FORM 10-KSB-ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15 (D)
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-13418
CENTURY PROPERTIES GROWTH FUND XXII
(Name of small business issuer in its charter)
California 94-2963120
(State or other jurisdiction of (I.R.S. Employer
incorporationororganization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina, 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $20,390,000
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days. Market value information
for Registrant's partnership interests is not available. Should a trading market
develop for these interests, it is management's belief that such trading would
not exceed $25 million.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Century Properties Growth Fund XXII (the "Partnership") was organized in January
1984, as a California limited partnership under the Uniform Limited Partnership
Act of the California Corporations Code. Fox Partners IV, a California general
partnership, is the general partner of the Partnership. The general partners of
Fox Partners IV are Fox Capital Management Corporation ("FCMC" or the "Managing
General Partner"), a California corporation, Fox Realty Investors ("FRI"), a
California general partnership, and Fox Partners 84, a California general
partnership.
The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-89285), was declared effective by the Securities and Exchange
Commission on September 25, 1984. The Partnership marketed its securities
pursuant to its Prospectus dated September 25, 1984, and thereafter supplemented
(hereinafter the "Prospectus"). This Prospectus was filed with the Securities
and Exchange Commission pursuant to Rule 424 (b) of the Securities Act of 1933.
The principal business of the Partnership is and has been to acquire, hold for
investment and ultimately sell income-producing multi-family residential
properties.
Beginning in September 1984 through June 1986, the Partnership offered
$120,000,000 in Limited Partnership units and sold units having an initial cost
of $82,848,000. The net proceeds of this offering were used to acquire eleven
income-producing real properties. The Partnership's original property portfolio
was geographically diversified with properties acquired in eight states. The
Partnership's acquisition activities were completed in September 1986 and since
then the principal activity of the Partnership has been managing its portfolio.
One property was acquired by the lender through foreclosure in 1992. One
property was sold in 1995.
On August 10, 1994, an affiliate of Apollo Real Estate Advisors, L.P. ("Apollo")
obtained general and limited partnership interests in NPI-AP Management, L.P.
("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, Inc. ("NPI
Equity"), the general partner of FRI, and the entity which controls the Managing
General Partner. 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. In addition, the approval of certain major actions on
behalf of the Partnership required the affirmative vote of at lease five
directors of the Managing General Partner.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control
of NPI Equity and (ii) all of the issued and outstanding shares of stock of
FCMC. In connection with these transactions, affiliates of Insignia appointed
new officers and directors of NPI Equity and FCMC. See "Item 9, Directors,
Executive Officers, Promotors and Control Persons, Compliance with Section 16(a)
of the Exchange Act."
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, an
affiliate of the Managing General Partner (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 Partnership as well as eleven affiliated limited partnerships.
On January 19, 1996, DeForest I and certain of its affiliates sold all of its
interest in the Partnership to Insignia NPI L.L.C. ("Insignia LLC"), an
affiliate of IFGP Corporation. Pursuant to a Schedule 13-D filed by Insignia LLC
with the Securities and Exchange Commission, Insignia LLC acquired 17,023
limited partnership units or approximately 28% of the total limited partnership
units of the Partnership. (See "Item 11, Security Ownership of Certain
Beneficial Owners and Management.")
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership 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 Partnership received
notice that it is a potentially responsible party with respect to an
environmental clean up site.
The Managing General Partner of the Partnership intends to maximize the
operating results and, ultimately, the net realizable value of each of the
Partnership's properties in order to achieve the best possible return for the
investors. Such results may best be achieved through property sales,
refinancings, debt restructurings or relinquishment of the assets. The
Partnership intends to evaluate each of its holdings periodically to determine
the most appropriate strategy for each of the assets.
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. The non-managing General Partners and
the Limited Partners have no right to participate in the management or conduct
of such business and affairs. NPI-AP provides day-to-day management services for
the Partnership's investment properties.
The business in which the Partnership is engaged is highly competitive, and the
Partnership is not a significant factor in its industry. Each of its apartment
properties is located in or near a major urban area and, accordingly, competes
for rentals not only with similar apartment properties in its immediate area but
with hundreds of similar apartment properties throughout the urban area. Such
competition is primarily on the basis of location, rents, services and
amenities. In addition, the Partnership competes with significant numbers of
individuals and organizations (including similar partnerships, real estate
investment trusts and financial institutions) with respect to the sale of
improved real properties, primarily on the basis of the prices and terms of such
transactions.
ITEM 2. DESCRIPTION OF PROPERTIES:
The following table sets forth the Partnership's investment in properties:
Date of
Property Purchase Type of Ownership Use
Wood Creek Apartments 5/84 Fee ownership subject to Apartment
Mesa, Arizona first mortgage 432 units
Plantation Creek 6/84 Fee ownership subject to Apartment
Apartments first mortgage 484 units
Atlanta, Georgia
Stoney Creek Apartments 6/85 Fee ownership subject to Apartment
Dallas, Texas first mortgage 364 units
Four Winds Apartments 9/85 Fee ownership subject to Apartment
Overland, Kansas first mortgage 350 units
Promontory Point 10/85 Fee ownership subject to Apartment
Apartments first mortgage 252 units
Austin, Texas
Cooper's Pointe Apartments 11/85 Fee ownership subject to Apartment
Charleston, South first mortgage 192 units
Carolina
Hampton Greens Apartments 12/85 Fee ownership subject to Apartment
Dallas, Texas first and second mortgages 309 units
Autumn Run Apartments 6/86 Fee ownership subject to Apartment
Naperville, Illinois first mortgage 320 units
Copper Mill Apartments 9/86 Fee ownership subject to Apartment
Richmond, Virginia first mortgage 192 units
SCHEDULE OF PROPERTIES:
(dollar amounts in thousands)
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
Wood Creek $ 16,105 $ 6,339 5-30 yrs. SL $ 4,875
Plantation Creek 25,470 10,025 5-30 yrs. SL 8,239
Stoney Creek 14,052 5,461 5-30 yrs. SL 5,737
Four Winds 16,182 5,494 5-30 yrs. SL 6,549
Promontory Point 11,639 4,294 5-30 yrs. SL 5,083
Cooper's Pointe 7,400 2,954 5-30 yrs. SL 2,628
Hampton Greens 12,128 4,375 5-30 yrs. SL 5,300
Autumn Run 17,422 6,080 5-30 yrs. SL 7,267
Copper Mill 9,327 3,156 5-30 yrs. SL 5,674
Total $129,725 $ 48,178 $ 51,352
See "Note A" included in "Item 7, Financial Statements" for a description of the
Partnership's depreciation policy.
