<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, 1999 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)
CONTENTS
================================================================================
<TABLE>
<CAPTION>
PAGE
<S> <C> <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 - 18
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 19
PART III
Item 10. Directors and Executive Officers of the Partnership 19 - 20
Item 11. Executive Compensation 21
Item 12. Security Ownership of Certain Beneficial Owners and Management 22
Item 13. Certain Relationships and Related Transactions 22
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 10-K 23 - 25
Signatures 26
</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.
1
<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
APARTMENT MIX
<TABLE>
<CAPTION>
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, 2000
RENTAL RATES
<TABLE>
<CAPTION>
TYPE SQ. FT. EA. CURRENT RENTS
--------------------------- ------------ -------------
<S> <C> <C>
Studio, 1 Bath 510 $381 - $485
1 Bedroom, 1 Bath 694 $475 - $555
2 Bedroom, 1 Bath 900 $525 - $615
2 Bedroom, 2 Bath 1,080 $545 - $665
2 Bedroom, 2 Bath (Villa) 1,282 $670 - $750
2 Bedroom, 2.5 Bath (Townhouse) 1,420 $675 - $770
</TABLE>
Scheduled monthly rents...........................................$162,937
Scheduled monthly rents x 12 months.............................$1,955,242
Laundry income.....................................................$23,000
Miscellaneous income (1)...........................................$33,000
Interest income.....................................................$9,400
Total scheduled gross revenues..................................$2,020,642
- -------
(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 a first trust deed note totaling $6,300,000 at
December 31, 1999. The partnership borrowed $143,000 for equipment and
short-term credit. The outstanding loan balance at December 31, 1999 is
$139,593. The General Partners believe that the foregoing Property is
adequately covered by insurance. Also, at this time there are proposed
programs for renovation and improvements of the property. The registrant
refinanced and consolidated the property's four trust deed notes into one
trust deed note on December 1, 1999. As per the loan covenants $835,460 was
withheld from the escrow and deposited into the reserve for replacement
account.
FIRST TRUST DEED INFORMATION
<TABLE>
<S> <C>
Monthly payments:...........................$46,139
Interest rate:..............................7.98%
Amortization schedule:......................30 years
Year due and payable:.......................December 1, 2009
Loan balance when due:......................$5,524,377
First trust deed holder:....................Reilly Mortgage Group, Inc.
</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 (the Partnership) 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 510 holders of Limited partnership Units at December
31, 1999, 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 1999, the Registrant paid $0 or $0 per unit; during 1998, paid $0; and
during 1997, paid $60,410 or $10 per unit. Additionally, the Registrant paid the
General Partners the following distributions: $0, $0 and $608 for 1999, 1998 and
1997, 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>
1999 $ 1,696,973 $ (162,324) $ (26.87) $ 8,011,132 $ 6,439,593
1998 1,610,999 (85,730) (14.19) 7,172,848 5,332,629
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
</TABLE>
<TABLE>
<CAPTION>
PER UNIT LIMITED PARTNER
CASH DISTRIBUTIONS
<S> <C>
1999 $ 0
1998 0
1997 10
1996 0
1995 0
</TABLE>
5
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
Results of Operations:
Operating income for 1999 was $1,696,973, an improvement of $85,974 (5.33%) when
compared to the 1998 operating income of $1,610,999 and an increase of $190,052
(12.61%) when compared to $1,506,921 for 1997. Net spendable for 1999 was
$17,112 vs. $69,434 in 1998, a decline of $52,322 or (75.36%). When compared to
the 1997 net spendable of ($170,434), the net spendable generated in 1999 was
$187,606 (110.04%) higher. Operating income in 1999 reflects the write off of
the reimbursed portion of the Insurance Receivables-Fire Rent Loss of $38,016.
