SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10KSB
X Annual Report Pursuant to Section 13 or 15(d) of the Securities
- ---
Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996, or
__ Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number: 0-13493
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer As Specified in Its Charter)
Massachusetts 04-2833662
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)
One International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 617-330-8600
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 Registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES X NO__
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
Registrant had no revenue for its most recent fiscal year.
No market for the Limited Partnership Units exists and therefore, a market value
for such Units cannot be determined.
Documents Incorporated by Reference
Location in Form
10-KSB In
Which Document
is Incorporated
Part I The Partnership's Confidential Memorandum, dated June 11,
1984, filed as Exhibit 28(a) (the "Memorandum") to the
Partnership's Registration Statement on Form 10 filed on
April 30, 1985, including all Exhibits thereto
("Registration Statement")
Transitional Small Business Disclosure Format: Yes ___ No X
<PAGE>
PART I
Item 1. Description of Business
General
Twelve AMH Associates Limited Partnership (the "Partnership") was organized
under the Massachusetts Uniform Limited Partnership Act on April 24, 1984. The
general partners of the Partnership (the "General Partners") are Two Winthrop
Properties, Inc. ("Two Winthrop") and Linnaeus-Lexington Associates Limited
Partnership ("Linnaeus-Lexington"). Two Winthrop is a Massachusetts corporation
which is a wholly-owned subsidiary of First Winthrop Corporation ("First
Winthrop"), a Delaware corporation, which in turn is wholly-owned by Winthrop
Financial Associates, A Limited Partnership ("WFA"), a Maryland limited
partnership; the sole general partner of WFA is Linnaeus Associates.
Linnaeus-Lexington is a Massachusetts limited partnership. The general partner
of Linnaeus-Lexington is WFA. Two Winthrop is the managing general partner of
the Partnership. See "Change in Control".
The Partnership was capitalized by contributions from partners. In August
1984, upon completion of its offering, the Partnership sold 600 Units of Limited
Partnership Interest at an aggregate purchase price of $57,750,000 pursuant to
Regulation D promulgated under the Securities Act of 1933. The Partnership used
the net proceeds from the offering, together with a line of credit obtained from
a major commercial bank for an interim loan, which has been repaid in full, and
a purchase money note from the seller, the Aetna Casualty and Surety Company
("Aetna"), to acquire its 66.667% interest in Square 254 Limited Partnership
(the "Square 254") and to acquire, in 1988, a 66.67% general partner interest in
National Place Land Limited Partnership ("National Land"). Square 254 and
National Land are hereinafter collectively referred to as the "Operating
Partnerships."
Square 254 is a District of Columbia limited partnership organized in 1979.
The general partners of Square 254 are the Partnership, the Quadrangle
Development Corporation ("Quadrangle") and the Marriott Corporation
("Marriott"). Quadrangle is the managing general partner of Square 254. The
limited partners are Marriott and NP Limited Partnership, an affiliate of
Quadrangle. Quadrangle is the general partner of NP Limited Partnership and owns
approximately 77% of the partnership interests in NP Limited Partnership.
Quadrangle and Marriott are not affiliated with the Partnership, WFA or any of
its affiliates.
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National Land is a District of Columbia limited partnership organized
on August 8, 1988. The 66.67% general partner of National Land is the
Partnership. The limited partners are Quadrangle (16.665%) and Marriott
(16.665%).
The only business of the Partnership is investing as a general partner
in Square 254 and National Land.
The Partnership is currently in its operating phase and expects to remain
in this phase until April 1999 (Maturity Date of Partnership Debt) at which time
the partnership will evaluate selling its investment or holding the investment
longer than originally expected.
Properties owned by the Operating Partnerships
1. Square 254
Square 254 developed and presently owns and operates a mix- use complex
know as "National Place," located at 1331 Pennsylvania Avenue, N.W., Washington,
D.C. National Place consists of: (i) the 772-room J.W. Marriott Hotel managed by
the Marriott Corporation, (ii) the 71,000 square feet of retail space leased to
and managed by The Rouse Company, (iii) the 418,000 square feet of office space,
(iv) a leasehold interest in the 1,600-seat National Theatre leased on net basis
to the New National Theater Corporation, which in turn contracts with the
Shubert Organization to provide programming for the theater, and (v) the 400-car
parking garage managed by QuikPark, Inc. In addition, Square 254 leases from
National Land pursuant to a ground lease (the "Ground Lease") which expires in
2083, the land on which National Place is located.
The Hotel: The J. W. Marriott Hotel is a fifteen story, 772-room hotel
which opened in February 1984. Its special features include four restaurants,
in-house catering services, health club including an indoor swimming pool, two
ballrooms of 14,000 and 8,400 square feet, 10 function rooms totaling 30,000
square feet, 18 hospitality suites, 2 Vice-Presidential suites, and 2
Presidential suites. The following table sets forth the
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average occupancy and room rate at the Hotel for the calendar years ended
December 1996 and 1995:
December 31,
1996 1995
Average Occupancy(%) 83.1 83.7
Average Room Rate($) 151 146
Revenue per
Available Room($) 125 122
Square 254 entered into a Management Agreement with Marriott pursuant
to which Marriott is acting as the exclusive agent to manage and operate the
hotel. The agreement has a term of 30 years and expires in February 2014.
Marriott may renew the agreement for four renewal terms of 10 years each and one
final renewal term through the expiration of the ground lease with National
Land. Marriott earns a management fee equal to 3% of gross revenues for central
office services and an incentive fee of 20% of the operating profit of the
hotel. For this purpose hotel operating profit is defined as the excess of gross
revenues over deductions including: (i) all normal costs of operation; (ii) the
3% of gross revenues central office services fee described above; (iii) a
reserve to cover replacements of the hotel's furniture, fixtures and equipment
and non-routine repairs and maintenance, which reserve is 5% of the hotel's
gross revenues with the balance limited at any time to 3.5% of gross revenues
for the immediately preceding three years; (iv) the hotel's pro rata share of
chain services; and (v) certain insurance costs and real estate taxes. However,
if, during the initial term of the agreement, the 80% share of the operating
profit that Square 254 is to receive is less than the Owner's Priority, defined
as 50% of Square 254's debt service on first mortgage financing, Square 254 is
to receive the portion of Marriott's 20% incentive fee needed to make up the
difference. This portion will be paid back to Marriott in subsequent years from
distributions to Square 254 in excess of the Owner's Priority. Neither Marriott
nor Square 254 may assign their rights and obligations under the agreement
without the approval of the other party except for certain small shops and
concessions in the hotel which Marriott may sublease. Square 254 may terminate
the agreement if (i) the operating profit that it receives in any two
consecutive fiscal years falls below the Owner's Priority or (ii) in any two
consecutive years during a renewal term, Square 254's rate of return on
replacement costs is less than 120% of the average annual yield for the three
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immediately preceding fiscal years on 20-year U.S. Treasury bonds and, in either
case, Marriott does not advance the difference to Square 254. If Square 254
decides to sell the hotel, it must notify Marriott, which shall have the right
to purchase the hotel on the same terms as proposed to be offered to proposed
buyers.
The Office Towers: The Office Towers are known as the North and South
Towers. The North Tower has 15 floors with an aggregate of approximately 350,000
square feet of net rentable office space. The South Tower has 6 floors with an
aggregate of approximately 60,000 square feet of net rentable office space.
There is a connecting access between the two towers at the fifth floor level.
The Office Towers and common areas are managed by Quadrangle pursuant
to an agreement which is scheduled to expire on April 30, 1999. The agreement
provides for fees payable to Quadrangle of (i) 3% of gross receipts as a fee for
management of the office space and (ii) $100,000 per year increased by 25% of
the percentage increase in the CPI with January 1, 1984 as the base for
management of the common areas. The following table sets forth the average
occupancy, the average rent per square foot of the Officer Towers and the
effective rent per square foot after taking into consideration any free rent
periods or give-backs for the calendar years ended December 1996 and 1995:
December 31,
1996 1995
Average Occupancy(%) 83 87
Average Rent
Per Square Foot ($) 38 36
Effective Rent($) 32 32
The Department of Justice ("DOJ") leases, in the aggregate, approximately
43% of the leasable space at the Office Towers (office and storage space of
182,677 square feet, in the aggregate). The leases with DOJ provide for annual
rent payments in the aggregate of $5,738,020 and terminate on May 14, 2000 with
respect to 92468 square feet and August 14, 2004 with respect to 90209 square
feet.
National Association of Manufacturers ("NAM") leases 11.5% of leasable
space at the Office Towers a majority of which is located on the 14th and 15th
floors, (office and storage space of 50,032 square feet, in the aggregate) for a
gross rent of $2,346,957, with a lease expiration date of May 31, 2001. Square
254 negotiated a new lease, moving NAM from the 14th and 15th floors to the 6th
and 12th floors. The new lease, signed December 18, 1996, provides for NAM to
move into the entire 6th floor (42,530 square feet), and 2,305 square feet on
the 12th floor, with aggregate annual lease payments of $1,613,427, increasing
annually with a lease termination date of April 30, 2012. Upon occupancy,
expected May 1, 1997, NAM will lease, in the aggregate, approximately 10.5% of
leaseable space in the Office Towers.
