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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
Commission File
For the fiscal year ended December 31, 1998 Number 0-14536
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WINTHROP CALIFORNIA INVESTORS LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Delaware 04-2869812
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(State of organization) (IRS Employer Identification No.)
Five Cambridge Center, 9th Floor, Cambridge, Massachusetts 02142
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 234-3000
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No X
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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-K or any amendment to this
Form 10-K. [ ]
No market exists for the limited partnership interests of the Registrant, and,
therefore, a market value for such interests cannot be determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
Item 1. Business.
Organization
The most significant asset of Winthrop California Investors Limited
Partnership (the "Registrant") is a 25% limited partnership interest in Crow
Winthrop Development Limited Partnership, a Maryland limited partnership (the
"Development Partnership"). Due to a dispute with the general partner of the
Development Partnership, the Registrant has unable to obtain the necessary
information with which to complete audited financial statements as well as
provide full disclosure regarding the Development Partnership's operations. See
"Item 3. Litigation." Recently, the Registrant was provided with audited
financial statements for the Development Partnership but has not yet been able
to complete its audited financial statements. Furthermore, the Registrant has
not been provided with the necessary information relating to the development of
the parcel owned by the Development Partnership. As a result, (i) certain
information contained in this Annual Report on Form 10-K is being omitted in
reliance on Rule 12b-21 promulgated under the Securities Exchange Act of 1934
and (ii) the information set forth herein in Item 2 regarding the Development
Partnership may not be completely accurate.
The Registrant was originally organized on January 24, 1985 as a
Maryland limited partnership. On October 16, 1985, the Registrant was
reorganized as a Delaware limited partnership in accordance with the provisions
of the Delaware Revised Uniform Limited Partnership Act. The Registrant was
organized for the purpose of owning (i) a general partnership interest in, and
serving as a general partner of, Crow Winthrop Operating Partnership, a Maryland
general partnership (the "Operating Partnership" and, collectively with the
Registrant and the Development Partnership, the "Partnerships") which was
originally organized on January 24, 1985 to acquire, own and operate an
approximately 1.6 million square foot office facility known as the Fluor
Corporation World Headquarters Facility in Irvine (Orange County), California
(the "Headquarters Facility"), and (ii) a limited partnership interest in the
Development Partnership which was organized on January 24, 1985 to acquire and
own in excess of 120 acres of land surrounding the Headquarters Facility (the
"Excess Land" and, collectively with the Headquarters Facility, the
"Properties") and to develop such Excess Land with office, hotel, retail and
entertainment complexes. In March 1992, the Registrant acquired a 99% limited
partnership interest in Winthrop California Management Limited Partnership, a
Maryland limited partnership ("WC Management"), which has the right to perform
management and leasing functions at the Headquarters Facility.
The general partners of the Registrant (the "General Partners") are
Winthrop Financial Associates, A Limited Partnership ("WFA") and Three Winthrop
Properties, Inc. ("Three Winthrop").
The Registrant was initially capitalized with nominal capital
contributions from the General Partners. In December 1986, the Registrant
completed an offering of 3,500 units of limited partnership interest ("Units")
in the Registrant to limited partners ("Limited Partners"), raising capital
contributions of $217,780,500. One of the Limited Partners is WILCAP Limited
Partnership, a Massachusetts limited partnership which is wholly-owned by WFA
and its affiliates ("WILCAP"). On May 9, 1986, WILCAP purchased 1,000 Units for
an aggregate price of $54 million, or $54,000 per Unit, payable in cash upon its
admission to the Registrant. The purchase price equaled the purchase price paid
by other Limited Partners in the offering less brokerage
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commissions which otherwise would have been payable to an affiliate of WFA and a
pro rata portion of certain acquisitions fees which otherwise would have been
payable to WFA. Of the total capital contributions raised, $151,194,500 was paid
upon admission of the Limited Partners, and the balance was payable in
installments pursuant to the terms of promissory notes. As of May 1, 1988, the
Limited Partners' capital contributions had been paid in full.
Description of Business
Until 1997, the only business of the Registrant was investing as a 99%
general partner in the Operating Partnership, as a 25% limited partner in the
Development Partnership and as a 99% limited partner in WC Management. The other
partner of the Operating Partnership is Crow Irvine #2, a California limited
partnership ("Crow Irvine"). Pursuant to an amendment to the partnership
agreement of the Operating Partnership entered into in February 1992, the
Registrant assumed sole responsibility for the management of the business of the
Operating Partnership. Crow Irvine is also the general partner of the
Development Partnership. The general partner of Crow Irvine is Crow Irvine #1, a
Texas limited partnership, and the limited partner is the Fluor Corporation. The
general and limited partners of Crow Irvine #1 are certain partners and an
affiliate of Trammel Crow Company. Trammel Crow Company is one of the largest
private real estate development and investment firms in the United States.
In exchange for its interests in the Operating Partnership and the
Development Partnership, the Registrant agreed to contribute as capital $138
million and $45 million, respectively, payable in installments. As of May 1988,
the Registrant had fully funded the capital contributions. The Registrant is
entitled to (i) 97% (of which the Limited Partners receive 98%) of the profits,
losses and cash flow of the Operating Partnership and (ii) after certain
priorities, 90% (of which the Limited Partners receive 90% of the proceeds) from
a sale or refinancing in respect of the Operating Partnership. The Registrant is
entitled to 25% (of which the Limited Partners receive 60%) of (i) the profits,
losses and cash flow of the Development Partnership and (ii) after certain
priorities, the proceeds from a sale or refinancing in respect of the
Development Partnership.
Change in Ownership; Mortgage Loan Workout
After the acquisition of the Headquarters Facility, the Orange County
rental market, in general, and the rental market in the area proximate to John
Wayne Airport (the "Greater Airport market") weakened dramatically as supply of
office space outpaced demand. In addition, in the late 1980s an affiliate of
Fluor Corporation ("Fluor"), which originally occupied 100% of the Headquarters
Facility in 1985, began exercising its right to cancel the lease with respect to
significant portions of space at the Headquarters Facility. While WC Management
was able to re-let much of the vacated space and maintain low vacancy rates as
the result of an aggressive leasing campaign, the Headquarters Facility suffered
a decline in achievable rents. The decline in rents was due to significantly
lower rental rates for the re-let Flour space, which were consistent with the
then current market rates. Furthermore, Fluor notified the Registrant in 1996
that it intended to construct a new facility to serve as its headquarters and
vacated the Headquarters Facility upon its lease expiration in 1998.
As a result of the adverse events described above, the Operating
Partnership was unable to satisfy the approximately $198 million due under a
Secured Promissory Note (the "Existing Secured Note") at its April 1, 1996
maturity. Prior to the maturity of the Existing Secured Note, the Operating
Partnership and the holders of the Existing Secured Note (the
"Certificateholders") commenced negotiations to restructure the Existing Secured
Note. On April 10, 1996, Pacific
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Mutual Realty Finance, Inc. ("Pacific Mutual"), the agent for the
Certificateholders, notified the Operating Partnership that it had received the
requisite consents from the Certificateholders to extend the maturity date
through June 1996. Although the Operating Partnership was unable to repay the
principal amount outstanding on the Existing Secured Note at such extended
maturity date, the Operating Partnership continued to pay interest at the
non-default rate after such maturity date. As a result of its inability to
satisfy the Existing Secured Note at maturity, a notice of default against the
Headquarters Facility was filed in June 1996 and in July 1996, Pacific Mutual
took possession of approximately $1.3 million in cash that was held in a pledged
account. Nonetheless, negotiations among the parties continued, and in August
1996 the parties reached an agreement providing for the payment of excess cash
to the Certificateholders pursuant to a monthly cash sweep of the Operating
Partnership's rent account.