SCHEDULE OF MORTGAGES:
(Dollar amounts in thousands)
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1996 Rate Amortized Date Maturity
Wood Creek $ 12,810 7.93% 30 yrs 2/2006 $ 11,319
Plantation Creek 15,788 7.93% 30 yrs 2/2006 13,952
Stoney Creek 6,995 7.88% 30 yrs 1/2006 6,180
Four Winds 9,607 7.93% 30 yrs 2/2006 8,489
Promontory Point 2,840 (1) (2) 12/1999 2,840
Cooper's Pointe 4,217 7.88% 30 yrs 1/2006 3,725
Hampton Greens 5,755 7.88% 30 yrs 1/2006 5,084
Autumn Run 9,100 7.33% (2) 11/2003 9,100
Copper Mill 6,052 7.88% 30 yrs 1/2006 5,347
Total $ 73,164
(1) Libor plus three and three-quarters percent.
(2) Interest only payments.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average Annual Average
Rental Rates Occupancy
Property 1996 1995 1996 1995
Wood Creek $6,853/unit $6,554/unit 95% 97%
Plantation Creek 8,526/unit 8,062/unit 96% 95%
Stoney Creek 5,873/unit 5,611/unit 93% 94%
Four Winds 6,843/unit 6,513/unit 96% 97%
Promontory Point 7,047/unit 6,745/unit 92% 97%
Cooper's Pointe 6,222/unit 6,197/unit 98% 95%
Hampton Greens 5,727/unit 5,409/unit 94% 97%
Autumn Run 8,790/unit 8,577/unit 93% 95%
Copper Mill 8,182/unit 7,701/unit 93% 96%
As noted under "Item 1, Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other apartment complexes in the area. The Managing General
Partner believes that all of the properties are adequately insured. All of the
lease terms are for one year or less. No individual tenant occupies 10% or more
of the available rentable space.
Real estate taxes (in thousands) and rates in 1996 for each property were:
1996 1996
Billing Rate
Wood Creek $ 140 6.24
Plantation Creek 217 4.03
Stoney Creek 208 1.30
Four Winds 150 1.32
Promontory Point 206 2.61
Cooper's Pointe 91 1.55
Hampton Greens 191 2.59
Autumn Run 329 6.84
Copper Mill 75 0.96
ITEM 3. LEGAL PROCEEDINGS
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature. The Managing General Partner of the Partnership believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The unit holders of the Partnership did not vote on any matter during the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Limited Partnership unit holders are entitled to certain distributions as
provided in the Partnership Agreement. No market for the limited partnership
units exists, nor is any expected to develop.
The Partnership distributed $2,549,000 ($30.76 per limited partnership unit) to
the limited partners and $52,000 to the general partners in 1996 from the
proceeds received from the sale of the Partnership's Monterrey Village property.
As of December 31, 1996, the approximate number of holders of the 82,848 limited
partnership units outstanding was 5,828.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership's net loss for the year ended December 31, 1996, was
approximately $1,539,000 versus a net loss of approximately $425,000 for the
year ended December 31, 1995. The increase in loss is primarily attributable to
the gain on disposition of the Partnership's Monterey Village Apartments in
August 1995, of approximately $2,033,000. Also contributing to the increase is
an increase in general and administrative expense and a reduction in rental
income. The decrease in rental income due to the sale of Monterey Village
Apartments was partially offset by increases in rental rates at the remaining
properties. The increase in general and administrative expense is due to
increased professional fees in 1996 as compared to 1995. Offsetting the above
changes are decreases in interest, operating and depreciation expenses in 1996.
The decrease in interest is due to the refinancing of eight properties, the
assumption of the mortgage that encumbered Monterey Village by the purchaser at
the 1995 sale date and the reduced principal balance at Promontory Point due to
the $1,500,000 paydown as discussed below. Operating expense decreased for the
year ended December 31, 1996, as compared to the same period in 1995 due to the
sale of Monterey Village Apartments and due to reduced expenditures at
Plantation Creek Apartments, Cooper's Pointe Apartments, and Hampton Greens
Apartments. The decreases in operating expenditures at Plantation Creek and
Cooper's Pointe were due to exterior and interior painting costs at both
properties in 1995. There was also a reduction of floor covering repairs at
Plantation Creek in 1996 as compared to 1995. The decreases in operating
expenses at Hampton Greens in 1996 as compared to 1995 is due to the receipt in
1996 of insurance proceeds related to wind damage sustained at the property and
a reduction in floor covering repairs. These decreases in operating expenses
were partially offset by increases in operating expenses at Promontory Point
Apartments. The increase at Promontory Point Apartments was due to increased
advertising in an effort to increase occupancy and professional fees. The
decrease in depreciation expense is due to the sale of Monterey Village
Apartments in August 1995.
On August 18, 1995, the Partnership sold Monterey Village Apartments to an
unaffiliated third party for $10,609,000. After assumption of the mortgage
balance of $7,359,000 and closing costs, the Partnership received net proceeds
of $2,926,000. For financial reporting purposes the sale resulted in a gain on
disposition of $2,033,000. The Partnership also recognized an extraordinary loss
on extinguishment of debt of $217,000 in 1995 due to the write-off of
unamortized loan costs. Additionally, the Partnership recorded extraordinary
losses on debt extinguishment related to the refinancings of certain of its
investment properties as discussed below.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rentals and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
Capital Resources and Liquidity
At December 31, 1996, the Partnership had unrestricted cash of $1,111,000 as
compared to $4,717,000 at December 31, 1995. Net cash provided by operating
activities increased primarily as a result of the reduction in operating
expenditures as discussed above and due to timing payments on trade payables.
