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SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
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Decade Companies income Properties--A Limited Partnership
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(Name of Registrant as Specified In Its Charter)
Arnold K. Less
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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ARNOLD K. LEAS
18650 West Corporate Drive, Suite 300
Brookfield, Wisconsin 53045
(414-792-8900)
November 12, 1996
Re: Offer by Decade Companies
Income Properties - A Limited Partnership
to Purchase its Limited Partnership Interests
Dear Fellow Limited Partner:
I am writing to you about the offer that all of the limited partners of
Decade Companies Income Properties - A Limited Partnership (the "Partnership")
received from the Partnership. As you know, the Partnership, whose principal
executive offices are located at 250 Patrick Boulevard, Suite 140, Brookfield,
Wisconsin 53045, has offered to purchase our limited partnership interests (the
"LP Interests") for approximately 40% of our original investment. For the
reasons indicated below, I do not believe the Offer is in the best interests of
the limited partners. Therefore, I recommend that the limited partners elect not
to tender their LP Interests to the Partnership. In addition, as an alternative,
I recommend that we remove the general partner of the Partnership and replace it
with Wellington Management Corporation.
1. The Tender Offering is Unfair and the Limited Partners Should Reject
it.
(a) The Money Which Would be Used to Purchase our LP Interests is
our Money. The money that will be used to purchase our LP Interests is coming
from the Partnership. This is our money. As of June 30, 1996 the Partnership has
accumulated over $4,300,000 of unrestricted cash. If the Partnership distributed
that cash to us, we would each receive $246 per $1,000 invested and would still
own our $1,000 LP Interests. Instead, Decade Companies, the general partner of
the Partnership (the "General Partner"), is proposing that we sell our LP
Interests to the Partnership and the Partnership pay us with our own money.
(b) The Purchase Price for the LP Interests is Less than the Net
Asset Value per LP Interest. The $402 purchase price for the LP Interests is
substantially less than the $576 net asset value per LP Interest determined by
the appraisers selected and hired by the General Partner to conduct an appraisal
of the Partnership. Although the tender offer materials indicate that the $576
value does not consider all of the costs of liquidating the Partnership,
completing all of the filings required by the Securities and Exchange Commission
or the costs of the Partnership's own tender offer, I believe an approximately
30.21% reduction from the net asset value is excessive.
(c) The Tender Offer is not Contemplated by the Objectives of the
Partnership. The Partnership's Amended and Restated Agreement of Limited
Partnership provides that the principal objectives of the Partnership are "in
the order of priority to (1) preserve and protect the Limited Partners' Capital
Investment, (2) provide for quarterly distributions of Cash Available for
Distribution... and (3) provide capital appreciation through increases in value
of the Partnership's real estate assets..." The offer is clearly contrary to
these objectives. An offer of .40 on the dollar after ten years is certainly not
preserving and protecting our capital. Quarterly cash distributions have been
suspended and the Limited Partners have not seen any capital appreciation.
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Offer by Decade Companies
November 12, 1996
Page 2
For the above reasons, I believe it is not in the limited partners' best
interests to tender their LP Interests to the Partnership. I recommend that you
not sell your LP Interests to the Partnership and, if you have already returned
the paperwork, that you withdraw your LP Interests from the tender offer by
providing written notice to the Partnership before November 22, 1996. Certainly,
it is my intent not to tender my LP Interests to the Partnership.
2. Alternative Proposal. Some of you may be inclined to accept the offer
of .40 on the dollar because you do not believe that you have a choice. I would
like to propose an alternative.
In the spring of 1988, I formed Wellington Management Corporation ("WMC")
to serve as general partner for a series of real estate and equipment investment
programs. To date, WMC has sponsored 19 programs and raised a approximately $35
million. WMC-sponsored programs have distributed over $11,393,734 at 8% to 12%
of invested principal annually to our investors and have never missed or
suspended a quarterly payment. The culture throughout the Wellington Companies
is to place the investors first. In 1993, 1994 and 1995, WMC was named to the
Future 50 in Metro-Milwaukee, recognized as one of the fastest growing companies
in the area. In 1996, for the second consecutive year, WMC was listed as one of
the fastest growing privately held companies in the U.S. by Inc. Magazine.
