<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the year ended Commission File Number
December 31, 1997 0-11980
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
California 95-3887496
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3250 Ocean Park Blvd., Suite 380
Santa Monica, CA 90405
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code:
(310)450-6866
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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..........
The Registrant has no voting stock. The Registrant's outstanding securities
consist of units of limited partnership interest which have no readily
ascertainable market value since there is no immediate public trading market for
these securities on which to base a calculation of aggregate market value.
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I
Item 1. Business 1 - 3
Item 2. Properties 4
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II
Item 5. Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters 5
Item 6. Selected Financial Data 5
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6 - 7
Item 8. Financial Statements 7 - 17
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 18
PART III
Item 10. Directors and Executive Officers of the Partnership 18 - 19
Item 11. Executive Compensation 20
Item 12. Security Ownership of Certain Beneficial Owners and
Management 21
Item 13. Certain Relationships and Related Transactions 21
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 10-K 22 - 24
Signatures 25
</TABLE>
<PAGE>
PART I
ITEM 1 - BUSINESS:
Venetian Park Associates, Ltd., a California limited partnership (the
"Registrant") was formed on October 31, 1983 to acquire, own and operate a 295
unit rental housing project known as Venetian Park Apartments (the "Property")
on a parcel of real property located at 1540, 1555 and 1560 Mosaic Way and 4841
North Pershing Avenue, Stockton, California, for $10,925,000, in accordance with
Section 221(d) (4) of the National Housing Act, as amended, and the rules and
regulations of the Department of Housing and Urban Development pertaining
thereto. Norman Jacobson and Theodore J. Weill are the general partners (the
"General Partners") of Registrant.
Registrant's objective from the Property are to:
1) Generate sufficient cash flow from operations to (I) pay all expenses, (ii)
reduce the outstanding balances of loans secured by the Partnership
property, and (iii) thereafter, provide cash distributions to the Limited
Partners;
2) Have potential to appreciate in value in excess of the purchase price; and
3) To the extent possible, the Partners should not realize taxable income with
respect to a portion or all of distributions to the Limited Partners of
cash from operations. The fundamental objective was to acquire the
Property for its economic benefits.
Registrant's property is managed by Norman Jacobson Management Company, an
affiliate of one of the General Partners.
GEOGRAPHICAL DATA
VENETIAN PARK APARTMENTS
The Venetian Park Apartments is on a 16.4 acre site in the city of Stockton,
California. Stockton is the county seat of San Joaquin Valley and is
approximately 45 miles south of Sacramento, California, the state capital. The
Property is one block west of Stockton's major regional shopping center which
includes Macy's, Sears, Weinstock's, JCPenney's and Ward's. Delta College is
immediately across the street, and the University of the Pacific is one mile to
the south. Interstate Highway 5 is approximately one mile to the west, and
downtown Stockton is approximately three miles due south. The Property is
located in northern Stockton where nearly all of the city's population growth
has occurred during the past four decades. Stockton's current population is
210,500, an increase of 48,400 since 1982 when the population was 162,100.
Agriculture is Stockton's largest industry and is the home of five of
California's major grower and producer associations. Major manufacturing firms
include American Forest Products, Gold Bond Building Products, H. J. Heinz
Company, Safeway Meat Processing, Libbey-Owens-Ford Glass Company and Sun
Diamond Growers of California. Honda Company's district automobile parts center
is located in Stockton. American Savings Bank, with offices throughout
California, is headquartered in Stockton and is the city's largest financial
institution. The Port of Stockton, with approximately 1,000 employees, has been
one of the county's leading employers since 1933. It serves all the world's
major ports.
Stockton Metropolitan Airport is 10 minutes from Venetian Park Apartments. The
city is 85 miles from San Francisco and approximately two and a half hours
driving time from South Lake Tahoe, and less than three hours from Reno, Nevada.
<PAGE>
ITEM 1 - BUSINESS:
PROPERTY DESCRIPTION
VENETIAN PARK APARTMENTS
1540, 1555 AND 1560 MOSAIC WAY AND 4841 N. PERSHING AVENUE
STOCKTON, CALIFORNIA
Number of Units: 295 (41 buildings)
Lot Size: 16.44 acres (716,126 square feet)
Zoning: R-3, Apartment District
Parking: 317 carports, 122 open spaces
Year Built: 1976 through 1978 in four phases
Construction: 2-story wood frame and stucco except 12 one-story "villa"
units
AMENITIES
- Clubhouse (includes exercise room with universal gym and sauna)
- Extensive network of canals, waterways and fountains
- Individually-metered central forced-air conditioning and heating in
each unit
- Built-in electric ranges and ovens
- Dishwashers in all apartments
- Refrigerators in all apartments
- Garbage disposals
- Washer and dryer in each apartment
- 209 units with fireplaces
- Dining rooms with wet bar in all villas and townhouses
- Three swimming pools
- One tennis court with access to seven additional courts and 18 night-
lighted courts across Pershing Avenue
- Wall-to-wall carpets and drapes
- Large walk-in closets
- Outside storage units in each apartment
- Laundry rooms
<TABLE>
<CAPTION>
APARTMENT MIX
NUMBER TYPE SQ.FT.EA. TOTAL SQ.FT.