The increase in cash used in investing activities is due to the net proceeds on
disposition of Monterey Village in 1995 and an increase in property improvements
and replacements in 1996. The increase in cash used in financing activities is
due to the Partnership obtaining new financing on four of its properties in 1996
as discussed below. In addition, the Partnership paid a distribution of
approximately $2,601,000 to its partners in the first quarter of 1996.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership 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 Partnership's only unused source of
liquidity.
On January 17, 1996, the Partnership refinanced the mortgages encumbering Wood
Creek, Four Winds, and Plantation Creek. The new mortgages carry a stated
interest rate of 7.93% and are amortized over 30 years with balloon payments due
on February 1, 2006. On November 15, 1996, the Partnership refinanced the
mortgage encumbering Autumn Run. The new mortgage carries a stated interest
rate of 7.33%. The new mortgage matures November 1, 2003. Loan costs are being
amortized over the lives of the loans.
The refinancing of Wood Creek replaced indebtedness of $12,500,000 with a new
mortgage in the amount of $12,900,000. Total capitalized loan costs were
$318,000. The early extinguishment of debt resulted in an extraordinary loss of
$350,000, arising from prepayment penalties and the write-off of unamortized
loan costs. Wood Creek was also required to pay a release price of $1,500,000
which was used to paydown the mortgage on Promontory Point. In connection with
the refinancing, the Partnership was required to transfer all the assets and
liabilities of Wood Creek Apartments to a newly formed subsidiary, Wood Creek
CPGF 22, L.P.
The refinancing of Four Winds replaced indebtedness of $10,410,000 with a new
mortgage in the amount of $9,675,000. Total capitalized loan costs were
$296,000. In connection with the refinancing, the Partnership was required to
transfer all the assets and liabilities of Four Winds Apartments to a newly
formed subsidiary, Four Winds CPGF 22, L.P.
The refinancing of Plantation Creek replaced indebtedness of $13,045,000 with a
new mortgage in the amount of $15,900,000. Total capitalized loan costs were
$413,000. The early extinguishment of debt resulted in an extraordinary loss of
$131,000, arising from prepayment penalties and the write-off of unamortized
loan costs. In connection with the refinancing, the Partnership was required to
transfer all the assets and liabilities of Plantation Creek Apartments to a
newly formed subsidiary, Plantation Creek CPGF 22, L.P.
The refinancing of Autumn Run replaced indebtedness of $10,563,000 with a new
mortgage in the amount of $9,100,000. Total capitalized loan costs were
$180,000.
On December 29, 1995, the Partnership refinanced the mortgages encumbering
Hampton Greens, Stoney Creek, Cooper's Pointe and Copper Mill. The new mortgages
carry a stated interest rate of 7.88% and are amortized over 30 years with
balloon payments due on January 1, 2006.
The Partnership refinanced the mortgage encumbering Hampton Greens Apartments
with a new first mortgage in the amount of $5,800,000. The loan may not be
prepaid without penalty. Loan costs are being amortized over the life of the
loan. In connection with the refinancing, the Partnership was required to
transfer all the assets and liabilities of Hampton Greens Apartments to a newly
formed subsidiary, Hampton Greens CPGF 22, L.P.
The Partnership refinanced the mortgage encumbering Stoney Creek Apartments with
a new first mortgage in the amount of $7,050,000. The loan may not be prepaid
without penalty. In connection with the refinancing, the Partnership was
required to transfer all the assets and liabilities of Stoney Creek Apartments
to a newly formed subsidiary, Stoney Creek CPGF 22, L.P.
The Partnership refinanced the mortgage encumbering Cooper's Pointe Apartments
with a new first mortgage in the amount of $4,250,000. The loan may not be
prepaid without penalty. In connection with the refinancing, the Partnership
was required to transfer all the assets and liabilities of Cooper's Pointe
Apartments to a newly formed subsidiary, Cooper's Pointe CPGF 22, L.P.
The Partnership refinanced the mortgage encumbering Copper Mill Apartments with
a new first mortgage in the amount of $6,100,000. The loan may not be prepaid
without penalty. Loan costs are being amortized over the life of the loan. In
connection with the refinancing, the Partnership was required to transfer all
the assets and liabilities of Copper Mill Apartments to a newly formed, wholly-
owned subsidiary, Copper Mill CPGF 22, L.P.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the Partnership. The mortgage
indebtedness of $73,164,000 is amortized over varying periods with balloon
payments ranging from December 1999, to February 2006. Future cash
distributions will depend on the levels of cash generated from operations,
property sales, and the availability of cash reserves. No cash distributions
were paid in 1995. During the first three months of 1996, the Partnership
distributed $2,549,000 ($30.76 per limited partnership unit) to the limited
partners and $52,000 to the general partners from the proceeds received from the
sale of the Partnership's Monterey Village property.