Square 254 is currently working on leasing the 50,000 square feet of
space, a majority of which is on the 14th and 15th floors, which will be vacated
by NAM on May 1, 1997.
The Retail Space: The Shops at National Place is a three-story indoor
mall with 71,118 square feet of space, surrounding a central atrium, which is
interconnected to the retail space in the National Press Building. The space
beneath the National Press Building is not owned by Square 254. Effective
October 1, 1996 only the section owned by Square 254 is operated by the Rouse
Company, which is not affiliated with the Partnership or its General Partners.
The Rouse Company has expressed an interest in withdrawing from its lease, and
Square 254 is interviewing other entities to manage the Shops. The lowest level
of The Shops has both retail tenants and restaurants. The middle level has
primarily retail tenants. The upper level is a food court with fast-food
restaurants and large common seating areas. In addition, The Shops connect with
the Hotel lobby on the lowest level along an arcade, where additional food and
retail operations are located. In all, there are approximately 50 merchants
currently leasing the retail space.
The retail space is governed by a lease between Square 254 as Lessor
and the Rouse Company of the District of Columbia as Lessee. The original term
of the lease expires on May 15, 2014 with two options to extend (first option
for 30 years and second option until the end of the ground lease). Payments to
Square 254 under the lease are dependent on and a function of net cash flow from
the retail space. The parent corporation of Rouse guaranteed Rouse's payment of
minimum annual fixed rent of $18 per square foot to Square 254 for the first
three years. The Base Rent is $1,368,100 (or approximately $19 per square foot).
The Additional Rent of $202,440 (or approximately $3 per square foot) is the
amount of the increase in the annual lease payment
<PAGE>
because the net cash flow during the first two years of operation was below $18
per square foot. The Percentage Rent is 67% of net cash flow in excess of the
aggregate of the Base Rent and the Additional Rent up to $30.56 per square foot
plus 72% of net cash flow in excess of $30.56 per square foot up to $37 per
square foot and 63% of net cash flow in excess of $37 per square foot. No
Percentage Rent was paid to Square 254 in 1996 or 1995. In addition any increase
in rent under the ground lease due to a redevelopment that materially changes
the market area will raise the fixed annual rent by 7% of such increase.
The National Theater: The National Theater is a seven-story structure
whose auditorium holds approximately 1,600 seats. It was built in 1885 with
substantial renovations in 1922 and 1984.
The National Theater is leased on a net basis to the New National Theater
Corporation, which in turn contracts with the Shubert Organization to provide
programming for the theater.
Revenue received by Square 254 from the National Theater was $66,816
and $65,607 in 1996 and 1995, respectively.
Square 254 entered into a lease with the New National Theatre Corporation
with an initial term of 35 years, plus renewal options extending throughout the
99-year term of the ground lease. The lease commenced on December 29, 1980.
Under the lease, Square 254 agreed to reconstruct and renovate the National
Theatre Building, and the New National Theatre Corporation (the "Corporation")
agreed to operate the National Theatre, primarily for the production of live,
non-media drama presentations. The Corporation has contracted with the New York-
based Shubert organization to provide established Broadway shows. The
Corporation pays annual base rent under the lease plus $25,000 multiplied by the
percentage increase in the Consumer Price Index for the District of Columbia
(the "CPI"). The Corporation has the right to renew the lease for five ten-year
terms and one fourteen-year term. Rent during the first two renewal terms will
consist of annual base rent and additional rent equal to the greater of (a) the
annual base rent multiplied by the percentage increase in the CPI for that year
or (b) 1% of the increase in the Corporation's gross receipts for that year over
the annual average of gross receipts for the preceding three years. Rent is to
be renegotiated by the parties after 55 years and decided by arbitration if
necessary.
<PAGE>
The Parking Garage: The Parking Garage is a 400-car, underground parking
facility consisting of five floors of underground parking garage facilities,
together with the first floor garage entrance, driveway and ramps leading to the
parking facility, containing approximately 143,662 square feet. Square 254
received $404,288 and $352,305 in revenue from the Parking Garage for the years
ended December 31, 1996 and 1995, respectively.
The Parking Garage is leased to QuikPark, Inc. under a lease effective
on October 21, 1994 and terminating on April 30, 1998. The rent payable under
the lease is equal to ninety-five percent of gross revenue (i.e. all receipts
other than D.C. Parking Tax). The operating expenses of the Parking Garage are
expenses of Square 254. Prior to the effective date of the lease with QuikPark,
Inc., the Parking Garage was leased to Marriott. Under the lease with Marriott,
which commenced January 1, 1986 and expired on October 20, 1994, the rental
under the Marriott lease was 5% gross revenues.
2. National Land
National Land was formed in 1988 for the purpose of purchasing the fee
interest in the Land and the national Theater Building (collectively, the "New
Properties") from the Pennsylvania Avenue Development Corporation ("PADC"). As a
result, National Land became the lessor under the Ground Lease and the Theater
Lease under which Square 254 is the Lessee.
Square 254 signed a lease with the Pennsylvania Avenue Development
Corporation (PADC) on September 12, 1979 (the "Ground Lease"). The commencement
date for the land is September 12, 1979 and for the National Theatre building is
December 29, 1980. In August 1988, National Land purchased the land and National
Theatre building from PADC and assumed the Ground Lease from PADC. The term of
the lease is 99 years. At the expiration of the lease, National Land will own
the land and National Theatre building. Square 254 pays annual rent of
$2,100,000 to National Land. Square 254 is also obligated to pay Additional
Ground Lease Rent consisting of (a) $600,000 of the first $3,150,000 of net cash
flow pari passu with the distribution of $2,550,000 to Square 254 and (b) 20% of
all remaining net cash flow after distribution to Square 254 of an amount equal
to a 12% return upon Square 254's equity in the property, if any, in excess of
$15,000,000. Until there is an appraisal (which is not expected to occur during
the first fifteen years), Square 254's equity will not be deemed to exceed
$40,000,000. No additional Ground Lease Rent was paid by Square 254 in 1996 or
1995.
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Square 254 and National Land maintain property and liability insurance
on the properties and believes such coverage to be adequate.
Partnership Agreement Amendment
In August 1995, the Managing General Partner amended Section 12.4 of
the Registrant's partnership agreement to clarify and remove any ambiguities
pertaining to the requirements for calling and voting at a meeting of Investor
Limited Partners, or taking action by written consent of partners in lieu
thereof. Such requirements include, among other matters, that any action by
written consent may be initiated only by the General Partner or by one or more
Investor Limited Partners holding not less than 10% of the outstanding Units.
Competition
National Place is affected by and subject to the general competitive
conditions of the lodging industry and commercial real estate. In addition,
National Place is located in an area which contains numerous other properties
which may be considered competitive. The varying cycles of Congress (when in
session and when elections are held) cause fluctuations in the Washington D.C.
hotel market.
Change in Control
On December 22, 1994, control of the General Partners was transferred from
Arthur J. Halleran, Jr. and Jonathan W. Wexler to Nomura Asset Capital
Corporation ("Nomura"). Mr. Halleran had been the sole general partner of
Linneaus Associates and Messrs. Halleran and Wexler had been the general
partners of Linnaeus- Lexington. Pursuant to an Investment Agreement with
Nomura, Mr. Halleran and certain other individuals who comprise the senior
management of WFA, including Mr. Wexler, agreed to the transfer the Linnaeus
Associates general partner interest to W. L. Realty, L.P. and transfer the
Linnaeus-Lexington general partner interest to WFA.
On July 18, 1995, in an event subsequent to the submission of the original
Partnership Annual Report on Form 10-KSB for the year ended December 31, 1994,
control of the General Partners was transferred by Nomura to an affiliate of
Apollo Real Estate Advisors, L.P. ("Apollo"). In connection with this
transaction,
<PAGE>
Messrs. Halleran and Wexler resigned as a director and officer
of, among others, the General Partners.
The general partner of W. L. Realty, L. P. is Londondarry Acquisition II,
L.P. The general partner of Londondarry Acquisition II, L.P. is LDY - GP
Partners II, L.P. The general partner of LDY - GP Partners II, L.P. is
Londondarry Acquisition Corporation II, Inc. Apollo owns 100% of the stock of
Londondarry Acquisition Corporation II, Inc.
Employees
The Registrant does not have any employees. Services are performed for the
Partnership by the General Partners and agents retained by it. In addition, the
Partnership has retained Winthrop Financial Co., Inc., to perform certain
administrative services for the Partnership. For these services, Winthrop
Financial Co., Inc., is entitled to receive an annual fee of $300,000. As of
December 31, 1996, Winthrop Financial Co., Inc., has been paid its fee for 1996
and a portion of its accrued fee for the period 1984 through 1995.
