UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995, 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 0-11137
CENTURY PROPERTIES FUND XVII
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2782037
- --------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Insignia Plaza, P.O. Box 1089
Greenville, South Carolina 29602
- --------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 239-1000
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
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 ]
No market for the Limited Partnership Units exists and therefore a market
value for such Units cannot readily be determined.
DOCUMENTS INCORPORATED HEREIN BY REFERENCE:
Prospectus of Registrant dated March 29, 1982, and thereafter
supplemented incorporated in Parts I and IV.
CENTURY PROPERTIES FUND XVII
(A limited partnership)
PART I
Item 1. Business.
Century Properties Fund XVII (the "Registrant") was organized in
November 1981 as a California limited partnership under the Uniform Limited
Partnership Act of the California Corporations Code. Fox Partners, a California
general partnership, is the general partner of the Registrant. The general
partners of Fox Partners are Fox Capital Management Corporation (the "Managing
General Partner"), a California corporation, Fox Realty Investors ("FRI"), a
California general partnership, and Fox Partners 82, a California general
partnership.
The Registrant's Registration Statement, filed pursuant to the
Securities Act of 1933 (No. 2-75411), was declared effective by the Securities
and Exchange Commission ("Commission") on March 29, 1982. Registrant marketed
its securities pursuant to its Prospectus dated March 29, 1982, and thereafter
supplemented (hereinafter the "Prospectus"). The Prospectus was filed with the
Commission pursuant to Rule 424(b) of the Securities Act of 1933.
The principal business of the Registrant is and has been to acquire,
hold for investment and ultimately sell income-producing multi-family
residential property. The Registrant is a "closed" limited partnership real
estate syndicate. For a further description of the business of the Registrant,
see the sections entitled "Risk Factors" and "Investment Objectives and
Policies" of the Prospectus.
From March 1982 through October 1982 the Registrant offered and sold
$75,000,000 in Limited Partnership Units. The net proceeds of this offering were
used to purchase twelve multi-family residential properties or interests
therein, one of which was owned by a joint venture in which the Registrant had a
50 percent interest. In January 1984, the Registrant acquired its joint venture
partner's interest in this property. The Registrant's original property
portfolio was geographically diversified with properties acquired in four
states. Since 1982, the principal activity of the Registrant has been managing
its portfolio. Three apartment properties were sold in 1988. One apartment
property was acquired by the lender through a deed-in-lieu of foreclosure in
1992. During 1993 two apartment properties were sold and one was acquired by the
lender through foreclosure. See "Item 2, Properties" for a description of the
Registrant's properties.
The Registrant is involved in only one industry segment, as described
above. The business of the Registrant is not seasonal. The Registrant does not
engage in any foreign operations or derive revenues from foreign sources.
Both the income and the expenses of operating the properties owned by
the Registrant are subject to factors outside the Registrant's control, such as
oversupply of similar rental facilities resulting from overbuilding, increases
in unemployment or population shifts, changes in zoning laws or changes in
patterns or needs of the users. Expenses, such as local real estate taxes and
management expenses, are subject to change and cannot always be reflected in
rental increases due to market conditions or existing leases. The profitability
and marketability of developed real property may be adversely affected by
changes in general and local economic conditions and in prevailing interest
rates. Favorable changes in such factors will not necessarily enhance the
profitability or marketability of such properties. Even under the most favorable
market conditions there is no guarantee that any property owned by the
Registrant can be sold or, if sold, that such sale could be made upon favorable
terms.
It is possible that legislation on the state or local level may be
enacted in the states where the Registrant's properties are located which may
include some form of rent control. There have been, and it is possible there may
be other, Federal, state and local legislation and regulations enacted relating
to the protection of the environment. The Managing General Partner is unable to
predict the extent, if any, to which such new legislation or regulations might
occur and the degree to which the occurrence of such events might adversely
affect the properties still owned by the Registrant.
The Registrant monitors its properties for evidence of pollutants,
toxins and other dangerous substances, including the presence of asbestos. In
certain cases, environmental testing has been performed which resulted in no
material adverse conditions or liabilities. In no case has the Registrant
received notice that it is a potentially responsible party with respect to an
environmental clean up site.
The Registrant maintains property and liability insurance on the
properties and believes such coverage to be adequate.
At this time, it appears that the original investment objective of
capital growth from the inception of the Registrant will not be attained and
that investors will not receive a return of all their invested capital. The
extent to which invested capital is returned to investors is dependent upon the
success of the Registrant's strategy as set forth in "Item 7" as well as upon
significant improvement in the performance of the Registrant's remaining
properties and the markets in which such properties are located and on the sales
price of the remaining properties. In this regard, it is anticipated at this
time that some of the remaining properties will be held longer than originally
expected. The ability to hold and operate these properties is dependent on the
Registrant's ability to obtain additional financing, refinancing or debt
restructuring as required.
Property Matters
Village in the Woods - On August 3, 1995, the Registrant paid $910,000
to satisfy in full the $1,039,000 second mortgage encumbering the Village in the
Woods Apartments at a discount. The Registrant recognized an extraordinary gain
on extinguishment of debt of $129,000 during the third quarter of 1995.
Employees
Services are performed for the Registrant at its remaining properties
by on-site personnel all of whom are employees of NPI-AP Management, L.P.
("NPI-AP"), an affiliate of the Managing General Partner, which directly manages
the Registrant's remaining properties. All payroll and associated expenses of
such on-site personnel are fully reimbursed by the Registrant to NPI-AP.
Pursuant to a management agreement, NPI-AP provides certain property management
services to the Registrant in addition to providing on-site management.
Change in Control
From March 1988 through December 1993, the Registrant's affairs were
managed by Metric Management, Inc. ("MMI") or a predecessor. On December 16,
1993, the services agreement with MMI was modified and, as a result thereof, the
Managing General Partner began directly providing real estate advisory and asset
management services to the Registrant. As advisor, such affiliate provides all
partnership accounting and administrative services, investment management, and
supervisory services over property management and leasing.
On December 6, 1993, the shareholders of the Managing General Partner
entered into a Voting Trust Agreement with NPI Equity Investments II, Inc. ("NPI
Equity II") pursuant to which NPI Equity II was granted the right to vote 100%
of the outstanding stock of the Managing General Partner. In addition, NPI
Equity II became the managing partner of FRI. As a result, NPI Equity II
indirectly became responsible for the operation and management of the business
and affairs of the Registrant and the other investment partnerships originally
sponsored by the Managing General Partner and/or FRI. The individuals who had
served previously as partners of FRI and as officers and directors of the
Managing General Partner contributed their general partnership interests in FRI
to a newly formed limited partnership, Portfolio Realty Associates, L.P.
("PRA"), in exchange for limited partnership interests in PRA. The shareholders
of the Managing General Partner and the prior partners of FRI, in their capacity
as limited partners of PRA, continue to hold indirectly certain economic
interests in the Registrant and such other investment limited partnerships, but
have ceased to be responsible for the operation and management of the Registrant
and such other partnerships.
On August 10, 1994, an affiliate of Apollo Real Estate Advisors, L.P.
("Apollo") obtained general and limited partnership interests in NPI-AP.
On October 12, 1994, Apollo acquired one-third of the stock of National
Property Investors, Inc., ("NPI") the parent corporation of NPI Equity II.
Pursuant to the terms of the stock acquisition, Apollo was entitled to designate
three of the seven directors of the Managing General Partner and NPI Equity II.
In addition, the approval of certain major actions on behalf of the Registrant
required the affirmative vote of at least five directors of the Managing General
Partner.
On August 17, 1995, the stockholders of NPI entered into an agreement
to sell to IFGP Corporation, a Delaware corporation, an affiliate of Insignia
Financial Group, Inc., a Delaware corporation ("Insignia"), all of the issued
and outstanding common stock of NPI, for an aggregate purchase price of
$1,000,000. NPI is the sole shareholder of NPI Equity II, the general partner of
FRI, and the entity which controls the Managing General Partner. The closing of
the transactions contemplated by the above mentioned agreement (the "Closing")
occurred on January 19, 1996.