ITEM 7. FINANCIAL STATEMENTS
CENTURY PROPERTIES GROWTH FUND XXII
LIST OF FINANCIAL STATEMENTS
Independent Auditors' Report
Consolidated Balance Sheet - December 31, 1996
Consolidated Statements of Operations - Years ended December 31, 1996 and
1995
Consolidated Statements of Changes in Partners' Capital - Years ended
December 31, 1996 and 1995
Consolidated Statements of Cash Flows - Years ended December 31, 1996 and 1995
Notes to Consolidated Financial Statements
Independent Auditors' Report
To the Partners
Century Properties Growth Fund XXII
Greenville, South Carolina
We have audited the accompanying consolidated balance sheet of Century
Properties Growth Fund XXII (a limited partnership)(the "Partnership") and its
subsidiaries as of December 31, 1996, and the related consolidated statements of
operations, partners' equity and cash flows for each of the two years in the
period ended December 31, 1996. 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 audits 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 Growth Fund XXII and its subsidiaries as of December 31, 1996, and
the results of its operations and its cash flows for each of the two years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
s/Imowitz Koenig & Co., LLP
New York, New York
February 14, 1997
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1996
Assets
Cash and cash equivalents $ 1,111
Restricted cash 500
Other assets 2,457
Investment properties:
Land $ 14,396
Buildings and related personal property 115,329
129,725
Less accumulated depreciation (48,178) 81,547
Deferred financing costs, net 1,753
$ 87,368
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable and accrued expenses $ 2,572
Mortgages payable 73,164
Partners' (Deficit) Capital
General partner's $ (7,407)
Limited partners' (82,848 units issued
and outstanding) 19,039 11,632
$ 87,368
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended
December 31,
1996 1995
Revenues:
Rental income $ 19,359 $ 19,895
Other income 1,031 782
Gain on disposition of property -- 2,033
Total revenues 20,390 22,710
Expenses:
Operating 10,601 10,964
Interest 6,591 7,192
Depreciation 3,865 4,002
General and administrative 391 266
Total expenses 21,448 22,424
(Loss) income before extraordinary item (1,058) 286
Extraordinary loss on extinguishment of debt (481) (711)
Net loss $ (1,539) $ (425)
Net loss allocated to general partner $ (182) $ --
Net loss allocated to limited partners (1,357) (425)
Net loss $ (1,539) $ (425)
Net loss per limited partnership unit:
(Loss) income before extraordinary item $ (11.26) $ 2.44
Extraordinary loss (5.12) (7.57)
Net loss per limited partnership unit $ (16.38) $ (5.13)
Distribution per limited partnership unit $ 30.76 $ --
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' (deficit) capital at
December 31, 1994 82,848 $ (7,173) $ 23,370 $16,197
Net loss for the year ended
December 31, 1995 -- -- (425) (425)
Partners' (deficit) capital at
December 31, 1995 82,848 (7,173) 22,945 15,772
Net loss for the year ended
December 31, 1996 -- (182) (1,357) (1,539)
Distributions to partners -- (52) (2,549) (2,601)
Partners' (deficit) capital at
December 31, 1996 82,848 $ (7,407) $ 19,039 $11,632
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended
December 31,
1996 1995
Operating activities:
Net loss $ (1,539) $ (425)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation 3,865 4,002
Amortization of mortgage costs 303 150
Extraordinary loss on extinguishment of debt 481 711
Gain on disposition of property -- (2,033)
Change in accounts:
Other assets (1,087) (324)
Accounts payable and accrued expenses 1,224 (147)
Net cash provided by operating activities 3,247 1,934
Cash flows from investing activities:
Net proceeds on disposition of property -- 2,926
Property improvements and replacements (1,412) (430)
Net cash (used in) provided by investing (1,412) 2,496
activities
Cash flows from financing activities:
Mortgage principal payments (504) (2,037)
Repayment of mortgage notes payable (48,018) (20,582)
Proceeds from long-term borrowings 47,575 23,200
Loan costs (1,491) (506)
Debt extinguishment costs (402) (263)
Distributions paid to partners (2,601) --
Net cash used in financing activities (5,441) (188)
Net (decrease) increase in cash and cash equivalents (3,606) 4,242
Cash and cash equivalents at beginning of period 4,717 475
Cash and cash equivalents at end of period $ 1,111 $ 4,717
Supplemental information:
Cash paid for interest $ 5,886 $ 7,142
Sale of property and assumption of mortgage in 1995 - See "Note F"
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
Notes to Consolidated Financial Statements
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
Century Properties Growth Fund XXII (the "Partnership") is a California limited
partnership organized in August 1984, to acquire and operate residential
apartment complexes. The Partnership's general partner is Fox Partners IV, a
California general partnership. The general partners of Fox Partners IV are Fox
Capital Management Corporation (the "Managing General Partner" or "FCMC"), a
California corporation, Fox Realty Investors ("FRI"), a California general
partnership and Fox Associates 84, a California general partnership. The
capital contributions of $82,848,000 ($1,000 per unit) were made by the limited
partners.
Consolidation:
The consolidated financial statements include the statements of the Partnership
and eight subsidiaries. All significant intercompany transactions and balances
have been eliminated.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with a maturity, when
purchased, of three months or less to be cash equivalents. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Investment Properties in Real Estate:
In 1995 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," which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. The impairment loss is measured by
comparing the fair value of the asset to its carrying amount. The effect of
adoption was not material.
Depreciation:
Depreciation is calculated by the straight-line method over the estimated lives
of the rental properties and related personal property ranging from 5 to 30
years.
Loan Costs:
Loan costs of $2,065,000 are included in "Deferred financing costs, net" in the
accompanying consolidated balance sheet and are being amortized on a straight-
line basis over the life of the loans. At December 31, 1996, accumulated
amortization is $312,000. Amortization of loan costs is included in interest
expense.
Leases:
The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases.
Fair Value:
In 1995, the Partnership implemented Statement of Financial Accounting Standards
No. 107, "Disclosure about Fair Value of Financial Instruments," which requires
disclosure of fair value information about financial instruments for which it is
practicable to estimate that value. The carrying amount of the Partnership's
cash and cash equivalents approximates fair value due to short-term maturities.
The Partnership estimates the fair value of its fixed rate mortgage by
discounted cash flow analysis, based on estimated borrowing rates currently
available to the Partnership ("Note C"). The fair value of the mortgages
approximates their carrying value.
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.
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
consolidated financial statements of the Partnership.
Reclassifications:
Certain reclassifications have been made to the 1995 balances to conform to the
1996 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control
of NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner
of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI
Equity is a wholly-owned subsidiary of National Property Investors, Inc.
("NPI"). In connection with these transactions, affiliates of Insignia appointed
new officers and directors of NPI Equity and FCMC.
The following payments were made to the Managing General Partner and affiliates
in 1996 and 1995 (in thousands):
For the Year Ended
December 31,
1996 1995
Property management fees (included in operating
expenses) $ 1,010 $ 1,011
Reimbursement for services of affiliates (included
in investment properties, general and
administrative expenses and operating expenses) 182 174
For the period from January 19, 1996, to December 31, 1996, the Partnership
insured its properties under a master policy through an agency and insurer
unaffiliated with the Managing General Partner. An affiliate of the Managing
General Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the Managing General Partner who
received payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations is not
significant.
An affiliate of the Managing General Partner was paid fees of $43,000 relating
to a successful real estate tax appeal on the Partnership's investment
properties during the year ended December 31, 1995. This fee is included in
operating expenses.