Item 2. Description of Properties
The Partnership owns no property other than its interest in Square 254
and NPLLP. The Operating Partnerships own no property other than the Properties
and the New Properties, which are described under Item 1 above.
The annual realty taxes for the Properties in 1996 were $3,170,677.
Item 3. Legal Proceedings
To the Partnership's knowledge, there are no material pending legal
proceedings to which the Partnership is a party or of which any of its property
is subject.
Item 4. Submission of Matters to a Vote of Security Holders
None.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
There is no public trading market for the Units. Trading in the Units
is infrequent and occurs solely through private transactions. In addition,
transfers of Units are subject to limitations contained in the Partnership's
partnership agreement, including a requirement that the General Partners consent
thereto which consent may be granted or withheld in the General Partners' sole
discretion. The Partnership's partnership agreement was filed as Exhibit 3(a) to
the Partnership's Registration Statement on Form 10 filed on April 30, 1985, as
amended thereafter (the "Partnership Agreement"). As of March 15, 1997, there
were approximately 714 holders of 600 outstanding Units.
The Partnership Agreement requires that Cash Flow (as defined therein)
be distributed to the partners in specified portions at reasonable intervals
during the fiscal year, but in any event not less often than annually no later
than 90 days after the end of the fiscal year. There are no restrictions on the
Partnership's present or future ability to make distributions of Cash Flow.
There have been no cash distributions paid or accrued since the inception of the
Partnership. It is not anticipated that the Partnership will be able to make
distributions to its Limited Partners, if at all, prior to 1999.
The Operating Partnership made distributions to the Partnership during
1996 totaling $3,163,926. Certain fees, loans and interest due to affiliates
were repaid from this distribution. See "Item 6, Management's Discussion and
Analysis or Plan of Operation."
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of
Operation
Liquidity and Capital Resources
The Partnership's only assets consist of its general partnership interests
in Square 254 and National Land. There are no known trends, demands,
commitments, events or uncertainties that will result in the Partnership's
liquidity increasing or decreasing in any material way. Prior to 1996, the
Partnership received no cash distributions from the Operating Partnerships. As a
result, the Partnership had relied on loans from affiliates as its primary
source of liquidity. In order to satisfy its administrative and other expenses,
affiliates of the General Partner have made interest-free loans to the
Partnership for administrative expenses, an interest-bearing loan related to the
Partnership's interest in National Land and Winthrop Management has agreed to
defer its fees. As of December 31, 1996, all loans from the General Partner have
been fully repaid and the Partnership owed $3,300,000 to Winthrop Financial Co.,
Inc., for unpaid asset management fees. In 1996, the Operating Partnership had
sufficient revenue to make distributions to the Partnership totaling $3,163,926.
These distributions were used to satisfy certain of the fees, loans and interest
due on the affiliate loans. In January 1997, the Partnership paid Winthrop's
1997 fee of $300,000 and reduced the $3,300,000 accrued fee balance by $500,000.
The balance of the distribution was retained as Partnership reserves. Square 254
is not expected to make any future distributions until December 1997, if any,
depending upon property operating results in 1997. The Partnership's current
reserves are expected to be sufficient to fund administrative expenses in the
foreseeable future. All future distributions to the Partnership from Square 254
will be used to repay unpaid asset management fees after payment of
administrative expenses of the Partnership.
In the future, the Partnership will continue to require cash to pay
management fees and general and administrative expenses and may require cash to
satisfy its obligation to fund any operating deficits of the Operating
Partnership. The Partnership has made no commitments for capital expenditures as
of December 31, 1996.
<PAGE>
Based on (i) Square 254's budget for 1997 which shows sufficient
reserves at year-end 1997 for a cash distribution in 1997 and (ii) Square 254
anticipation of a refinancing of its debt at lower interest rates in 1997 with a
resulting decrease in interest expense in future years, the General Partners
believe that Square 254 will continue to generate sufficient cash flow to
distribute cash to the Partnership on a consistent basis in the foreseeable
future. However, the ability of Square 254 to generate sufficient cash flow is
subject to many factors outside the control of the Partnership. Accordingly,
there can be no assurance that Square 254 will continue to be able to make
distributions to its partners.
In addition to the affiliate loans described above, the Partnership is
obligated on the following loans:
(a) In connection with the Partnership's acquisition of its interest in
Square 254, the Partnership obtained a non-recourse purchase money note payable
to Aetna in the principal amount of $22,000,000 (the "Aetna Loan"). The Aetna
Loan bears simple interest at 15% per annum and requires no current payments
until maturity in August 1999, at which time Aetna is obligated to refinance the
Note if the Partnership is unable to obtain financing from another source. The
term of the refinancing shall be 10 years; the rate of the refinancing shall be
equal to Aetna's then current rate for 10-year permanent loans secured by first
mortgage liens on collateral substantially similar to the Partnership's
investment. However, the Partnership may not be able to satisfy the debt service
for the refinanced loan. On December 31, 1996, the outstanding balance of
principal plus accrued interest on the Note was [$62,700,000).
(b) Aetna also provided the Partnership with a $20 million line of
credit (the "Aetna Line of Credit"), which expired in December 1989. The
Partnership used the Aetna Line of Credit to fund its requirement to contribute
its pro rata share of operating deficits incurred by Square 254. Borrowings
under the Aetna Line of Credit bear interest at the annual rate of 15.5% and
require no current payments until maturity in August 1999 at which time Aetna is
obligated to refinance the Note if the Partnership is unable to obtain financing
from another source. The term of the refinancing shall be 10 years; the rate of
the refinancing shall be equal to Aetna's then current rate for 10- year
permanent loans secured by first mortgage liens on collateral substantially
similar to the Partnership's investment.
<PAGE>
On December 31, 1996, the outstanding balance of principal and accrued interest
on the Aetna Line of Credit was [$27,546,842
(c) Two Winthrop properties, Inc., loaned the Partnership $667,000 in
August 1988 (the "Winthrop Financial Loan") to fund the Partnership's
acquisition of its general partnership interest in National Land. In 1996 the
loan plus accrued interest was repaid in full.
Based on the Partnership's current and expected cash flow, the Partnership
will not have sufficient funds to satisfy the Aetna Loan and the Aetna Line of
Credit at maturity. Accordingly, if the Partnership cannot refinance or modify
the Aetna Loan on favorable terms, or sell its interest in the Operating
Partnerships for sufficient value, the Partnership may lose its interest in the
Operating Partnerships through foreclosure. In addition, any distributions made
by the Operating Partnerships will be applied first to satisfy the Winthrop
asset management fees. As a result, at this time it appears that investors in
the Partnership will not receive a return of a significant portion of their
investment.
Square 254
Square 254 receives room revenues from the Hotel and rental revenues from
the other components of its property and is responsible for operating expenses,
administrative expenses, capital improvements and debt service payments. Square
254 had negative cash flow after payment of repairs, capital improvements and
distributions to partners for the year ended December 31, 1996, as compared to
positive cash flow for the year ended December 31, 1995.
Square 254 uses working capital reserves as its primary source of
liquidity. Square 254 had adequate working capital reserves to fund its
operations and other expenditures through 1996.
During 1996, the general partners of Square 254 made substantial
expenditures of $3,083,686. The majority of these expenditures were made in
connection with re-leasing a significant portion of the Office Towers and
renovation of meeting rooms at the Hotel. Such expenditures were funded from the
Operating Partnership's short-term investments and unrestricted cash reserves,
which together had a balance of $9,624,733 at December 31, 1996 as well as cash
generated from
<PAGE>
operation of Square 254. Each year, a portion of the gross revenue of the Hotel
(currently 5% of gross revenue) is added to the Hotel replacement reserve
account for the purpose of funding future capital requirements of the Hotel. The
Hotel replacement reserve account had a remaining balance of $2,704,973 as of
December 31, 1996. The general partners of Square 254 currently believe Square
254's short-term investments and unrestricted cash reserves will be sufficient
to fund Square 254's operations and capital expenditures over the next several
years. However, the ability of Square 254 to fund expenditures in the future
will depend on Square 254's ability to achieve certain levels of operation. If
existing reserves and future operations are not sufficient to support these
expenditures, the general partners of Square 254 will evaluate the necessity of
making these expenditures against the ability of Square 254 to obtain additional
capital from outside lending sources and the willingness and ability of the
general partners of Square to contribute additional Capital.
Square 254 has two mortgage loans, both of which are secured by a first
mortgage on its assets. The debt maturity date is in 1999 with a balloon payment
in the aggregate of approximately $124 million. The aggregate mortgage balance
was $125,967,692 as of December 31, 1996. See, Item 7 "Financial Statements" ,
Note 4 to the Financial Statements for a description of the terms of these
loans.