In view of the success WMC has experienced, contrasted with the current
General Partner's inability to meet the Partnership's stated objectives, I
propose that Decade Companies be removed as General Partner of the Partnership
and WMC be selected as the new general partner. Obviously, as an officer,
director and approximately 40% shareholder of WMC and as an officer and director
of its wholly-owned subsidiary, WMC Realty, Inc. ("Realty"), I am not
disinterested in this proposal. However, I believe that WMC's track record
speaks for itself and that it would make an excellent general partner for the
Partnership.
Since 1990, WMC has purchased and managed properties valued at
approximately $47,500,000 on behalf of investors. These properties have been
operated with the stated goal of producing cash flow for distribution to our
investors. Distributions to Wellington investors from our real estate programs
total $3,866,046 through September 30, 1996. Our quarterly distributions have
never been suspended, in direct contrast to the current suspension of your
distributions at the direction of Decade.
Over years of managing rental properties, we have learned that successful
apartment communities result from combining high occupancy rates with controlled
operating expenses. Operating expenses average 39% of gross rental income at the
properties we manage (contrasting with 65% for the six months ending June 30,
1996 for the Partnership as managed by Decade). In addition, occupancy rates at
our stabilized properties average 95%.
During April, 1996 Wellington Properties Trust, our affiliated real estate
investment trust, began public trading on NASDAQ. The trust, which trades under
the stock symbol "WLPT", exclusively owns apartment communities, with two
properties located in Madison, Wisconsin (the location of the Partnership's
"Meadows" property). As the manager of a publicly traded REIT, I believe WMC is
well qualified to administer and manage a public partnership such as Decade
Companies Income Properties.
As the general partner, WMC will work diligently to prepare the
Partnership's properties for sale and liquidate the Partnership in an effort to
obtain a fair return for the limited partners. Obviously, WMC cannot offer
instant liquidity for your investment. I believe, however, that WMC can increase
the value of your investment and provide you with substantially greater than
$402 per Limited Partnership Interest upon the sale of the properties. If WMC
were appointed as the general partner, WMC would retain Realty to provide
property management services pending the sale of the Partnership's properties.
Realty would
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Offer by Decade Companies
November 12, 1996
Page 3
charge a property management fee of 5% of gross receipts rather than the
approximately 8% which has been paid by the Partnership over the past three
years. (See note 7 to the Financial Statements for the years ended December 31,
1995, 1994 and 1993 prepared by Ernst & Young, included in the offering
materials dated October 24, 1996.)
3. Recommendation Summary. I recommend that you reject the tender offer
proposed by the Partnership. If you have already returned the paperwork
accepting the offer, it is not too late. You can withdraw your acceptance by
giving written notice to the Partnership prior to November 22, 1996. A "Notice
of Withdrawal" form has been included for your convenience.
I further propose that all limited partners sign a notification to remove
Decade Companies as general partner of the Partnership. If the best Decade
Companies can do after ten years is to give us 40.2c on the dollar, the
Partnership's goals are not being met and Decade Companies should be held
accountable.
I am filing proxy materials with the Securities and Exchange Commission
("SEC") to seek limited partner approval of the removal of Decade Companies as
general partner and the appointment of WMC as successor general partner. These
materials will be forwarded to you immediately upon completion of the SEC review
process. The notification form for removal of Decade Companies and replacement
by WMC as general partner of the Partnership will be included in the materials
you will receive. I request that you carefully consider this alternative before
accepting what I believe is clearly an inadequate offer.
Best personal regards,
Arnold K. Leas, a Limited Partner
AKL: cab
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NOTICE OF WITHDRAWAL
Re: Decade Companies Income Properties -- A Limited Partnership
Please be advised that I (we) hereby withdraw the number of units indicated
below which were previously tendered pursuant to the Offer to Purchase Interests
dated October 24, 1996.
Dated November __, 1996
_____________________________________________
Signature
_____________________________________________
Print Name
_____________________________________________
Signature
_____________________________________________
Print Name
NOTE: THIS FORM MUST BE RETURNED BY NOVEMBER 22, 1996.
MAIL OR FAX TO:
DECADE COMPANIES INCOME PROPERTIES -- A LIMITED PARTNERSHIP
250 PATRICK BLVD., SUITE 140
BROOKFIELD, WISCONSIN 53045-5864
FAX (414) 792-0808
Please also send a copy to:
Arnold K. Leas
18650 W. Corporate Drive, Suite 300
Brookfield, Wisconsin 53045
Fax (414) 792-8900