In connection with the refinancing of Hampton Greens, Stoney Creek, Cooper's
Pointe and Copper Mill in December 1995, an affiliate of the Managing General
Partner received $116,000. This amount is included in "Deferred financing
costs, net."
In connection with the refinancing of Wood Creek, Four Winds, and Plantation
Creek, Insignia Capital Advisors, Inc., an affiliate of the Managing General
Partner, received $192,000 in January 1996. In connection with the refinancing
of Autumn Run in November 1996, an affiliate of the Managing General Partner
received $14,000. These amounts are included in "Deferred financing costs,
net."
In addition, approximately $574,000 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.
In accordance with the partnership agreement, the general partner received a
Partnership management incentive allocation equal to ten percent of net and
taxable losses and cash distributions. The general partner was also allocated
its two percent continuing interest in the Partnership's net and taxable losses
and cash distributions after the above allocation of the Partnership management
incentive. Gains from the disposition of Partnership properties were allocated
first to the general partner to the extent of distributions received or they are
entitled to receive, then 12% of the remainder until the deficit in their
capital account is eliminated.
On March 29, 1996, an affiliate of Insignia acquired the corporate general
partners owning 1% of the subsidiary partnerships which own the Wood Creek
Apartments, Four Winds Apartments, Plantation Creek Apartments, Hampton Greens
Apartments, Stoney Creek Apartments, Cooper's Pointe Apartments, Copper Mill
Apartments and Promontory Point Apartments.
NOTE C - MORTGAGES PAYABLE
The principal terms of mortgages payable are as follows (in thousands):
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1996
Wood Creek $ 94 7.93% 2/2006 $ 11,319 $ 12,810
Plantation Creek 116 7.93% 2/2006 13,952 15,788
Stoney Creek 51 7.88% 1/2006 6,180 6,995
Four Winds 71 7.93% 2/2006 8,489 9,607
Promontory Point 23 (1) (2) 12/1999 2,840 2,840
Cooper's Pointe 31 7.88% 1/2006 3,725 4,217
Hampton Greens 42 7.88% 1/2006 5,084 5,755
Autumn Run 56 (1) 7.33% 11/2003 9,100 9,100
Copper Mill 44 7.88% 1/2006 5,347 6,052
$ 73,164
(1) Interest only monthly payments.
(2) Libor plus three and three-quarters percent.
The mortgages payable are nonrecourse and are secured by pledge of the
Partnership's rental properties and by pledge of revenues from the respective
rental properties. Certain of the notes include prepayment penalties if repaid
prior to maturity.
Scheduled principal payments of the mortgages payable subsequent to December 31,
1996, are as follows:
1997 $ 561
1998 608
1999 3,497
2000 711
2001 770
Thereafter 67,017
$ 73,164
NOTE D - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
(Dollar amounts in thousands)
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
SUBSIDIARIES:
Wood Creek $ 12,810 $ 2,130 $ 13,440 $ 535
Plantation Creek 15,788 2,653 20,827 1,990
Stoney Creek 6,995 1,803 12,509 (260)
Four Winds 9,607 1,363 14,288 531
Promontory Point 2,840 1,690 10,129 (180)
Cooper's Pointe 4,217 513 6,696 191
Hampton Greens 5,755 2,086 9,474 568
Copper Mill 6,052 933 8,061 333
64,064 13,171 95,424 3,708
PARTNERSHIP:
Autumn Run 9,100 1,462 14,957 1,003
Total $ 73,164 $ 14,633 $ 110,381 $ 4,711
<TABLE>
<CAPTION>
Gross Amount at Which Carried
At December 31, 1996
Buildings Accumu- Depre-
And Related lated Year of ciable
Personal Depre- Constru- Life-
Description Land Property Total ciation ction Years
<S> <C> <C> <C> <C> <C> <C>
SUBSIDIARIES:
Wood Creek $ 2,117 $ 13,988 $ 16,105 $ 6,339 1985 5-30 yrs.
Plantation Creek 2,655 22,815 25,470 10,025 1978 5-30 yrs.
Stoney Creek 1,689 12,363 14,052 5,461 1983 5-30 yrs.
Four Winds 1,357 14,825 16,182 5,494 1987 5-30 yrs.
Promontory Point 1,595 10,044 11,639 4,294 1984 5-30 yrs.
Cooper's Pointe 510 6,890 7,400 2,954 1986 5-30 yrs.
Hampton Greens 2,086 10,042 12,128 4,375 1986 5-30 yrs.
Copper Mill 929 8,398 9,327 3,156 1987 5-30 yrs.
12,938 99,365 112,303 42,098
PARTNERSHIP:
Autumn Run 1,458 15,964 17,422 6,080 1987 5-30 yrs.
Total $ 14,396 $ 115,329 $ 129,725 $ 48,178
</TABLE>
Reconciliation of Investment Properties and Accumulated Depreciation:
December 31,
1996 1995
Investment Properties
Balance at beginning of year $128,394 $139,861
Sale of investment property -- (11,897)
Disposal of property (81) --
Property Improvements 1,412 430
Balance at end of year $129,725 $128,394
December 31,
1996 1995
Accumulated Depreciation
Balance at beginning of year $ 44,342 $ 43,985
Sale of investment property -- (3,645)
Disposal of property (29) --
Additions charged to expense 3,865 4,002
Balance at end of year $ 48,178 $44,342
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996 and 1995, is $128,845,000 and $127,398,000, respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1996 and 1995, is $77,493,000 and $72,780,000, respectively.
NOTE E - REFINANCING AND EXTRAORDINARY LOSS
On January 17, 1996, the Partnership refinanced the mortgages encumbering Wood
Creek, Four Winds, and Plantation Creek. The new mortgages carry a stated
interest rate of 7.93% and are amortized over 30 years with balloon payments due
on February 1, 2006. On November 15, 1996, the Partnership refinanced the
mortgage encumbering Autumn Run. The new mortgage carries a stated interest
rate of 7.33%. The new mortgage matures November 1, 2003. Loan costs are being
amortized over the lives of the loans.