------ -------------------------------- --------- ------------
<S> <C> <C> <C>
60 Studios 510 30,600
92 1-bedroom, 1 bath 694 63,848
48 2-bedroom, 1 bath 900 43,200
72 2-bedroom, 2 bath 1,080 77,760
12 2-bedroom, 2 bath (Villa) 1,282 15,384
11 2-bedroom, 2.5 bath (Townhouse) 1,420 15,620
-----------
295 TOTAL LIVABLE SQUARE FOOTAGE 246,412
</TABLE>
2
<PAGE>
ITEM 1 - BUSINESS:
VENETIAN PARK APARTMENTS
SCHEDULED GROSS INCOME
BEGINNING JANUARY, 1998
RENTAL RATES
<TABLE>
<CAPTION>
TYPE SQ. FT. EA. CURRENT RENTS
- -------------------------------- ----------- -------------
<S> <C> <C>
Studio, 1 Bath 510 $321 - $456
1 Bedroom, 1 Bath 694 $395 - $536
2 Bedroom, 1 Bath 900 $500 - $566
2 Bedroom, 2 Bath 1,080 $500 - $630
2 Bedroom, 2 Bath (Villa) 1,282 $600 - $750
2 Bedroom, 2.5 Bath (Townhouse) 1,420 $650 - $750
</TABLE>
<TABLE>
<S> <C>
Scheduled monthly rents. . . . . . . . . . . . . . . . . . . . . $ 152,137
Scheduled monthly rents x 12 months. . . . . . . . . . . . . . . $1,825,644
Laundry income . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,000
Miscellaneous income (1) . . . . . . . . . . . . . . . . . . . . $ 35,000
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . $ 11,000
Total scheduled gross revenues . . . . . . . . . . . . . . . . . $1,894,644
</TABLE>
_______
(1) Net security deposit forfeitures plus late charges and miscellaneous
income.
3
<PAGE>
ITEM 2 - PROPERTIES:
LOAN INFORMATION
VENETIAN PARK APARTMENTS
Registrant's only property is a 295-unit apartment complex (herein the
"Property") consisting of 41 buildings on a 16.44 acre site at 1540, 1555 and
1560 Mosaic Way and 4841 North Pershing Avenue, Stockton, California, and
commonly known as the Venetian Park Apartments. The Property is subject to
encumbrances, consisting of four (one for each parcel) first trust deed notes
totaling $5,440,034 at December 31, 1997. The General Partners believe that the
foregoing Property is adequately covered by insurance. Also, at this time there
are no proposed programs for renovation, improvements or further development of
the Property.
<TABLE>
<CAPTION>
FIRST TRUST DEED INFORMATION
<S> <C>
Monthly payments:. . . . . . . . . . . . $44,792
Interest rate: . . . . . . . . . . . . . 7.5% and 8%
Amortization schedule: . . . . . . . . . 25 to 26 years
Year due and payable:. . . . . . . . . . until paid (2017 to 2018)
Loan balance when due: . . . . . . . . . $0
First trust deed holder: . . . . . . . . State Teachers' Retirement Board of
Ohio and Colonial Mortgage
Service Co.
Assumption fee:. . . . . . . . . . . . . $32,500
</TABLE>
<TABLE>
<CAPTION>
PHASE MONTHLY PAYMENT INTEREST RATE
----- --------------- -------------
<S> <C> <C>
I $14,951 8.0%
II 12,933 7.5%
III 15,894 7.5%
IV 1,013 7.5%
</TABLE>
ITEM 3 - LEGAL PROCEEDINGS:
A former employee has filed a complaint claiming discrimination with the State
of California. A Mutual Release & Settlement Agreement was procured on January
30, 1998. The Agreement provided for the defendant to pay $7,500. Venetian
Park's insurance carrier covered some of the legal costs. The insurance carrier
provided legal counsel for settling the case and paid the agreed upon settlement
amount.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
4
<PAGE>
PART II
ITEM 5 - MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDERS MATTERS:
The Limited Partnership Units have limited transferability and no established
public trade market has developed or is expected to develop in the future.
There were approximately 530 holders of Limited partnership Units at December
31, 1997, holding 6,041 Limited Partnership Units of Registrant. Although the
General Partners have an equity interest in Registrant, they were not issued
units. The general partners own 61 units, giving the partnership a total of
6,102 partner units.
During 1997, the Registrant paid $60,410 or $10 per unit; during 1996, paid $0;
and during 1995, paid $0. Additionally, the Registrant paid the General
Partners the following distributions: $608, $0 and $0 for 1997, 1996 and 1995,
respectively.
ITEM 6 - SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
YEAR OPERATIONAL DATA BALANCE SHEET DATA
- ---- ---------------- ------------------
NET INCOME TOTAL
NET INCOME (LOSS) PER LTD. LONG-TERM
NET REVENUES (LOSS) PARTNER UNIT TOTAL ASSETS DEBT
------------ ---------- --------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
1997 $1,506,921 $(332,327) $(54.46) $7,273,875 $5,440,034
1996 1,622,281 (13,062) (2.14) 7,757,031 5,555,954
1995 1,590,577 (188,611) (30.91) 7,837,361 5,663,545
1994 1,628,405 (98,415) (16.13) 8,139,694 5,763,051
1993 1,700,458 (79,447) (13.02) 8,399,527 5,855,221
</TABLE>
PER UNIT LIMITED PARTNER
CASH DISTRIBUTIONS
1997 $10
1996 0
1995 0
1994 10
1993 34
5
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
Results of Operations:
Operating income for 1997 decreased on a year-to-year basis; $1,506,921 in 1997
vs. $1,622,281 in 1996, a decline of $115,360. Net spendable last year was
($170,494) vs. $159,060 during 1996, a decline of $329,554.
