SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ________________
Commission File No. 0-15511
Development Partners
(A Massachusetts Limited Partnership)
(Exact name of registrant as specified in its charter)
Massachusetts 04-2895800
(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
5110 Langdale Way, Colorado Springs, CO 80906
(Address of principal executive offices) (Zip Code)
(719) 576-5122
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed
by Sections 13 and 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 _X_ No ___
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
June 30
1997 December 31,
(Unaudited) 1996
ASSETS
Property, at cost
<S> <C> <C>
Land $5,114,512 $5,114,512
Buildings and improvements 15,561,584 15,561,584
Equipment, furnishings and fixtures 1,775,052 1,687,793
------------- -------------
22,451,148 22,363,889
Less accumulated depreciation (4,950,736) (4,741,203)
------------- -------------
17,500,412 17,622,686
Cash and cash equivalents 410,177 537,735
Real estate tax escrows 80,899 27,976
Deposits and prepaid expenses 2,969 639
Accounts Receivable 18,450 20,631
Investment in partnership 290,278 293,210
Deferred expenses, net of accumulated
amortization of $310,794 and $298,472 3,522 15,844
------------- -------------
Total assets $18,306,707 $18,518,721
============= =============
LIABILITIES AND PARTNERS' EQUITY
<S> <C> <C>
Mortgage notes payable $8,552,718 $8,615,326
Accounts payable 32,715 57,602
Accrued expenses 178,153 164,447
Due to affiliates (Note 8) 1,985 10,680
Rents received in advance - 6,158
Tenant security deposits 70,600 66,305
------------- -------------
Total liabilities 8,836,171 8,920,518
General Partner's equity (83,526) (83,524)
Limited Partner's equity 9,554,062 9,681,727
------------- -------------
Total liabilities and partners' equity $18,306,707 $18,518,721
============= =============
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
---- ---- ---- ----
Revenue:
<S> <C> <C> <C> <C>
Rental income $600,390 $613,532 $1,259,223 $1,281,204
Interest Income 5,447 9,093 11,754 17,950
------------- ------------- ------------- -------------
605,837 622,625 1,270,977 1,299,154
Expenses:
Operating Expenses 271,151 286,166 562,552 572,254
Interest 201,103 203,911 402,934 408,485
Depreciation and amortization 110,927 107,322 221,854 211,766
General and administrative 44,807 61,182 80,932 119,448
Equity in (income) loss
from partnership 1,480 (2,847) 2,933 (5,082)
------------- ------------- ------------- -------------
629,468 655,734 1,271,205 1,306,871
------------- ------------- ------------- -------------
Net income (loss) ($23,631) ($33,109) ($228) ($7,717)
============= ============= ============= =============
Net income (loss) allocated to:
General Partners ($236) ($331) ($2) ($77)
Per unit net income (loss) allocated
to Investor Limited Partner interest:
36,411 units issued ($0.64) ($0.90) ($0.01) ($0.21)
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
-------------
Investor Total
General Limited Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1995 (76,142) 10,152,380 10,076,238
Cash distributions (5,202) (254,877) (260,079)
Net income (2,180) (215,776) (217,956)
------------- ------------- -------------
Balance at December 31, 1996 (83,524) 9,681,727 9,598,203
Cash distributions - (127,439) (127,439)
Net income (loss) (2) (226) (228)
------------- ------------- -------------
Balance at June 30, 1997 ($83,526) $9,554,062 $9,470,536
============= ============= =============
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------
Six Months Ended
June 30
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Interest received $11,754 $24,100
Cash received from operating revenue 1,257,360 1,278,373
General and administrative expenses (107,205) (146,054)
Operating expense (606,899) (642,865)
Interest paid (402,934) (408,485)
----------------------------
Net cash provided by operating activities 152,076 105,069
Cash flows from investing activities:
Purchase of fixed assets (87,259) (99,322)
Proceeds from maturities of short-term investments - (22,477)
Deposits (2,330) -
Distributions from partnership - 14,092
----------------------------
Net cash provided by investing activities (89,589) (107,707)
Cash flows from financing activities:
Distributions to partners (127,439) (127,438)
Principal payments on mortgage note payable (62,607) (57,058)
------------- -------------
Net cash used by financing activities (190,045) (184,496)
------------- -------------
Net decrease in cash and cash equivalents (127,558) (187,134)
Cash and cash equivalents at beginning of year 537,735 532,019
------------- -------------
Cash and cash equivalents at end of year $410,177 $344,886
============= =============
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------
Reconciliation of net income (loss) to net cash provided by operating
activities:
Six Months Ended
June 30
1997 1996
---- ----
<S> <C> <C>
Net income (loss) ($228) ($7,717)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 221,854 211,766
Equity in (income) loss from partnership 2,933 (5,082)
Change in assets and liabilities net of effects of investing and financing
activities:
Increase in real estate tax escrow (52,923) (51,875)
Decrease in interest receivable - 6,150
Decrease in accounts payable and accrued expenses (11,183) (27,213)
Decrease in due to (from) affiliates (6,514) (18,129)
Decrease in rents received in advance (6,158) -
Increase (decrease) in tenant security deposits 4,295 (2,831)
------------- -------------
Net cash provided by operating activities $152,076 $105,069
============= =============
</TABLE>
<PAGE>
1. Organization of Partnership:
Development Partners (A Massachusetts Limited Partnership), (the "Partnership"),
formerly Berry and Boyle Development Partners, was formed on October 23, 1985.
