential
share of the net sale proceeds plus any deficit in T&C's cumulative annual
preferred return. However, there were no distributable proceeds from the
disposition of the property.
Town and Country was also obligated under a 12% promissory note
payable ($991,686 outstanding at December 5, 1995 (immediately prior to the
disposition) and at December 31, 1994) to an affiliate of the developer
which matured June 30, 1993. The Partnership and JMB-VIII had reached an
agreement in principle with the developer to extend the original due date
of the promissory note. Although no interest payments were being made the
venture continued to accrue interest on the note at the original contract
rate. As of the date of disposition of the Property, such promissory note
was cancelled and the note (including accrued interest of $586,537 at
December 5, 1995 (immediately prior to the disposition) was treated as a
capital contribution by the unaffiliated venture partner.
Through December 5, 1995, (immediately prior to the disposition) the
Partnership and its affiliated joint venture partner had made interest-
bearing loans aggregating $4,740,437 to the T&C venture to fund operating
deficits at the property pursuant to a proposed amendment to the Town and
Country joint venture agreement. However, such proposed amendment was not
executed prior to termination. The Partnership's portion of these loans
was $1,489,920 (including accrued interest) and had been reflected as
contributions to unconsolidated venture in the consolidated financial
statements and had been netted into the gain on disposition as of December
5, 1995.
Pursuant to the terms of the joint venture agreement, the Partnership
and its joint venture partners also made advances aggregating $1,013,880.
The Partnership's portion of these advances was $270,510 and had been
reflected as contributions to the unconsolidated venture in the
consolidated financial statements and has been netted into the gain on
disposition as of December 5, 1995.
Town and Country was approximately 73% occupied (8% represented
temporary tenants) on the disposition date. Town and Country faced strong
competition in its area. T&C Venture had prepared and evaluated a plan for
an extensive renovation and re-merchandising of Town and Country. Given
Town and Country's level of debt, the strong competition that the Town and
Country faced and the significant cost that would have been required to
lease, renovate and re-merchandise Town and Country, T&C Venture decided in
September 1995 not to commit any additional capital to pay continued
operating deficits of Town and Country, including funding for debt service
payments, without obtaining a modification to the existing non-recourse
mortgage loan. Consequently, Town and Country remitted to the lender only
the amount of cash flow from property operations after expenses rather than
the full debt service payment required for the month of September 1995.
The lender was unwilling to modify the loan and realized upon its security
in December 1995, as a result of the default in the payment of debt
service.
As a result of the disposition of Town and Country to the lender and
the liquidation of the joint ventures mentioned above, the Partnership
recognized a gain of $908,413 net of the venture partners' shares, for
financial reporting purposes and a gain of approximately $3,501,670 net of
the venture partners' shares, for Federal income tax reporting purposes in
1995. The Partnership had previously recorded a provision for value
impairment of approximately $30,115,000 (of which the Partnership's share
was $1,686,425) for financial reporting purposes relating to the underlying
real estate assets. There were no proceeds from the disposition. Under
the terms of the applicable venture agreements, gain on disposition of Town
and Country and liquidations of the joint ventures was to be allocated
according to the respective ownership percentages of the venture partners
as previously discussed.
An affiliate of the Managing General Partner of the Partnership had
responsibility for management and leasing of the Town and Country Center
under a management agreement which provided for a management fee based on a
percentage of gross income (as defined) from the property's operations not
to exceed 5% in aggregate.
PLAZA/SEATTLE (BLANCHARD SEATTLE)
On October 17, 1996, the joint venture sold the Blanchard Plaza
investment property to an unaffiliated third party for $26,100,000, all of
which was received (less closing costs and prorations) in cash at closing.
After repayment in full of the outstanding mortgage loan secured by the
property, with a principal balance of approximately $15,166,000 at the date
of sale and the payment of closing costs related to the sale, the joint
venture received net sale proceeds of approximately $9,903,000. As a
result of the sale, the venture recognized in 1996 a gain of approximately
$7,415,000 and $16,222,000 for financial reporting and Federal income tax
purposes, respectively, of which substantially all which has been allocated
to the Partnership pursuant to the venture agreement. In addition,
pursuant to the venture agreement, all of the net proceeds from the sale
are allocable to the Partnership. As this is the last investment property
of the Partnership, the Partnership made the final liquidating distribution
of $12,328,192 ($148.96 per Interest paid directly to the Holders of
Interest) in December 1996 and has terminated its affairs as of December
31, 1996.