The scheduled gross monthly rental roll for December 1997 was $152,097 vs.
$148,308, an increase of $3,789 or 2.55%. Rental losses (vacancies, net
delinquencies and rental discounts) amounted to $354,108 vs. $228,648 in 1996, a
jump of $125,460. However, the vacancy factor for December 1997 dropped to
10.72% of scheduled gross income vs. an average of 14.12% for the entire year.
At the same time, rental discounts have been slashed considerably due to a
noticeable improvement in the local rental market and amounted to $5,342 in
December 1997 vs. an average of $8,852 per month for the entire year. The
greatest part of the December 1997 rent discount total was comprised of rental
discounts offered in prior months schedules to become effective in later months.
The totals for coming months will gradually diminish. At the same time, vacancy
losses for 1997 were $254,089 vs. $202,739 for 1996, an increase of $51,350.
Operating expenses and replacements during 1997 were $1,114,411 vs. $884,245 the
prior year, an increase of $230,166. Repairs and maintenance were increased by
$83,200 when comparing 1997 and 1996. As reported previously, we spent $71,969
more in 1997 than in 1996 for exterior and interior painting, roof repairs,
boiler replacements, maintenance office construction and pool work.
Furthermore, replacement expenses last year exceeded the prior year by $55,081.
Exterior painting, which has been budgeted in phases over the entire project
will continue in 1998, along with roof replacements, driveway repairs and
replacement of broken cement walkways.
Cash on hand as of December 31, 1997 was $159,824 of which $108,486 consisted of
tenant refundable security deposits. At the same time the previous year, cash
on hand was $376,368 of which $89,460 consisted of tenant refundable security
deposits. The property's FHA replacement reserves as of December 31, 1997 stood
at $141,500 vs. $141,237 at the same time the year before.
With interest rates on conventional apartment loans now around 7% or less, and
with the current loan balance of only $5,440,034, we are working with various
lenders for the purpose of refinancing the Property provided such refinancing
can provide us with sufficient funds to complete the painting and re-roofing of
the project and lower our monthly mortgage payment and ancillary costs at the
same time. When our vacancy factor recedes even further, provided we have the
funds to complete the repainting of the exterior of the Property, it may then be
a prudent time to seek a buyer for the Project.
ANALYSIS OF CASH FLOWS:
Operating Activities:
The Partnership had a cash flow from operating activities of ($58,633), $279,906
and $90,989 for each of the three years in the period ended December 31, 1997,
respectively. During 1997, the Partnership Property had a negative cash flow of
($235,571) vs. a positive cash flow of $158,936 during 1996. Over a third of
the difference was attributable to higher vacancy losses, while the remainder
was due to increased operating expenses, the majority of which was represented
by higher expenditures for repairs, maintenance and replacements.
6
<PAGE>
Financing Activities:
The principal repayment of long-term debt remain consistent over the three-year
period. There were no capital distributions to partners in 1996 due to the soft
rental market. The Partnership declared and paid a distribution in January 1997
for the 1996 year. The distribution relatively small at $61,018, it is the
first to be issued in some period of time. The distributions to partners were
$61,018, $0 and $0 for each of the three years in the period ended December 31,
1997, respectively.
ITEM 8 - FINANCIAL STATEMENTS:
The Registrant's Financial Statements for the periods ended December 31, 1997,
1996 and 1995 follow.
Page
Number
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . 8
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Statements of Operation. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Statements of Changes in Partners' Equity. . . . . . . . . . . . . . . . . 11
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 12
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 13-17
7
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
TO VENETIAN PARK ASSOCIATES, LTD.
SANTA MONICA, CALIFORNIA
We have audited the accompanying balance sheets of VENETIAN PARK ASSOCIATES,
LTD. (A LIMITED PARTNERSHIP) as of December 31, 1997 and 1996, and the related
statements of operations, changes in partners' equity, and cash flows for each
of the years in the three year period ended December 31, 1997. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Venetian Park Associates, Ltd.