The scheduled gross monthly rental for December 1999 was $162,890, $6,153
(3.93%) more than the December 1998 rent roll of $156,737 and (7.10%) higher
than the December 1997 rent roll of $152,097. Aggregate rental loss (vacancies,
net delinquencies and rental discounts) for 1999 of $291,856 is a reduction of
$6,710 or (2.25%) when compared to 1998's rental loss of $298,566. As mentioned
above, 1999's rental loss includes the $38,016 unreimbursed insurance-fire rent
loss, which was written off to vacancies. The Property's higher occupancy rate
is due in large part to improved economic conditions in the Stockton area. When
the buildings are painted and the other work completed, Venetian will reap the
benefits of such improvements with lower operating expenses and further increase
in occupancy rates.
Operating expenses during 1999 were $1,102,545 vs. $964,881 in 1998, an increase
of $137,664 (14.27%). When compared to 1997's operating expenses of $1,114,411,
1999's operating expenses are lower by $11,866 (1.06%). The operating expense
increase was due to an increase in expenditures in repairs and maintenance and
replacements.
The Property's cash accounts at the end of 1999, 1998 and 1997, respectively,
were $300,521, $135,283 and $159,824. Only part of the refinancing proceeds were
in the Partnership's capital bank accounts due to holdbacks required by the
lender to insure completion of the rehabilitation work. On January 13, 2000,
Reilly Mortgage Group, the lender, released $94,056 from the Repair Escrow total
of $835,460. As of February 8, 2000, the painters have completed painting 62
units which is 22% of the total job. In addition, the roof replacement along
with the repair and re-plastering of one of the Property's three swimming pools
are underway.
ANALYSIS OF CASH FLOWS:
Operating Activities:
The Partnership had a cash flow from operating activities of $68,521, $104,097,
and ($39,607) for each of the three years in the period ended December 31, 1999,
respectively. The decrease of the cash flow is mainly due to the write off of
$38,016 to vacancy loss. This amount is the unreimbursed portion of the $52,016
accrued rent loss due to the 1998 fire. Travellers Insurance covered only
$14,000.
Financing Activities:
The principal repayment of the long-term debt remained consistent over the
three-year period until the last month of 1999 when the loan was refinanced.
On December 1, 1999, the escrow closed for the new First Trust Deed Loan in the
amount of $6,300,000 payable $46,139.38 monthly including fixed-rate interest of
7.98% amortized for 30 years and due in 10 years. The prior loans' monthly
payments including mortgage insurance were $47,019. We retired loans with
balances of $5,173,951 whose combined interest rate plus mortgage insurance
averaged approximately 8%.
The former loan holders released $223,018 which had been held in the Property's
FHA Replacement Reserve Account. That amount combined with net cash through
escrow and a property tax refund enabled us to have on hand $294,015 after
retirement of the Property's laundry equipment and short-term credit loan in
January 2000.
6
<PAGE>
After the planned renovation work is completed and the lender approves the
replacement covenants, the reserve for replacement account will be released. At
that time we expect to have approximately $460,000 cash on hand. During the next
few months, the rental office will be revamped and a maintenance shop
constructed immediately adjacent to one of the pool buildings. This will free up
one of the apartments now being used as a shop as we will need such apartment as
vacancies diminish.
There were no cash distributions to partners in 1999 or 1998 to recover from the
negative cash flow in 1997. The Partnership declared and paid a distribution in
January 1997 for the 1996 year. The relatively small distribution of $61,018 is
the first to be issued in some period in time. The distributions to partners
were $0, $0 and $61,018 for each of the three-year period ended December 31,
1999, respectively.
ITEM 8 - FINANCIAL STATEMENTS:
The Registrant's Financial Statements for the periods ended December 31, 1999,
1998 and 1997 follow.
<TABLE>
<CAPTION>
Page
Number
<S> <C>
Independent Auditors' Report..................................................8
Balance Sheets................................................................9
Statements of Operations.....................................................10
Statements of Changes in Partners' Equity....................................11
Statements of Cash Flows.....................................................12
Notes to Financial Statements.............................................13-17
</TABLE>
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, 1999 and 1998, 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, 1999. 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, 1999 and 1998, and the results of its
operations and its cash flows for each of the years in the three year period
ended December 31, 1999, in conformity with generally accepted accounting
principles.