GP L'Auberge Communities, L.P., a California Limited Partnership, (formerly
Berry and Boyle Management) and Berry and Boyle Realty Advisors ("Advisors") (A
Massachusetts Limited Partnership), are the General Partners. A total of 2,033
individual Limited Partners owning 36,411 Units have contributed $18,205,500 of
capital to the Partnership. At June 30, 1997, the total number of Limited
Partners was 2,003. Except under certain limited circumstances upon termination
of the Partnership, the General Partners are not required to make any additional
capital contributions. The General Partners or their affiliates will receive
various fees for services and reimbursement for various organizational and
selling costs incurred on behalf of the Partnership.
The accompanying consolidated financial statements present the activity of the
Partnership for the six months ended June 30, 1997 and 1996.
The Partnership will continue until December 31, 2010, unless earlier terminated
by the sale of all or substantially all of the assets of the Partnership, or by
the dissolution and liquidation of the joint ventures.
2. Significant Accounting Policies:
A. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiaries: Canyon View Joint Venture and
Broadmoor Pines Joint Venture. All intercompany accounts and
transactions have been eliminated in consolidation. The Partnership
accounts for its investment in Casabella Associates utilizing the
equity method of accounting. The Partnership's investment account is
adjusted to reflect its pro rata share of profits, losses and
distributions from Casabella Associates.
The Partnership follows the accrual method of accounting.
B. Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents. The
carrying value of cash and cash equivalents approximates fair value. It
is the Partnership's policy to invest cash in income-producing
temporary cash investments. The Partnership mitigates any potential
risk from such concentration of credit by placing investments with high
quality financial institutions.
C. Significant Risks and Uncertainties
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.
D. Depreciation
Depreciation is provided for by the use of the straight-line method
over estimated useful lives as follows:
Buildings and improvements 40 years
Equipment, furnishings and fixtures 5-15 years
E. Deferred Expenses
Costs of obtaining various mortgages on the properties are being
amortized over the term of the related mortgage notes payable using the
straight-line method. Buy down fees relating to permanent loan
refinancings (see Note 7) are being amortized over a three year period.
Any unamortized costs remaining at the date of a refinancing are
expensed in the year of refinancing.
F. Income Taxes
No provision is made for income taxes since the Partners are required
to include on their tax returns their pro rata share of the
Partnership's taxable income or loss. If the Partnership's tax returns
are examined by the Internal Revenue Service or a state taxing
authority, and such an examination results in a change in partnership
taxable income or loss, such change will be reported to the Partners.
G. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
H. Long-Lived Assets
The Partnership's long-lived assets include property and equipment and
deferred expenses. The Partnership evaluates rental properties for
impairment when conditions exist which may indicate that it is probable
that the sum of expected future cash flows (undiscounted) from rental
properties is less than its carrying value. Upon determination that a
permanent impairment has occurred, rental properties are reduced to
fair value. For the year ended December 31, 1996, and the quarter ended
June 30, 1997, permanent impairment conditions did not exist at any of
the Partnership's properties.