On November 27, 1996, the Certificateholders and the Operating
Partnership reached an agreement (the "Agreement of Understanding") in principle
on the terms of a plan of reorganization. Under the Agreement of Understanding,
the Certificateholders agreed to support a pre-arranged bankruptcy plan of
reorganization for the Operating Partnership on certain terms and conditions.
The Certificateholders also agreed to forbear from exercising any remedies so
long as the Agreement of Understanding was in effect.
In connection with, and as contemplated by, the Agreement of
Understanding, the Operating Partnership filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") on March
28, 1997. As a condition to the transfer of the Headquarters Facility as
contemplated by the Operating Partnership's Second Amended and Restated Plan of
Reorganization dated June 27, 1997 (the "Plan"), the requisite consent of the
Limited Partner to the Plan was sought and subsequently obtained. The Plan was
approved by the Bankruptcy Court on October 3, 1997.
Pursuant to the terms of the Plan, the Operating Partnership
contributed all of its assets and liabilities, including all of its right, title
and interest in the Headquarters Facility and $500,000 of unencumbered cash, to
Jamboree LLC, a newly formed Delaware limited liability company, in exchange for
an initial 10% ownership interest in Jamboree LLC. In addition, Jamboree LLC
paid to the Registrant a $500,000 fee in connection with the Plan. Immediately
prior to the transfer by the Operating Partnership of its assets and liabilities
to Jamboree LLC, the Existing Secured Note was satisfied by (i) the forgiveness
of approximately $93 million of the debt plus interest accrued thereon and (ii)
the issuance by the Operating Partnership of two intermediate notes, one in the
original principal amount of $4.5 million (the "First Intermediate Note") and
the second in the original principal amount of $100 million (the "Second
Intermediate Note"). Subsequent to the contribution by the Operating Partnership
of all of its assets and liabilities to Jamboree LLC, the Certificateholders
contributed the First and Second Intermediate Notes to Jamboree Office REIT (a
newly formed real estate investment trust, the initial stockholders of which
were the Certificateholders) and Jamboree Office REIT, in turn, contributed the
First Intermediate Note to Jamboree LLC in exchange for the remaining 90%
interest in Jamboree LLC. Jamboree LLC satisfied the Second Intermediate Note by
issuing the New Notes (as defined below) in the original principal amount of
$100 million in satisfaction of the $100 million outstanding balance.
Pursuant to the terms of the Operating Agreement of Jamboree LLC,
Jamboree LLC will terminate on the earlier to occur of (i) one year after the
sale or transfer of the Headquarters Facility, provided that the Jamboree LLC
Board (as defined below) does not vote to continue the company, (ii) September
28, 2002, (iii) the consent of the members of Jamboree LLC or (iv) as required
by applicable law. Jamboree LLC is governed by a five person board of member
representatives (the
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"Jamboree LLC Board"). The initial five members will be designated one by the
Operating Partnership and four by Jamboree Office REIT. A majority of the
members of the Jamboree LLC Board must approve (i) all operating decisions not
designated as requiring unanimous approval in Jamboree LLC's Limited Liability
Company Agreement (the "LLC Agreement") and (ii) termination for cause of the
Management Agreement (as hereinafter defined). Unanimous approval of the
Jamboree LLC Board is required to (i) commence a voluntary case under the
Bankruptcy Code, (ii) terminate the Management Agreement without cause, (iii)
sell all or any material portion of the Headquarters Facility prior to three
years after the effective date of the Plan, (iv) except as otherwise provided in
the LLC Agreement, issue additional units representing membership interests (v)
authorize business activities other than the ownership and operation of the
Headquarters Facility within three years of the Effective Date, (vi) following
the sale of the Headquarters Facility, authorize the continued existence of
Jamboree LLC for more than one year, and (vii) authorize certain other matters
as provided in the LLC Agreement.
In addition, the Operating Partnership was granted the right (the
"Exchange Right") to exchange its interest in Jamboree LLC at any time after one
year from the effectiveness of the Plan (subject to certain exceptions) through
March 27, 2002 for shares in Jamboree Office REIT ("REIT Shares"). In general,
the Operating Partnership may exchange its 10% interest in Jamboree LLC for a
fixed number of REIT Shares (on a one-for-one basis) in Jamboree Office REIT,
subject to adjustment, equal to 900,000 multiplied by the Operating
Partnership's then ownership percentage in Jamboree LLC. All REIT Shares
received by the Operating Partnership either upon the exchange of its interest
in Jamboree LLC or as payment for the Property Appreciation Right (as defined
below) will be "Registerable Securities" pursuant to the provisions of the
Property Appreciation and Put Right. In general, upon the occurrence of certain
events, the Operating Partnership can request that Jamboree Office REIT prepare
a registration statement to effect the registration of the shares held by the
Operating Partnership in Jamboree Office REIT.
Furthermore, the Operating Partnership has the right to acquire
additional equity interests in, or receive cash payments from, Jamboree Office
REIT (the "Property Appreciation Rights"). The Property Appreciation Rights will
be exercisable, if at all, at any time until the close of business on March 27,
2002. In general, the Property Appreciation Rights entitle the Operating
Partnership to purchase (i) REIT Shares representing 10% of the equity value of
Jamboree LLC for a purchase price of $10,888,888.89 in the aggregate, if the
fair market value of all of the issued and outstanding REIT Shares equals or
exceeds $98 million divided by Jamboree Office REIT's interest in Jamboree LLC
and (ii) REIT Shares representing 55% of the equity value of Jamboree LLC for a
purchase price of $152,777,777.78 in the aggregate, if the fair market value of
the issued and outstanding REIT Shares equals or exceeds $125 million divided by
Jamboree Office REIT's interest in Jamboree LLC. Alternatively, the Operating
Partnership can purchase such additional REIT Shares on a "cashless basis" by
surrendering a portion of the REIT Shares to be purchased in payment of the
applicable purchase price. If the Operating Partnership elects to exercise
either of the property appreciation rights, Jamboree Office REIT has the option
to deliver to the Operating Partnership in lieu of the issuance of REIT Shares a
cash payment equal to the difference between the then current market value of
the REIT Shares which would otherwise be issued and the exercise price for such
REIT Shares.
The fair market value of the REI Shares for the purpose of the Property
Appreciation Right will be determined by an appraisal obtained by Jamboree
Office REIT. If the Operating Partnership disputes the appraisal obtained by
Jamboree Office REIT, it may obtain a second appraisal. If the appraisals differ
by less than 10%, then the value will be deemed to be the average of the two
determinations. If the appraisals differ by 10% or more, then the two appraisers
will select a third
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appraiser to perform a third appraisal, and the value will be deemed to be the
value that constitutes the mid-point of the range between the two determinations
that are closest in amount.