In July 1983, the Partnership acquired, through Plaza Seattle joint
venture, an interest in the 15-story office building in Seattle,
Washington. The terms of the Plaza Seattle partnership agreement provided
that the joint venture partners would not be obligated to make any cash
contributions to the joint venture; however, the value of the joint venture
partners' contribution of their interest in the land to the joint venture
was taken into account in determining the terms of the joint venture
partnership agreement. Distribution of annual cash flow (after debt
service) was to be made first to the Partnership as reimbursement for its
aggregate additional contributions; then the joint venture partners were
entitled to receive the next $90,000 per annum of annual cash flow; the
Partnership was entitled to receive the next $1,078,838, and any excess
annual cash flow would have been distributable 92.3% to the Partnership and
7.7% to the joint venture partners. Distributions of annual cash flow to
the Partnership and to the joint venture partners ceased in prior years.
The Partnership had funded 100% of all subsequent deficits at Blanchard
Plaza office building. Consequently, operating profits and losses were
allocated 100% to the Partnership.
The joint venture partnership agreement also provided that the net
proceeds, if any, from any sale or refinancing of the property would be
allocated as follows: first to the Partnership as reimbursement for its
aggregate additional capital contributions; then the Partnership shall be
paid the outstanding balance of its $2,000,000 loan to the venture (such
loan has been eliminated in consolidated financial statements) plus any
accrued interest thereon (monthly payments of interest only were due and
were made at a rate of 10.88%); the joint venture partners were entitled to
receive the next $1,250,000 of such proceeds; the Partnership was entitled
to receive the next $15,225,000 and any remaining proceeds would have been
be distributed 92.3% to the Partnership and 7.7% to the joint venture
partners. The joint venture partnership agreement provided for gain or
loss on the disposition of the property to be allocated to the extent
needed to equalize the capital accounts of the joint venture partners, to
the extent of any net proceeds distributed to the joint venture partners,
and any remaining gain or loss 92.3% to the Partnership and 7.7% to the
joint venture partners. Due to the sale of the property in October 1996,
Plaza/Seattle recognized in 1996 $7,415,169 and $16,221,707 of gain on sale
of investment property for financial reporting and Federal income tax
purposes, of which $7,415,169 and $14,612,914, respectively, was allocable
to the Partnership. Plaza/Seattle terminated its affairs effective
December 31, 1996.
An affiliate of the Managing General Partner had responsibility for
management and leasing of the Blanchard Plaza office building under a
management agreement which provided for a management fee equal to 4% of
gross income (as defined) from the property's operations. In December
1994, such affiliate sold substantially all of its assets and assigned its
interest in its management contracts including the agreement for the
Blanchard Plaza office building, to an unaffiliated third party.
In 1995, the joint venture received notification from the General
Services Administration ("GSA"), a major tenant at the property, that it
was due approximately $423,000 in minimum rent credits relating to the
alleged overpayment of real estate taxes from 1989 to 1995. Although the
joint venture disputed this claim, the GSA began offsetting its monthly
rent payments in January 1996 in an amount equal to 1/12 of the amount in
dispute. The joint venture filed an appeal with the General Services Board
of Contract Appeals. During the third quarter of 1996, the joint venture
executed an agreement in settlement of this claim whereby GSA was allowed
to withhold the settlement amount from rental payments in 1996. The joint
venture is bound by a confidentiality provision in the settlement agreement
which does not permit disclosure of the terms of the settlement; however,
the joint venture believed the settlement was in the best interest of the
joint venture.
The long-term non-recourse mortgage note secured by the Blanchard
Plaza office building (prior to its 1996 repayment in connection with the
sale of the investment property as described above) was modified effective
December 1, 1988. Such modification, among other things, provided for debt
service to be paid at reduced rates through the May 1, 1991 payment with
the interest rate differential being added monthly to the principal balance
on the note. The mortgage note balance included cumulative deferred
interest of $2,565,705 at December 31, 1995. The note was classified as a
current liability at December 31, 1995, since an agreement was reached in
1995 to extend the maturity from December 1, 1995 to December 1, 1996. The
note accrued interest at a fixed rate of 10.5% and required monthly
payments of principal and interest of $148,693. The note provided for
additional principal payments of annual net cash flow payable in April of
the following year ($79,589 and $255,800 was paid in April 1995 and 1996,
respectively).