The Partnership believes that the Square 254 loans will be able to be
refinanced on or prior to maturity. The Partnership is currently pursuing, along
with Square 254's other two general partners, refinancing opportunities and
believes that the Square 254 loans will be refinanced prior to maturity.
However, if these loans are not extended, refinanced or satisfied, or the
property is not sold, it could be lost through foreclosure.
Under the terms of the Ground Lease, Square 254 was able to defer
certain amounts of its rent obligations. The deferred amount accrues interest at
12.4447% per annum. Interest and deferred rent is repaid monthly to the extent
Square 254 has sufficient cash flow. In 1996 and 1995, Square 254 made payments
on the deferred ground rent of principal and interest of $175,715 and $153,929,
respectively. The outstanding balance of deferred ground rent on December 31,
1996 was $890,324. Square 254 is current in its obligation under the Ground
Lease with respect to payment due on the deferred ground rent.
<PAGE>
National Land
National Land receives revenues solely from lease payment under the Ground
Lease and is responsible for debt service payments. In connection with its
acquisition of the Land, National Land obtained a loan in the original principal
amount of $43,101,900, which loan matures in 2018. As of December 31, 1996, the
outstanding balance on this loan was $43,101,900. In addition, accrued interest
on this loan totalled $32,245,634 at December 31, 1996. (See, Item 7, "Financial
Statements", Note 3 to the Financial Statements of National Place Land Limited
Partnership for a description of the terms of this loan.)
In order for National Land to sell its property or refinance the loan
encumbering the property, the consent of all of the general partners is
required.
Results of Operations
The Partnership's loss from operations increased from $7,666,897 for the
year ended December 31, 1995 to $8,205,951 for the year ended December 31, 1996.
This increase in loss from operations was due to an increase in interest expense
of $658,747 which was only partially offset by a decrease in related party
interest of $135,296. Interest expense increased due to increased principal and
accrued interest balance on the Partnership's outstanding loans. Related party
interest expense decreased due to the partial satisfaction of interest-bearing
affiliate loans made during 1996 as discussed above. All other items of revenue
and expense remained relatively constant.
The Operating Partnerships' net loss increased from $5,782,475 for the year
ended December 31, 1995 to $8,053,808 for the year ended December 31, 1996. This
increase is primarily attributable to a decrease in rental revenue and increases
in hotel operations expense, rental operations expense and interest expense.
Hotel operations expense increased by $143,947 during 1996 as compared to 1995
due to increases in the cost of food, rental equipment, insurance, repairs and
maintenance. Rental operations revenue decreased from $13,744,613 in 1995 to
$12,777,117 in 1996 as a result of the lease for the entire sixth floor expiring
in 1996. Similarly, rental operations expense increased in 1996 as compared to
1995 due to increases in depreciation and amortization, repairs and maintenance
and utilities costs. As a result of an increase in interest expense from
National Land and an increase in interest expense with respect to the Aetna
Loan, interest expense increased $966,510 in 1996 as compared to 1995. All other
items of revenue and expense remained relatively constant.
<PAGE>
Item 7. Financial Statements
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT
BALANCE SHEETS
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
To the Partners of
Twelve AMH Associates Limited Partnership:
We have audited the accompanying balance sheets of Twelve AMH Associates Limited
Partnership (the "Partnership") as of December 31, 1996 and 1995, and the
related statements of operations, changes in partners' deficit and cash flows
for the years then ended. 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 the Partnership as of December
31, 1996 and 1995, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
March 7, 1997
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
1996 1995
---- ----
<S> <C> <C>
ASSETS:
Investments in Operating Partnerships
(Note 4) $ (243,620) $ 8,691,341
Deferred financing cost, net of accumulated
amortization of $41,109 and $37,778,
respectively (Note 3) 8,891 12,222
Cash and cash equivalents 1,043,786 40
-------------- ------------------
TOTAL ASSETS $ 809,057 $ 8,703,603
============== ============
LIABILITIES:
Purchase Money Note, net of
unamortized discount (Note 5) 52,002,242 46,149,350
Notes payable (Note 6) 9,873,978 9,873,978
Accrued interest on operating
deficit notes (Note 6) 17,672,864 16,121,141
Accrued expenses 15,010 24,084
Due to affiliates (Note 8) 3,300,000 5,018,456
------------ -----------
82,864,094 77,187,009
------------ ----------
PARTNERS' DEFICIT:
Limited partners - Units of Limited
Partnership Interest, $96,250 stated
value per unit; authorized, issued
and outstanding - 600 Units (80,708,206) (67,272,291)
General partners ( 1,346,831) (1,211,115)
-------------- -------------
(82,055,037) (68,483,406)
------------- -------------
TOTAL LIABILITIES AND
PARTNERS' DEFICIT $ 809,057 $ 8,703,603
============== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
1996 1995
-------------- ----------
<S> <C> <C>
EXPENSES:
Interest (Notes 5 and 6) $ 7,404,615 $ 6,745,868
Related party interest (Note 8) 17,588 152,884
Amortization (Notes 2 and 3) 404,630 404,630
Related party management fee (Note 8) 300,000 300,000
Other 79,118 63,515
---------------- -------------
8,205,951 7,666,897
------------- ------------
LOSS FROM OPERATIONS (8,205,951) (7,666,897)
INTEREST INCOME 3,726 ---
EQUITY IN LOSSES FROM
OPERATING PARTNERSHIPS
(Notes 2 and 4) (5,369,406) (3,855,159)
--------------- --------------
NET LOSS (Note 1) $(13,571,631) $(11,522,056)
============ ============
NET LOSS ALLOCATED TO
GENERAL PARTNERS $ (135,716) $ (115,221)
============== ==============
NET LOSS ALLOCATED TO
LIMITED PARTNERS $(13,435,915) $(11,406,835)
============ ============
NET LOSS PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ (22,393) $ (19,011)
=============== ===============
...........................................................
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
Investor
Limited General
Partners Partners Total
<S> <C> <C> <C>
Balance, December 31, 1994 $(55,865,456) $(1,095,894) $(56,961,350)
Net loss (11,406,835) (115,221) (11,522,056)
------------- ------------- -------------
Balance, December 31, 1995 (67,272,291) (1,211,115) (68,483,406)
Net Loss (13,435,915) (135,716) (13,571,631)
-------------- -------------- --------------
Balance, December 31, 1996 $(80,708,206) $(1,346,831) $(82,055,037)
============= ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
1996 1995
---------- -------
Cash flows from operating actities:
<S> <C> <C>
Net loss $(13,571,631) $(11,522,056)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Amortization 2,957,852 2,298,775
Equity in losses of Operating Partnerships 5,369,406 3,855,159
Interest added to loan principal on Purchase
Money Note 3,300,000 3,300,000
Increase in accrued interest on operating deficit notes 1,551,723 1,551,723
(Decrease)/increase in accrued expenses (9,074) 24,084
(Decrease)/increase in due to affiliates (1,051,456) 491,995
------------ -----------
Net cash used in operating activities (1,453,180) (320)
------------ -------------
Cash from investing activities:
Distributions received from operating partnership 3,163,926 ---
------------- --------------
Net cash provided by investing activities 3,163,926 ---
------------- --------------
Cash flows from financing activities:
Repayment of loan from affiliate (667,000) ---
------------- ----------------
Net cash used in financing activities (667,000) ---
------------- ----------------
Increase/(decrease) in cash and cash equivalents 1,043,746 (320)
Cash and cash equivalents beginning of the period 40 360
------------- --------------
Cash and cash equivalents end of the period $ 1,043,786 $ 40
=========== ==============
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 839,872 $ -
=========== ==============
</TABLE>
The accompanying notes are an integral part of thesefinancial statements.
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. ORGANIZATION
Twelve AMH Associates Limited Partnership (the "Partnership") was organized as a
Massachusetts limited partnership under the Massachusetts Uniform Limited
Partnership Act on April 24, 1984, for the purpose of acquiring a 66.667%
general partnership interest in Square 254 Limited Partnership ("Square 254"), a
District of Columbia limited partnership organized in 1979. On August 31, 1984,
the Partnership acquired the interest in Square 254 from The Aetna Casualty and
Surety Company, a Connecticut corporation ("Aetna").
Square 254 has developed and presently owns and operates a multiple use complex
known as "National Place", located at 1331 Pennsylvania Avenue, N.W., Washington
D.C. National Place consists of the 772-room J.W. Marriott Hotel, a retail area
containing 71,000 square feet, office towers containing 418,000 net rentable
square feet, a 400-car parking garage and the 1,600-seat National Theatre which
is subleased to a not-for-profit organization. Square 254 leased the land on
which National Place is situated and the National Theater Building on a long
term basis from the Pennsylvania Avenue Development Corporation through August
11, 1988, after which it has been leased from National Place Land Limited
Partnership as described below. The Partnership will terminate on December 31,
2090, or sooner, in accordance with the terms of the Partnership Agreement. The
general partners of the Partnership are Two Winthrop Properties, Inc. and
Linnaeus Lexington Associates Limited Partnership. The general partners of
Square 254 are Quadrangle Development Corporation, a Delaware corporation,
Marriott Corporation, a Delaware corporation, and the Partnership.