To satisfy the Second Intermediate Note, Jamboree LLC issued promissory
notes (the "New Notes") having an aggregate principal amount of $100,000,000 to
the Certificateholders. The New Notes are divided into two tranches, the Class A
Notes and the Class B Notes. The Class A Tranche had an initial principal
balance of $80,000,000, bears interest at 2.25% above the interest rate on
United States Treasury Bonds or Notes with a maturity date closest to the Class
A Notes and is payable in interest only for the first 36 months (provided,
however, that payments of interest for a the first 12 month period may be made
by issuing additional Class A Notes) and thereafter, monthly payments of
interest and principal based on a 25-year amortization schedule. In this regard,
additional Class A Notes in the original principal amount of approximately
$2,633,000 were issued as of December 31, 1998 to satisfy a portion of the
interest payments due on the Class A Notes. The Class B Tranche had an initial
principal balance of $20,000,000, bears interest at 3.0% above the interest rate
on United States Treasury Bonds or Notes with a maturity date closest to the
Class B Notes and is payable in interest only for the first 36 months (
provided, however, that payments of interest for the first 48 months may be made
by issuing additional Class B Notes) and thereafter, monthly payments of
interest and principal based on a 25-year amortization schedule. In this regard,
additional Class A Notes in the original principal amount of approximately
$1,920,000 were issued as of December 31, 1998 to satisfy a portion of the
interest payments due on the Class B Notes.
As security for the New Notes, among other things, Jamboree LLC granted
the Certificateholders a security interest on the Headquarters Facility and the
Operating Partnership executed a Pledge and Security Agreement pursuant to which
the Operating Partnership pledged its interest in Jamboree LLC to the Class A
Noteholders and the Class B Noteholders as collateral for the payment in full of
all amounts evidenced by the New Notes. If Jamboree LLC were to default on its
obligations under the New Notes, the Class A Noteholders and the Class B
Noteholders will have the right to foreclose on the Registrant's interest in
Jamboree LLC. If this were to occur, the Registrant would lose its entire
ownership interest in the Headquarters Facility. There can be no assurance that
the Headquarters Facility will be able to generate sufficient cash flow to
enable it to satisfy its obligations under the New Notes.
Change in Management
Pursuant to a series of transactions which were consummated in February
1992, the following changes in management were effected: (i) in consideration of
the payment of approximately $4 million to Crow Management, effective March 10,
1992, Crow Management transferred its rights under the Management Contract to a
newly organized affiliate of the Registrant, WC Management (see "Property
Management" below); (ii) the partnership agreement of the Operating Partnership
was amended to give the Registrant the right to manage the business of the
Operating Partnership; (iii) the partnership agreement for the Development
Partnership and the agreement with respect to the development of the Excess Land
were amended to afford greater flexibility to Crow Irvine and its principals in
modifying the master plan for the development of the Excess Land; and (iv) the
Operating Partnership agreed to provide Crow Management with 3,000 square feet
of rent free space until April 1, 1996 and to perform tenant improvements
therein costing $36,000.
In connection with the transaction described above, the Registrant and
WFA agreed to indemnify Crow Irvine for any liability it may incur, on a going
forward basis, as a result of it remaining a general partner of the Operating
Partnership. In addition, Crow Irvine gave up its right
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of first offer in the event of a sale of the Headquarters Facility, and the
buy-sell arrangement originally included in the partnership agreement as a
mechanism to resolve disputes was eliminated. The amendment to the partnership
agreement for the Development Partnership eliminated the Registrant's right of
first offer in the event of a sale of the land. In addition, the provisions in
the partnership agreement of the Operating Partnership which restricted the
ability of the principals of Crow Irvine to transfer their interests were
amended. As amended, the principals may transfer their interests so long as
there is no change in control. Transfers which would cause a change in control
require the prior consent of the Registrant, which consent will not be
unreasonably withheld. Such consent will be given so long as the transferee has
net worth and experience comparable to the present principals and the transferee
is of sound moral character (i.e., not known to engage in criminal conduct) and
has a good business reputation.
Employees
The Registrant does not have any employees. Services are performed for
the Registrant by the General Partners and agents retained by them.
Property Management
Winthrop Management LLC, an affiliate of WFA, has, since 1992, been
retained by WC Management to actually perform management and leasing functions
at the Headquarters Facility. Winthrop Management LLC is reimbursed at cost by
WC Management for the compensation paid by Winthrop Management LLC to certain
senior level on-site employees as well as for accounting and other support
functions performed off-site by Winthrop Management LLC. The compensation paid
to other Winthrop Management LLC employees as well as the costs associated with
the office space occupied by Winthrop Management and other administrative
expenses are reimbursed to Winthrop Management LLC, at cost, by the Operating
Partnership. WC Management and Winthrop Management LLC occupy approximately
13,000 and 2,000 square feet of space, respectively, at the Headquarters
Facility. Under the terms of its Management Agreement, WC Management was, until
the March 1997 loan restructuring, entitled to a fee of 5% of gross receipts
from the Headquarters Facility. As a result of, and as a condition to, the Plan,
WC Management's fee has been reduced to 2% of gross receipts. Additionally, WC
Management will receive certain incentive fees based on reductions it is able to
achieve, if any, in certain operating and other expenses. Leasing commission
payments, consistent with prevailing market rates, will be paid to WC Management
for all third-party leases it procures for the Headquarters Facility. All
payments under the Management Agreement will be paid to WC Management and the
Registrant will have no rights to any payments thereunder.
Partnership Agreement Amendment
In August 1995, the General Partner amended the Registrant's
partnership agreement to clarify and remove certain ambiguities pertaining to
the requirements for calling and voting at a meeting of 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 Limited Partners holding
not less than 10% of the outstanding Units.
Tender Offer
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On November 24, 1999, Sutter/Jamboree Acquisition Fund, LLC
("Sutter/Jamboree") purportedly commenced a tender offer to purchase up to 1,000
Units at a purchase price of $1,500 per Unit, pursuant to the terms and
conditions of an Offer to Purchase dated November 24, 1999, and the related
Letter of Transmittal (together, the "Sutter Offer"). On November 30, 1999, the
Registrant received a letter from counsel to Sutter/Jamboree in the Sutter Offer
notifying it of the Sutter Offer and providing a copy of the offering materials
related thereto. The letter also contained a request that the Registrant comply
with certain provisions of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act") by either providing Sutter/Jamboree with a list of the name
and address of, and the number of units held by, each limited partner of your
partnership, or agreeing to mail the Sutter Offer offering materials to limited
partners.
On December 2, 1999, a representative of the Registrant telephoned a
representative of Sutter/Jamboree and stated that the Registrant would neither
provide the requested list of limited partner information nor agree to mail the
Sutter Offer offering materials, and that a letter from the Registrant's legal
counsel would be forthcoming.
On December 2, 1999, the Registrant's legal counsel mailed a letter
written on behalf of the Registrant to counsel for Sutter/Jamboree. In the
letter counsel indicated that (i) the Registrant's agreement of limited
partnership required (A) the prior written consent of WFA to any assignment or
transfer of units and (B) that any transfer of units comply with applicable
Federal securities laws, (ii) as a result of the absence of current financial
information with respect to the Registrant, WFA will not consent to any transfer
of units made pursuant to the Sutter Offer, and (iii) the Sutter Offer does not
comply with the disclosure requirements of the Exchange Act applicable to tender
offers for limited partnership units, and, accordingly, the Registrant is not
required to comply with the request received on November 30.