/s/ Block, Plant, Eisner, Fiorito & Belak-Berger
Encino, California
FEBRUARY 3, 2000
8
<PAGE>
===============================================================================
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
BALANCE SHEETS
===============================================================================
ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1999 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash $ 300,521 $ 135,282
Tenants' rents receivable 3,356 2,309
Insurance receivable - 158,642
Prepaid expenses 17,250 25,660
Other receivables and deposits 214,670 -
- -------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 535,797 321,893
- -------------------------------------------------------------------------------------------------------------------
Restricted deposits and funded reserves:
Mortgage escrow deposits 45,261 62,560
Reserve for replacements 835,460 166,672
- -------------------------------------------------------------------------------------------------------------------
Total restricted deposits and funded reserves: 880,721 229,232
- -------------------------------------------------------------------------------------------------------------------
Fixed assets, net 6,446,296 6,603,181
- -------------------------------------------------------------------------------------------------------------------
Other assets:
Prepaid loan fees, net of accumulated amortization
of $1,246 in 1999 and $14,590 in 1998 148,318 17,816
Deposits - 726
- -------------------------------------------------------------------------------------------------------------------
Total other assets 148,318 18,542
- -------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $8,011,132 $7,172,848
===================================================================================================================
</TABLE>
<PAGE>
===============================================================================
LIABILITIES AND PARTNERS' EQUITY
===============================================================================
<TABLE>
<CAPTION>
December 31, 1999 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 192,430 $ 137,777
Accounts payable - trade and accrued expenses 65,619 104,688
Accrued expense - fire damage - 82,281
Accrued interest 42,456 35,466
Tenants' prepaid rents 6,428 5,998
- -------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 306,933 366,210
- -------------------------------------------------------------------------------------------------------------------
Other liabilities:
Long-term debt, net of current portion 6,247,163 5,194,852
Tenants' security deposits 96,825 89,251
- -------------------------------------------------------------------------------------------------------------------
Total other liabilities 6,343,988 5,284,103
- -------------------------------------------------------------------------------------------------------------------
Commitments and contingencies - -
- -------------------------------------------------------------------------------------------------------------------
Partners' equity 1,360,211 1,522,535
- -------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $8,011,132 $7,172,848
===================================================================================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
===============================================================================
<TABLE>
<CAPTION>
Years ended December 31, 1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Rental income $1,631,307 $1,548,750 $1,438,831
Other income 56,219 55,151 57,886
Interest income 9,447 7,098 10,204
- -------------------------------------------------------------------------------------------------------------------
1,696,973 1,610,999 1,506,921
- -------------------------------------------------------------------------------------------------------------------
Expenses:
Administrative 274,910 263,785 283,725
Utilities 196,579 190,979 189,869
Operating and maintenance 469,817 354,746 483,789
Taxes and insurance 171,078 167,560 156,581
Financial expense 448,633 440,372 448,154
Depreciation and amortization 298,280 279,287 277,130
- -------------------------------------------------------------------------------------------------------------------
1,859,297 1,696,729 1,839,248
- -------------------------------------------------------------------------------------------------------------------
NET LOSS $ (162,324) $ (85,730) $ (332,327)
- -------------------------------------------------------------------------------------------------------------------
NET (LOSS) PER LIMITED PARTNER UNITS
(6,041 UNITS ISSUED AND OUTSTANDING) $ (26.87) $ (14.19) $ (54.46)
===================================================================================================================
</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
===============================================================================
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
(61 UNITS) (6,041 UNITS) (6,102 UNITS)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
December 31, 1998:
Net loss (857) (84,873) (85,730)
Distribution to partners - - -
- -------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 14,266 1,508,269 1,522,535
December 31, 1999:
Net loss (1,623) (160,701) (162,324)
Distribution to partners - - -
- -------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $ 12,643 $ 1,347,568 $ 1,360,211