As the Partnership had committed to a plan to sell the property, the
property was classified as held for sale or disposition as of July 1, 1996,
and therefore, was not subject to continued depreciation. The results of
operations of the property included in the accompanying consolidated
financial statements were losses of $776,624, $971,959, and $1,041,690 for
the years ended December 31, 1996, 1995 and 1994, respectively.
PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or
losses of the Partnership from operations were allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale or
refinancing of investment properties were generally to be allocated to the
General Partners to the greater of 1% of such profits or the amount of cash
distributable to the General Partners from any such sale or refinancing (as
described below). Losses from the sale or refinancing of investment
properties were to be allocated 1% to the General Partners. The remaining
sale or refinancing profits and losses were to be allocated to the Limited
Partners.
The Partnership Agreement also generally provided that notwithstanding
any allocation contained in the Agreement, if at any time profits are
realized by the Partnership, any current or anticipated event that would
cause the deficit balance in absolute amount in the Capital Account of the
General Partners to be greater than their share of the Partnership's
indebtedness (as defined) after such event, then the allocation of profits
to the General Partners shall be increased to the extent necessary to cause
the deficit balance in the Capital Account of the General Partners to be no
less than their respective shares of the Partnership's indebtedness after
such event. In general, the effect of this provision was to allow the
deferral of the recognition of taxable gain to the Limited Partners.
During 1996, such provisions resulted in additional profits to be allocated
to the General Partners for financial reporting and Federal income tax
purposes. Such special allocations did not have an effect on total assets,
total partners' capital or net earnings.
The General Partners were not required to make any capital
contributions except under certain limited circumstances upon termination
of the Partnership. Accordingly, upon termination, the General Partners
contributed $682,741 to the Partnership which was included in the final
liquidating distribution to the Holders of Interests. In addition, pursuant
to similar limitations contained in the Partnership Agreement, Two Broadway
Associates (a Holder of Interests and an affiliate of Merrill Lynch, the
selling agent for the initial public offering of Interests) contributed
$467,789 in 1996 to the Partnership (which has been netted against limited
partnership distributions in the accompanying 1996 consolidated financial
statements) which also was included in the final liquidating distribution
to the Holders of Interests.
Distributions of "cash flow" of the Partnership was allocated 90% to
the Limited Partners and 10% to the General Partners. In addition, the
General Partners were to receive as a distribution from the sale of real
property by the Partnership 3% of the selling price, and that the remaining
proceeds (net after expenses and retained working capital) were to be
distributed 85% to the Limited Partners and 15% to the General Partners.
However, the Limited Partners were to receive 100% of such net sale
proceeds until the Limited Partners (i) had received cash distributions of
sale or refinancing proceeds in an amount equal to the Limited Partners'
aggregate initial capital investment in the Partnership and (ii) had
received cumulative cash distributions from the Partnership's operations
which, when combined with sale or refinancing proceeds previously
distributed, equal a 6% annual return on the Limited Partners' average
capital investment for each year (their initial capital investment as
reduced by sale or refinancing proceeds previously distributed) commencing
with the second fiscal quarter of 1983. Additionally, payment of the
portion of sale and refinancing proceeds allocable to the General Partners
pursuant to the above was to be deferred until such time as the Limited
Partners received cumulative cash distributions from sale and refinancing
proceeds and from Partnership operations in an amount equal to the Limited
Partners' initial capital investment in the Partnership plus a 10% annual
return on the Limited Partners' average capital investment (as defined
above). Approximately $3,197,000 otherwise payable to the General Partners
was previously distributed to the Limited Partners since 1981 pursuant to
the preferential distribution levels described above.