On December 7, 1999, a representative of Sutter Opportunity Fund, LLC,
an affiliate of Sutter/Jamboree, appeared at the Registrant's office and
delivered a letter demanding that they be permitted to inspect and copy the
register of holders of units pursuant to the provisions of the Registrant's
limited partnership agreement and Delaware law. A representative of the
Registrant advised them that counsel needed to be consulted with before
responding to the request.
On December 8, 1999, Sutter Opportunity Fund, LLC commenced an action
in the Delaware Chancery Court against the Registrant and WFA to obtain a list
of the limited partners of your partnership. In a letter to limited partners
dated December 9, 1999, the Registrant indicated that, in accordance with the
provisions of the Registrant's partnership agreement, it had decided to restrict
transfers of units under the Sutter Offer based on its belief that the Sutter
Offer violates certain provisions of applicable securities laws and the absence
of current financial information on the Registrant sufficient to enable limited
partners to make an informed decision as to whether to sell units. The
Registrant also recommended that limited partners reject the Sutter Offer and
disclosed that an affiliate of WFA may be making an offer to purchase units at a
price substantially above the price provided for in the Sutter Offer.
On December 14, 1999, the Registrant sent a letter to counsel for
Sutter Opportunity Fund, LLC rejecting the request to provide a list of limited
partners.
On December 21, 1999, a representative of the Registrant contacted a
representative of Sutter/Jamboree to inform them that in light of the
anticipated filing of this Annual Report on Form
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10-K, the Registrant would mail Sutter/Jamboree's offering materials. However,
the Registrant's representative further stated that no transfers of Units would
be affected until the Registrant's audited financial statements for the year
ended December 31, 1998 is made available to the Limited Partners. A letter was
sent from counsel to the Registrant to Sutter/Jamboree to this effect on
December 21, 1999.
It is currently anticipated that both the Sutter Offer and an offer by
an affiliate of WFA will be mailed to limited partners in the near future.
However, at present, no transfers of limited partnership interests in the
Registrant will be affected until the Registrant's current financial information
is completed, filed with the Securities and Exchange Commission and disseminated
to the Registrant's limited partners.
Item 2. Properties.
The Registrant owns no property other than its interests in the
Operating Partnership, the Development Partnership and WC Management.
The Operating Partnership
The Operating Partnership's sole asset is its 10% ownership interest in
Jamboree LLC. Jamboree LLC, in turn, owns title in fee simple to the
Headquarters Facility. The Headquarters Facility consists of eight buildings; a
10-story tower, a single story concourse and six four-story buildings;
containing, in the aggregate, approximately 1,692,219 rentable square feet of
space and approximately 15 acres of land. The property is located in the Greater
Airport area of Irvine, California and is used principally as various tenants'
corporate headquarters.
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The following table sets forth those tenant's at the Headquarters
Facility that occupy 10% or more of the rentable square footage, business
conducted by the tenant, expiration date of the lease term, renewal options and
the 1999 annual rent for the leases:
Lease Renewal 1999 Monthly
Tenant/Business Square Footage (%) Expiration Option (1) Base Rent
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ConAgra, Inc.(2) 384,117 (22.7%) 8/31/10 2-5 yr. (3)
Air Touch Cellular 189,265 (11.18%) 11/30/00 2-5 yr.(4) $246,045
Communication
Services
Denny's Inc. 158,362 (9.36%) 7/24/04 3-5 yr. $214,841
Food service
company(5)
Waban, Inc.(6) 57,208 (3.39%) 7/24/04 3-5 yr. $62,035
Home improvement
retailer
(1) The first number represents the number of renewal options. The second
number represents the length of each option.
(2) According to tenant's Annual Report on Form 10-K, ConAgra is a diversified
food company that operates across the food chain, from basic agricultural
inputs to production and sale of branded consumer products. Tenant entered
into lease on November 19, 1999.
(3) Tenant improvements are now under construction. Tenant is not required to
commence paying rent until September 2000 with respect to 262,648 square
feet of space and December 1, 2000 with respect to 121,469 square feet of
space. Lease provides for the following rental payments
262,648 Square Feet 121,469 Square Feet
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Rent Dates Monthly Rate Rent Dates Monthly Rate
---------- ------------ ---------- ------------
9/1/00 to 8/31/01 $422,863 12/1/00 to 8/31/03 $176,130
9/1/01 to 2/28/03 $467,513 9/1/03 to 8/31/05 $193,136
3/1/03 to 8/31/05 $491,152 9/1/05 to 2/29/08 $202,853
9/1/05 to 2/29/08 $514,790 3/1/08 to 8/31/10 $213,785
3/1/08 to 8/31/10 $541,055
(4) Tenant has advised WC Management that it does not intend to exercise its
renewal option.
(5) Tenant has subleased 106,676 square feet of space to Waban's and the
remainder of the space to one of its affiliates. Parent company of
Denny's, which filed for bankruptcy, guaranteed the lease.
(6) The space listed is in addition to the space subleased from Denny's Inc.
The following table sets forth the occupancy rates for the last five
years and the associated
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gross rental per square foot amount, as footnoted. At November 30, 1999, 92%
(including the ConAgra lease) at the Headquarters Facility was leased under
leases with an average rental rate (exclusive of ConAgra) of $21.00 per square
foot.
Percentage Average Annual Total
Occupancy Gross Rental Per SF
Year Rate(1) of Occupied Space (2)
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1994 99.5% 23.59
1995 95.0% 23.08
1996 91.5% 23.34
1997 97.5% 20.51
1998 88.0% 21.33
(1) Occupancy rates are based on December 31 of indicated year and are not
yearly averages.
(2) Calculated using operating revenues, including rent escalations and other
revenues, for the entire year divided by the total square footage of
occupied space (based on the occupancy rates reported in this table).
(3) Occupancy Rate and Average Rental Rate are for eleven months ended
11/30/99.
The following table sets forth certain information concerning lease
expirations as of January 1, 1999 (assuming no renewals for this property for
the period from January 1, 1999 through December 31, 2008). The leases which
were scheduled to expire in 1999 have not been renewed.
Annualized
Number of Aggregate SF Rentals for Percentage of
Tenants Whose Covered By Leases Total Annualized
Leases Expire Expiring Leases Expiring($) Rental
------------- --------------- ----------- ------
1999 2 558,625 4,636,913 18.78
2000 12 254,762 3,251,518 15.31
2001 7 62,787 496,091 2.83
2002 11 70,882 590,059 3.66
2003 6 136,214 1,615,262 11.20
2004 5 311,887 3,765,864 36.13
2005 4 133,167 2,485,124 41.23
2006 0 0 0 0
2007 0 0 0 0
2008 0 0 0 0
In the opinion of the General Partners, as of October 1, 1999 the
properties comprising the Headquarters Facility are adequately covered by
insurance.
11
<PAGE>
The Development Partnership. The following information relating to the
Development Partnership is based solely on information provided to the
Partnership by the general partner of the Development Partnership. As stated
earlier, due to disputes with the general partner of the Development
Partnership, the Partnership makes no representation or warranty as to the
accuracy thereof.
The Development Partnership was formed in 1985 for the purpose of
acquiring, owning and developing approximately 120 acres of land in Orange
County, California. The general partner is Crow Irvine #2, a California limited
partnership and the limited partner is your partnership.