The refinancing of Wood Creek replaced indebtedness of $12,500,000 with a new
mortgage in the amount of $12,900,000. Total capitalized loan costs were
$318,000. The early extinguishment of debt resulted in an extraordinary loss of
$350,000, arising from prepayment penalties and the write-off of unamortized
loan costs. Wood Creek was also required to pay a release price of $1,500,000
which was used to paydown the mortgage on Promontory Point. In connection with
the refinancing, the Partnership was required to transfer all the assets and
liabilities of Wood Creek Apartments to a newly formed subsidiary, Wood Creek
CPGF 22, L.P.
The refinancing of Four Winds replaced indebtedness of $10,410,000 with a new
mortgage in the amount of $9,675,000. Total capitalized loan costs were
$296,000. In connection with the refinancing, the Partnership was required to
transfer all the assets and liabilities of Four Winds Apartments to a newly
formed subsidiary, Four Winds CPGF 22, L.P.
The refinancing of Plantation Creek replaced indebtedness of $13,045,000 with a
new mortgage in the amount of $15,900,000. Total capitalized loan costs were
$413,000. The early extinguishment of debt resulted in an extraordinary loss of
$131,000, arising from prepayment penalties and the write-off of unamortized
loan costs. In connection with the refinancing, the Partnership was required to
transfer all the assets and liabilities of Plantation Creek Apartments to a
newly formed subsidiary, Plantation Creek CPGF 22, L.P.
The refinancing of Autumn Run replaced indebtedness of $10,563,000 with a new
mortgage in the amount of $9,100,000. Total capitalized loan costs were
$180,000.
On December 29, 1995, the Partnership refinanced the mortgages encumbering
Hampton Greens, Stoney Creek, Cooper's Pointe and Copper Mill. The new mortgages
carry a stated interest rate of 7.88% and are amortized over 30 years with
balloon payments due on January 1, 2006.
The Partnership refinanced the mortgage encumbering Hampton Greens Apartments
with a new first mortgage in the amount of $5,800,000. The loan may not be
prepaid without penalty. Loan costs are being amortized over the life of the
loan. In connection with the refinancing, the Partnership was required to
transfer all the assets and liabilities of Hampton Greens Apartments to a newly
formed subsidiary, Hampton Greens CPGF 22, L.P.
The Partnership refinanced the mortgage encumbering Stoney Creek Apartments with
a new first mortgage in the amount of $7,050,000. The loan may not be prepaid
without penalty. In connection with the refinancing, the Partnership was
required to transfer all the assets and liabilities of Stoney Creek Apartments
to a newly formed subsidiary, Stoney Creek CPGF 22, L.P.
The Partnership refinanced the mortgage encumbering Cooper's Pointe Apartments
with a new first mortgage in the amount of $4,250,000. The loan may not be
prepaid without penalty. In connection with the refinancing, the Partnership
was required to transfer all the assets and liabilities of Cooper's Pointe
Apartments to a newly formed subsidiary, Cooper's Pointe CPGF 22, L.P.
The Partnership refinanced the mortgage encumbering Copper Mill Apartments with
a new first mortgage in the amount of $6,100,000. The loan may not be prepaid
without penalty. Loan costs are being amortized over the life of the loan. In
connection with the refinancing, the Partnership was required to transfer all
the assets and liabilities of Copper Mill Apartments to a newly formed
subsidiary, Copper Mill CPGF 22, L.P.
NOTE F - SALE OF INVESTMENT PROPERTY
On August 18, 1995, the Partnership sold Monterey Village Apartments to an
unaffiliated third party for $10,609,000. After assumption of the mortgage
balance of $7,359,000 and closing costs, the Partnership received net proceeds
of $2,926,000. For financial reporting purposes the sale resulted in a gain on
disposition of $2,033,000. The Partnership also recognized an extraordinary loss
on extinguishment of debt of $217,000 in 1995 due to the write-off of
unamortized loan costs.
NOTE G - DISTRIBUTIONS
In January, 1996, the Partnership distributed $2,549,000 ($30.76 per limited
partnership unit) to the limited partners and $52,000 to the general partners
from proceeds from the sale of Monterey Village Apartments in August 1995.
NOTE H - INCOME TAXES
The differences between the method of accounting for income tax reporting and
the accrual method of accounting used in the consolidated financial statements
are as follows (in thousands, except unit data):
1996 1995
Net loss as reported $ (1,539) $ (425)
Differences resulted from:
Depreciation (842) (1,085)
Gain on sale of property -- 582
Construction period interest 35 (187)
Prepaid rent 70 --
Other 58 48
Net loss tax method $ (2,218) $ (1,067)
Taxable loss per limited partnership unit $ (26) $ (12)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
1996
Partners' equity as reported $ 11,632
Differences resulted from:
Deferred sales commissions and
organization costs 12,427
Depreciation (29,121)
Interest expense 322
Payments credited to property and
improvements 2,014
Construction period interest amortization (3,498)
Other 181
Partners' deficit-income tax method $ (6,043)
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements with Imowitz Koenig & Co. LLP regarding the 1996 or
1995 audits of the Partnership's financial statements.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Partnership has no officers or directors. Fox Capital Management
Corporation, the managing general partner of the Partnership's general partner
(the "Managing General Partner"), manages and controls substantially all of the
Partnership's affairs and has general responsibility in all matters affecting
its business.
The names, ages and positions held by executive officers and directors of the
Managing General Partners, as of December 31, 1996, are as follows:
Name Age Position
William H. Jarrard, Jr. 50 President and Director
Ronald Uretta 41 Vice President and
Treasurer
John K. Lines 37 Vice President and
Secretary
Kelley M. Buechler 39 Assistant Secretary
William H. Jarrard, Jr. has been President and Director of the Managing General
Partner since June 1996 and Managing Director - Partnership Administration of
Insignia since January 1991. Mr. Jarrard served as Managing Director -
Partnership Administration and Asset Management from July 1994 to January 1996.
During the five years prior to joining Insignia in 1991, he served in similar
capacities for U. S. Shelter.