Upon the Closing, the officers and directors of NPI, NPI Equity II and
the Managing General Partner resigned and IFGP Corporation caused new officers
and directors of each of those entities to be elected. See "Item 10, Directors
and Executive Officers of the Registrant."
The Tender Offer
On October 12, 1994, affiliates of Apollo acquired (i) one-third of the
stock of the respective general partners of DeForest Ventures I L.P. ("DeForest
I") and DeForest Ventures II L.P. and (ii) an additional equity interest in
NPI-AP (bringing its total equity interest in such entity to one-third). NPI-AP
is a limited partner of DeForest I which was formed for the purpose of making
tender offers for limited partnership units in the Registrant as well as 11
affiliated limited partnerships.
On January 19, 1996, DeForest I and certain of its affiliates sold all
of its interest in the Registrant to Insignia NPI L.L.C. ("Insignia LLC"), an
affiliate of Insignia. Pursuant to a Schedule 13-D filed by Insignia LLC with
the Securities and Exchange Commission, Insignia LLC acquired 25,710.5 limited
partnership units or approximately 34% of the total limited partnership units of
the Registrant. (See "Item 12, Security Ownership of Certain Beneficial Owners
and Management.")
Competition
The Registrant is affected by and subject to the general competitive
conditions of the residential real estate industry. Many of the Registrant's
properties which are or were located in oil industry dependent and other
weakened markets have been adversely affected by economic conditions in these
markets. In addition, each of the Registrant's properties competes in an area
which normally contains numerous other multi-family residential properties which
may be considered competitive.
Item 2. Properties.
A description of the multi-family residential properties in which the
Registrant has an ownership interest is as follows:
Date of
Name and Location Purchase Size
- ----------------- -------- ----
Cherry Creek Gardens Apartments 09/82 296 units
9959 East Peakview Avenue
Englewood, Colorado
Creekside Apartments 10/82 328 units
5250 Cherry Creek South Drive
Denver, Colorado
The Lodge Apartments 10/82 376 units
8405 East Hampden Avenue
Denver, Colorado
The Village in the Woods Apartments 10/82 530 units
11800 Grant Road
Cypress, Texas
Cooper's Pond Apartments 03/83 463 units
6225 North Dale Mabry Highway
Tampa, Florida
All of the Registrant's properties are owned in fee. However, The
Village in the Woods Apartments was owned by a general partnership in which the
Registrant held a 50 percent interest until January 1984, when the Registrant
acquired the joint venture partner's interest. See Item 8, "Consolidated
Financial Statements and Supplementary Data" for information regarding any
encumbrances to which the properties of the Registrant are subject.
The following chart sets forth the occupancy rates at December 31,
1995, 1994, 1993, 1992 and 1991 for the Registrant's remaining properties:
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
for the Year Ended
December 31,
--------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Cherry Creek Gardens Apartments 96 98 97 96 96
Creekside Apartments 97 97 97 95 97
The Lodge Apartments 97 97 95 95 96
The Village in the Woods Apartments 94 93 93 90 93
Cooper's Pond Apartments 93 94 88 90 88
Item 3. Legal Proceedings.
Lawrence M. Whiteside, on behalf of himself and all others similarly
situated, v. Fox Capital Management Corporation et, al., Superior Court of the
State of California, San Mateo County, Case No. 390018. ("Whiteside")
Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all
others similarly situated, v. DeForest Ventures I L.P., DeForest Capital I
Corporation, MRI Business Properties Fund, Ltd. II, MRI Business Properties
Fund, Ltd. III, NPI Equity Investments II, Inc., Montgomery Realty Company-84,
MRI Associates, Ltd. II, Montgomery Realty Company-85 and MRI Associates, Ltd.
III, United States District Court, Northern District of Georgia, Atlanta
Division("Ruben").
Roger L. Vernon, individually and on behalf of all similarly situated
persons v. DeForest Ventures I L.P. et. al., Circuit Court of Cook County,
County Departments, Chancery Division, Case No. 94CH0100592. ("Vernon")
James Andrews, et al., on behalf of themselves and all others similarly
situated v. Fox Capital Management Corporation, et al., United States District
Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-3351-JEC. ("Andrews")
In the fourth quarter of fiscal 1994, limited partners in certain
limited partnerships affiliated with the Registrant, commenced actions against,
among others, the Managing General Partner. The actions alleged, among other
things, that the tender offers made by DeForest Ventures I L.P. ("DeForest I")
and DeForest Ventures II L.P. ("DeForest II") in October 1994 constituted (a) a
breach of the fiduciary duty owed by the Managing General Partner to the limited
partners of the Registrant, and (b) a breach of, and an inducement to breach,
the provisions of the Partnership Agreement of the Registrant. The actions,
which had been brought as class actions on behalf of limited partners sought
monetary damages in an unspecified amount and, in the Whiteside action, to
enjoin the tender offers. The temporary restraining order sought in the
Whiteside action was denied by the court on November 3, 1994, and on November
18, 1994, the court denied Whiteside a preliminary injunction.
On March 16, 1995, the United States Court for the Northern District of
Georgia, Atlanta, Division, entered an order which granted preliminary approval
to a settlement agreement (the "Settlement Agreement") in the Ruben and Andrews
actions, conditionally certified two classes for purpose of settlement, and
authorized the parties to give notice to the classes of the terms of the
proposed settlement. Plaintiffs counsel in the Vernon and Whiteside action
joined in the Settlement Agreement as well. The Settlement Agreement received
final approval on May 19, 1995 and the actions were dismissed subject to
satisfaction of the terms of the Settlement Agreement. The two certified classes
constituted all limited partners of the Registrant and the eighteen other
affiliated partnerships who either tendered their units in connection with the
October tender offers or continued to hold their units in the Registrant and the
other affiliated partnerships. Pursuant to the terms of the Settlement
Agreement, which were described in the notice sent to the class members in March
1995, (and more fully described in the Amended Stipulation of Settlement
submitted in the court on March 14, 1995) all claims which either were made or
could have been asserted in any of the class actions would be dismissed with
prejudice and/or released. In consideration for the dismissal and/or release of
such claims, among other things, DeForest I paid to each unit holder who
tendered their units in the Registrant an amount equal to 15% of the original
tender offer price less attorney's fees and expenses. In addition, DeForest I
commenced a second tender offer on June 2, 1995 for an aggregate number of units
of the Registrant (including the units purchased in the initial tender)
constituting up to 49% of the total number of units of the Registrant at a price
equal to the initial tender price plus 15% less attorney's fees and expenses.
Furthermore, under the terms of the Settlement Agreement, the Managing General
Partner agreed, among other things, to provide the Registrant a credit line of
$150,000 per property which would bear interest at the lesser of the prime rate
plus 1% and the rate permitted under the partnership agreement of the
Registrant. The second tender offer closed on June 30, 1995.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the period
covered by this Report.
PART II
Item 5. Market for the Registrant's Equity and Related Security
Holder Matters.
The Limited Partnership Unit holders are entitled to certain
distributions as provided in the Partnership Agreement. No market for Limited
Partnership Units exists, nor is any expected to develop. As of March 1, 1996,
unit holders have received distributions from operations of $70 to $88 for each
original $1,000 contribution.
No distributions from operations were made during the years ended
December 31, 1995 and 1994. See "Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations" for a discussion of the
Registrant's financial ability to make distributions.
As of March 1, 1996, the approximate number of holders of Limited
Partnership Units was 5,834.
Item 6. Selected Financial Data.
The following represents selected financial data for the Registrant for
the years ended December 31, 1995, 1994, 1993, 1992 and 1991. The data should be
read in conjunction with the consolidated financial statements included
elsewhere herein. This data is not covered by the independent auditors' report.