(A Limited Partnership) as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the years in the three year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
BLOCK, PLANT, EISNER, FIORITO & BELAK-BERGER
Encino, California
FEBRUARY 5, 1998
8
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
---------- ----------
<S> <C> <C>
Current assets:
Cash $ 51,337 $ 286,908
Tenants' rents receivable 2,778 2,778
Prepaid expenses 24,019 24,886
---------- ----------
Total current assets 78,134 314,572
---------- ----------
Restricted deposits and funded reserves:
Tenants' security deposits 108,486 89,460
Mortgage escrow deposits 66,682 54,633
Reserve for replacements 141,500 141,237
---------- ----------
316,668 285,330
---------- ----------
Fixed assets, net 6,860,291 7,136,468
---------- ----------
Other assets:
Prepaid loan fees, net of accumulated
amortization of $13,637 in 1997 and
$12,684 in 1996 18,769 19,722
Deposits 13 939
---------- ----------
18,782 20,661
---------- ----------
$7,273,875 $7,757,031
---------- ----------
---------- ----------
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable - trade and accrued expenses $ 88,656 $ 57,479
Accrued interest 35,466 35,466
Tenants' prepaid rents 1,276 5,184
Current portion of long-term debt 127,095 115,920
---------- ----------
Total current liabilities 252,493 214,049
---------- ----------
Other liabilities:
Long-term debt, net of current portion 5,312,939 5,440,034
Tenants' security deposits 100,178 101,338
---------- ----------
Commitments and contingencies 5,413,117 5,541,372
---------- ----------
Partners' equity 1,608,265 2,001,610
---------- ----------
$7,273,875 $7,757,031
---------- ----------
---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 9
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Rental income $1,438,831 $1,549,615 $1,503,619
Other income 57,886 61,201 77,337
Interest income 10,204 11,465 9,621
---------- ---------- ----------
1,506,921 1,622,281 1,590,577
---------- ---------- ----------
Expenses:
Administrative 283,725 256,375 322,831
Utilities 189,869 171,759 182,018
Operating and maintenance 483,789 305,075 370,300
Taxes and insurance 155,781 162,612 154,989
Financial expense 448,154 457,423 464,950
Depreciation and amortization 277,130 281,299 283,300
---------- ---------- ----------
1,838,448 1,634,543 1,778,388
---------- ---------- ----------
Loss before franchise tax (331,527) (12,262) (187,811)
Franchise tax 800 800 800
---------- ---------- ----------
Net loss $ (332,327) $ (13,062) $ (188,611)
---------- ---------- ----------
---------- ---------- ----------
Net (loss) per limited
partnership interest $ (54.46) $ (2.14) $ (30.91)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 10
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
(61 UNITS) (6,041 UNITS) (6,102 UNITS)
----------- ------------ ------------
<S> <C> <C> <C>
Balance, December 31, 1994 $21,069 $2,182,214 $2,203,283
December 31, 1995:
Net loss (1,885) (186,726) (188,611)
Distribution to partners 0 0 0
------- ---------- ----------
Balance, December 31, 1995 19,184 1,995,488 2,014,672
December 31, 1996:
Net loss (131) (12,931) (13,062)
Distribution to partners 0 0 0
------- ---------- ----------
Balance, December 31, 1996 19,053 1,982,557 2,001,610
DECEMBER 31, 1997:
NET LOSS (3,322) (329,005) (332,327)
DISTRIBUTION TO PARTNERS (608) (60,410) (61,018)
------- ---------- ----------
BALANCE, DECEMBER 31, 1997 $15,123 $1,593,142 $1,608,265
------- ---------- ----------
------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $(332,327) $ (13,062) $(188,611)
--------- --------- ---------
Adjustments to reconcile net (loss) to
net cash provided by operating activities:
Depreciation and amortization 277,130 281,299 283,300
Change in assets -(increase) decrease:
Tenants' rents receivable 0 0 3,348
Tenants' security deposits (19,026) (5,426) (47)
Prepaid expenses 867 (800) (1,429)
Restricted deposits and reserves (12,312) (22,478) 1,070
Deposits 926 58 7,574
Change in liabilities - increase (decrease):
Accounts payable and accrued expenses 31,177 24,526 (23,792)
Tenants' prepaid rents (3,908) 1,702 (1,498)
Tenants' security deposit payable (1,160) 14,087 11,074
--------- --------- ---------
Total adjustments 273,694 292,968 279,600
--------- --------- ---------
Net cash flow provided by (used by)
operating activities (58,633) 279,906 90,989
--------- --------- ---------
Cash flows from investing activities:
Acquisition of fixed assets 0 (13,379) (2,585)
--------- --------- ---------
Cash flows from financing activities:
Principal reduction of long-term debt (115,920) (107,591) (99,506)
Capital distributions to partners (61,018) 0 0
--------- --------- ---------
Net cash used by financing activities (176,938) (107,591) (99,506)
--------- --------- ---------
Net increase (decrease) in cash (235,571) 158,936 (11,102)
Cash at beginning of year 286,908 127,972 139,074
--------- --------- ---------
Cash at end of year $51,337 $286,908 $127,972
--------- --------- ---------
--------- --------- ---------
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest expense $421,602 $430,114 $438,015
State franchise tax 800 800 800
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 12
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Organization and significant accounting policies:
Organization:
The partnership, organized as a limited partnership within California,
formed October 31, 1983 to acquire an interest in real property
located in Stockton, California. On October 31, 1983 the partnership
purchased an existing apartment complex with a total of 295 units
comprised of four separate apartment projects operated under Section
221(d) (4) of the National Housing Act. Such projects are regulated
by HUD as to operating methods. The partnership is economically
dependent on the Stockton, California rental market.