Prior to dissolution, the Partnership paid the final liquidating
distribution of $12,328,192 comprised of $11,432,531 paid in cash to the
Limited Partners and $895,661 into a liquidating trust established for the
benefit of the Holders of Interests.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, was permitted
to engage in various transactions involving the Managing General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses paid by the Partnership to the General Partners and their
affiliates as of December 31, 1996, 1995 and 1994 were as follows:
1996 1995 1994
------- -------- --------
Property management and
leasing fees . . . . . . . . . . $ -- -- 541,101
Insurance commissions. . . . . . . -- -- 5,111
Reimbursement (at cost) for
out-of-pocket salary, salary
related expenses and other
costs for the Partnership
and its investment property. . . 47,590 92,977 178,354
------- -------- --------
$47,590 92,977 724,566
======= ======== ========
In December 1994, one of the affiliated property managers sold
substantially all of its assets and assigned its interest in its management
contracts to an unaffiliated third party. In addition, certain of the
management personnel of the property manager became management personnel of
the purchaser and its affiliates. The successor to the affiliated property
manager's assets was acting as the property manager of the Blanchard Plaza
office building after the sale of the management contract on the same terms
that existed prior to assignment of the management company contract.
Effective October 1, 1995, the Managing General Partner of the
Partnership engaged independent third parties to perform certain
administrative services for the Partnership which were previously performed
by and partially reimbursed to, affiliates of the General Partners.
LEASES - AS PROPERTY LESSOR
The Partnership had determined that all leases relating to the
Blanchard Plaza Office Building were properly classified as operating
leases; therefore, rental income was reported when earned and the cost of
the property, excluding the cost of the land, was depreciated over its
estimated useful life. Leases with tenants ranged in terms from one to
fifteen years and provided for fixed minimum rent and partial reimbursement
of operating costs.
INVESTMENT IN UNCONSOLIDATED VENTURE
Summary financial information for the Town and Country venture (for
the period ending December 5, 1995 (the disposition date) is as follows:
1995
-----------
Current assets . . . . . . . . . . . . . . . . . . . . --
Current liabilities. . . . . . . . . . . . . . . . . . --
-----------
Working capital . . . . . . . . . . . . . . . . --
-----------
1995
-----------
Investment property, net . . . . . . . . . . . . . . . --
Other assets . . . . . . . . . . . . . . . . . . . . . --
Other liabilities. . . . . . . . . . . . . . . . . . . --
Long-term debt . . . . . . . . . . . . . . . . . . . . --
Venture partners' subordinated equity. . . . . . . . . --
-----------
Partners' capital . . . . . . . . . . . . . . . $ --
===========
Represented by:
Invested capital . . . . . . . . . . . . . . . . . . $13,321,032
Cumulative distributions . . . . . . . . . . . . . . (6,460,225)
Cumulative losses. . . . . . . . . . . . . . . . . . (6,860,807)
-----------
$ --
===========
Total income . . . . . . . . . . . . . . . . . . . . . $ 5,664,565
===========
Expenses applicable to operating loss. . . . . . . . . $39,731,163
===========
Operating loss . . . . . . . . . . . . . . . . . . . . $34,066,598
===========
Gain on disposition. . . . . . . . . . . . . . . . . . $ 2,589,331
===========
Also, for the year ended December 31, 1994, total income, expenses
applicable to operating loss and operating loss were $6,934,956,
$10,486,956 and $3,551,999, respectively, for the unconsolidated venture
noted above.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during
fiscal years 1995 and 1996.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Managing General Partner of the Partnership was JMB Realty
Corporation ("JMB"), a Delaware corporation, substantially all of the
outstanding stock of which was owned, directly or indirectly, by certain of
its officers and directors and members of their families. JMB had
responsibility for all aspects of the Partnership's operations, subject to
the requirement that sales of real property must be approved by the
Associate General Partner of the Partnership, ABPP Associates, L.P. ABPP
Associates, L.P. an Illinois limited partnership with JMB as the sole
general partner was directed by a majority in interest of its limited
partners (who were generally officers, directors and affiliates of JMB or
its affiliates) as to whether to provide its approval of any sale of real
property (or any interest therein) of the Partnership. The Partnership was
subject to certain conflicts of interest arising out of its relationships
with the General Partners and their affiliates as well as the fact that the
General Partners and their affiliates were engaged in a range of real
estate activities. Certain services were provided to the Partnership or
its investment properties by affiliates of the General Partners, including
property management services and insurance brokerage services. In general,
such services were provided on terms no less favorable to the Partnership
than could be obtained from independent third parties and are otherwise
subject to conditions and restrictions contained in the Partnership
Agreement. The Partnership Agreement permitted the General Partners and
their affiliates to provide services to, and otherwise deal and do business
with, persons who were engaged in transactions with the Partnership, and
permitted the Partnership to borrow from, purchase goods and services from,
and otherwise to do business with, persons who did business with the
General Partners or their affiliates. The General Partners and their
affiliates were in competition with the Partnership under certain
circumstances, including, in certain geographical markets, for tenants for
properties and/or for the sale of properties. Because the timing and
amount of cash distributions and profits and losses of the Partnership
could be affected by various determinations by the General Partners under
the Partnership Agreement, including whether and when to sell or refinance
a property, the establishment and maintenance of reasonable reserves, the
timing of expenditures and the allocation of certain tax items under the
Partnership Agreement, the General Partners may have had a conflict of
interest with respect to such determinations.