For the Year Ended December 31,
--------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
(Amounts in thousands except per unit data)
TOTAL REVENUES $12,008 $11,355 $12,909 $13,272 $13,314
======= ======= ======= ======= =======
LOSS BEFORE EXTRAORDINARY ITEM $ (474) $ (437) $(2,445) $(3,592) $(4,278)
EXTRAORDINARY ITEM 129 - 3,813 - -
------- ------- ------- ------- -------
NET INCOME (LOSS) $ (345) $ (437) $ 1,368 $(3,592) $(4,278)
======= ======= ======= ======= =======
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT(1):
(Loss) before extraordinary item $ (5.57) $ (5.13) $(28.76) $(42.24) $(50.31)
Extraordinary items 1.52 - 44.85 - -
------- ------- ------- ------- -------
NET INCOME (LOSS) $ (4.05) $ (5.13) $ 16.09 $(42.24) $(50.31)
======= ======= ======= ======= =======
TOTAL ASSETS $43,075 $44,041 $44,040 $54,764 $63,701
======= ======= ======= ======= =======
LONG-TERM OBLIGATIONS:
Notes payable $35,537 $35,800 $35,363 $45,759 $50,560
======= ======= ======= ======= =======
(1) $1,000 original contribution per unit, based on units outstanding during
the year after giving effect to the allocation of net loss to the general
partner.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
The Registrant holds investments in and operates residential real
estate properties, with apartments leased to tenants subject to leases of up to
one year. The properties are located in Colorado, Florida and Texas. The
Registrant receives rental income from its properties and is responsible for
operating expenses, administrative expenses, capital improvements and debt
service payments. As of March 1, 1996, seven of the twelve properties originally
purchased by the Registrant were sold or otherwise disposed.
The Registrant uses working capital reserves provided from any
undistributed cash flow from operations, sales and refinancing proceeds as its
primary source of liquidity. For the long term, cash from operations will remain
the Registrant's primary source of liquidity. There have been no distributions
since 1985. All of the Registrant's properties (except for Cooper's Pond)
experienced positive cash flow during the year ended December 31, 1995. The
Managing General Partner is currently evaluating the cash needs of the
Registrant in order to determine whether any cash distributions from operations
can be made in the near future.
The level of liquidity based upon cash and cash equivalents experienced
a $1,474,000 increase at December 31, 1995, as compared to 1994. The
Registrant's $2,703,000 of cash from operating activities and $68,000 of net
cash provided by investing activities was partially offset by $1,297,000 of cash
used in financing activities. Cash provided by operations improved at December
31, 1995, as compared to 1994, primarily due to improved operations at all of
the Registrant's properties except for Cooper's Pond. Cash provided by investing
activities consisted of $760,000 received from a reserve for capital
improvements as reimbursement for the Registrant's prior year real estate
improvements. The Registrant also spent $692,000 for real estate improvements
during the year ended December 31, 1995. Cash used in financing activities
consisted of $910,000 paid in satisfaction of a mortgage payable at a discount
and $387,000 of notes payable principal payments. The Registrant currently has
$836,000 in reserves which it anticipates will be used for capital improvements
in 1996. All other increases (decreases) in certain assets and liabilities are
the result of the timing of receipt and payment of various operating activities.
On August 3, 1995, the Registrant paid $910,000 to satisfy in full the
$1,039,000 second mortgage encumbering The Village in the Woods Apartments at a
discount. The Registrant recognized an extraordinary gain on extinguishment of
debt of $129,000 during 1995.
Working capital reserves are primarily invested in repurchase
agreements secured by United States Treasury obligations. The Managing General
Partner believes that, if market conditions remain relatively stable, cash flow
from operations, when combined with working capital reserves, will be sufficient
to fund required capital improvements and regular debt service payments for the
next twelve months and the foreseeable future. The Registrant has balloon
payments due in 1999 and 2000 totaling $10,896,000 and $24,667,000,
respectively. Although the Managing General Partner is confident that all
mortgages can be refinanced or extended, if the mortgages are not extended, or
refinanced, or the properties not sold, the properties could be lost through
foreclosure.
As required by the terms of the settlement of the actions brought
against, among others, DeForest Ventures I L.P. ("DeForest I") relating to the
tender offer made by DeForest I in October 1994 (the "First Tender Offer") for
units of limited partnership interest in the Registrant and certain affiliated
partnerships, DeForest I commenced a second tender offer (the "Second Tender
Offer") on June 2, 1995 for units of limited partnership interest in the
Registrant. Pursuant to the Second Tender Offer, DeForest I acquired an
additional 3,861 units of the Registrant which, when added to the units acquired
during the First Tender Offer, represents approximately 34% of the total number
of outstanding units of the Registrant. Also in connection with the settlement,
an affiliate of the Managing General Partner has made available to the
Registrant a credit line of up to $150,000 per property owned by the Registrant.
The Registrant has no outstanding amounts due under this line of credit. Based
on present plans, the Managing General Partner does not anticipate the need to
borrow in the near future. Other than cash and cash equivalents, the line of
credit is the Registrant's only unused source of liquidity.
On January 19, 1996, the stockholders of NPI, the sole shareholder of
NPI Equity II, sold to IFGP Corporation all of the issued and outstanding stock
of NPI. In addition, an affiliate of Insignia purchased the limited partnership
units held by DeForest I and certain of its affiliates. IFGP Corporation caused
new officers and directors of NPI Equity II and the Managing General Partner to
be elected. The Managing General Partner does not believe these transactions
will have a significant effect on the Registrant's liquidity or results of
operations. See "Item 1 Business-Change in Control".
At this time, it appears that the original investment objective of
capital growth from inception of the Registrant will not be attained and that
investors will not receive a return of all of their invested capital. The extent
to which invested capital is returned to investors is dependent upon the
performance of the Registrant's properties and the markets in which such
properties are located and on the sales price of the remaining properties. In
this regard, all of the remaining properties have been held longer than
originally expected. The ability to hold and operate these properties is
dependent on the Registrant's ability to obtain refinancing or debt modification
as required.
Real Estate Market
The business in which the Registrant is engaged is highly competitive,
and the Registrant is not a significant factor in its industry. Each investment
property is located in or near a major urban area and, accordingly, competes for
rentals not only with similar properties in its immediate area but with hundreds
of similar properties throughout the urban area. Such competition is primarily
on the basis of location, rents, services and amenities. In addition, the
Registrant competes with significant numbers of individuals and organizations
(including similar partnerships, real estate investment trusts and financial
institutions) with respect to the sale of improved real properties, primarily on
the basis of the prices and terms of such transactions.
Results of Operation
1995 Compared to 1994
Net loss, before the extraordinary gain on extinguishment of debt,
increased by $37,000 for the year ended December 31, 1995, as compared to 1994,
due to an increase in expenses of $690,000, which was offset by an increase in
revenues of $653,000. Net loss, before extraordinary gain on extinguishment of
debt, increased primarily due to the amortization of deferred debt discount,
which was offset by improved operations at all of the Registrant's properties,
except for Cooper's Pond Apartments.
Revenues increased by $653,000 for the year ended December 31, 1995, as
compared to 1994, due to increases in rental revenue of $644,000 and interest
income of $9,000. Rental revenue increased primarily due to an increase in
rental rates at all of the Registrant's properties, which was slightly offset by
an increase in concessions at Village in the Woods Apartments. Occupancy
remained relatively stable at all of the Registrant's properties. Interest
income remained relatively constant.
Expenses increased by $690,000 for the year ended December 31, 1995, as
compared to 1994, due to increases in interest expense of $241,000, operating
expenses of $522,000 and depreciation expense of $71,000, which were only
partially offset by a decrease in general and administrative expenses of
$144,000. Interest expense increased due to the amortization of the deferred
debt discount, which was partially offset by the prepayment of the second
mortgage encumbering Village in the Woods Apartments in August 1995 and the
amortization of mortgage principal balances. Operating expenses increased due to
an increase in maintenance at all of the Registrant's properties. Depreciation
expense increased due to the effect of the prior years fixed asset additions.
General and administrative expenses decreased due to a reduction in asset
management costs, effective July 1, 1994.
1994 Compared to 1993
Net loss, before the extraordinary gain on extinguishment of debt,
decreased by $2,008,000 for the year ended December 31, 1994, as compared to
1993, due to a decrease in revenues of $1,554,000 and expenses of $3,562,000.