With HUD approval, the financial statements have been prepared on a
consolidated basis encompassing the following four separate HUD
projects:
PROJECT NAME HUD PROJECT NUMBER
---------------------------- ------------------
Venetian Park Apartments I 136-35387-PM
Venetian Park Apartments II 136-35409-PM
Venetian Park Apartments III 136-35450-PM
Venetian Park Apartments IV 136-35518-PM
Cash and cash equivalents:
For purposes of the statement of cash flows, the Partnership considers
all unrestricted investment instruments purchased with original
maturities of three months or less to be cash equivalents. At
December 31, 1997, 1996 and 1995, there were no cash equivalents.
The partnership maintains cash balances in excess of the current FDIC
limit, at Wells Fargo Bank.
Fixed assets and depreciation:
Fixed assets are stated at cost. Depreciation is provided on the
straight-line and accelerated methods over estimated useful lives
which range from 5 to 35 years. The fixed assets are pledged as
collateral for the mortgage note payable. Maintenance, repairs and
minor renewals are expensed as incurred.
Amortization:
Prepaid loan fees are being amortized on a straight-line basis over
the term of the loans, 33-1/3 years.
Income taxes:
Income or loss of the partnership is allocated 1% to the general
partners and 99% to the limited partners, which represents their
respective ownership interests in the partnership. No income tax
provision has been included in the financial statements since income
or loss of the partnership is required to be reported by the
respective partners on their income tax returns. The State of
California imposes a minimum franchise tax per year for limited
partnerships.
13
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(CONTINUED)
Organization and significant accounting policies:
Advertising costs:
The Partnership's policy is to expense advertising costs when
incurred. The advertising costs for 1997, 1996 and 1995 were expensed
in the amount of $58,634, $27,819 and $30,709, respectively.
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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Restricted cash:
Tenant security deposits:
The Federal Housing Administration requires that all tenants' security
deposits collected be restricted to repayment of extraordinary damages
caused by the tenants or repayment to the tenants at the end of their
leases. These deposits are to be held in separate bank accounts in
the name of the project.
Reserve for replacements:
The FHA also requires reserve for replacement funds to be maintained
by the mortgagee for the mortgagor to cover major expenditures of the
project for replacements. The payments are included with the mortgage
payments and amount to $2,098 per month. The disbursements from this
fund require the approval of HUD. The activity was as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Balance, beginning of year $141,237 $116,065
Deposits 25,172 25,168
Interest earned, net of service charge 3,443 3,322
Interest withdrawals (3,501) (3,318)
Replacement expenditures (24,851) 0
-------- --------
Balance, end of year $141,500 $141,237
-------- --------
-------- --------
</TABLE>
14
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(CONTINUED)
Restricted cash (continued):
Mortgage escrow deposits account:
The mortgage escrow deposits account is also maintained by the
mortgagee for the mortgagor for the future payment of insurance and
taxes. Payments to the account are included with the monthly mortgage
payments. The activity was as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Balance, beginning of year $54,633 $57,327
Deposits 173,746 160,152
Disbursements:
Property taxes (108,322) (109,417)
Hazard insurance (26,014) (25,499)
Mortgage insurance (27,361) (27,930)
-------- --------
Balance, end of year $66,682 $54,633
-------- --------
-------- --------
</TABLE>
Fixed assets, net:
Fixed assets consist of the following:
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Land $ 1,158,278 $ 1,158,278
Buildings 9,562,017 9,562,017
Furniture and fixtures 310,957 310,957
----------- -----------
11,031,252 11,031,252
Less accumulated depreciation 4,170,961 3,894,784
----------- -----------
$ 6,860,291 $ 7,136,468
----------- -----------
----------- -----------
</TABLE>
Mortgage payable:
The mortgages payable are 40-year notes which are insured by HUD under
Section 221(d)(4) of the National Housing Act. The notes are secured by
first trust deeds on the land and buildings. Under agreements with the
mortgage lender and FHA, the Project is required to make monthly escrow
deposits for property insurance, mortgage insurance, property taxes and
reserve for replacement of fixed assets. The interest rates, monthly
installments and outstanding balances due are as follows:
15
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(CONTINUED)
Mortgage payable (continued):
<TABLE>
<CAPTION>
INTEREST MONTHLY BALANCE
DATE RATES INSTALLMENTS 12/31/96
---- -------- ------------ --------
<S> <C> <C> <C> <C>
I 2017 8.0% $14,951 $1,739,782
II 2017 7.5% 12,933 1,593,699
III 2017 7.5% 15,894 1,980,059
IV 2018 7.5% 1,013 126,494
------- ----------
$44,791 $5,440,034
------- ----------
------- ----------
</TABLE>
Mortgage payable maturing in the next five years consists of:
<TABLE>
<S> <C>
1998 $ 127,095
1999 135,064
2000 145,792
2001 157,672
2002 170,530
Beyond five year s4,703,881
----------
Total mortgage due 5,440,034
Less current portion 127,095
----------
$5,312,939
----------
----------
</TABLE>
Related party transactions:
Norman Jacobson, a general partner of the partnership, is also an officer
and stockholder of Norman Jacobson Realty Resources, Inc. Norman Jacobson
Realty Resources, Inc. (NJRR) received a management fee for its services
equal to 3% of the project's net revenues for the current year. NJRR was
paid management fees and reimbursed out of pocket expenses totaling $57,840
during the year ended December 31, 1997, $58,918 during the year ended
December 31, 1996 and $56,499 during the year ended December 31, 1995.