Ronald Uretta has been Vice President and Treasurer of the Managing General
Partner since June 1996 and Insignia's Chief Operating Officer since August
1996. From January 1992 to August 1996, Mr. Uretta was Insignia's Chief
Financial Officer. Mr. Uretta was Insignia's Secretary from January 1992 to
June 1994. From May 1988 until September 1990, Mr. Uretta was a self-employed
financial consultant. From January 1978 until January 1988, Mr. Uretta was
employed by Veltri Raynor & Company, independent certified public accountants.
John K. Lines has been Vice President and Secretary of the Managing General
Partner since June 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.
Kelley M. Buechler has been Assistant Secretary of the Managing General Partner
since June 1996. Ms. Buechler has been Assistant Secretary of Insignia since
1991. During the five years prior to joining Insignia in 1991, she served in
similar capacities for U. S. Shelter.
No family relationships exist among any of the officers or directors of the
Managing General Partner.
ITEM 10. EXECUTIVE COMPENSATION
The Partnership 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 12, Certain Relationships and Related Transactions").
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Partnership 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 Partnership in accordance with the terms of the Partnership
Agreement.
The following table sets forth certain information regarding limited partnership
units of the Partnership owned by each person who is known by the Partnership to
own beneficially or exercise voting or dispositive control over more than 5% of
the Partnership'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 December 31, 1996.
Name and address of Amount and nature of
Beneficial Owner Beneficial Owner % of Class
Insignia NPI LLC 17,022.5 20.6%
All directors and
executive officers as
a group -- --
There are no arrangements known to the Partnership, the operation of which may,
at a subsequent date, result in a change in control of the Partnership.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control
of NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner
of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI
Equity is a wholly-owned subsidiary of National Property Investors, Inc.
("NPI"). In connection with these transactions, affiliates of Insignia appointed
new officers and directors of NPI Equity and FCMC.
The following payments were made to the Managing General Partner and affiliates
in 1996 and 1995 (in thousands):
For the Year Ended
December 31,
1996 1995
Property management fees (included in operating
expenses) $ 1,010 $ 1,011
Reimbursement for services of affiliates (included
in investment properties, general and
administrtive expenses and operating expenses) 182 174
For the period from January 19, 1996, to December 31, 1996, the Partnership
insured its properties under a master policy through an agency and insurer
unaffiliated with the Managing General Partner. An affiliate of the Managing
General Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the Managing General Partner who
received payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations is not
significant.
An affiliate of the Managing General Partner was paid fees of $43,000 relating
to a successful real estate tax appeal on the Partnership's investment
properties during the year ended December 31, 1995. This fee is included in
operating expenses.
In connection with the refinancing of Hampton Greens, Stoney Creek, Cooper's
Pointe and Copper Mill in December 1995, an affiliate of the Managing General
Partner received $116,000. This amount is included in "Deferred financing
costs, net."
In connection with the refinancing of Wood Creek, Four Winds, and Plantation
Creek, Insignia Capital Advisors, Inc., an affiliate of the Managing General
Partner, received $192,000 in January 1996. In connection with the refinancing
of Autumn Run in November 1996, an affiliate of the Managing General Partner
received $14,000. These costs are included in "Deferred financing costs, net."
In addition, approximately $574,000 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.
As a result of its ownership of 17,022.5 limited partnership units, Insignia
Properties L.P. ("Insignia LP") could be in a position to significantly
influence all voting decisions with respect to the Partnership. 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 LP 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 LP has agreed
for the benefit of non-tendering unitholders, that is will vote its Units: (i)
against any proposal to increase the fees and other compensation payable by the
Partnership 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 LP's right to vote each
Unit acquired.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1996: None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CENTURY PROPERTIES GROWTH FUND XXII
By: FOX PARTNERS IV,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Managing General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
Date: March 27, 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 Partnership and
in the capacities and on the dates indicated.
Signature/Title Title Date
/s/William H. Jarrard, Jr. President and March 27, 1997
William H. Jarrard, Jr. Director
/s/Ronald Uretta Vice President March 27, 1997
Ronald Uretta and Treasurer
CENTURY PROPERTIES INCOME FUND XXII
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of
August 17, 1995, incorporated by reference to the
Partnership'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.
2.5 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
Partnership dated September 20, 1983, as amended on
June 13, 1989, and as thereafter supplemented
contained in the Partnership's Registration Statement
on Form S-11 (Reg. No. 2-79007).
10.1 Promissory Note dated December 27, 1994, from Century
Stoney Greens, L.P. to USL Capital Corporation
("USL") in the principal amount of $30,000,000
incorporated by reference to the Registrant's Form
10-K for the year ended December 31, 1994.
10.2 Form of Deed of Trust, Security Agreement, Assignment
of Leases and Rents, Fixture Filing and Financing
Statement by CSG to Howard E. Schreiber, Trustee for
the benefit of USL incorporated by reference to the
Registrant's Form 10-K for the year ended December
31, 1994.
10.3 Form of Promissory Note from the Registrant to Secore
Financial Corporation ("Secore") relating to the
refinancing of each of Cooper's Pointe, Copper Mill,
Four Winds, Hampton Greens, Plantation Creek, Stoney
Creek, and Wood Creek incorporated by reference to
the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1995.
10.4 Form of Mortgage/Deed of Trust and Security Agreement
from the Registrant to Secore relating to the
refinancing of each of Cooper's Pointe, Copper Mill,
Four Winds, Hampton Greens, Plantation Creek, Stoney
Creek and Wood Creek incorporated by reference to the
Partnership's Annual Report on Form 10-K for the year
ended December 31, 1995.
10.5 Multifamily Note dated June 14, 1996, by and between
the Partnership and Lehman Brothers Holdings, Inc.
for Autumn Run.