The general partners have contributed $20 in respect of their general
partnership interests in the Partnership. On August 31, 1984, the Partnership
admitted investor limited partners who subscribed for a total of 600 Units,
representing capital contributions of $57,750,000. Pursuant to the terms of the
Partnership Agreement, profits or losses and cash distributions (after certain
priority distributions) are allocated 99% to the investor limited partners and
1% to the general partners, respectively. Profits or losses and cash
distributions resulting from the sale or refinancing of the Partnership's
interest in Square 254 will be allocated 70% to the investor limited partners
and 30% to the general partners after certain priority allocations to the
partners of amounts necessary to increase their capital balances to an amount
equal to their invested capital.
National Place Land Limited Partnership (the "Land Partnership" or "NPLLP") was
organized on August 8, 1988 to acquire and lease both the land underlying the
National Place complex (the "Land") and the National Theater Building for an
aggregate purchase price of $43,101,900. As owners of the Land, The Land
Partnership partners became lessors under the 99 - year lease of the Property
(the "Lease") to Square 254 described in the Confidential Memorandum dated June
11, 1984 (the "Confidential Memorandum"). Square 254, as lessee, remains
obligated under the Lease to pay rent to the Land Partnership, as lessor. The
rent payments under the Lease to the Land Partnership provide the cash flow
which will service the acquisition debt incurred by the Land Partnership in
connection with the purchase of the Land. The Partnership has a 66.67% general
partnership interest in the Land Partnership.
Each of the partners of NPLLP contributed to the capital of NPLLP its pro rata
share of the approximately $1,000,000 of expenses incurred in connection with
the purchase of the Land and the closing of the $43,101,900 loan from AEW Trust
#136, a trust funded by certain pension funds. As security for this loan, the
lender received a first priority deed of trust in the property of NPLLP. The
partners of NPLLP (including the Partnership) also pledged a portion of their
respective partnership interests in Square 254 to the lender. In addition, the
Partnership granted to Aetna a security interest in the Partnership's interest
in NPLLP. The Partnership's pro rata share of NPLLP's initial capitalization was
$667,000, which was loaned by Two Winthrop Properties, Inc. to the Partnership
at an interest rate of the then current rate for five year U.S. Treasury Notes
plus 250 basis points. This loan was repaid from the first available cash flow
from operations of the Partnership in 1996. Net profits and losses of NPLLP are
to be allocated among partners in proportion to their respective partnership
interests.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statements
The Partnership prepares its financial statements using the accrual basis of
accounting. The Partnership, as an investor partnership, accounts for its
investments in Square 254 and NPLLP (together, the "Operating Partnerships")
using the equity method. Under the equity method of accounting, the investment
cost (including amounts paid or accrued) is subsequently adjusted by the
Partnership's share of the Operating Partnerships' results of operations and by
distributions received. Costs relating to the acquisition and selection of the
investments in the Operating Partnerships are capitalized to the investment
account and amortized over forty years. Costs in excess of the Partnership's
initial basis in the net assets of Square 254 (approximately $14,800,000) are
also amortized over forty years. The accounting books and records of the
Operating Partnerships are maintained using the accrual basis of accounting.
Cash and Cash Equivalents
Investments in a money market account are considered to be cash equivalents for
financial reporting purposes.
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred Costs
Amortization of deferred financing cost is computed using the straight-line
method over the term of the Purchase Money Note.
Income Taxes
No provision for income taxes is reflected in the accompanying financial
statements of the Partnership. Partners are required to report on their
individual tax return their allocable share of income, gains, losses, deductions
and credits of the Partnership.
Syndication Costs
Each investor limited partner's capital account has been reduced by the
partner's pro-rata share of syndication costs incurred by the Partnership.
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.
3. DEFERRED FINANCING COSTS
The following is a summary of deferred costs at December 31:
<TABLE>
Amortization
Period 1996 1995
----------------- ------------- ---------
<S> <C> <C> <C>
Financing fee, at cost 15 years $ 50,000 $ 50,000
Less: Accumulated amortization (41,109) (37,778)
------------ ----------
Unamortized costs $ 8,891 $ 12,222
=========== ==========
</TABLE>
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
4. INVESTMENTS IN OPERATING PARTNERSHIPS
The Partnership's Investments in the Operating Partnerships are summarized
as follows:
<TABLE>
Square 254 NPLLP
<S> <C> <C>
Balance, December 31, 1994 $27,473,561 $14,525,765)
Amortization (401,296) ---
Equity in losses of Operating Partnerships (364,860) (3,490,299)
----------- --------------
Balance, December 31, 1995 26,707,405 (18,016,064)
Distribution from Operating Partnership (3,163,926) ---
Amortization (401,629) ---
Equity in losses of Operating Partnership (1,482,581) (3,886,825)
------------- ---------------
Balance, December 31, 1996 $21,659,269 $(21,902,889)
=========== =============
</TABLE>
<PAGE>
4. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
The condensed financial statements and condensed notes to financial
statements of the Operating Partnerships (presented on a combined basis
with all significant inter-partnership transactions eliminated) are as
follows:
<TABLE>
CONDENSED BALANCE SHEETS
December 31, December 31,
1996 1995
Assets
<S> <C> <C>
Rental property, net of accumulated
depreciation of $68,625,745 and
$63,526,534, respectively $123,685,019 $128,279,482
Land 39,123,872 39,123,872
Cash, cash equivalents and replacement
reserve 9,625,610 10,415,296
Accounts receivable, net of allowance
for doubtful accounts of $100,000 and
$100,000, respectively 3,029,051 4,172,808
Deferred costs, net of accumulated amortization
of $146,955 and $127,764, respectively 424,968 444,159
Other assets 3,895,486 4,682,468
--------------- ------------
Total Assets $179,784,006 $187,118,085
============ ============
Liabilities and Partners' Capital (Deficit)
Liabilities:
Notes payable $ 201,315,227 $196,253,535
Accounts payable 3,114,483 3,275,024
Other liabilities 407,006 588,428
----------------- ----------------
204,836,716 200,116,987
Partners' Capital (Deficit):
Twelve AMH Associates
Limited Partnership (10,687,727) (2,154,395)
Other partners (14,364,983) (10,844,507)
--------------- -------------
Total Liabilities and Partners'
Capital (Deficit) $ 179,784,006 $187,118,085
============== ============
</TABLE>
4. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
For the Years Ended December 31,
1996 1995
------------------ ------------
Revenue:
<S> <C> <C>
Hotel operations $ 54,916,902 $ 54,850,569
Rental operations 12,777,117 13,744,613
Other 506,124 679,794
--------------- ---------------
68,200,143 69,274,976
------------- -------------
Expenses:
Hotel operations 44,516,630 44,372,683
Rental operations 8,953,515 8,395,923
Interest 22,783,806 22,287.858
Other --- 987
-------------------- ------------------
76,253,951 75,057,451
-------------- -------------
Net loss $ (8,053,808) $ (5,782,475)
============= ============
Net loss allocated to Twelve AMH
Associates Limited Partnership $ (5,369,407) $ (3,855,159)
============= ============
Net loss allocated to other partners $ (2,684,401) $ (1,927,316)
============= ============
</TABLE>
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
4. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
CONDENSED NOTES TO FINANCIAL STATEMENTS OF THE OPERATING
PARTNERSHIPS
A. Summary of Significant Accounting Policies
Rental Property
Square 254 and NPLLP have adopted the provisions of SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of, on January 1, 1996. This Statement requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying
amount of an asset to future net cash flows expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
measured by the amount by which the carrying amount of the assets exceed
the fair value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less costs to sell. Adoption of
this Statement did not have a material impact on the Operating
Partnership's financial position, the results of its operations or its cash
flows.
Rental property includes building costs, lease costs and furniture,
fixtures and equipment. Building costs are recorded at cost and are
composed of the J.W. Marriott Hotel and National Place. Depreciation is
computed using the straight-line method over 40 years commencing when the
component is placed in service. Depreciation and amortization expense
amounted to $7,697,341 and $7,557,237 for 1996 and 1995, respectively.
Lease costs include costs of tenant improvements, renovation of the
National Theater and office space leasing costs. Such amounts are amortized
over the lesser of the term of the related lease or the life of the asset,
generally five to ten years, using the straight-line method.
Furniture, fixtures and equipment is recorded at cost. Depreciation is
computed based on the useful lives of the assets, generally five to ten
years, using the straight-line method.
Deferred Financing Costs
Costs incurred in obtaining permanent loan financing are amortized on a
straight-line basis over the term of the loans.