The General Partners received cash compensation from the partnership
totaling $30,160 in 1997 and $32,180 in 1996 and $30,858 in 1995 consisting
of project management fees equal to 2% of the project's net revenues for
each year.
Distributions to Limited and General Partners:
The partnership declared and paid a distribution in the amount of $61,018
for the year ended December 31, 1997. For the years ended December 31,
1996 and 1995, the partnership had no distributions declared and paid.
16
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(CONTINUED)
Commitments and contingencies:
A former employee has filed a complaint claiming discrimination with the
State of California. A Mutual Release & Settlement Agreement was procured
on January 30, 1998. The Agreement provided for the defendant to pay
$7,500. Venetian Park's insurance carrier covered some of the legal costs.
The insurance carrier provided legal counsel for settling the case and paid
the agreed upon settlement amount.
17
<PAGE>
ITEM 9 - DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:
There have been no disagreements with accountants on any matters of financial
statement presentation or related disclosures.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS:
Registrant has no directors or executive officers but is managed by the General
Partners.
The General Partners are described below:
NORMAN JACOBSON. Mr. Jacobson co-founded WAGNER/JACOBSON CO., INC. in 1958.
That firm engaged primarily in real estate brokerage of income-producing
multifamily residential real estate and served as general partner for a number
of public and private syndications. Because Mr. Jacobson's time is devoted
to property management and syndication activities and serving the interests of
the investors in the syndications formed by him, his involvement with
WAGNER/JACOBSON CO., INC., has ceased. In 1982, Mr. Jacobson, formed NORMAN
JACOBSON REALTY RESOURCES, INC. Mr. Jacobson is also President of NORMAN
JACOBSON MANAGEMENT CO, which acts as property manager for various apartment
complexes and commercial properties in Los Angeles, Orange, Sacramento, San
Joaquin, Solano and Contra Costa Counties.
In 1981 Mr. Jacobson co-formed Jacobson/Weill Income Realty Fund, a publicly
offered real estate fund, which purchased the Chateau Apartments, a 104-unit
apartment complex located at 1503 Fulton Avenue, Sacramento, California. In
1982 Mr. Jacobson and Mr. Ted Weill were co-general partners with Bateman
Eichler, Hill Richards Realty in Parkfair Associates, Ltd., a publicly offered
limited partnership, formed for the purpose of purchasing the 120-unit Parkfair
Apartments and Parkfair Professional Building in Sacramento. In 1983, Mr.
Jacobson and Mr. Weill formed Venetian Park Associates, Ltd. which purchased the
295-unit Venetian Park Apartments in Stockton, California.
Mr. Jacobson is also General Partner for Hilltop Associates, Ltd. (formed in
1983 to purchase the 70-unit Hilltop Apartments), Hillsdale Investors, Ltd.
(formed in 1984 to purchase the 48-unit Hillsdale Garden Apartments), Jefferson
Place Investors (formed in 1985 to purchase the 66-unit Jefferson Place
Apartments) and Cottage Bell Investors (formed in 1985 to purchase the 160-unit
Cottage Bell Apartments). These properties are all in Sacramento. In addition,
Mr. Jacobson is General Partner for Muir Creek Investors (formed in 1986 to
purchase the 108-unit Muir Creek Apartments in Martinez, California), and Med
Village Investors (formed in 1988 for the purpose of constructing the 106-unit
Mediterranean Village Apartments in Fairfield, California).
Norman Jacobson Realty Resources, Inc., of which Mr. Jacobson is a principal and
the sole owner, is general partner of Palm Mesa, Ltd. (formed in 1970 to
purchase the 147-unit Palm Mesa Apartments) and Parkwood Village, Ltd. (formed
in 1971 to purchase the 276-unit Newport Village Apartments). Both of these
properties are in Costa Mesa, California.
In 1977, Mr. Jacobson was president of the Los Angeles Board of Realtors.
Formerly he was president of the Venice Board of Realtors. He has been a
director of the California Association of Realtors (CAR) periodically since 1963
and was elected regional vice-president of the CAR in 1978. In 1971-72 he was
vice-chairman of the CAR's Syndication Division and was founding editor of the
Syndication Division's official publication, THE CALIFORNIA SYNDICATOR. Mr.
Jacobson lectures and writes extensively in the fields of real estate
investments. He has periodically instructed for University of California
Extension since 1961, lectures from time to time for the UCLA Graduate School of
Management and is one of 80 real estate professionals in the United States
invited to write a Chapter for THE REAL ESTATE HANDBOOK published by Dow-Jones,
Irwin.
18
<PAGE>
Mr. Jacobson holds a degree in business administration from UCLA, where he
graduated in 1952. THEODORE J. WEILL. Mr. Weill is a general partner in
numerous ongoing private and public syndications, and is active in real estate
development and other activities. From December, 1969 to February, 1977, Mr.