Net loss decreased primarily due to the provision for impairment of value during
1993, the disposition of Inwood Grove Apartments in December 1993, Treehouse
Apartments in August 1993, The Lakes Apartments in July 1993 and improved
operations at all of the Registrant's remaining properties except for Cherry
Creek Gardens.
Revenues decreased by $1,554,000 for the year ended December 31, 1994,
as compared to 1993, due to the disposition of Inwood Grove Apartments,
Treehouse Apartments and The Lakes Apartments. With respect to the remaining
properties, rental revenue increased by $673,000.
Rental revenue with respect to the remaining properties increased
primarily due to an increase in rental rates at all of the Registrant's
properties and an increase in occupancy at Cooper's Pond Apartments. Occupancy
increased slightly at Lodge Apartments and remained relatively constant at
Cherry Creek Gardens, Creekside Apartments and Village in the Woods Apartments.
In addition, interest income increased by $12,000 primarily due to the receipt
in July 1994 of interest income relating to the release of escrow funds from the
sale of The Lakes Apartments in 1993.
Expenses decreased by $3,562,000 for the year ended December 31, 1994,
as compared to 1993, primarily due to the disposition of Inwood Grove
Apartments, Treehouse Apartments and The Lakes Apartments. With respect to the
remaining properties, expenses decreased as the increases in operating expenses
of $837,000 and depreciation expense of $285,000 were more than offset by
decreases in interest expense of $400,000 and the provision for impairment of
value of $1,430,000 on Cooper's Pond Apartments, which was recognized in the
prior year. Operating expenses increased at the remaining properties primarily
due to an increase in exterior painting at all of the Registrant's properties,
(except for Coopers Pond Apartments) and due to continuing deferred maintenance
at all of the Registrant's properties except for Village in the Woods.
Depreciation expense increased due to the effect of fixed asset additions during
1993 and 1994. The decrease in interest expense was primarily attributable to
the lower interest rates obtained on mortgage refinancings during 1993 and the
amortization of the mortgage principal balances during 1993. In addition,
general and administrative expenses decreased by $91,000 due to a reduction in
asset management costs, effective July 1, 1994, which was partially offset by
costs associated with the management transition.
Item 8. Consolidated Financial Statements and Supplementary Data.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
INDEX
Page
Independent Auditors' Reports............................................ F - 2
Consolidated Financial Statements:
Balance Sheets at December 31, 1995 and 1994........................ F - 4
Statements of Operations for the Years Ended December 31, 1995,
1994 and 1993..................................................... F - 5
Statements of Partners' Equity for the Years Ended
December 31, 1995, 1994 and 1993.................................. F - 6
Statements of Cash Flows for the Years Ended December 31, 1995,
1994 and 1993..................................................... F - 7
Notes to Consolidated Financial Statements.......................... F - 8
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation at
December 31, 1995................................................. F -16
Consolidated financial statements and financial statement schedules not included
have been omitted because of the absence of conditions under which they are
required or because the information is included elsewhere in the consolidated
financial statements.
To the Partners
Century Properties Fund XVII
Greenville, South Carolina
Independent Auditors' Report
We have audited the accompanying consolidated balance sheets of Century
Properties Fund XVII, (a limited partnership) (the "Partnership") and its wholly
owned subsidiaries as of December 31, 1995 and 1994 and the related consolidated
statements of operations, partners' equity and cash flows for the years then
ended. Our audits also included the additional information supplied pursuant to
Item 14(a)(2). These consolidated financial statements are the responsibility of
the Partnership's management. 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated 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 consolidated financial position of Century
Properties Fund XVII and its subsidiaries as of December 31, 1995 and 1994 and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles. Also in our opinion,
the related financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.
Imowitz Koenig & Co., LLP
Certified Public Accountants
New York, N.Y.
January 26, 1996
INDEPENDENT AUDITORS' REPORT
Century Properties Fund XVII:
We have audited the accompanying consolidated statements of operations,
partners' equity and cash flows of Century Properties Fund XVII (a limited
partnership) (the "Partnership") and its wholly-owned subsidiaries for the year
ended December 31, 1993. 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, such consolidated financial statements present fairly, in all
material respects, the results of operations and cash flows of the Partnership
and its wholly-owned subsidiaries for the year ended December 31, 1993 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
San Francisco, California
March 18, 1994
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
------------------------------
1995 1994
------------ ------------
ASSETS
Cash and cash equivalents $ 2,623,000 $ 1,149,000
Reserve for capital improvements 836,000 1,596,000
Other assets 928,000 1,164,000
Real Estate:
Real Estate 65,648,000 64,917,000
Accumulated depreciation (26,013,000) (23,970,000)
Allowance for impairment of value (1,430,000) (1,430,000)
------------ ------------
Real estate, net 38,205,000 39,517,000
Deferred financing costs, net 483,000 615,000
------------ ------------
Total assets $ 43,075,000 $ 44,041,000
============ ============
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses and other liabilities $ 678,000 $ 1,036,000
Notes payable 35,537,000 35,800,000
------------ ------------
Total liabilities 36,215,000 36,836,000
------------ ------------
Partners' Equity (Deficit):
General partners (6,922,000) (6,881,000)
Limited partners (75,000 units
outstanding at December 31,
1995 and 1994) 13,782,000 14,086,000
------------ ------------
Total partners' equity 6,860,000 7,205,000
------------ ------------
Total liabilities and partners'
equity $ 43,075,000 $ 44,041,000
============ ============
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993
----------- ----------- -----------
Revenues:
Rental $11,874,000 $11,230,000 $12,651,000
Interest income 134,000 125,000 113,000
Gain on property disposition - - 145,000
----------- ----------- -----------
Total revenues 12,008,000 11,355,000 12,909,000
----------- ----------- -----------
Expenses (including $1,180,000 and
$655,000 paid to the general
partners and affiliates in
1995 and 1994):
Operating 6,672,000 6,150,000 6,691,000
Interest 3,524,000 3,283,000 4,778,000
Depreciation 2,043,000 1,972,000 1,977,000
General and administrative 243,000 387,000 478,000
Provision for impairment of value - - 1,430,000
----------- ----------- -----------
Total expenses 12,482,000 11,792,000 15,354,000
----------- ----------- -----------
Loss before extraordinary item (474,000) (437,000) (2,445,000)
Extraordinary item:
Gain on extinguishment of debt 129,000 - 3,813,000
----------- ----------- -----------
Net (loss) income $ (345,000) $ (437,000) $ 1,368,000
=========== =========== ===========
Net (loss) income per limited
partnership unit:
Loss before extraordinary item $ (5.57) $ (5.13) $ (28.76)
Extraordinary item 1.52 - 44.85
----------- ----------- -----------
Net (loss) income $ (4.05) $ (5.13) $ 16.09
=========== =========== ===========
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
General Limited Total
partners' partners' partners'
(deficit) equity equity
----------- ----------- -----------
Balance - January 1, 1993 $(6,990,000 $13,264,000 $ 6,274,000
Loss before extraordinary item (288,000) (2,157,000) (2,445,000)
Extraordinary item - Gain on
extinguishment of debt 449,000 3,364,000 3,813,000
----------- ----------- -----------
Balance - December 31, 1993 (6,829,000) 14,471,000 7,642,000
Net loss (52,000) (385,000) (437,000)
----------- ----------- -----------
Balance - December 31, 1994 (6,881,000) 14,086,000 7,205,000
Loss before extraordinary item (56,000) (418,000) (474,000)
Extraordinary item - Gain on
extinguishment of debt 15,000 114,000 129,000
----------- ----------- -----------
Balance - December 31, 1995 $(6,922,000) $13,782,000 $ 6,860,000
=========== =========== ===========
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
----------- ----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (345,000) $ (437,000) $ 1,368,000
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation and amortization 3,299,000 2,924,000 3,138,000
Provision for impairment of value - - 1,430,000
Gain on extinguishment of debt (129,000) - (3,813,000)
Gain on property disposition - - (145,000)
Financing costs paid - - (499,000)
Changes in operating assets and
liabilities:
Other assets 236,000 (328,000) (236,000)
Accrued expenses and other
liabilites (358,000) 1,000 254,000
----------- ----------- ------------
Net cash provided by operating
activities 2,703,000 2,160,000 1,497,000
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property sales expenses paid - - (225,000)
Proceeds from disposition of real estate - - 4,800,000
Additions to real estate (692,000) (2,238,000) (1,191,000)
Reserve for capital improvements 760,000 73,000 (1,669,000)
----------- ----------- ------------
Net cash provided by (used in) investing
activities 68,000 (2,165,000) 1,715,000
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Satisfaction of note payable (910,000) - -
Notes payable proceeds - - 11,615,000
Notes payable principal payments (387,000) (357,000) (14,421,000)
----------- ----------- ------------
Net cash (used in) financing activities (1,297,000) (357,000) (2,806,000)
----------- ----------- ------------
Increase (Decrease) in Cash and Cash
Equivalents 1,474,000 (362,000) 406,000
Cash and Cash Equivalents at Beginning
of Year 1,149,000 1,511,000 1,105,000
----------- ----------- ------------
Cash and Cash Equivalents at End of Year $ 2,623,000 $ 1,149,000 $ 1,511,000
=========== =========== ============
Supplemental Disclosure of Cash Flow
Information:
Interest paid in cash during the
year $ 2,268,000 $ 2,330,000 $ 3,161,000
=========== =========== ============
Supplemental Disclosure of Non-Cash
Investing and Financing Activities:
Additions to real estate funded by
notes payable $ 39,000 $ - $ -
=========== =========== ============
Gain on extinguishment of debt in 1995
and 1993 - See Notes 5 and 7.