The names, positions held and length of service therein of each
director and the executive and certain other officers of the Managing
General Partner are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- - ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Chief Financial Officer 2/22/96
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Executive Vice President 1/02/87
Chief Executive Officer 8/01/93
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Gary Nickele Executive Vice President and 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Managing General Partner to be held on
June 7, 1997. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Managing General Partner to be held on June 7,
1997. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"),
Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real
Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate
Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI
("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-
XVII"), JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB
Mortgage Partners, Ltd-IV ("Mortgage Partners-IV"), Carlyle Income Plus,
Ltd. ("Carlyle Income Plus") and Carlyle Income Plus, Ltd.-II ("Carlyle
Income Plus-II") and the managing general partner of JMB Income Properties,
Ltd.-IV ("JMB Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"),
JMB Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties,
Ltd.-VII ("JMB Income-VII"), JMB Income Properties, Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income
Properties, Ltd.-XII ("JMB Income-XII"), and JMB Income Properties, Ltd.-
XIII ("JMB Income-XIII"). JMB is also the sole general partner of the
associate general partner of most of the foregoing partnerships. Most of
the foregoing directors and officers are also officers and/or directors of
the various affiliated companies of JMB including Arvida/JMB Managers, Inc.
(the general partner of Arvida/JMB Partners, L.P. ("Arvida")), Arvida/JMB
Managers-II, Inc. (the general partner of Arvida/JMB Partners, L.P.-II
("Arvida-II")), and Income Growth Managers, Inc. (the corporate general
partner of IDS/JMB Balanced Income Growth, Ltd. ("IDS/BIG")). Most of such
directors and officers are also partners of certain partnerships which are
associate general partners in the following real estate limited partner-
ships: Carlyle-VII, Carlyle-IX, Carlyle-XI, Carlyle-XII, Carlyle-XIII,
Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII, JMB Income-VI, JMB
Income-VII, Income-X, JMB Income-XI, JMB Income-XII, JMB Income-XIII,
Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus, Carlyle
Income Plus-II and IDS/BIG.
The business experience during the past five years of each such
director and officer of the Managing General Partner of the Partnership in
addition to that described above is as follows:
Judd D. Malkin (age 59) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB since
October, 1969. Mr. Malkin is a director of Urban Shopping Centers, Inc.,
an affiliate of JMB that is a real estate investment trust in the business
of owning, managing and developing shopping centers. He is a Certified
Public Accountant.
Neil G. Bluhm (age 59) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Bluhm has been associated with JMB since
August, 1970. Mr. Bluhm is a director of Urban Shopping Centers, Inc., an
affiliate of JMB that is a real estate investment trust in the business of
owning, managing and developing shopping centers. He is a member of the
Bar of the State of Illinois and a Certified Public Accountant.
Burton E. Glazov (age 58) has been associated with JMB since June,
1971 and served as an Executive Vice President of JMB until December, 1990.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.
Stuart C. Nathan (age 55) has been associated with JMB since July,
1972. Mr. Nathan is also a director of Sportmart, Inc., a retailer of
sporting goods. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 63) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 50) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December, 1990. Mr. Schreiber is President of Schreiber Investments, Inc.,
a company which is engaged in the real estate investing business. He is
also a senior advisor and partner of Blackstone Real Estate Partners, an
affiliate of the Blackstone Group, L.P. Since 1994, Mr. Schreiber has also
served as trustee of Amli Residential Property Trust, a publicly-traded
real estate investment trust that invests in multi-family properties. Mr.
Schreiber is a director of Urban Shopping Centers, Inc., an affiliate of
JMB that is a real estate investment trust in the business of owning,
managing and developing shopping centers. He is also director of a number
of investment companies advised by T. Rowe Price Associates and its
affiliates. He holds a Masters degree in Business Administration from
Harvard University Graduate School of Business.