===================================================================================================================
</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
===============================================================================
<TABLE>
<CAPTION>
Years ended December 31, 1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (162,324) $ (85,730) $(332,327)
- -------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Depreciation and amortization 298,280 279,287 277,130
Change in assets -(increase) decrease:
Tenants' rents receivable (1,046) 469 -
Insurance receivables 158,642 (158,642) -
Prepaid expenses 8,410 (1,641) 867
Restricted deposits and reserves (39,007) (21,050) (12,312)
Other receivables and deposits (87,944) (713) 926
Change in liabilities - increase (decrease):
Accounts payable and accrued expenses (32,213) 16,041 31,177
Accrued expenses - fire damage (82,281) 82,281 -
Tenants' prepaid rents 430 4,722 (3,908)
Tenants' security deposit payable 7,574 (10,927) (1,160)
- -------------------------------------------------------------------------------------------------------------------
Total adjustments 230,845 189,827 292,720
- -------------------------------------------------------------------------------------------------------------------
NET CASH FLOW PROVIDED BY (USED IN)
OPERATING ACTIVITIES 68,521 104,097 (39,607)
- -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of fixed assets (122,200) (21,233) -
Release of escrow deposits 46,542 - -
Release of reserve for replacements 176,436 - -
Refinance funding reserve for replacements (835,460) - -
- -------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) INVESTING ACTIVITIES (734,682) (21,233) -
- -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from refinance of mortgage 6,300,000 - -
Payoff of debt from refinance of mortgage (5,173,914) - -
Proceeds of short-term loan 125,000 18,000 -
Principal reduction of long-term debt (144,122) (125,405) (115,920)
Capital distributions to partners - - (61,018)
Loan fees from refinance of mortgage (149,564) - -
Good faith deposit for refinance (126,000) - -
- -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 831,400 (107,405) (176,938)
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 165,239 (24,541) (216,545)
Cash at beginning of year 135,282 159,823 376,368
- -------------------------------------------------------------------------------------------------------------------
CASH AT END OF YEAR $ 300,521 $ 135,282 $ 159,823
===================================================================================================================
</TABLE>
12
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS (CONTINUED)
===============================================================================
<TABLE>
<CAPTION>
Years ended December 31, 1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest expense $ 442,204 $ 413,382 $ 421,602
State franchise tax 800 800 800
===================================================================================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
===============================================================================
ORGANIZATION AND
SIGNIFICANT
ACCOUNTING POLICIES:
ORGANIZATION: The partnership, organized as a limited partnership
within California, was 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. The partnership is
economically dependent on the Stockton, California
rental market.
CASH AND CASH For purposes of the statements of cash flows, the
EQUIVALENTS: Partnership considers all unrestricted investment
instruments purchased with original maturities of
three months or less to be cash equivalents. At
December 31, 1999, 1998 and 1997, there were no cash
equivalents.
CONCENTRATION OF The Partnership maintains its cash in bank deposit
CREDIT RISK: accounts which exceed federally insured limits. The
Partnership has not experienced any losses in such
accounts. The Partnership believes it is not exposed
to any significant credit risk on cash.
FIXED ASSETS AND Fixed assets are stated at cost. Depreciation is
DEPRECIATION: 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, 10 years.
Previous loan fees have been written off.
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.
ADVERTISING COSTS: The Partnership's policy is to expense advertising
costs when incurred. The advertising costs for 1999,
1998 and 1997 were expensed in the amount of $35,782,
$32,121 and $58,634, 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.
14
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
INSURANCE RECEIVABLE: Venetian Park suffered fire damage to 8 units in
Phase II. Venetian Park hired the Greenspan Company,
professional adjusters of losses for the insured to
represent the partnership to negotiate with the
insurance company for settlement of fire damage and
loss of rents. The insurance carrier, Travelers
Indemnity of Illinois, paid $250,804 to Reilly
Mortgage Company and other vendors directly. The
monies were held in the reserve for replacement
account and payments were made payable to Venetian
Park and the specific vendor. As of year end,
December 31, 1998, $106,626 was due for fire damage
and $52,016 for loss of rents. The $106,626 was
received on January 27, 1999. Only $14,000 of the
rent receivable was collectible from the insurance
company and the balance was written off in 1999. As
of the month of February, 1999, the eight units were
available for rent.