Disposition of rental properties in
1993 - See Note 7.
Amortization of deferred debt discount -
See Note 5.
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Century Properties Fund XVII (the "Partnership") is a limited partnership
organized under the laws of the State of California to acquire, hold for
investment, and ultimately sell income-producing real estate. The
Partnership currently owns five residential apartment complexes of which
three are located in Colorado, and one each in Florida and Texas. The
general partner of the Partnership is Fox Partners, a California general
partnership. The general partners of Fox Partners are Fox Capital
Management Corporation ("FCMC"), a California corporation, Fox Realty
Investors ("FRI"), a California general partnership, and Fox Partners 82,
a California general partnership. The capital contributions of
$75,000,000 ($1,000 per unit) were made by the limited partners,
including 100 Limited Partnership Units purchased by FCMC.
On December 6, 1993, the shareholders of FCMC entered into a Voting Trust
Agreement with NPI Equity Investments II, Inc. ("NPI Equity" or the
"Managing General Partner") pursuant to which NPI Equity was granted the
right to vote 100 percent of the outstanding stock of FCMC and NPI Equity
became the Managing General Partner of FRI. As a result, NPI Equity
became responsible for the operation and management of the business and
affairs of the Partnership and the other investment partnerships
originally sponsored by FCMC and/or FRI. NPI Equity is a wholly-owned
subsidiary of National Property Investors, Inc. ("NPI, Inc."). The
shareholders of FCMC and the partners in FRI retain indirect economic
interests in the Partnership and such other investment limited
partnerships, but have ceased to be responsible for the operation and
management of the Partnership and such other partnerships.
In October 1994, DeForest Ventures I L.P. ("DeForest I") made a tender
offer for limited partnership interests in the partnership, as well as
eleven affiliated limited partnerships. DeForest Ventures II, L.P.
("DeForest II") made tender offers for limited partnership interests in
seven affiliated limited partnerships. Shareholders who controlled
DeForest Capital I Corporation, the sole general partner of DeForest I,
also controlled NPI, Inc. As of December 31, 1995, DeForest I had
acquired approximately 34% of total limited partnership units of the
Partnership (see Note 9).
On January 19, 1996, the stockholders of NPI, Inc. sold all of the issued
and outstanding stock of NPI, Inc. to an affiliate of Insignia
Financial Group, Inc. ("Insignia"). In addition, an affiliate of
Insignia acquired the limited partnership interests of the Partnership
held by DeForest I and certain of its affiliates (see Note 9).
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Consolidation
The consolidated financial statements include the statements of the
Partnership and its wholly-owned subsidiaries formed in 1991. All
significant intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Fair Value of Financial Instruments
In 1995, the Partnership implemented Statement of Financial Accounting
Standards ("SFAS") No. 107, "Disclosures about Fair Value of Financial
Instruments," as amended by SFAS No. 119, "Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments," which
requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it
is practicable to estimate fair value. Fair value is defined in the SFAS
as the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or
liquidation sale. The Partnership believes that the carrying amount of
its financial instruments (except for long term debt) approximates fair
value due to the short term maturity of these instruments. The fair value
of the Partnership's long term debt, after discounting the scheduled loan
payments to maturity, approximates its carrying balance.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with an original
maturity of three months or less at the time of purchase to be cash
equivalents.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of Credit Risk
The Partnership maintains cash balances at institutions insured up to
$100,000 by the Federal Deposit Insurance Corporation. Balances in excess
of $100,000 are usually invested in repurchase agreements, which are
collateralized by United States Treasury obligations. Cash balances
exceeded these insured levels during the year. At December 31, 1995,
substantially all of the Partnership's cash was invested in overnight
repurchase agreements, secured by United States Treasury obligations,
which are included in cash and cash equivalents.
Real Estate
Real estate is stated at cost. Acquisition fees are capitalized as a cost
of real estate. In 1995, the Partnership adopted SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of ", which requires impairment losses to be
recognized for long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows are not sufficient
to recover the asset's carrying amount. The impairment loss is measured
by comparing the fair value of the asset to its carrying amount. The
adoption of the SFAS had no effect on the Partnership's financial
statements.
Depreciation
Depreciation is computed by the straight-line method over estimated
useful lives currently ranging from 27.5 to 30 years for buildings and
improvements and six to seven years for furnishings.
Deferred Financing Costs
Financing costs are deferred and amortized, as interest expense, over the
lives of the related loans which range from three to nine years, or
expensed, if financing is not obtained. As of December 31, 1995 and 1994,
accumulated amortization amounted to $620,000 and $488,000, respectively.
Net Income (Loss) Per Limited Partnership Unit
The net income (loss) per limited partnership unit is computed by
dividing net income (loss) allocated to the limited partners by 75,000
units outstanding.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
Taxable income or loss of the Partnership is reported in the income tax
returns of its partners. Accordingly, no provision for income taxes is
made in the financial statements of the Partnership.
Reclassification
Certain amounts from 1994 and 1993 have been reclassified to conform to
the 1995 presentation.
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
In accordance with the Partnership Agreement, the Partnership may be
charged by the general partner and affiliates for services provided to
the Partnership. From March 1988 to December 1992, such amounts were
assigned pursuant to a services agreement by the general partner and
affiliates to Metric Realty Services, L.P. ("MRS"), which performed
partnership management and other services for the Partnership.
On January 1, 1993, Metric Management, Inc. ("MMI"), successor to MRS, a
company which is not affiliated with the general partner, commenced
providing certain property and portfolio management services to the
Partnership under a new services agreement. As provided in the new
services agreement effective January 1, 1993, no reimbursements were made
to the general partner and affiliates after December 31, 1992. Subsequent
to December 31, 1992, reimbursements were made to MMI. On December 16,
1993, the services agreement with MMI was modified and, as a result
thereof, NPI Equity began directly providing cash management and other
Partnership services on various dates commencing December 23, 1993. On
March 1, 1994, an affiliate of NPI Equity commenced providing certain
property management services (see Notes 1 and 9). Related party expenses
for the years ended December 31, 1995, 1994 and 1993 were as follows:
1995 1994 1993
---- ---- ----
Property management fees $ 592,000 $ 466,000 $ -
Real estate tax reduction fees 27,000 - -
Reimbursement of administrative expenses:
Partnership accounting and investor services 162,000 189,000 -
--------- --------- ---------
Total $ 781,000 $ 655,000 $ -
========= ========= =========
Property management fees and real estate tax reduction fees are included
in operating expenses. Reimbursed expenses are primarily included in
general and administrative expenses. In addition, approximately $399,000
of insurance premiums, which were paid to an affiliate of NPI Inc. under
a master insurance policy arranged by such affiliate, are included in
operating expenses for the year ended December 31, 1995.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES (Continued)
In accordance with the partnership agreement, the general partner
received a partnership management incentive allocation equal to ten
percent of net and taxable income (loss) before gains on property
dispositions. The general partner is also allocated its two percent
continuing interest in the Partnership's net and taxable income (loss)
after the preceding allocation. The general partner is also allocated
gain on property dispositions to the extent it is entitled to receive
distributions and then twelve percent of any remaining gain.