Since inception, the Development Partnership sold 32 acres of the
Excess Land in 1989 for $42,150,000. In accordance with the sale of that parcel
of land, there were certain requirements of the purchase concerning land-use,
which were not met. As such, ownership of that 32 acres reverted back to the
Development Partnership. In 1998, they again sold this 32-acre parcel of land
owned by the Development Partnership.
In 1994, a 36,400 square foot parcel of land was sold to Edwards
Theaters Circuit, Inc. for $3,500,000. The Registrant did not receive any
proceeds from the sale of the land. The Registrant was informed by the general
partner of the Development Partnership that such proceeds were used to pay
certain debts and obligations of the Development Partnership, pursuant to the
Development Partnership's partnership agreement.
During 1997, the Development Partnership formed Shops at Park Place LLC
for the purpose of owning and operating a retail center. The Development
Partnership is the managing and sole member of Shops at Park Place LLC. During
1998, the Development Partnership formed Park Place Residential Realty LLC and
Park Place Residential Realty-Land LLC, for the purpose of reacquiring and
reselling the approximately 32 acres of residential property originally sold in
1989. The 32 acres were sold in 1998 for a gross sales price of $50,000,000. In
addition, during 1998, the Development Partnership formed 3121 Michelson Drive
LLC and Park Place Hotel Company LLC and, in January 1998 formed Park Place
Parking Company LLC for the purposes of developing, owning and operating a
150,000 square foot Class A office building, a luxury hotel and parking
structures, respectively. In 1999, Park Place Hotel signed a 20-year operating
agreement with a hotel operator. The Development Partnership is the managing and
sole member of each of these limited liability companies.
Item 3. Legal Proceedings.
To the best of the Registrant's knowledge, there are no material
pending legal proceedings to which it is a party or to which its properties are
subject except as follows:
Pursuant to an Assignment and Assumption Agreement entered into as of
October 3, 1997 in connection with the bankruptcy proceeding for the Operating
Partnership, In re Crow Winthrop Operating Partnership, U.S. Bankruptcy Court
(C.D. Cal.), Docket No. SA97-14512-JR, Jamboree LLC assumed the Operating
Partnership's obligation to indemnify WFA, the Registrant, the Operating
Partnership and WC Management (the "Subject Entities"), for all expenses,
including reasonable attorneys' fees and costs, incurred by Winthrop in
connection with or arising out of its participation in the Operating
Partnership.
12
<PAGE>
1. Crow Winthrop Development Limited Partnership, et al. v. Winthrop
California Investors Limited Partnership, et al., Civil Action No. 174570,
Circuit Court of Montgomery County, Maryland. In August 1997, the Development
Partnership and its general partner Crow Irvine #2 ("Crow") sued the Registrant
and its general partners seeking a declaratory judgment and injunctive relief to
prevent the Registrant from converting the Operating Partnership, in which the
Registrant and Crow were partners, from a general partnership to a limited
partnership and from converting Crow to a limited partner. The plaintiffs also
sought unspecified damages. Upon the filing of the action, the Court granted a
temporary restraining order in favor of the plaintiffs. In October 1997, after
hearing, the Court refused to grant a preliminary injunction in favor of the
plaintiffs and the temporary restraining order expired. The Operating
Partnership thereafter was converted to a limited partnership with Crow as its
limited partner.
An answer was filed and each of the parties served written discovery.
The Court thereafter stayed the action due to the pendency of actions in
California involving the parties or their affiliates. Upon the expiration of the
stay, the plaintiffs moved to dismiss the action without prejudice. On November
3, 1999, the Court dismissed the action without prejudice.
2. Crow Winthrop Development Limited Partnership and Crow Orange County
Management Company, Inc. v. Winthrop California Management Limited Partnership,
et al., Superior Court of California, County of Orange, Docket No. 789429. In
January 1998, WC Management was named as a defendant in an action seeking
declaratory relief that certain agreements between the parties have been
terminated and that plaintiff has the exclusive right to manage the common areas
of certain contiguous parcels of real estate containing office and retail space
located in Irvine, California. In the alternative, the plaintiffs seek a
declaration that WC Management perform certain tasks and be prevented from
assessing certain charges in connection with its management of the common areas.
The action was removed to federal court and transferred to the Bankruptcy Court
which, in April 1998, granted summary adjudication in favor of WC Management on
plaintiffs' termination claims. The plaintiffs did not appeal from that
decision.
The remainder of the claims were thereafter remanded to state court.
Plaintiffs' alternative claims for declaratory relief concerning performance
issues related to the management of the subject property remain pending. The
case was transferred to the complex litigation panel of the Orange County
Superior Court and deemed related to two other actions which involve the same
subject property. WC Management is not a party to those other actions.
On or about September 24, 1999, the plaintiffs were granted the right
to file an amended complaint. The amended complaint is not substantively
different from the original complaint, and the only relief sought is declaratory
relief. An answer was filed on behalf of WC Management and Winthrop Management,
LLC on or about October 22, 1999.
There are two motions pending which seek the consolidation of this
action with other pending actions involving the same subject property. One
motion filed on or about October 21, 1999, by the plaintiffs in this action
seeks to consolidate this action with an action captioned as Crow Winthrop
Development Limited Partnership, a Maryland limited partnership, and Crow Orange
County Management Company, Inc., a Texas corporation vs. Jamboree LLC, a
Delaware limited liability company, OCSC Case No. 813915.
13
<PAGE>
The second motion filed by Jamboree LLC on or about November 12, 1999,
in one of the other currently pending actions, in which Winthrop is not a party,
seeks to consolidate this action with the same action for which consolidation is
sought in the first motion to consolidate (OCSC Case No. 813915) and with three
additional cases: Crow Winthrop Development Limited Partnership v. Jamboree LLC,
et al., OCSC Case No. 789562; Crow Winthrop Development Limited Partnership v.
Jamboree LLC, et al., OCSC Case No. 791662; and Jamboree LLC v. Crow Winthrop
Development Limited Partnership, Crow Orange County Management Company, Inc., et
al., OCSC Case No. 806526. WC Management has filed notices that it does not
oppose these motions to consolidate.
3. Winthrop California Investors Limited Partnership v. Crow Winthrop
Development Limited Partnership, Civil Action No. 178303, Circuit Court of
Montgomery County, Maryland. In October 1997, the Registrant brought suit
against the Development Partnership and its general partner seeking declaratory
and injunctive relief to allow the Registrant to exercise its rights as a
limited partner in the Development Partnership to audit the Development
Partnership's books and records and seeking damages for the Development
Partnership's past refusals to allow such access. In January 1998, the Court
granted partial summary judgment in favor of the Registrant, declaring and
ordering that the Registrant has the right to inspect and audit the Development
Partnership's books, records and files. The Registrant's auditors thereafter
reviewed the Development Partnership's books and records. After obtaining access
to the Development Partnership's books and records, the Registrant voluntarily
dismissed its claim for breach of fiduciary duty based on the Development
Partnership's past refusals to allow the Registrant access.