10.6 Multifamily Note dated November 1, 1996, by and
between the Partnership and Lehman Brothers Holdings,
Inc. for Autumn Run.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Growth Fund XXII 1996 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000740156
<NAME> CENTURY PROPERTIES GROWTH FUND XXII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,111
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 129,725
<DEPRECIATION> (48,178)
<TOTAL-ASSETS> 87,368
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 73,164
0
0
<COMMON> 0
<OTHER-SE> 11,632
<TOTAL-LIABILITY-AND-EQUITY> 87,368
<SALES> 0
<TOTAL-REVENUES> 20,390
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,448
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,591
<INCOME-PRETAX> (1,058)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,058)
<DISCONTINUED> 0
<EXTRAORDINARY> (481)
<CHANGES> 0
<NET-INCOME> (1,539)
<EPS-PRIMARY> (16.38)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
EXHIBIT 10.5
MULTIFAMILY NOTE
US $9,100,000.00 New York, New York
As of June 14, 1996
FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., or
order, the principal sum of NINE MILLION ONE HUNDRED THOUSAND AND 00/100 DOLLARS
($9,100,000.00) with interest on the unpaid principal balance from the date of
this Note, until paid, at the Applicable Interest Rate (defined herein).
Principal and interest shall be payable at 3 World Financial Center, New York,
New York 10285, or such other place as the holder hereof may designate in
writing, as follows:
(i) payments of interest only commencing on the first day of July, 1996
and thereafter on the first day of each succeeding calendar month up
to and including the Maturity Date (defined herein); and
(ii) the balance of the aggregate outstanding principal sum and all accrued
but unpaid interest thereon shall be due and payable on the Maturity
Date.
The term "Maturity Date" shall mean August 1, 1996, or any extension
thereof pursuant to the terms of this Note.
Interest on the principal sum of the Note shall be calculated on the basis
of the actual number of days elapsed in a three hundred sixty (360) day year.
All payments to Lender under the Note or this Agreement shall be made by wire
transfer of immediately available federal funds.
If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any default in
the payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.
Prepayments shall be applied against the outstanding principal balance of
this Note and shall not extend or postpone the due date of any subsequent
monthly installments or change the amount of such installments, unless the
holder hereof shall agree otherwise in writing.
From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the outstanding principal balance of this Note,
without giving notice to or obtaining the consent of the undersigned, the
successors or assigns of the undersigned or guarantors, and without liability on
the part of the holder hereof, the holder hereof may, at the option of the
holder hereof, extend the time for payment of said outstanding principal balance
or any part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, and agree in writing with the
undersigned to modify the rate of interest or period of amortization of this
Note or change the amount of the monthly installments payable hereunder.
Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors and endorsers, and
shall be binding upon them and their successors and assigns.
The indebtedness evidenced by this Note is secured by a Mortgage or Deed of
Trust dated as of the date hereof, and reference is made thereto for rights as
to acceleration of the indebtedness evidenced by this Note. This Note shall be
governed by the law of the jurisdiction in which the Property subject to the
Mortgage or Deed of Trust is located.
The undersigned shall pay any installment of principal and/or interest due
hereunder within ten (10) calendar days after such installment or principal
and/or interest is due. The undersigned shall pay any other installment due
hereunder or due in accordance with the terms of the Mortgage or Deed of Trust
securing this Note, within thirty (30) calender days of the date such
installment is due.
Century Properties Growth Fund XII, a California
limited partnership
By: Fox Partners IV, a California general
partnership, its managing general partner
By: Fox Capital Management Corporation, a
California corporation, its managing general
partner
By: /s/William H. Jarrard, Jr.
Name: William H. Jarrard, Jr.
Title: President
EXHIBIT 10.6
Loan No. 734105797
Autumn Run
MULTIFAMILY NOTE
US $9,100,000.00
New York, New York
As of November 1, 1996
FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., 3 World
Financial Center, New York, New York 10285, or order, the principal sum of Nine
Million One Hundred Thousand and 00/100 Dollars, with interest on the unpaid
principal balance from the date of this Note, until paid, at the rate of 7.33
percent per annum. Interest only shall be payable at 3 World Financial Center,
New York, New York 10285, or such other place as the holder hereof may designate
Fifty-Five Thousand Five Hundred Eighty-Five and 83/100 Dollars (US $55,585.83)
on the first day of each month beginning December 1, 1996, until the entire
indebtedness evidenced hereby is fully paid, except that any remaining
indebtedness, if not sooner paid, shall be due and payable on November 1, 2003.
If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any default in
the payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.
Prepayments shall be applied against the outstanding principal balance of
this Note and shall not extend or postpone the due date of any subsequent
monthly installments or change the amount of such installments, unless the
holder hereof shall agree otherwise in writing. The holder hereof may require
that any partial prepayments be made on the date monthly installments are due
and be in the amount of that part of one or more monthly installments which
would be applicable to principal.
From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the outstanding principal balance of this Note,
without giving notice to or obtaining the consent of the undersigned, the
successors or assigns of the undersigned or guarantors, and without liability on
the part of the holder hereof, the holder hereof may, at the option of the
holder hereof, extend the time for payment of said outstanding principal balance
or any part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, and agree in writing with the
undersigned to modify the rate of interest or period of amortization of this
Note or change the amount of the monthly installments payable hereunder.
Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors and endorsers, and
shall be binding upon them and their successors and assigns.
The indebtedness evidenced by this Note is secured by a Mortgage or Deed of
Trust dated as of the date hereof, and reference is made thereto for rights as
to acceleration of the indebtedness evidenced by this Note. This Note shall be
governed by the law of the jurisdiction in which the Property subject to the
Mortgage or Deed of Trust is located.
The undersigned shall pay any installment of interest due hereunder within
ten (10) calendar days after such installment of interest is due. The
undersigned shall pay any other installment due hereunder or due in accordance
with the terms of the Mortgage or Deed of Trust securing this Note, within
thirty (30) calendar days of the date such installment is due.
IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its representatives thereunto duly authorized.
BORROWER: CENTURY PROPERTIES GROWTH FUND XXII
a California limited partnership
BY: Fox Partners IV,
a California general partnership,
its general partner
BY: Fox Capital Management Corporation,
a California corporation, its
general partner
BY: /s/William H. Jarrard, Jr.
Name: William H. Jarrard. Jr.
Title: President
LENDER: LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman
Brothers Holdings Inc., a Delaware
Corporation
By:/s/Paul A. Hughson
Name: Paul A. Hughson
Title: Authorized Signatory
PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE.
This 1st day of November, 1996.
LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman
Brothers Holdings Inc., a Delaware
Corporation
By:/s/Larry J. Kravetz
Name: Larry J. Kravetz
Title: Authorized Signatory