Weill served as principal in the development of recreational communities and
became Executive Vice President of the Resort Development Group of Dart/Kraft
Industries in 1970. From January, 1963, to November, 1969, he was President and
Chairman of a privately held real estate and brokerage company specializing in
commercial, industrial and income property with annual sales of $50 million, and
a property management company with managed assets of $100 million. Mr. Weill
has served as a consultant to Dart/Kraft Industries, SRI International and ITT
Corporation. In March, 1977, he founded Weill Financial Corporation, a Los
Angeles real estate investment organization.
Mr. Weill has a Bachelor's degree in marketing and finance from the University
of Pennsylvania, Wharton School of Finance and Commerce in 1956, and in 1977
graduated with honors from the Pepperdine University Presidential/Key Executive
MBA program.
PROPERTY MANAGEMENT
The Partnership Agreement provides that J/W Management Corp., a California
Corporation organized by the General Partners, will be responsible, through its
own personnel and/or through subcontracted management services, for the
management of the Property, for a fee of 5% of the gross income of the Property,
which fee is generally charged in the Stockton area. Historically, J/W
Management has subcontracted the off-site property management to firms
specializing in apartment house management and has paid 3% of the gross income
to such firms while retaining the remaining 2% as compensation for overseeing
the subcontractor's work. J/W Management Corp. was dissolved in 1990, and
the General Partners individually continue to oversee the subcontractor's work
and receive the 2% compensation.
Presently, the off-site management of the property is subcontracted to Norman
Jacobson Management Co., an affiliate of one of the General Partners.
19
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION:
During the year ended December 31, 1997, the General Partners (see Item 13)
received cash compensation from Registrant totaling $30,160 consisting of
project management fees. Norman Jacobson received $19,755 and Theodore J. Weill
received $10,405.
Also, during the year ended December 31, 1997, one of the General Partners and
his affiliate, Norman Jacobson Management Co. (see Item 13) received cash
compensation from Registrant totaling $57,840 consisting of project management
fees and reimbursement for out-of-pocket expenses.
The following table summarizes the types, estimated amounts and recipients of
compensation that will or may be paid to the General Partners or their
affiliates from and after January 1, 1998:
<TABLE>
<CAPTION>
PERSON RECEIVING TYPE OF COMPENSATION AMOUNT PAID
COMPENSATION -------------------- -----------
----------------
<S> <C> <C>
General Partners: Interest in distributions An interest equal to 1% of cash
from operations distributions from operations.
Norman Jacobson None
Theodore Weill None
General Partners Subordinated interests ESTIMATED MAXIMUM AMOUNTS
in distributions An interest equal to 25%
(less amounts received by
the General Partners by
virtue of their 1%
interest in the
Partnership) of the
undistributed cash
amounts resulting from
the sale or refinance of
the Partnership Property
remaining after payment
to investors of an amount
equal to 100% of their
original capital
contributions plus an 8%
cumulative annual,
noncompounded return
thereon less prior
distributions from the
Partnership.
General Partners Subordinated Real Estate Equal to an amount not to
or one or more Commissions (payable if exceed one-half of the
real estate recipient performs services acquisition fees which
brokers related to resales of could be paid during the
affiliated with Partnership Properties) Acquisition Period, but
the General only after return of the
Partners Limited Partners' capital
contributions and (unless
previously paid through
distributions) 6% per
annum cumulative non-
compounded return
thereon.
General Partners: Property management fee HUD approval contract
Norman Jacobson provides for 5% of the
Theodore J. Weill net revenues of the Property.
The Partnership paid
approximately 2% of net
revenues, $30,160 for the
year ended December 31,
1997, which was paid to
the General Partners:
$19,755 to Norman Jacobson
and $10,405 to Theodore J.
Weill; and
Norman Jacobson 3% of net revenues
Management Co., ($45,240 for the year
an affiliate of ended December 31, 1997)
one of the to Norman Jacobson
General Partners Management Co.
responsible for
management of
the property
</TABLE>
20
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
Registrant has no directors or officers but is managed by the General Partners.
At December 31, 1997, neither of the General Partners owned any of the
outstanding Limited Partnership Units nor did any person known to the General
Partners own 5% or more of the outstanding Limited Partnership Units.
ITEM 13 - CERTAIN RELATIONSHIPS:
The General Partners, either personally or through affiliated entities, are
General Partners in other real estate limited partnerships, some of which may be
comparable in certain respects to the Partnership. The General Partners have
organized other partnerships in the past and will organize other partnerships in
the future, including partnerships which may have investment objectives similar
to those of the Partnership. Such General Partner will have legal and financial
obligations with respect to those other partnerships which are similar to his
obligations with respect of the Partnership, including contingent liability, for
the obligations of such partnerships.
The General Partners are prohibited from entering into any transaction on behalf
of the Partnership with any other limited partnership in which the General
Partners or any affiliate of the General Partners has an interest.
The General Partners may engage in the real estate business or in other
businesses for their own account for the accounts of others or otherwise, and
neither the Partnership nor any Limited Partners shall be entitled to any
interest therein. There may be conflicts of interest on the part of the General
Partners between the Partnership and other limited partnerships with which they
are affiliated at such time as the Partnership attempts to sell or rent realty
or employ resident and building managers, as well as under other circumstances.