4. Winthrop California Investors Limited Partnership v. Crow Winthrop
Development Limited Partnership, et al., Superior Court of California, County of
Orange, Case No. 812346. In January 1999, the Registrant, a 25% limited partner
in the Development Partnership, brought suit in Maryland against defendant the
Development Partnership, its general partner, the general partner of the
Development Partnership's general partner, and the general partner of that
entity alleging claims for breach of the Development Partnership partnership's
agreement, breach of fiduciary duty, and conversion and requested that a
receiver be appointed to conduct the business of the Development Partnership.
The Registrant sought approximately $9 million in damages resulting from
wrongful distributions of capital proceeds of the Development Partnership in
connection with a 1998 sale of real estate by the Development Partnership.
The defendants filed a motion to dismiss the action claiming that they
are not subject to personal jurisdiction in Maryland and that Maryland is an
inconvenient forum. Defendants argued that the action should proceed in
California, if at all. The court in Maryland granted the defendants' motion on
the ground of inconvenient forum in July 1999.
The Registrant thereafter filed substantially the same claims in
California, with the above-caption. The defendants filed a demurrer to the
complaint, arguing that it should be dismissed for a variety of reasons. The
court overruled the defendants' demurrer on September 24, 1999. On or about
November 5, 1999, the defendants filed their answer in which they alleged a
general denial to the allegations of the complaint. The case is now in
discovery.
5. Winthrop California Investors Limited Partnership v. Crow Winthrop
Development Limited Partnership, et al.,/Crow Winthrop Development Limited
Partnership and Crow Irvine #2 v.
14
<PAGE>
Winthrop California Investors Limited Partnership, et al., United States
District Court for the Central District of California, Southern Division, Case
No. SACV99-1519 GLT (ANx). On or about November 5, 1999, defendant the
Development Partnership and its general partner filed a cross-complaint in the
action described in numbered paragraph 4 above, purporting to allege claims for
breach of fiduciary duty, aiding and abetting breach of fiduciary duty and
unfair business practices. the Registrant and certain affiliates, as well as
several unaffiliated entities are named as cross-defendants in the
cross-complaint. In summary, the cross-complaint appears to allege that the
cross-defendants have engaged in a conspiracy to fraudulently acquire and
manipulate the management positions of numerous partnerships to their benefit
and in particular have done so with respect to the Operating Partnership, which
the cross-claimants allege was improperly forced into bankruptcy to the alleged
detriment of the cross-claimants. The cross-claimants also allege that the
Registrant in its capacity as a limited partner in the Development Partnership
has breached its alleged fiduciary duties to the Development Partnership by
allegedly participating in or filing lawsuits, in order to hinder the
development of the Development Partnership's land; failing to abide by
agreements; and by disclosing proprietary information concerning the Development
Partnership.
On December 8, 1999, the Registrant and others removed the
cross-complaint to the United States District Court for the Central District of
California, Southern Division seeking the reference of the cross-complaint to
the United States Bankruptcy Court for the Central District of California where
the Operating Partnership bankruptcy proceeding remains open.
6. See Item 1. Business-Tender Offer for information regarding the
action commenced in Delaware Chancery Court against Registrant and WFA to obtain
a list of limited partners.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
15
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
There is no established public trading market for the Units in the
Registrant. Trading in the Units is sporadic and occurs solely through private
transactions. In addition, transfers of Units are subject to limitations set
forth in the Registrant's partnership agreement which require the prior written
consent of WFA of any such transfer, which consent may be granted or denied in
WFA's sole discretion. As of December 1, 1999, there were 1,665 holders of 3,500
Units.
The Registrant's partnership agreement requires that Cash Flow (as
defined therein) be distributed to the partners in specified proportions at
reasonable intervals during the fiscal year and in any event no later than 60
days after the close of each fiscal year. The Registrant's ability to make
distributions of Cash Flow is limited by the extent to which (i) it receives
distributions of Cash Flow from the Operating Partnership, the Development
Partnership and, from WC Management, (ii) it earns income from other sources and
(iii) its receipts of Cash Flow and income are not sufficient to meet its
expenses and current obligations including fees payable to the General Partners.
In addition, the General Partners have the right to establish, maintain and
replenish reserves from available cash prior to making distributions to
partners.
No cash distributions were paid or accrued to the Limited Partners for
the years ended December 31, 1996, 1997 or 1998. Although the Registrant
received distributions from WC Management in 1996, 1997 and 1998, these
distributions have been applied to replenish unrestricted reserves previously
held by the Registrant and to pay certain accrued but unpaid fees to WFA. It is
not anticipated that that there will be any additional distributions from
operations in the near future.
16
<PAGE>
Item 6. Selected Financial Data.
As previously disclosed, financial information for the Development
Partnership has just recently been provided to the Registrant. As a result, the
Registrant has not yet been able to finalize its financial statements. The
Registrant, in reliance on Rule 12b-21 promulgated under the Exchange Act, is
filing this Annual Report on Form 10-K without the required Selected Financial
Data but will file an amendment to this Item 6 at such time as the audited
financial statements of the Registrant for the years ended December 31, 1997 and
1998 are completed.
The following is a summary of certain financial data for Jamboree LLC,
the entity in which the Operating Partnership holds a 10% interest, for the
periods indicated. The summary financial information for Jamboree LLC for the
years ended 1998 and 1997 is based on audited financial statements delivered to
your partnership's limited partners under cover of a letter dated September 10,
1999.
Selected Financial Data
(in thousands, except unit data)
October 3, 1997
Year ended through
December 31, 1998 December 31, 1997
----------------- -----------------
Statements of Income:
Rent $24,709 $5,999
Common area expense reimbursement 8,886 1,855
Interest income 751 175
Other income 893 279
Total revenues 35,239 8,307
Total reimbursable common area
expenses 13,321 3,332
Total nonreimbursable expenses 2,397 362
Total expenses 26,780 6,245
Net Income 8,459 2,062
Statements of Cash Flows
Cash and Cash Equivalents $23,237 $13,164
Net cash provided by operating 14,584 1,249
activities
October 3, 1997
Year ended through
Balance Sheet Data: December 31, 1998 December 31, 1997
----------------- -----------------
Total Assets $123,901 $112,686
Total Liabilities 118,475 107,930
Member's equity 5,426 4,755
The following is a summary of certain financial data for the Development
Partnership, the entity in which your partnership holds a 25% interest, for the
years ended 1998 and 1997. The
17
<PAGE>
summary financial information provided for the Development Partnership is based
on audited financial statements.
Selected Financial Data
(in thousands)
Year Ended
-----------------------
1998 1997
---- ----
Minimum rents $2,779 $2,436
Operating expense recoveries 2,000 1,915
Percentage rents 285 226
Parking 140 208
Other revenues 22 32
Total revenues 5,226 4,816
Total operating costs and expenses 6,077 4,937
Operating Loss (851) (121)
Other income (expense)
Interest expense (1,704) (1,490)
Interest income 935 308
Gain on sale of residential property 42,952 --
Other 3,340 --
Net income (Loss) $44,673 $(1,304)
Statements of Cash Flows
Cash and Cash Equivalents $26,563 $4,727
Net cash provided by operating activities (2,151) 731
Year Ended
-----------------------
1998 1997
---- ----
Balance Sheet Data:
Total Assets $105,678 $79,035
Total Liabilities 40,499 52,065
Total partners' capital 65,180 26,970
18
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Registrant, in reliance on Rule 12b-21 promulgated under the
Exchange Act is filing this Annual Report on Form 10-K without the required
Management Discussion and Analysis but will file an amendment to this Item 7 at
such time as the audited financial statements of the Registrant for the years
ended December 31, 1997 and 1998 are completed.