<PAGE>
INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
Revenue Recognition
Base rental revenue is reported for financial statement purposes using the
straight-line method over the terms of the respective leases. Square 254
records unbilled rent receivable representing the amount that straight-line
rental revenue exceeds rents collectible under the lease agreements.
Square 254 considers current information and events regarding the tenants'
ability to repay their obligations in determining if unbilled rent
receivable is impaired. When it is probable that Square 254 will be unable
to collect all rents due according to the contractual lease terms, unbilled
rent receivable is considered to be impaired. The amount of the impairment
is measured based on the present value of expected future cash flows.
Impairment losses are recorded through a loss on the write-off of assets.
Cash receipts on impaired unbilled rent receivable are applied to reduce
the remaining outstanding balance and as rental revenue, thereafter.
Revenues from hotel operations are recorded when earned, in accordance with
accrual basis accounting.
Income Taxes
No provision has been included in the financial statements for federal
income taxes since income or loss of the Operating Partnerships is
required to be reported by the respective partners. The Operating
Partnerships are subject to local franchise taxes.
Certain items are treated differently for financial statement
reporting and tax return purposes.
Cash Equivalents
For financial statement purposes, the Operating Partnerships consider cash
in the hotel replacement reserve account and funds invested in money market
accounts (that have maturities of three months or less) to be cash
equivalents.
The hotel replacement reserve account is equal to 5 percent of the hotel's
gross revenues per year with the balance limited to 3.5 percent of gross
revenue for the preceding three years. The cash is not restricted.
<PAGE>
4. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
Use of Estimates
Square 254 and NPLLP have made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from these estimates.
Reclassification
Certain 1995 amounts have been reclassified to conform with the 1996
presentation.
<PAGE>
4. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
B. Notes Payable
The Aetna Life Insurance Company has provided permanent loan financing to Square
254. The terms of the loans are as follows:
<TABLE>
1996 1995
---- ----
<S> <C> <C>
15-year permanent loan at 11 5/8% interest. Principal and interest payments
of $1,178,000 are due monthly based on a 38-year amortization schedule. The
current interest rate is subject to upward adjustment effective June 1996 to
a new rate not to exceed 13 5/8% per annum. The loan is due July 1999 with a
balloon payment of approximately $114,400,000 plus accrued interest thereon.
The loan may be prepaid on or after July 1996 with a prepayment premium of
3%. Such premium is reduced by 1% each year. However, if the interest rate
is adjusted upward, as mentioned above, the loan may be prepaid without
penalty. $116,208,875 $116,797,851
15-year permanent loan at 13% interest. Principal and interest payments of
$109,200 are due monthly based on a 38-year amortization schedule. The loan
is due in May 1999 with a balloon payment of approximately $9,650,000 plus
accrued interest thereon. The loan may be prepaid on or after May 1996 with
a
prepayment premium of 3%. Such premium is reduced by 1% each year. 9,758,817 9,797,773
---- --------- ---- ---------
125,967,692 126,595,624
The above loans are secured by the building and tenant improvements. There are
no restrictive covenants or provisions on the loans. Square 254 has estimated
the fair value of its notes payable at December 31, 1996 to be $143,130,000 by
discounting the future cash flows under the notes payable using borrowing rates
currently available to the Partnership for notes with similar terms and
maturities.
NPLLP has obtained long term financing from the AEW Trust #136 as follows:
30-year permanent loan at 11% interest and additional interest based on
NPLLP's net cash flow, as defined in the loan agreement. Payment terms
include monthly interest payments of $187,827, with any unpaid base interest
in excess of the minimum monthly interest payment deferred and added to
principal, up to a maximum principal outstanding of $300,000,000. All unpaid
principal and interest is due in August 2018, including "shared appreciation
interest," which is based on the capitalized value of the land lease and on
the lender's required rate of return. The note is secured by NPLLP's
interest in the land lease. Also, NPLLP's partners have assigned portions of
their interests in Square 254 Limited Partnership as additional collateral.
75,347,535 69,657,911
$201,315,227 $196,253,535
</TABLE>
4. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)
C. Related Party Transactions
Square 254 has entered into a contract for hotel management services with
Marriott Corporation ("Marriott"), a general partner of the Operating
Partnerships, which has an initial term of 30 years commencing with the opening
date of the hotel and four 10-year renewal options. Under the terms of the
management agreement, the Marriott Corporation will retain a fee equal to 20% of
the operating profit of the hotel subject to certain deferrals, with the 80%
balance of the operating profit to be paid to Square 254. This fee amounted to
$2,887,889 and $2,887,495 in 1996 and 1995, respectively. There were no deferred
payments due under this agreement as of December 31, 1996 and 1995. In addition,
the Marriott Corporation earns an amount equal to 3 percent of gross revenues to
cover costs and expenses incurred as managing agent. This fee amounted to
$1,647,507 and $1,642,075 in 1996 and 1995, respectively. Total fees earned by
Marriott under this contract amounted to $4,535,396 and $4,529,570 in 1996 and
1995, respectively.
Square 254 has entered into a contract for partnership management services with
QDC Property Management, Inc., an affiliate of Quadrangle Development
Corporation ("QDC"), a general partner of the Operating Partnerships. Under the
terms of the agreement, which is in effect until April 1999, the management
company will be paid a fee equal to 3 percent of the gross receipts from the
rental of National Place office space but not less than $5,000 per month.
Additionally, for common area management services, QDC Property Management Inc.
is to be paid an annual base fee of $100,000 with increases tied to the Consumer
Price Index. Management fees earned by QDC Property Management, Inc. amounted to
$408,006 and $369,477 for the years ended December 31, 1996 and 1995,
respectively.
Square 254 reimburses Quadrangle Management Corporation ("QMC") for certain
costs incurred by QMC on its behalf, such as engineering, janitorial, and tenant
services. Total reimbursable costs paid to QMC were $633,550 and $601,364 in
1996 and 1995, respectively.
Square 254 entered into a garage management agreement with Quik Park, Inc., an
affiliate of QDC, which expires in 2004. Quik Park earns a management fee of 5
percent of gross garage revenue. Fees amounted to $82,618 and $81,356 for 1996
and 1995, respectively.
On September 12, 1979, Square 254 entered into a 99-year land lease agreement
with Pennsylvania Avenue Development Corporation ("PADC"), a wholly owned
subsidiary of the United States government. The lease was subsequently assumed
by NPLLP on August 11, 1988 in connection with the purchase of the leased land
and deferred rent by NPLLP. The lease provides for a basic annual rent of
$2,100,000 payable in equal monthly installments and rebates and other rent
deferrals based on the Partnership's compliance with certain criteria stated in
the lease. The deferred portion accrues interest at 12.4447 percent, compounded
monthly. Payments on the deferred rent and accrued interest are payable to NPLLP
in equal monthly installments over a 36 year period which began in May 1984.
Square 254 has the option to prepay any or all of the deferred rent or accrued
interest thereon. Additionally, the lease provides for additional rental
payments when net cash flow is achieved. No additional rent was due for 1996 or
1995 since there was no net cash flow, as defined in the lease agreement.
The effects of this lease have been eliminated for purposes of the condensed
financial statement information presented above.
5. PURCHASE MONEY NOTE
In 1984, the Partnership acquired Aetna's 66.667% general partnership
interest in Square 254. The purchase price of $60,000,000 for the interest
was evidenced by a cash payment of $38,000,000 and a nonrecourse purchase
money promissory note ("Purchase Money Note") of $22,000,000. The Purchase
Money Note is secured by the Partnership's investment in Square 254 as well
as a security interest in the Partnership's interest in NPLLP. The Purchase
Money Note bears simple interest at a rate of 15% per annum, with all
interest payable at maturity, August 31, 1999. In the event that the
Partnership wishes to refinance outstanding principal and interest under the
note at maturity and the Partnership is unable to refinance with another
financial institution on terms then prevailing in the market, Aetna has
agreed to refinance outstanding principal and interest at prevailing market
rates for a term of not less than 10 years. In accordance with generally
accepted accounting principles, the Partnership has discounted the Purchase
Money Note at an imputed interest rate of 12%, compounded monthly. The
Purchase Money Note outstanding at December 31 is as follows:
<TABLE>
1996 1995
---- ----
<S> <C> <C>
Purchase Money Note,
including accrued interest $62,700,000 $59,400,000
Less: Unamortized discount (10,697,758) (13,250,650)
----------- -----------
$52,002,242 $46,149,350
=========== ===========
</TABLE>
In 1996, the Purchase Money Note was sold by Aetna to another insurance
company.
It is not practicable to estimate the fair value of the note due to the
nature of the instrument and the absence of quoted market prices for similar
financial instruments.