3. RESERVE FOR CAPITAL IMPROVEMENTS
As of December 31, 1995 and 1994, the reserve for capital improvements
represents amounts held by lenders on Creekside, The Lodge, Coopers Pond
and Cherry Creek Gardens to be used for capital improvements and repairs
to the properties (see Note 5). These funds will be released to the
Partnership as improvements and repairs are completed.
4. REAL ESTATE
Real estate, at December 31, 1995 and 1994, is summarized as follows:
1995 1994
---------- -------
Land $ 7,237,000 $ 7,237,000
Buildings and improvements 52,679,000 52,349,000
Furnishings 5,732,000 5,331,000
------------ ------------
Total 65,648,000 64,917,000
Accumulated depreciation (26,013,000) (23,970,000)
Allowance for impairment of value (1,430,000) (1,430,000)
------------ ------------
Real Estate, Net $ 38,205,000 $ 39,517,000
============ ============
5. NOTES PAYABLE
Individual rental properties are pledged as collateral for the related
notes payable. Interest rates on the notes currently range from 7.875
percent to 8.63 percent, not including one of the notes which has been
discounted to yield interest at an annual rate of 10.25 percent.
Amortization of discounted amounts was $1,124,000, $794,000 and
$1,009,000 for 1995, 1994 and 1993, respectively.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
5. NOTES PAYABLE (Continued)
Principal payments at December 31, 1995, are required as follows:
1996 $ 391,000
1997 423,000
1998 458,000
1999 11,199,000
2000 24,780,000
Thereafter 4,134,000
Unamortized discount (5,848,000)
------------
Total $35,537,000
============
Amortization of deferred financing costs totaled $132,000, $158,000 and
$143,000 for 1995, 1994 and 1993, respectively.
On August 3, 1995, the Partnership paid $910,000 to satisfy in full the
$1,039,000 second mortgage encumbering The Village in the Woods
Apartments at a discount. The debt forgiveness of $129,000 was recognized
as an extraordinary item in 1995.
In connection with the October 1993, debt modification agreements with
the three lenders of the Cooper's Pond Apartments notes payable, the
Partnership negotiated a discounted payoff of $250,000 on the $526,000
second loan on Phase I which was due in July 1995. The debt forgiveness
of $276,000 was recognized as an extraordinary item in 1993.
6. ALLOWANCE FOR IMPAIRMENT OF VALUE
The Partnership determined that, based upon current economic conditions
and projected operational cash flows, the recovery of the carrying value
of Cooper's Pond Apartments, located in Tampa, Florida, was not likely.
Accordingly, an allowance for impairment of value of $1,430,000 was
recognized in 1993 to reduce the carrying value of the property to its
estimated fair value. Carrying value includes the cost of the property
less accumulated depreciation and deferred financing costs. Due to the
current real estate market it is reasonably possible that the
Partnership's estimate of fair value will change within the next year.
7. PROPERTY DISPOSITIONS
In June 1993, the Partnership sold The Lakes Apartments, located in
Tucson, Arizona for $2,500,000. After payment of the existing loans of
$2,291,000 and expenses of the sale of approximately $70,000, proceeds to
the Partnership were approximately $139,000. The proceeds which were held
back in escrow, were released and received by the Partnership in June
1994. The net loss on the sale was $404,000. An allowance for impairment
of $438,000 was recognized in 1992 and an adjustment to the allowance was
recognized as a gain on property disposition of $34,000 in 1993.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
7. PROPERTY DISPOSITIONS (Continued)
In August 1993, the Partnership sold Treehouse Apartments, located in
Tampa, Florida for $2,400,000. As part of the sale, a portion of the
existing loan in the amount of $1,991,000 was repaid at the time of sale.
The lender forgave the remaining principal balance of $100,000. After
payment of the existing loan and expenses of sale of $142,000, proceeds
to the Partnership were approximately $267,000. At the date of sale, the
carrying amount of land and improvements, net of the $785,000 provision
for impairment of value recognized in 1992, was $2,147,000. The gain on
sale, excluding the debt forgiveness of $100,000, was $111,000 and was
recognized in 1993.
In December 1993, the Partnership allowed Inwood Grove Apartments,
located in Houston, Texas, to be acquired by the lender through
foreclosure. Accordingly, the Partnership was relieved of the first notes
payable totaling $8,235,000, $1,749,000 of accrued and unpaid interest
and $200,000 in property taxes. The gain of $3,437,000 from debt
extinguishment was recognized in 1993 as an extraordinary item.
8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING
The differences between the accrual method of accounting for income tax
reporting and the accrual method of accounting used in the consolidated
financial statements are as follows:
1995 1994 1993
---- ---- ----
Net (loss) income - financial statements $ (345,000) $ (437,000) $ 1,368,000
Differences resulted from:
Provision for impairment of value - - 1,430,000
Depreciation and amortization (994,000) (1,028,000) (1,557,000)
Amortization of discount on notes
payable 1,124,000 794,000 1,975,000
Gain on property disposition - - 2,622,000
Interest forgiven - - 1,678,000
Interest capitalized for income tax
reporting 12,000 175,000 -
Debt forgiven - - (276,000)
Other 2,000 21,000 (70,000)
---------- ---------- -----------
Net (loss) income - income tax method $ (201,000) $ (475,000) $ 7,170,000
========== ========== ===========
Taxable (loss) income per Limited
Partnership Unit after allocation
of taxable (loss) to the general
partner $ (2.36) $ (5.59) $ 84.32
========== ========== ===========
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING (Continued)
1995 1994 1993
---------- --------- -------
Partners' equity-financial statements $ 6,860,000 $ 7,205,000 $ 7,642,000
Differences resulted from:
Sales commissions and organization
expenses 9,324,000 9,324,000 9,324,000
Depreciation (27,936,000) (26,942,000) (25,914,000)
Provision for impairment of value 1,430,000 1,430,000 1,430,000
Leaseback termination (1,365,000) (1,365,000) (1,365,000)
Lease payments credited to rental
properties 2,068,000 2,068,000 2,068,000
Amortization of discount on notes
payable 10,486,000 9,362,000 8,568,000
Construction period interest and
taxes (483,000) (483,000) (483,000)
Debt forgiven (276,000) (276,000) (276,000)
Interest capitalized for income tax
reporting 187,000 175,000 -
Other (92,000) (94,000) (115,000)
----------- ----------- -----------
Partners' equity - income tax method $ 203,000 $ 404,000 $ 879,000
=========== =========== ===========
9. SUBSEQUENT EVENT
On January 19, 1996, the stockholders of NPI, Inc. sold all of the issued
and outstanding stock of NPI, Inc. to an affiliate of Insignia. In
addition, an affiliate of Insignia acquired the limited partnership
interests of the Partnership held by DeForest I and certain of its
affiliates (see Note 1). As a result of the transaction, the Managing
General Partner of the Partnership is controlled by Insignia. Insignia
affiliates now provide property and asset management services to the
Partnership, maintain its books and records and oversee its operations.