H. Rigel Barber (age 47) has been associated with JMB since March,
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.
Glenn E. Emig (age 49) has been associated with JMB since December,
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters Degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.
Gary Nickele (age 44) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.
Gailen J. Hull (age 48) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.
Howard Kogen (age 61) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership had no officers or directors. The General Partners of
the Partnership were entitled to receive a share of cash distributions,
when and as cash distributions are made to the Limited Partners, and a
share of profits or losses. Reference is also made to the Notes for a
description of such transactions, distributions and allocations. No cash
distributions were paid in 1996, 1995 and 1994 to the General Partners.
An affiliate of the Managing General Partner provided property
management services to the Partnership in 1994 for the Blanchard Plaza
office building in Seattle, Washington for a fee calculated at 4% of gross
income from the property until December 1994 when the affiliate sold
substantially all of its assets and assigned its interest in its management
contracts to an unaffiliated third party. As set forth in the Prospectus
of the Partnership, the Managing General Partner must negotiate such
agreements on terms no less favorable to the Partnership than those
customarily charged for similar service in the relevant geographical area
(but in no event at rates greater than 4% of gross income from a property),
and such agreements must be terminable by either party thereto, without
penalty upon 60 days' notice.
The General Partners of the Partnership were reimbursed for their
salaries, salary-related expenses and direct expenses relating to the
administration of the Partnership and the operation of the Partnership's
real property investments. During 1996, the Managing General Partner
earned and was paid reimbursement for such expenses in the amount of
$47,590.
Effective October 1, 1995, the Managing General Partner of the
Partnership engaged independent third parties to perform certain
administrative services for the Partnership which were previously performed
by, and partially reimbursed to, affiliates of the General Partners.
The Partnership was permitted to engage in various transactions
involving affiliates of the Managing General Partner of the Partnership or
its affiliates. The relationship of the Managing General Partner (and its
directors and officers) to its affiliates is set forth above in Item 10
above and Exhibit 21 hereto.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group was known by the Partnership to own beneficially more than 5% of the outstanding
Interests of the Partnership immediately prior to the final liquidating distribution.
(b) The Managing General Partner, its officers and directors and the Associate General Partner owned as a
group the following Interests of the Partnership immediately prior to the final liquidating distribution:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- - -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership JMB Realty Corporation 100 Interests Less than 1%
Interests directly
Limited Partnership Managing General 100 Interests Less than 1%
Interests Partner, its directly
officers and directors
and the Associate
General Partner
as a group
<FN>
No officer or director of the Managing General Partner of the Partnership possessed a right to acquire
beneficial ownership of Interests of the Partnership.
(c) There existed no arrangement, known to the Partnership, the operation of which would have resulted in a
change in control of the Partnership.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Managing General Partner, affiliates or their management other than
those described in Note 6, Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial
Statements filed with this report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated April 14,
1982, as supplemented September 23, 1982, January 11, 1983, February 22,
1983, and March 28, 1983, and filed with the Commission pursuant to Rules
424(b) and 424(c), is hereby incorporated herein by reference. Copies of
pages 8-16, 118-120 and A-6 to A-9 are incorporated herein by reference to
Exhibit 3 to the Partnership's Report on Form 10-K (File No. 0-12432) for
December 31, 1992 dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, which is hereby
incorporated herein by reference to Exhibit 3 to the Partnership's Report
on Form 10-K (File No. 0-12432) for December 31, 1992 dated March 19, 1993.
3-C. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is hereby incorporated herein by
reference to Exhibit 3-C to the Partnership's Report on Form 10-Q (File No.
0-12432) for September 30, 1996 dated November 8, 1996.
4-A. Modification documents relating to the long-term
mortgage note secured by the Blanchard Plaza Building in Seattle,
Washington are hereby incorporated by reference to Exhibit 4-A to the
Partnership's Report on Form 10-K (File No. 0-12432) for December 31, 1992
dated March 19, 1993.
4-B. Modification documents relating to the extension
of the mortgage note secured by Blanchard Plaza Building in Seattle,
Washington are hereby incorporated herein by reference to Exhibit 4-B to
the Partnership's Report on Form 10-K (File No. 0-12432) for December 31,
1995 dated March 25, 1996.