<PAGE>
6. NOTES AND FEES PAYABLE
The Partnership entered into an Operating Deficit Guarantee Agreement with
Aetna which required Aetna to lend to the Partnership an aggregate amount
of up to $20,000,000, as needed by the Partnership, which in turn
contributed or loaned such amounts to Square 254. The Partnership's ability
to borrow under this agreement expired on December 31, 1989. No
contributions have been made since 1987 when the Partnership contributed
$1,124,678 to fund Square 254's operating deficits. Advances under the
Operating Deficit Guarantee Agreement ("Operating Deficit Notes") bear
interest at the rate of 15.5% per annum and are due and payable together
with interest on or before August 31, 1999. In the event that the
Partnership wishes to refinance outstanding principal and interest under
the note at maturity and the Partnership is unable to refinance with
another financial institution on terms then prevailing in the market, Aetna
has agreed to refinance outstanding principal and interest at prevailing
market rates for a term of not less than 10 years. The outstanding balance
of these advances was $9,873,978 as of December 31, 1996 and 1995. The
balance of the accrued interest on these advances was $17,672,864 and
$16,121,141 as of December 31, 1996 and 1995, respectively.
In 1996, the Operating Deficit Notes were sold by Aetna to another
insurance company.
It is not practicable to estimate the fair value of the notes due to the
nature of the instruments and the absence of quoted market prices for
similar financial instruments.
<PAGE>
7. TAXABLE LOSS
The Partnership's tax basis net loss for the years ended December 31, 1996
and 1995 differs from the net loss for financial reporting purposes
primarily due to differences in the recognition of depreciation and
capitalized costs. A reconciliation of net loss for financial reporting
purposes to federal income tax basis net loss for the years ended December
31, 1996 and 1995 follows:
<TABLE>
1996 1995
---------------- ---------
<S> <C> <C>
Net loss for financial
reporting purposes $(13,571,631) $(11,522,056)
Amortization of the
costs in excess of the Partnership's
initial basis in the net assets of
an Operating Partnership 370,046 370,046
Expenses accrued and
payable to related parties not
deductible until year of payment
for tax purposes (100,000) 300,000
Interest expense on the Purchase Money
Note utilizing the simple interest
method for tax purposes 2,552,892 1,894,145
Non-deductible expenses for tax
purposes 388 1,233
Amortization of costs (19,062) (19,062)
Equity in Operating Partnerships' financial
statement loss in excess of tax loss (tax
loss in excess of financial statement loss) 88,470 (1,115,831)
Depreciation of basis
adjustment under Section 708 of the
Internal Revenue Code (1,898,459) (1,898,459)
-------------- --------------
Tax basis net loss $(12,577,356) $(11,989,984)
============ ============
</TABLE>
Partners capital (deficit) account balances for federal income tax purposes
were $(147,921,553) and $(135,344,197) as of December 31, 1996 and 1995,
respectively.
<PAGE>
8. TRANSACTIONS WITH AFFILIATES
The Partnership's transactions with the general partners and their
affiliates include the following:
Expenses for 1996 and 1995 include an annual management fee of
$300,000 earned by an affiliate of a General Partner. Unpaid
management fees payable to this affiliate amounted to $3,300,000 and
$3,400,000 at December 31, 1996 and 1995, respectively.
The Partnership obtained a loan from Two Winthrop Properties, Inc. for
$667,000 which was used to fund the Partnership's share of the initial
capitalization of NPLLP (see Note 1). The loan matured on September 1,
1993 and bears interest at 11.44%. Two Winthrop Properties, Inc. had
extended the maturity date to December 31, 1996. Accrued interest on
this advance amounted to $822,284 at December 31, 1995. In 1996, the
Partnership repaid Two Winthrop Properties, Inc. all outstanding loan
principal and accrued interest. Total loan interest expense was
$17,588 and $152,884 for the years ended December 31, 1996 and 1995,
respectively.
Winthrop Financial made non-interest bearing advances for the payment
of professional fees. Outstanding advances amounted to $129,172 at
December 31, 1995. All outstanding amounts were repaid in 1996.
9. LIQUIDITY
During 1996, the Partnership received $3,163,926 of cash distributions from
the Operating Partnerships. These funds are being used primarily to repay
amounts that had been advanced by affiliates and to pay fees that had been
accrued to affiliates. Prior to 1996, the Partnership relied on loans from
affiliates as its primary source of liquidity. In the future, the
Partnership will continue to require cash to repay amounts due to
affiliates, pay management fees and to pay general and administrative
expenses and may require cash to satisfy its obligation to fund any
operating deficits of the Operating Partnerships. To the extent required,
affiliated entities have agreed to provide funds to the Partnership in an
amount sufficient to satisfy the Partnership's operating requirements.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
<PAGE>
PART III
Item 9. Directors and Executive Officers, Promoters and
Control Persons; Compliance With Section 16(a) of the Exchange
Act.
The Partnership has no officers or directors. Two Winthrop manages and
controls substantially all of Registrant's affairs and has general
responsibility and ultimate authority in all matters effective its business. As
of March 1, 1997, the names of the directors and executive officers of Two
Winthrop and the position held by each of them, are as follows:
Has Served as
Position Held with the a Director or
Name and Age Managing General Partner Officer Since
Michael L. Ashner Chief Executive Officer 1-96
and Director
Richard J. McCready President and
Chief Operating Officer 7-95
Jeffrey Furber Executive Vice President 7-95
and Clerk
Edward Williams Chief Financial Officer 4-96
Vice President and
Treasurer
Peter Braverman Senior Vice President 1-96
Michael L. Ashner, age 45, has been the Chief Executive Officer of
Winthrop Financial Associates, A Limited Partnership ("WFA") since January 15,
1996. From June 1994 until January 1996, Mr. Ashner was a Director, President
and Co-chairman of National Property Investors, Inc., a real estate investment
company ("NPI"). Mr. Ashner was also a Director and executive officer of NPI
Property Management Corporation ("NPI Management") from April 1984 until January
1996. In addition, since 1981 Mr. Ashner has been President of Exeter Capital
Corporation, a firm which has organized and administered real estate limited
partnerships.
Richard J. McCready, age 38, is the President and Chief Operating Officer
of WFA and its subsidiaries. Mr. McCready previously served as a Managing
Director, Vice President and Clerk of WFA and a Director, Vice President and
Clerk of the Managing General Partner and all other subsidiaries of WFA. Mr.
McCready joined the Winthrop organization in 1990.
Jeffrey Furber, age 37, has been the Executive Vice President of WFA
and the President of Winthrop Management since January 1996. Mr. Furber served
as a Managing Director of WFA from January 1991 to December 1995 and as a Vice
President from June 1984 until December 1990.
Edward V. Williams, age 56, has been the Chief Financial Officer of WFA
since April 1996. From June 1991 through March 1996, Mr. Williams was Controller
of NPI and NPI Management. Prior to 1991, Mr. Williams held other real estate
related positions including Treasurer of Johnstown American Companies and Senior
Manager at Price Waterhouse.
Peter Braverman, age 45, has been a Senior Vice President of WFA since
January 1996. From June 1995 until January 1996, Mr. Braverman was a Vice
President of NPI and NPI Management. From June 1991 until March 1994, Mr.
Braverman was President of the Braverman Group, a firm specializing in
management consulting for the real estate and construction industries. From 1988
to 1991, Mr. Braverman was a Vice President and Assistant Secretary of Fischbach
Corporation, a publicly traded, international real estate and construction firm.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Residential Associates I, A Limited
Partnership; Winthrop Residential Associates II, A Limited Partnership; Winthrop
Residential Associates III, A Limited Partnership; 1626 New York Associates
Limited Partnership; 1999 Broadway Associates Limited Partnership; Indian River
Citrus Investors Limited Partnership; Nantucket Island Associates Limited
Partnership; One Financial Place Limited Partnership; Presidential Associates I
Limited Partnership; Riverside Park Associates Limited Partnership; Springhill
Lake Investors Limited Partnership; Winthrop California Investors Limited
Partnership; Winthrop Growth Investors I Limited Partnership; Winthrop Interim
Partners I, A Limited Partnership; Southeastern Income Properties Limited
Partnership; Southeastern Income Properties II Limited Partnership; Winthrop
Miami Associates Limited Partnership; Winthrop Apartment Investors Limited
Partnership.
Except as indicated above, neither the Partnership nor Two Winthrop has
any significant employees within the meaning of Item 401(b) of Regulation S-B.
There are no family relationships among the officers and directors of Two
Winthrop.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Partnership under Rule 16a-3(e) during the Partnership's most
recent fiscal year and Forms 5 and amendments thereto furnished to the
Partnership with respect to its most recent fiscal year, the Partnership is not
aware of any director, officer or beneficial owner of more than ten percent of
the units of limited partnership interest in the Partnership that failed to file
on a timely basis, as disclosed in the above Forms, reports required by section
16(a) of the Exchange Act during the most recent fiscal year or prior fiscal
years.
Item 10. Executive Compensation
Registrant is not required to and did not pay any compensation to the
officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers and
directors (See Item 13, "Certain Relationships and Related Transactions").
Item 11. Security Ownership of Certain Beneficial Owners and
Management
(a) Security Ownership of Certain Beneficial Owners.