It is the policy of the Partnership that the Limited Partners may not engage
directly or indirectly in any capacity for monetary gain. Generally the Limited
Partners participate in the profits, losses and distributions and have certain
limited partner voting rights. No Limited Partner shall have any right to be
active in the conduct or management of the Partnership business, nor have any
power to bind the Partnership by contract, agreement, compromise or undertaking;
provided, however, that Limited Partners shall have the right to vote on
Partnership matters, as set forth in the Partnership Agreement, which affects
its basic structure.
Limited Partners holding 10% of the Units may call (in the General Partnership
notice) a meeting as provided in the Rules of the Commissioner of Corporations
of the State of California, and an affirmative vote of the majority interest of
the Limited Partners shall be required to take action upon certain matters as
provided in the Partnership Agreement.
21
<PAGE>
PART IV
ITEM 14 - FINANCIAL STATEMENTS AND EXHIBITS:
(a) EXHIBITS
None
(b) FINANCIAL STATEMENTS
The following financial statements are included in Item 8:
Independent Auditors' Report
Balance Sheets as of December 31, 1997 and 1996
Statements of Operation for the years ended December 31, 1997,
December 31, 1996 and December 31, 1995.
Statements of changes in partners' equity for the years ended December
31, 1997, December 31, 1996, and December 31, 1995.
Statements of cash flows for the years ended December 31, 1997,
December 31, 1996, and December 31, 1995.
Notes to Financial Statements
The following financial statement schedules follow:
Page
----
Independent auditors' report on financial statement schedules. . . 23
Schedule XI - Real Estate and Accumulated Depreciation . . . . . . 24
22
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON SUPPORTING SCHEDULES
TO VENETIAN PARK ASSOCIATES, LTD.
SANTA MONICA, CALIFORNIA
Under date of February 5, 1998, we reported on the balance sheets of VENETIAN
PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) as of December 31, 1997
and 1996 and the related statements of operations, changes in partners' equity
and cash flows for each of the years in the three-year period ended December 31,
1997, which are included in Item 8 of this annual report on Form 10-K. In
connection with our audits of the aforementioned financial statements, we also
have audited the related financial statement schedule as listed in Item 14 of
this annual report on Form 10-K. The financial statement schedule is the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on the financial statement schedule based on our audits.
In our opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.
BLOCK, PLANT, EISNER, FIORITO & BELAK-BERGER
Encino, California
FEBRUARY 5, 1998
23
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
COSTS
CAPITALIZED
SUBSEQUENT
INITIAL COST TO
TO PARTNERSHIP (A) ACQUISITION
------------------ -----------
BUILDING
AND
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS
----------- ------------ ---- ------------------ ------------
<S> <C> <C> <C> <C>
Apartment complex $5,440,034 $ 1,158,278 $ 9,768,873 $ 104,101
<CAPTION>
GROSS AMOUNT OF WHICH WAS
CARRIED AT CLOSE OF PERIOD (D)
------------------------------------------------------------------------
BUILDINGS
AND ACCUMULATED
LAND IMPROVEMENTS TOTAL DEPRECIATION
---- ------------ ----- ------------
<S> <C> <C> <C> <C>
$1,158,278 $ 9,872,974 $11,031,252 $ 4,170,961
Year of construction 1976-1978
Fiscal year acquired 1983
Life on which depreciation in latest
statement of operations is computed 5-35 years
</TABLE>
(A) The initial cost to the Partnership represents the original purchase
price of the property.
(B) Reconciliation of real estate owned for 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period $11,031,252 $11,017,873 $11,015,288
Additions during period 0 13,379 2,585
----------- ----------- -----------
Balance at close of period $11,031,252 $11,031,252 $11,017,873
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
(C) Reconciliation of accumulated depreciation for 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year $ 3,894,784 $ 3,614,446 $ 3,332,099
Additions during period:
Depreciation expense 276,177 280,338 282,347
----------- ----------- -----------
4,170,961 3,894,784 3,614,446
Deductions during period:
Accumulated depreciation on real estate
sold or improvements written off 0 0 0
----------- ----------- -----------
Balance at close of year $ 4,170,961 $ 3,894,784 $ 3,614,446
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
(D) Aggregate cost of real estate at December 31, 1997 for Federal income tax
purposes is $11,032,095.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) or 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.
VENETIAN PARK ASSOCIATES, LTD.
A California Limited Partnership
Date: 2/11/98 By: /s/ Theodore J. Weill
--------- -------------------------------
Theodore J. Weill
General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: 3/20/98 By: /s/Norman Jacobson
--------- -------------------------------
Norman Jacobson,
General Partner
25
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 368,005
<SECURITIES> 0
<RECEIVABLES> 45,579
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 413,584
<PP&E> 11,031,252
<DEPRECIATION> 4,170,961
<TOTAL-ASSETS> 7,273,875
<CURRENT-LIABILITIES> 252,493
<BONDS> 5,312,939
0
0
<COMMON> 0
<OTHER-SE> 1,708,443
<TOTAL-LIABILITY-AND-EQUITY> 7,273,875
<SALES> 0
<TOTAL-REVENUES> 1,506,921
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,390,294
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 448,154
<INCOME-PRETAX> (331,527)
<INCOME-TAX> 0
<INCOME-CONTINUING> (331,527)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (331,527)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