10-A. Acquisition documents relating to the purchase by
the Partnership of an interest in the Blanchard Plaza Building in Seattle,
Washington are hereby incorporated by reference to the Partnership's Report
on Form 8-K (File No. 0-12432) dated July 29, 1983.
10-B. Disposition documents relating to the Partnership
transferring its interest in the Town and Country Center in Houston Texas
are hereby incorporated herein by reference to Exhibit 10-B to the
Partnership's Report on Form 10-K (File No. 0-12432) for December 31, 1995
dated March 25, 1996.
10-C. Sale documents relating to the Partnership's sale
of the Blanchard Plaza investment property in Seattle, Washington are
hereby incorporated herein by reference to the Partnership's Report on Form
8-K (File No. 0-12432) dated October 30, 1996.
24. Powers of Attorney
27. Financial Data Schedule
(b) The following Report on Form 8-K was filed since the
beginning of the last quarter of the period covered by the this report.
(i) The Partnership's Report on Form 8-K for October 17,
1996 (describing the sale of the Partnership's Blanchard Plaza investment
property in Seattle, Washington was filed. This report was dated October
30, 1996. No financial statements were required to be filed therewith.
----------------
No annual report or proxy material for the fiscal year
1996 has been sent to the Partners of the Partnership. An annual report
will be sent to the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Partnership has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - IX
By: JMB Realty Corporation
Managing General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: February 14, 1997
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: JMB Realty Corporation
Managing General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: February 14, 1997
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: February 14, 1997
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: February 14, 1997
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: February 14, 1997
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: February 14, 1997
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: February 14, 1997
By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date: February 14, 1997
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: February 14, 1997
JMB INCOME PROPERTIES, LTD. - IX
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----
3-A. Pages 8-16, 118-120 and A-6
to A-9 of the Prospectus of
the Partnership dated
April 14, 1982 Yes
3-B. Amended and Restated Agreement
of Limited Partnership Yes
3-C. Acknowledgement of rights and
duties of the General Partners
of the Partnership Yes
4-A. Modification documents
related to the Blanchard
Plaza Building Yes
4-B. Modification documents
related to the extension
of the mortgage note
secured by the Blanchard
Plaza Building Yes
10-A. Acquisition documents
related to the
Blanchard Plaza Building Yes
10-B. Disposition documents
related to Town and
Country Center Yes
10-C. Sale Documents related
to the Blanchard Plaza
Building Yes
24. Powers of Attorney No
27. Financial Data Schedule No
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the managing general partner of JMB INCOME PROPERTIES,
LTD. - IX, do hereby nominate, constitute and appoint GARY NICKELE, GAILEN
J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf
of the undersigned officers a Report on Form 10-K of said partnership for
the fiscal year ended December 31, 1996, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.
H. RIGEL BARBER
- - -----------------------
H. Rigel Barber Chief Executive Officer
GLENN E. EMIG
- - -----------------------
Glenn E. Emig Chief Operating Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the managing general partner of JMB INCOME PROPERTIES,
LTD. - IX, do hereby nominate, constitute and appoint GARY NICKELE, GAILEN
J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf
of the undersigned officers a Report on Form 10-K of said partnership for
the fiscal year ended December 31, 1996, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.
NEIL G. BLUHM
- - ----------------------- President and Director
Neil G. Bluhm
JUDD D. MALKIN
- - ----------------------- Chairman and Chief Financial Officer
Judd D. Malkin
A. LEE SACKS
- - ----------------------- Director of General Partner
A. Lee Sacks
STUART C. NATHAN
- - ----------------------- Executive Vice President
Stuart C. Nathan Director of General Partner
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 12,328,192
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,328,192
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,328,192
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 12,328,192
<TOTAL-LIABILITY-AND-EQUITY> 12,328,192
<SALES> 2,501,349
<TOTAL-REVENUES> 2,714,503
<CGS> 0
<TOTAL-COSTS> 1,910,228
<OTHER-EXPENSES> 356,422
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,300,361
<INCOME-PRETAX> (852,508)
<INCOME-TAX> 0
<INCOME-CONTINUING> (852,508)
<DISCONTINUED> 7,415,169
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,562,661
<EPS-PRIMARY> 16.34
<EPS-DILUTED> 16.34
</TABLE>