19
<PAGE>
Item 8. Financial Statements and Supplementary Data.
The Registrant, in reliance on Rule 12b-21 promulgated under the
Exchange Act is filing this Annual Report on Form 10-K without the required
Financial Statements but will file an amendment to this Item 8 at such time as
the audited financial statements of the Registrant for the years ended December
31, 1997 and 1998 are completed.
F-1
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
26
<PAGE>
PART III
Item 10. Directors and Executive Officers.
The Registrant has no directors or executive officers. The managing
general partner of the Registrant is WFA. WFA manages and controls substantially
all of Registrant's affairs and has general responsibility and ultimate
authority in all matters affecting its business. As of October 1, 1999, the
names of the executive officers of WFA and the position held by each of them,
are as follows:
Position Held with the Has Served as a
Name Managing General Partner Director or Officer Since
- ---- ------------------------ -------------------------
Michael L. Ashner Chief Executive Officer and 1-96
Director
Thomas C. Staples Chief Financial Officer 1-99
Peter Braverman Executive Vice President and 1-96
Director
Carolyn Tiffany Chief Operating Officer and 10-95
Clerk
Michael L. Ashner, age 47, has been the Chief Executive Officer of 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.
Thomas C. Staples, age 43, has been the Chief Financial Officer of WFA
since January 1, 1999. From March 1996 through December 1998, Mr. Staples was
Vice President/Corporate Controller of WFA. From May 1994 through February 1996,
Mr. Staples was the Controller of the Residential Division of Winthrop
Management.
Peter Braverman, age 47, has been a 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.
27
<PAGE>
Carolyn Tiffany, age 32, has been employed with WFA since January 1993.
From 1993 to September 1995, Ms. Tiffany was a Senior Analyst and Associate in
WFA's accounting and asset management departments. Ms. Tiffany was a Vice
President in the asset management and investor relations departments of WFA from
October 1995 to December 1997, at which time she became the Chief Operating
Officer of WFA.
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
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; Riverside Park Associates Limited Partnership;
Springhill Lake Investors Limited Partnership; Twelve AMH Associates Limited
Partnership; Winthrop Growth Investors I Limited Partnership; and Winthrop
Interim Partners I, A Limited Partnership.
Except as indicated above, neither the Registrant nor the General
Partner has any significant employees within the meaning of Item 401(b) of
Regulation S-K. There are no family relationships among the officers and
directors of WFA.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Registrant under Rule 16a-3(e) during the Registrant's most
recent fiscal year and Forms 5 and amendments thereto furnished to the
Registrant with respect to its most recent fiscal year, the Registrant is not
aware of any director, officer or beneficial owner of more than ten percent of
the units of limited partnership interest in the Registrant 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.
(f) Involvement in Certain Legal Proceedings. None.
Item 11. Executive Compensation.
Registrant is not required to and did not pay any compensation to the
officers or partners of the General Partner. The General Partner does not
presently pay any compensation to any of its officers or partners (See "Item 13,
Certain Relationships and Related Transactions").
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
WFA and Three Winthrop own all the outstanding general partnership
interests in the Registrant. The following table sets forth certain information
regarding Units of the Registrant owned by each person who is known by the
Registrant to own beneficially or exercise voting or dispositive control over
more than 5% of the Registrant's limited partnership assignee units, by each
28
<PAGE>
of the directors of the General Partners of the Registrant and by all directors
and executive officers of the General Partners as a group as of December 1,
1999.
- --------------------------------------------------------------------------------
Name and address of Beneficial Amount and nature of % of Class
Owner Beneficial Owner
- --------------------------------------------------------------------------------
WILCAP Limited Partnership (1) (2) 1,000 28.6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WILCAP Holdings Co., Inc. 18 *
(1)(2)(3)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Winthrop Financial Associates, A 5 *
Limited Partnership (1) (2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
All directors and executive -- --
officers as a group (five persons)
- --------------------------------------------------------------------------------
* Less than one percent
(1) The business address for WILCAP Limited Partnership WILCAP Holdings Co.,
Inc. and WFA is Five Cambridge Center, 9th Floor, Cambridge, Massachusetts
02142.
(2) Based upon information supplied to the Registrant by WILCAP Limited
Partnership. (3) WILCAP Holdings Co., Inc. is the general partner of
WILCAP Limited Partnership.
There exists no arrangements known to the Registrant the operation of
which may at a subsequent date result in a change in control of the Registrant.
Item 13. Certain Relationships and Related Transactions.
(a) Transactions with Management and Others.
The directors, officers and general partners of the General Partners
and their affiliates receive no remuneration or other compensation from the
Registrants.
Under the terms of the Partnership Agreement, the General Partners and
their affiliates are entitled to receive certain cash distributions from, and
allocations of taxable profits and losses from the Registrant. In addition, the
General Partners and their affiliates receive certain fees and compensation paid
by the Partnership for services rendered in connection with the operations of
the Partnership.
The only fees, commissions and cash distributions which the Registrant
paid or accrued for the account of the General Partners and their affiliates for
the years ended December 31, 1998, 1997 and 1996 is an annual asset management
fee payable to WFA of $750,000 per annum. The Registrant paid to the General
Partners $750,000 during each of the years ended December 31, 1998 and 1997. In
August 1996, the Registrant paid the General Partners $4,875,000 as payment of
current and accrued annual asset management fees. At December 1, 1999, the
Registrant had paid to the General Partners $562,500 on account of the annual
asset management fee for the year ended December 31, 1999.
There were no other material transactions between the General Partners
or their affiliates and the Registrant during 1996, 1997 or 1998, except as
follows:
29
<PAGE>
In February 1992, WC Management was organized for the purpose of buying
out Crow Management's interest in the Management Contract. A wholly-owned
subsidiary of WFA contributed $100 to the capital of this partnership in
exchange for a 1% general partnership interest. The Registrant contributed
approximately $4 million to the capital of WC Management in exchange for a 99%
limited partnership interest. In 1996, 1997 and 1998, the WFA affiliate which is
the general partner of WC Management received a distribution of $14,384, $16,076
and $12,380, respectively, in respect of its 1.0% interest. Others than the
distribution in respect of its 1% interest, the general partner of WC Management
received no compensation for its services as general partner.
WC Management has engaged Winthrop Management LLC, an affiliate of WFA,
to perform the services required under the Management Contract. Winthrop
Management LLC is reimbursed for payroll and other expenses associated with
discharging these duties. Winthrop Management LLC also occupies approximately
2,000 square feet of office space in the Headquarters Facility and receives
reimbursement from the Operating Partnership for the expenses associated with
this space. Other than these reimbursements, Winthrop Management LLC receives no
fees for the services it performs for WC Management.
(b) Certain Business Relationships.
The Registrant's response to Item 13(a) hereof is incorporated herein
by this reference. The Registrant has no other business relationship with
entities of which the officers, directors or general partners of the General
Partners or its affiliates are officers, directors or 10 percent shareholders
other than as discussed in "Item 12(a), Security Ownership of Certain Beneficial
Owners".
(c) Indebtedness of the Management.
There is no indebtedness to the Registrant by the General Partners or
their affiliates, or any of their officers, directors or general partners.