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
December 31, 1995
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -------- -------- -------- -------- --------
Cost capitalized Gross amount
Initial cost subsequent to carried at
to company acquisition close of period (1)
----------------------- ------------------------- ------------------------------
Buildings and Carrying Buildings and
Description Encumbrances Land Improvements Improvements Costs Land Improvements Total (2)
- ----------- ------------ ---- ------------ ------------ ----- ---- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Residential
Properties
- ----------
Cherry Creek Gardens
Apartments
Englewood, Colorado $ 7,882 $1,320 $11,879 $ 1,278 - $1,320 $13,157 $14,477
The Lodge Apartments
Denver, Colorado 5,864 1,575 8,580 1,526 - 1,575 10,106 11,681
Creekside Apartments
Denver, Colorado 5,339 1,366 7,307 1,273 - 1,366 8,580 9,946
Cooper's Pond
Apartments
Tampa, Florida 7,878 1,476 12,505 1,515 - 1,476 14,020 15,496
The Village in the
Woods
Apartments
Cypress, Texas 8,574 2,852 20,915 1,547 (11,266) 1,500 12,548 14,048
------ ------- ------- -------- -------- ------ ------- -------
TOTAL $35,537 $8,589 $61,186 $7,139 $(11,266) $7,237 $58,411 $65,648
======= ======= ======= ====== ======== ====== ======= =======
<CAPTION>
Column A Column F Column G Column H Column I
- -------- -------- -------- -------- --------
Life
Accumulated on which
depreciation depreciation
and provision is computed
for in latest
impairment Date of Date statement of
Description (3) Construction Acquired operations
- ----------- ---------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Residential
Properties
Cherry Creek Gardens
Apartments
Englewood, Colorado $ 5,943 1979 9/82 6-30 Yrs.
The Lodge Apartments
Denver, Colorado 4,510 1974 10/82 6-30 Yrs.
Creekside Apartments
Denver, Colorado 3,832 1974 10/82 6-30 Yrs.
Cooper's Pond
Apartments 1979 &
Tampa, Florida 7,548 1981(4) 3/83 6-30 Yrs.
The Village in the
Woods
Apartments
Cypress, Texas 5,610 12/83 10/82 6-30 Yrs.
-------
TOTAL $27,443
=======
</TABLE>
See accompanying notes.
SCHEDULE III
CENTURY PROPERTIES FUND XVII
(A Limited Partnership)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
NOTES:
(1) The aggregate cost for Federal income tax purposes is
$71,953,000.
(2) Balance, January 1, 1993 $ 80,296,000
Improvements capitalized subsequent to acquisition 1,191,000
Cost of rental properties sold and foreclosed on (18,808,000)
------------
Balance, December 31, 1993 62,679,000
Improvements capitalized subsequent to acquisition 2,238,000
------------
Balance, December 31, 1994 64,917,000
Improvements capitalized subsequent to acquisition 731,000
------------
Balance, December 31, 1995 $ 65,648,000
============
(3) Balance, January 1, 1993 $ 27,619,000
Additions charged to expense 1,977,000
Accumulated depreciation of rental properties sold
and foreclosed on (6,375,000)
Provision for impairment of value 1,430,000
Allowance for impairment of value on property sold (1,223,000)
------------
Balance, December 31, 1993 23,428,000
Additions charged to expense 1,972,000
------------
Balance, December 31, 1994 25,400,000
Additions charged to expense 2,043,000
------------
Balance, December 31, 1995 $ 27,443,000
============
(4) Construction completed in two phases.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosures.
Effective April 22, 1994, the Registrant dismissed its prior
Independent Auditors, Deloitte & Touche, LLP ("Deloitte") and retained as its
new Independent Auditors, Imowitz Koenig & Company, LLP. Deloitte's Independent
Auditors' Report on the Registrant's financial statements for the calendar year
ended December 31, 1993 did not contain an adverse opinion or a disclaimer of
opinion, and were not qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change Independent Auditors was approved
by the Managing General Partner's Directors. During calendar year ended 1993 and
through April 22, 1994 there were no disagreements between the Registrant and
Deloitte on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure which disagreements if not
resolved to the satisfaction of Deloitte, would have caused it to make reference
to the subject matter of the disagreements in connection with its reports.
Effective April 22, 1994, the Registrant engaged Imowitz Koenig &
Company, LLP as its Independent Auditors. The Registrant did not consult Imowitz
Koenig & Company, LLP regarding any of the matters or events set forth in Item
304(a)(2)(i) and (ii) of Regulation S-K prior to April 22, 1994.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Neither the the Registrant, nor Fox Partners ("Fox"), the general
partner of the Registrant, has any officers or directors. Fox Capital Management
Corporation (the "Managing General Partner'), the managing general partner of
Fox, manages and controls substantially all of the Registrant's affairs and has
general responsibility and ultimate authority in all matters affecting its
business. NPI Equity Investments II, Inc., which controls the Managing General
Partner, is a wholly-owned affiliate of National Property Investors, Inc., which
in turn is owned by an affiliate of Insignia (See "Item 1, Business - Change in
Control"). Insignia is a full service real estate service organization
performing property management, commercial and retail leasing, investor
services, partnership administration, mortgage banking, and real estate
investment banking services for various entities. Insignia commenced operations
in December 1990 and is the largest manager of multifamily residential
properties in the United States and is a significant manager of commercial
property. It currently provides property and/or asset management services for
over 2,000 properties. Insignia's properties consist of approximately 300,000
units of multifamily residential housing and approximately 64 million square
feet of commercial space.
As of March 1, 1996, the names and positions held by the officers and
directors of the Managing General Partner are as follows:
Has served as a
Director and/or
Officer of the Managing
Name Positions Held General Partner since
- ---- -------------- ---------------------
William H. Jarrard, Jr. President and Director January 1996
Ronald Uretta Vice President and January 1996
Treasurer
John K. Lines, Esquire Vice President, January 1996
Secretary and Director
Thomas R. Shuler Director January 1996
Kelley M. Buechler Assistant Secretary January 1996
William H. Jarrard, Jr., age 49, has been President and a Director of
the Managing General Partner since January 1996. Mr. Jarrard has been a Managing
Director - Partnership Administration of Insignia since January 1991.
Ronald Uretta, age 40, has been Insignia's Chief Financial Officer and
Treasurer since January 1992. Since September 1990, Mr. Uretta has also served
as the Chief Financial Officer and Controller of Metropolitan Asset Group.
John K. Lines, Esquire, age 36, has been a Director and Vice President
and Secretary of the Managing General Partner since January 1996, Insignia's
General Counsel since June 1994, and General Counsel and Secretary since July
1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel
and Vice President of Ocwen Financial Corporation, West Palm Beach, Florida.
From October 1991 until May 1993, Mr. Lines was a Senior Attorney with Banc One
Corporation, Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was an
attorney with Squire Sanders & Dempsey, Columbus, Ohio.
Thomas R. Shuler, age 50, has been Managing Director - Residential
Property Management of Insignia since March 1991 and Executive Managing Director
of Insignia and President of Insignia Management Services since July 1994. From
January 1983 until March 1991, Mr. Shuler was President of the Management
Division of Hall Financial Group, Inc., a property management organization
located in Dallas, Texas.
Kelley M. Buechler, age 38, has been Assistant Secretary of the
Managing General Partner since January 1996 and Assistant Secretary of Insignia
since 1991.
No family relationships exist among any of the officers or directors of
the Managing General Partner.
Each director and officer of the Managing General Partner will hold
office until the next annual meeting of stockholders of the Managing General
Partner and until his successor is elected and qualified.
Item 11. Executive Compensation
The Registrant is not required to and did not pay any compensation to
the officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers or
directors. (See "Item 13, Certain Relationships and Related Transactions.")
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The Registrant is a limited partnership and has no officers or
directors. The Managing General Partner has discretionary control over most of
the decisions made by or for the Registrant in accordance with the terms of the
Partnership Agreement. The Managing General Partner owns 100 limited partnership
units in the Registrant.
The following table sets forth certain information regarding limited
partnership units of the Registrant owned by each person who is known by the
Registrant to own beneficially or exercise voting or dispositive control over
more than 5% of the Registrant's limited partnership units, by each of the
Managing General Partner's directors and by all directors and executive officers
of the Managing General Partner as a group as of March 1, 1996.