RECLASSIFICATION: Certain amounts previously reported in financial
statements for 1998 have been reclassified to conform
to the 1999 presentation.
FAIR VALUE DISCLOSURES: The following estimated fair values have been
determined by the Company using available market
information.
CASH, AND CASH
EQUIVALENTS: The carrying amounts of these items are their fair
values.
LONG-TERM DEBT: The carrying amount of this item is recorded at
historical cost. The estimated fair value is based on
quoted market prices obtained from dealers.
The carrying/commitment amount and fair value of the
Partnership's financial instruments at December 31,
1999 and 1998 are as follows:
<TABLE>
<CAPTION>
CARRYING/
COMMITMENT FAIR
DECEMBER 31, 1999 AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents $ 300,521 $ 300,521
Long-term debt $6,439,593 $6,439,593
CARRYING/
COMMITMENT FAIR
DECEMBER 31, 1998 AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents $ 135,282 $ 135,282
Long-term debt $5,332,629 $5,332,629
</TABLE>
The fair value estimates presented are based on pertinent information
available to management as of December 31, 1999 and 1998. Although management
is not aware of any factors that would significantly affect the estimated
fair value amounts, such amounts have not been comprehensively revalued for
purposes of these financial statements since such dates, and current
estimates of fair value may differ significantly from the amounts presented.
15
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
RESERVE FOR The FHA also requires reserve for replacement funds
REPLACEMENTS: to be maintained by the mortgagee for the mortgagor
to cover major expenditures of the project for
replacements. The monthly reserve payments are
included with the regular mortgage payments and
amount to $2,098 per month. The disbursements from
this fund required the approval of HUD. On
December 1, 1999, the mortgage was refinanced, the
HUD requirements are no longer applicable (see
mortgage payable). The disbursement from the lender
established fund requires lender approval. The
activity was as follows:
<TABLE>
<CAPTION>
1999 1998
--------------------------------------------------------------------------------------
<S> <C> <C>
Balance, beginning of year $166,672 $141,500
Deposits - monthly 23,075 25,172
Deposit from escrow (lender established fund) 835,460 -
Interest earned, net of service charge 5,316 3,444
Interest withdrawals (5,316) (3,444)
Replacement expenditures (13,311) -
Release due to refinance (176,436) -
----------------------------------------------------------------------------------------
Balance, end of year $835,460 $166,672
========================================================================================
</TABLE>
MORTGAGE ESCROW The mortgage escrow deposits account is also
DEPOSITS ACCOUNT: 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>
<S> <C> <C>
Balance, beginning of year $ 62,560 $ 66,682
Deposits - monthly 146,463 157,597
Deposits from escrow 45,261 -
Disbursements:
Property taxes (105,547) (105,380)
Hazard and mortgage insurance (56,934) (56,339)
Release due to refinance (46,542) -
----------------------------------------------------------------------------------------
Balance, end of year $ 45,261 $ 62,560
========================================================================================
</TABLE>
16
<PAGE>
Fixed assets consist of the following:
<TABLE>
<CAPTION>
1999 1998
---------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 1,158,278 $ 1,158,278
Buildings and improvements 9,684,217 9,562,017
Furniture and fixtures 332,190 332,190
----------------------------------------------------------------------------------------
11,174,685 11,052,485
Less accumulated depreciation 4,728,389 4,449,304
---------------------------------------------------------------------------------------
</TABLE>
LONG-TERM DEBT: ======================================================
MORTGAGE PAYABLE:
The Partnership has a 30 year amortized fixed rate
mortgage due in 10 years dated November 24, 1999 in
the face amount of $6,300,000 payable in monthly
installments of $46,139 including principal and
interest beginning on January 1, 2000 and due and
payable in full on December 1, 2009. The mortgage loan
is recorded at fair value. The note is secured by
first trust deed on the land and buildings. Under an
agreement with the mortgage lender, the Project is
required to make monthly escrow deposits for property
insurance and taxes.