(d) Transactions with Promoters. None.
30
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this Report:
1. The exhibits listed in the accompanying Index to Exhibits
are filed as part of this Report.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last quarter
covered by this report.
31
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf of the undersigned, thereunto duly authorized.
WINTHROP CALIFORNIA INVESTORS LIMITED PARTNERSHIP
By: WINTHROP FINANCIAL ASSOCIATES, A LIMITED PARTNERSHIP,
Managing General Partner
By: /s/Michael L. Ashner
-----------------------------
Michael L. Ashner
Chief Executive Officer
Date: December 17, 1999
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 Officer December 17, 1999
- ------------------
Michael Ashner and Director
/s/ Thomas Staples Chief Financial Officer December 17, 1999
- -------------------
Thomas Staples
32
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document
------ --------
3,4 Limited Partnership Agreement of Winthrop California (1)
Investors Limited Partnership, dated October 16, 1988,
Agreement of Merger, dated October 16, 1985
3,4 Amendment to Limited Partnership Agreement of Winthrop (2)
California Investors Limited Partnership, dated November
15, 1995
10 (a) Form of Amended and Restated Partnership Agreement of Crow (3)
Winthrop Operating Partnership
(b) Form of Limited Partnership Agreement and Certificate of (3)
Amendment of Crow Winthrop Development Limited Partnership
(c) Amended and Restated Agreement of Purchase and Sale, dated (3)
October 31, 1984, by and among Fluor Corporation, as Seller,
and Crow Irvine #1, as Buyer
(d) Assignment of Amended and Restated Agreement of Purchase (3)
and Sale, dated as of May 24, 1985, by and among Fluor
Corporation and Crow Irvine #1, as Assignors, and Crow
Winthrop Operating Partnership and Crow Winthrop Development
Limited Partnership, as Assignees
(e) Management and Leasing Agreement, dated as of May 24, 1985, (3)
between Crow Winthrop Operating Partnership, as Owner and
Crow Orange County Management Company, as Manager
(f) First Amendment to Limited Partnership Agreement and (3)
Certificate of Amendment of Crow Winthrop Development
Limited Partnership, dated as of July 26, 1985, by and between
Crow Irvine #2, as General Partner, and Winthrop California
Investors Limited Partnership, as Limited Partner
33
<PAGE>
(g) First Amendment to Amended and Restated Agreement of (3)
Purchase and Sale, dated as of July 26, 1985, by and among
Fluor Corporation, as Seller, and Crow Winthrop Operating
Partnership and Crow Winthrop Development Limited Partnership,
as Buyer
(h) Contingent Purchase Price Agreement, dated as of July 26, (3)
1985, by and between Fluor Corporation, as Seller, and Crow
Winthrop Development Limited Partnership, as Buyer
(i) Subordinated Short Form Deed of Trust and Assignment of (3)
Rents, dated as of July 26, 1985, by and among Crow
Winthrop\Development Limited Partnership, as Trustor, Ticor
Title Insurance Company of California, as Trustee, and Fluor
Corporation, as Beneficiary
(j) Security Agreement, dated as of July 30, 1985, by and (3)
between Crow Winthrop Development Limited Partnership, as
Secured Party, and Winthrop California Investors Limited
Partnership, as Debtor
(k) Assignment of Master Leases, executed as of July 26, 1985, (3)
by and between Fluor Corporation, as Assignor, and Crow
Winthrop Operating Partnership, as Assignee, and Consent, dated
as of July 26, 1985, by Crow Winthrop Development Limited
Partnership, covering the following leases between Fluor
Corporation, as Landlord, and Fluor Engineers, Inc., as Tenant
(k)(i) Corporate Tower Lease (3)
(k)(ii) Concourse Lease (3)
(k)(iii) Building Pod Lease (3)
(l) Guaranty of Leases, dated as of July 26, 1985 by and among (3)
Fluor Corporation, as Guarantor, Crow Winthrop Operating
Partnership, as Landlord, and Crow Winthrop Development Limited
Partnership, as Developer
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(m) Concourse Management Agreement, dated as of July 26, 1985, (3)
by and between Fluor Engineers, Inc., as Manager, and Crow
Winthrop Operating Partnership, as Owner
(n) License Agreement dated as of July 26, 1985, by and between (3)
Crow Winthrop Development Limited Partnership, as Licensor, and
Fluor Engineers, Inc., as Licensee to Exhibit 10(n) to the
Registration Statement)
(o) Construction, Operation and Reciprocal Easement Agreement, (3)
dated as of July 26, 1985, by and between Crow Winthrop
Development Limited Partnership
(p) Amendment to Management and Leasing Agreement, dated as of (3)
July 26, 1985, by and between Crow Winthrop Operating
Partnership, as Owner, and Crow Orange County Management
Company, as Manager
(q) Air Space Lease, dated as of July 26, 1985, by and between (3)
Crow Winthrop Operating Partnership, as Lessor, and Crow
Winthrop Development Limited Partnership, as Lessee
(r) Air Space Easement Agreement, dated as of July 26, 1985, by (3)
and between Crow Winthrop Operating Partnership, as Grantor,
and Crow Winthrop Development Limited Partnership, as Grantee
(s) Amended and Restated Development Agreement, dated as of (1)
February 28, 1992, by and among Crow Winthrop Operating
Partnership, Crow Winthrop Development Limited Partnership,
Winthrop California Investors Limited Partnership and Crow
Irvine #2
(t) Management Agreement, dated as of July 26, 1985, by and (3)
among Crow Winthrop Operating Partnership and Crow Winthrop
Development Limited Partnership, as Owners, and Crow Orange
County Management Company, as Manager
(u) Bank Loan Agreement, dated as of September 19, 1986, by and (4)
between Winthrop California Investors Limited Partnership, as
Borrower, and Mellon Bank, N.A.
(v) Pledge and Security Agreement, dated as of September 19, (4)
1986, by and between Winthrop California Investors Limited
Partnership, as Debtor, and Mellon Bank, N.A.
(w) Revolving Credit Note, dated September 19, 1986, by (4)
Winthrop California Investors Limited Partnership in favor of
Mellon Bank, N.A. (incorporated by reference to Exhibit 10(w)
to
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(x) Lease between Crow Winthrop Operating Partnership and (5)
Denny's Inc., dated December 30, 1988
(y) Sublease between Crow Winthrop Operating Partnership and (5)
AT&T dated December 20, 1988
(z) Assignment and Assumption of Management Agreement, dated (1)
February 28, 1992, by and between Crow Orange County
Management Company, Inc. and Winthrop California
Management Limited Partnership
(aa) Second Amendment to Partnership Agreement, dated February (1)
28, 1992, by and between Crow Irvine #2 and Winthrop
California Investors Limited Partnership
(bb) Fourth Amendment to Limited Partnership Agreement and (1)
Certificate of Amendment, dated February 28, 1992, by and
between Crow Irvine #2 and Winthrop California Investors
Limited Partnership
(1) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended 1991, filed on August 28, 1992
(2) Incorporated by reference to the Registrant's Current Report on Form 8-K
filed November 15, 1995
(3) Incorporated by reference to Registrant's Registration Statement
(4) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year 1986, filed on March 31, 1987
(5) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year 1988, filed on March 31, 1989
36