Name and address of Amount and nature of
Beneficial Owner Beneficial Ownership % of Class
- ---------------- -------------------- ----------
Insignia NPI, L.L.C.(1) 25,710.5(2) 34
All directors and executive
officers as a group
(5 persons) - -
- ---------------
(1) The business address for Insignia NPI, L.L.C. is One Insignia Financial
Plaza, Greenville, South Carolina 29602.
(2) Based upon information supplied to the Registrant by Insignia NPI, L.L.C.
There are no arrangements known to the Registrant, the operation of
which may, at a subsequent date, result in a change in control of the
Registrant.
Item 13. Certain Relationships and Related Transactions.
In accordance with the Registrant's partnership agreement, the
Registrant may be charged by the general partner and affiliates for services
provided to the Registrant. From March 1988 to December 1992, such amounts were
assigned pursuant to a services agreement by the general partner and affiliates
to Metric Realty Services, L.P. ("MRS"), which performed partnership management
and other services for the Registrant.
On January 1, 1993, Metric Management, Inc. ("MMI"), successor to MRS,
a company which is not affiliated with the general partner, commenced providing
certain property and portfolio management services to the Registrant under a new
services agreement. As provided in the new services agreement effective January
1, 1993, no reimbursements were made to the general partner and affiliates after
December 31, 1992. Subsequent to December 31, 1992, reimbursements were made to
MMI. On December 16, 1993, the services agreement with MMI was modified and, as
a result thereof, NPI Equity II began directly providing cash management and
other partnership services on various dates commencing December 23, 1993. On
March 1, 1994, an affiliate of NPI Equity II commenced providing certain
property management services. Related party expenses for the years ended
December 31, 1995, 1994 and 1993 were as follows:
1995 1994 1993
--------- --------- -------
Property management fees $ 592,000 $ 466,000 $ -
Real estate tax reduction 27,000 - -
Reimbursement of administrative expenses:
Partnership accounting
and investor services 162,000 189,000 -
--------- --------- -------
Total $ 781,000 $ 655,000 $ -
========= ========= =======
Property management fees and real estate tax reduction fees are
included in operating expenses. Reimbursed expenses are primarily included in
general and administrative expenses. In addition, approximately $399,000 of
insurance premiums, which were paid to an affiliate of NPI under a master
insurance policy arranged by such affiliate, are included in operating expenses
for the year ended December 31, 1995.
In accordance with the Registant's partnership agreement, the general
partner received a partnership management incentive allocation equal to ten
percent of net and taxable income (loss) before gains on property dispositions.
The general partner is also allocated its two percent continuing interest in the
Registrant's net and taxable income (loss) after the preceding allocation. The
general partner is also allocated gain on property dispositions to the extent it
is entitled to receive distributions and then twelve percent of any remaining
gain.
As a result of its ownership of 25,710.5 limited partnership units,
Insignia NPI L.L.C. ("Insignia LLC") could be in a position to significantly
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters. When voting on matters,
Insignia LLC would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner. However, Insignia LLC has agreed
for the benefit of non-tendering unitholders, that it will vote its Units: (i)
against any proposal to increase the fees and other compensation payable by the
Registrant to the Managing General Partner and any of its affiliates; and (ii)
with respect to any proposal made by the Managing General Partner or any of its
affiliates, in proportion to votes cast by other unitholders. Except for the
foregoing, no other limitations are imposed on Insignia LLC's right to vote each
Unit acquired.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1)(2) Consolidated Financial Statements and Financial Statement
Schedules:
See Item 8 of this Form 10-K for Consolidated Financial
Statements of the Registrant, Notes thereto, and Financial
Statement Schedules. (A Table of Contents to Consolidated
Financial Statements and Financial Statement Schedules is
included in Item 8 and incorporated herein by reference.)
(a) (3) Exhibits:
2.1 NPI Stock Purchase Agreement, dated as of August 17, 1995,
incorporated by reference to the Registrant's Current Report on
Form 8-K dated August 17, 1995.
2.2 Partnership Units Purchase Agreement dated as of August 17,
1995 incorporated by reference to Exhibit 2.1 to Form 8-K filed
by Insignia Financial Group, Inc. ("Insignia) with the
Securities and Exchange Commission on September 1, 1995.
2.3 Management Purchase Agreement dated as of August 17, 1995
incorporated by reference to Exhibit 2.2 to Form 8-K filed by
Insignia with the Securities and Exchange Commission on
September 1, 1995.
2.4 Limited Liability Company Agreement of Riverside Drive L.L.C.,
dated as of August 17, 1995 incorporated by reference to Exhibit
2.4 to Form 8-K filed by Insignia with the Securities and
Exchange Commission on September 1, 1995.
2.5 Master Indemnity Agreement dated as of August 17, 1995
incorporated by reference to Exhibit 2.5 to Form 8-K filed by
Insignia with the Securities and Exchange Commission on
September 1, 1995.
3.4. Agreement of Limited Partnership incorporated by reference to
Exhibit A to the Prospectus of the Registrant dated March 29,
1982, and thereafter supplemented contained in the Registrant's
Registration Statement on Form S-11 (Reg. No. 2-75411).
16. Letter from the Registrant's former Independent Auditor dated
April 27, 1994, incorporated by reference to exhibit 10 to the
Registrant's Current Report on Form 8-K dated April 22, 1994.
(b) Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized this 28th day of March,
1996.
CENTURY PROPERTIES FUND XVII
By: Fox Partners
its General Partner
By: Fox Capital Management Corporation
Its Managing General Partner
By: /s/ William H. Jarrard, Jr.
---------------------------
William H. Jarrard, Jr.
President
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 date indicated.
Signature/Name Title Date
- -------------- ----- ----
/s/ William H. Jarrard, Jr. President and March 28, 1996
- --------------------------- Director
William H. Jarrard, Jr.
/s/ Ronald Uretta Principal Financial March 28, 1996
- ----------------- Officer and Principal
Ronald Uretta Accounting Officer
/s/ John K. Lines Director March 28, 1996
- -----------------
John K. Lines
Exhibit Index
Exhibit Page
- ------- ----
2.1 NPI Stock Purchase Agreement ............................. (1)
2.2 Partnership Units Purchase Agreement ..................... (2)
2.3 Management Purchase Agreement ............................ (3)
2.4 Limited Liability Company Agreement of
Riverside Drive L.L.C. ................................... (4)
2.5 Master Indemnity Agreement ............................... (5)
3.4 Agreement of Limited Partnership ......................... (6)
16 Letter from the Registrant's former Independent Auditor
dated April 27, 1994 ..................................... (7)
- -------------
(1) Incorporated by reference to Exhibit 2 to the Registrant's Current Report
on Form 8-K dated August 17, 1995.
(2) Incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(3) Incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(4) Incorporated by reference to Exhibit 2.4 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(5) Incorporated by reference to Exhibit 2.5 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(6) Incorporated by reference to Exhibit A to the Prospectus of the Registrant
dated March 29, 1982, and thereafter supplemented contained in the
Registrant's Registration Statement on Form S-11 (Reg. No. 2-75411).
(7) Incorporated by reference to exhibit 10 to the Registrant's Current Report
on Form 8-K dated April 22, 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XVII and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,459,000 <F1>
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 65,648,000
<DEPRECIATION> (27,443,000) <F2>
<TOTAL-ASSETS> 43,075,000
<CURRENT-LIABILITIES> 0
<BONDS> 35,537,000
<COMMON> 0
0
0
<OTHER-SE> 6,860,000
<TOTAL-LIABILITY-AND-EQUITY> 43,075,000
<SALES> 0
<TOTAL-REVENUES> 11,874,000
<CGS> 0
<TOTAL-COSTS> 8,715,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,524,000
<INCOME-PRETAX> (474,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (474,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 129,000
<CHANGES> 0
<NET-INCOME> (345,000)
<EPS-PRIMARY> (4.05)
<EPS-DILUTED> (4.05)
<FN>
<F1> Cash includes $836,000 of cash reserved for capital improvements.
<F2> Depreciation includes $1,430,000 of allowance for impairment of value.
</FN>
</TABLE>