Two Winthrop and Linnaeus own all the outstanding general partnership
interests in the Partnership. As general partners, they are entitled in the
aggregate to 1% of the Partnership's net income or loss for tax purposes, and,
after certain priority distributions, 1% of cash flow. In addition, after
certain priority allocations to the partners of amounts necessary to increase
their capital balances to an amount equal to their invested capital, the General
Partners are entitled to 30% of the proceeds of a capital transaction in
connection with the liquidation or termination of the Partnership. No other
person or group is known by the Partnership to be the beneficial owner
<PAGE>
of more than 5% of the outstanding partnership interests as of
March 15, 1997.
The Partnership is a limited partnership and has issued Units of
limited partnership interest. The Units are not voting securities, except that
the consent of the Limited Partners is required to approve or disapprove certain
transactions, including the removal of a General Partner, certain amendments to
the Partnership Agreement, the dissolution of the Partnership or the sale of all
or substantially all of the assets of the Partnership. No person or group is
known by the Partnership to be the beneficial owner of more than 5% of the
outstanding Units.
(b) Security Ownership of Management.
None of the officers, directors or partners the General Partners
beneficially own any Units as of the date hereof.
(c) Changes in Control.
There exists no arrangement known to the Partnership the operation of which
may at a subsequent date result in a change in control of the Partnership.
Item 12. Certain Relationships and Related Transactions
(a) Transactions with management and others
Pursuant to the terms of the Partnership Agreement, the General
Partners and their affiliates are entitled to receive certain cash distributions
and allocations of taxable income or loss from the Partnership. In addition, the
General Partners and their affiliates are entitled to various fees in connection
with the offering and the operations of the Partnership.
<PAGE>
The following table sets forth the amounts of fees, commissions and cash
distributions which the Partnership accrued for the account of the General
Partners and their affiliates for the years ended December 31, 1996 and 1995:
Entity Compensation 1996 1995
- ------ ------------ ---- ----
Winthrop Financial Partnership $300,000 $300,000
Co., Inc.
Winthrop Financial Various Fees $ - $ -
Co., Inc. and Interest(1)
(1) Associated with the original offering of limited partnership interests in
the Partnership.
For the years ended December 31, 1996 and 1995, the Partnership allocated
$62,886 and $59,950, respectively, of taxable losses to Two Winthrop in
accordance with its interest in the Partnership. For the years ended December
31, 1996 and 1995, the Partnership allocated $62,886 and $59,950, respectively,
of taxable losses to Linnaeus in accordance with its interest in the
Partnership.
In 1988, Two Winthrop loaned the Partnership $667,000 to provide the
necessary funds to pay the Partnership's initial capital contribution to
National Land. This loan was paid in full in April 1996.
From 1984 through 1995, Winthrop Financial Co., Inc., agreed to the
Partnership's deferral, on an interest-free basis, of the payment of an annual
partnership management fee for administrative and investor services in the
amount of $300,000. In 1996, Winthrop Financial Co., inc., received its $300,000
current fee and $100,000 of its accrued fees.
Since 1992, First Winthrop Corporation has made interest-free advances
to the Partnership to fund administrative costs. These advances totaled $39,111
in 1995, and at December 31, 1995 the total amount of advances outstanding was
$129,172. These interest free advances were repaid in full in February 1996.
Total management fees earned by Marriott and paid by Square
254 for managing and operating the J. W. Marriott Hotel, amounted
<PAGE>
to $4,535,396 and $4,529,570 in 1996 and 1995, respectively. Total management
fees earned by Quadrangle and paid by Square 254 for managing the Office Towers
and common area amounted to $408,006 and $369,477 for the years ended December
31, 1996 and 1995, respectively. Effective October 22, 1994, QuikPark, Inc., an
affiliate of Quadrangle, assumed management of the garage and earned fees of
$82,618 and $81,356 in 1996 and 1995, respectively, which amounts were paid by
Square 254 for managing and operating the parking garage. All transactions
described are on the same terms as would have been obtained from unrelated third
parties.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits:
The Exhibits listed on the accompanying Index to Exhibits are
filed as part of this Annual Report and incorporated in this
Annual Report as set forth in said Index.
(b) Reports on Form 8-K - None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TWELVE AMH ASSOCIATES LIMITED
PARTNERSHIP
By: Two Winthrop Properties, Inc.
Managing General Partner
By: /s/ Michael L. Ashner
Michael Ashner
Chief Executive Officer
Date: March 29, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature/Name Title Date
/s/ Michael Ashner Chief Executive March 29, 1997
- ------------------
Michael Ashner Officer and Director
/s/ Edward V. Williams Chief Financial March 29, 1997
Edward V. Williams Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Document Page
3(a) Form of Amended and Restated Limited Partnership Agreement of the
Partnership (incorporated by reference to Exhibit 3 to the
Partnership's Registration Statement on Form 10 dated April 30, 1985,
as thereafter amended)
3(b) Certificate of Limited Partnership of National Place Land Limited
Partnership dated August 2, 1988 (incorporated by reference to
Exhibit 3(h) to the Partnership's Annual Report on Form 10-K for the
year ended December
31, 1988)
3(c) Agreement of Limited Partnership of National Place Land Limited
Partnership dated August 8, 1988 (incorporated by reference to
Exhibit 3(c) to the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1988)
3(d) Amendment to Amended and Restated Limited Partnership Agreement of the
Partnership dated August 23, 1995 incorporated by reference to the
Partnership's Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 6, 1995.
4 See Exhibit 3 above
10(a) Form of Amended and Restated Limited Partnership Agreement of Square
254 Limited Partnership (incorporated by reference to Exhibit 10(a)
to the Registration Statement)
(b) Leasing Agreement dated as of March 3, 1984 between Square 254
Limited Partnership and Quadrangle Development Corporation
(incorporated by reference to Exhibit 10(b) to the Registration
Statement)
<PAGE>
(c) Management Agreement dated as of June 6, 1984 between
Square 254 Limited Partnership and Quadrangle Development Corporation
(incorporated by reference to Exhibit 10(c) to the Registration
Statement)
(d) Garage Lease dated June 6, 1984 between
Square 254 Limited Partnership and
Quickpark, Inc. (incorporated by reference to
Exhibit 10(d) to the Registration Statement)
(e) Pennsylvania Avenue Hotel Management Agreement dated as of July 23,
1984 between Square 254 Limited Partnership and Marriott Corporation
(incorporated by reference to Exhibit 10(e) to the Registration
Statement)
10(f) Lease dated September 12, 1979 between Pennsylvania Avenue
Development Corporation ("PADC") and Square 254 Limited (incorporated
by reference to Exhibit 10(f) to the Registration Statement)
(g) Lease dated April 24, 1984 between Square 254 Limited Partnership and
The Rouse Company of the District of Columbia (incorporated by
reference to Exhibit 10(g) to the Registration Statement)
(h) Pennsylvania Avenue Technical Services
Agreement between Square 254 Limited
Partnership and the Marriott Corporation
(incorporated by reference to Exhibit 10(h)
to the Registration Statement)
(i) Credit and Security Agreement dated
August 31, 1984 between Citibank, N.A.
and the Partnership (incorporated by
reference to Exhibit 10(i) to the Registration
Statement)
(j) Sublease dated May 26, 1982 by and between Square 254 Limited
Partnership and New National Theatre Corporation incorporated by
reference to Exhibit 10(j) to the Registration Statement)
<PAGE>
(k) Inducement Agreement dated as of August 2,
1984 by and between Financial Guaranty
Associates, Inc., the Partnership, Two
Winthrop Properties, Linnaeus Lexington
Associates Limited Partnership and Winthrop
Financial Co., Inc. (incorporated by
reference to Exhibit 10(k) to the Registration
Statement)
(l) Documents relating to the Mortgage Loan With Respect to the Property
Made by Aetna Casualty and Surety Corporation (incorporated by
reference to Exhibit 10(l) to the Registration Statement)
(m) Deed dated August 8, 1988 by and between PADC and National Place Land
Limited Partnership ("NPLLP") (incorporated by reference to Exhibit
10(m) to the
Registration Statement)
(n) Deed of Trust dated August 9, 1988 by and between NPLLP, grantor,
NPLLP, grantor, and the Trustees of AEW #136 Trust, beneficiary
(incorporated by reference to Exhibit 10(n) to the Registration
Statement)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from audited financial
statements for the one year period ending
December 31, 1996 and is qualified in its
entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000748524
<NAME> TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,043,786
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,043,786
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 809,057
<CURRENT-LIABILITIES> 15,010
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (82,055,037)
<TOTAL-LIABILITY-AND-EQUITY> 809,057
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 801,336
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,404,615
<INCOME-PRETAX> (13,571,631)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,571,631)
<EPS-PRIMARY> (22,619.39)
<EPS-DILUTED> (22,619.39)
</TABLE>