LOAN PAYABLE:
The partnership borrowed $18,000 from Wells Fargo Bank
or the acquisition of laundry equipment payable in 60
monthly installments including principal and interest
at $426 per month. The interest rate is 14.80% per
annum. The outstanding loan balance at December 31,
1999 is $14,593. The loan was paid in full in January,
2000.
The Partnership borrowed $125,000 from Wells Fargo
Bank for the good faith deposit made for the refinance.
The short term note was payable in interest only
installments of $990 per month. The interest rate is
9.5% per annum. The note was due and paid in full
January, 2000.
MATURITIES:
Long term debt maturing during the next five years is
as follows:
<TABLE>
<CAPTION>
Year ending December 31,
<S> <C>
2000 $ 192,430
2001 57,211
2002 61,947
2003 67,076
2004 72,628
Beyond five years
------------------------------------------------------
Total long-term debt due
Less current portion
------------------------------------------------------
$6,247,163
------------------------------------------------------
</TABLE>
17
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
RELATED PARTY Norman Jacobson, a general partner of the
TRANSACTIONS: partnership, is also an officer and the sole
shareholder 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 $69,252, $57,840 and
$58,918 for the years ended December 31, 1999, 1998
and 1997, respectively.
The General Partners received cash compensation from
the partnership totaling $33,803 in 1999 and $31,961
in 1998 and $30,160 in 1997 consisting of project
management fees equal to 2% of the project's net
revenues for each year.
DISTRIBUTIONS TO LIMITED The Partnership declared and paid the following
AND GENERAL PARTNERS: distributions in the amount of $0, $0 and $61,018
for the years ended December 31, 1999, 1998 and 1997,
respectively.
COMMITMENTS AND A former employee has filed a complaint claiming
CONTINGENCIES: discrimination with the State of California. A Mutual
Release & Settlement Agreement was procured on January
30, 1998. The Agreement provided for the Partnership
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.
On December 1, 1999 the Partnership refinanced and
vconsolidated the original four HUD insured mortgage
loans into one FHA mortgage loan. As part of the
refinance arrangement, certain loan restrictions were
required. The mortgagor withheld out of escrow
$835,460 for reserve for replacements. The repair
completion exhibit outlined five major repairs to be
made, asphalt driveways, parking lots, concrete
walkways, prepare and paint all building exteriors and
replace all building roofs. As of November, 1999, the
Partnership had contracted to have the roofs replaced
and the building repainted for a cost of $366,600 and
$104,500 of which $122,200 and $25,000 had been paid
as of year end, respectively. As of year end, the
prefabricated roofs had been ordered and work had
commenced on removing the old roofs. None of the
painting contract had begun by year end.
18
<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 invest ments. 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.
19
<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.
20
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION:
During the year ended December 31, 1999, the General Partners (see Item 13)
received cash compensation from Registrant totaling $33,803 consisting of
project management fees. Norman Jacobson received $22,160 and Theodore J.
Weill received $11,643.
Also, during the year ended December 31, 1999, one of the General Partners
and his affiliate, Norman Jacobson Management Co. (see Item 13) received cash
compensation from Registrant totaling $69,252 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, 2000:
<TABLE>
<CAPTION>
PERSON RECEIVING TYPE OF COMPENSATION AMOUNT PAID
---------------- -------------------- ------------
COMPENSATION
------------
<S> <C> <C>
General Partners: Interest in distributions from An interest equal to 1% of cash
operations distributions from operations.
Norman Jacobson None
Theodore Weill None
General Partners Subordinated interests in ESTIMATED MAXIMUM AMOUNTS An interest
distributions 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 or one or Subordinated Real Estate Equal to an amount not to exceed one-half
more real esate brokers Commissions (payable if of the acquisition fees which could be paid
affiliated with the General recipient performs services during the Acquisition Period, but only after
Partners related to resales of Partnership return of the Limited Partners' capital
Properties contributions and (unless previously paid
through distributions) 6% per annum
cumulative non-compounded return
thereon.
General Partners: Property management fee HUD approval contract provides for 5% of
Norman Jacobson the net revenues of the Property.The
Theodore J. Weill Partnership paid approximately 2% of
net revenues, $33,803 for the year ended
December 31, 1999, which was paid to the
General Partners: $22,160 to Norman
Jacobson and $11,643 to Theodore J.
Weill; and
Norman Jacobson 3% of net revenues ($50,623) for the year
Management Co., an ended December 31, 1999 was paid to
affiliate of one of the Norman Jacobson Management Co.
General Partners respon-
sible for management of the
property
</TABLE>
21
<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, 1999, 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.
22
<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, 1999 and 1998
Statements of Operations for the years ended December 31, 1999,
December 31, 1998 and December 31, 1997.
Statements of changes in partners' equity for the years ended
December 31, 1999, December 31, 1998, and December 31, 1997.
Statements of cash flows for the years ended December 31, 1999,
December 31, 1998, and December 31, 1997.
Notes to Financial Statements
The following financial statement schedules follow:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent auditors' report on financial statement schedules..... 23
Schedule XI - Real Estate and Accumulated Depreciation............ 24
</TABLE>
23
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON SUPPORTING SCHEDULES
TO VENETIAN PARK ASSOCIATES, LTD.
SANTA MONICA, CALIFORNIA
Under date of February 3, 2000, we reported on the balance sheets of VENETIAN
PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) as of December 31,
1999 and 1998 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, 1999, 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.
/s/ Block, Plant, Eisner, Fiorito & Belak-Berger
Encino, California
FEBRUARY 3, 2000
24
<PAGE>
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<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 $ 6,300,000 $1,158,278 $ 9,771,898 $ 244,509
========================================================================================================================
<CAPTION>
GROSS AMOUNT OF WHICH WAS
CARRIED AT CLOSE OF PERIOD (D)
-----------------------------------------------------------------------------------
BUILDINGS
AND ACCUMULATED
LAND IMPROVEMENTS TOTAL DEPRECIATION
-----------------------------------------------------------------------------------
<C> <C> <C> <C>
$ 1,158,278 $ 10,016,407 $ 11,174,685 $ 4,728,389
===================================================================================
</TABLE>
<TABLE>
<S> <C>
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 1999, 1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of period $11,052,485 $11,031,252 $11,031,252
Additions during period 122,200 21,233 0
- -------------------------------------------------------------------------------------------------------------------
Balance at close of period $11,174,685 $11,052,485 $11,031,252
===================================================================================================================
(C) Reconciliation of accumulated depreciation for 1999, 1998 and 1997:
Balance at beginning of year $ 4,449,304 $ 4,170,961 $3,894,784
Additions during period:
Depreciation expense 279,085 278,343 276,177
- -------------------------------------------------------------------------------------------------------------------
$ 4,728,389 $ 4,449,304 4,170,961
Deductions during period:
Accumulated depreciation on real estate
sold or improvements written off 0 0 0
- -------------------------------------------------------------------------------------------------------------------
Balance at close of year $ 4,728,389 $ 4,449,304 $4,170,961
===================================================================================================================
</TABLE>
(D) Aggregate cost of real estate at December 31, 1999 for Federal income
tax purposes is $11,175,461.
25
<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: 2/9/2000 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: 2/25/2000 By:/s/ Norman Jacobson
---------------- ---------------------------------------
Norman Jacobson
General Partner
26
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<CASH> 1,181,242 364,514
<SECURITIES> 0 0
<RECEIVABLES> 383,594 186,611
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,564,836 551,125
<PP&E> 11,071,027 11,071,027
<DEPRECIATION> 4,624,731 4,449,304
<TOTAL-ASSETS> 8,011,132 7,172,848
<CURRENT-LIABILITIES> 306,933 366,210
<BONDS> 6,343,988 5,284,103
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 1,360,211 1,522,535
<TOTAL-LIABILITY-AND-EQUITY> 8,011,132 7,172,848
<SALES> 0 0
<TOTAL-REVENUES> 1,696,973 1,610,999
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 1,410,664 1,256,357
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 448,633 440,372
<INCOME-PRETAX> (162,324) (85,730)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (162,324) (85,730)
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