3. Cash and Cash Equivalents:
Cash and cash equivalents at June 30, 1997, and December 31, 1996, consisted of
the following:
1997 1996
-------- --------
Cash on hand ............................. $168,979 $326,649
Certificate of deposit ................... 211,086
Money Market Accounts .................... 241,198
------- --------
$410,177 $537,735
======== ========
4. Joint Venture and Property Acquisitions:
The Partnership has invested in three properties located in Scottsdale and
Tucson, Arizona and Colorado Springs, Colorado. The success of the Partnership
will depend upon factors which are difficult to predict including general
economic and real estate market conditions, both on a national basis and in the
areas where the Partnership's investments are located.
Canyon View
On September 29, 1987, the Partnership acquired a majority interest in the
Canyon View Joint Venture which owns and operates a 168-unit multifamily
residential property located in Tucson, Arizona. The Partnership has been
designated as the managing joint venture partner and will control all decisions
regarding the operation and sale of the property.
In accordance with the terms of the purchase agreement and the joint venture
agreement, through June 30, 1997, the Partnership has contributed total capital
of $6,889,588 to the Canyon View Joint Venture, which was used to repay a
portion of the construction loan from a third party lender, to pay certain costs
related to the refinancing of the permanent loan, to cover operating deficits
incurred during the lease up period and to fund certain capital improvements. In
addition, the Partnership funded $745,902 of property acquisition costs which
were subsequently treated as a capital contribution to the joint venture.
For the six months ended June 30, 1997 and 1996, the Canyon View Joint Venture
had a net loss of $8,868 and $16,891, respectively.
Net cash from operations (as defined in the joint venture agreement) will be
distributed as available to each joint venture partner not less often than
quarterly, as follows:
First, to the Partnership until it has received an annual
non-cumulative 11.25% priority return on its capital contribution for
such year.
Second, the balance 75% to the Partnership and 25% to the other joint
venture partner.
Income from operations will be allocated to the Partnership and the other joint
venture partner generally in accordance with the distribution of net cash from
operations.
Losses from operations will generally be allocated 100% to the Partnership.
In the case of certain capital transactions and distributions, as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
Broadmoor
On October 12, 1988, the Partnership acquired L'Auberge Broadmoor ("Broadmoor")
(formerly Broadmoor Pines), a 108-unit residential property located in Colorado
Springs, Colorado, and simultaneously contributed the property to a joint
venture comprised of the Partnership and the property developer (the "Broadmoor
Pines Joint Venture"). The Partnership control and owns a majority interest in
the Broadmoor Pines Joint Venture and, therefore, the accounts and operations of
the Broadmoor Pines Joint Venture have been consolidated into those of the
Partnership.
The co-venture partner was Highland Properties, Inc. ("Highland"), a Colorado
based residential development, construction and management firm. Highland
developed the property known as L'Auberge Broadmoor.
The Partnership has been designated the managing joint venture partner of the
Broadmoor Pines Joint Venture and will have control over all decisions affecting
the Broadmoor Pines Joint Venture and the property.
JANUARY 1, 1996, THROUGH JULY 2, 1996
Net cash from operations (as defined in the joint venture agreement) was to be
distributed as available to each joint venture partner quarterly, as follows:
First, to the Partnership an amount equal to 11.25% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of its respective capital investment, as
defined in the joint venture agreement;
Second, the balance 80% to the Partnership, and 20% to the property
developer.
Losses from operations and depreciation for the Broadmoor Pines Joint Venture
were allocated 100% to the Partnership.
All profits from operations to the extent of cash distributions shall first be
allocated to the Partnership and the property developer in the same proportion
as the cash distributions. Any remaining profits are allocated 80% to the
Partnership and 20% to the property developer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
JULY 3, 1996, THROUGH JUNE 30, 1997
On July 3, 1996, the Partnership and certain affiliates consummated an agreement
with Highland Properties, Inc. ("Highland"), which separated the interests of
Highland and the Partnership, thus affording the Partnership greater flexibility
in the operation and disposition of the property. In consideration of a payment
by the Partnership to Highland totaling $8,683 and delivery of certain mutual
releases, Highland (i) relinquished its option to exercise its rights of first
refusal with regard to the sale of the property and (ii) assigned all of its
interest in the L'Auberge Broadmoor Joint Venture to the Partnership (while
preserving the economic interests of the venturer in these Joint Ventures),
which resulted in the dissolution of the L'Auberge Broadmoor Joint Venture.
Highland may still share in cash flow distributions or proceeds from the sale of
the property if certain performance levels are met.
Through June 30, 1997, the Partnership has made cash payments totaling
$6,079,200 and has funded $684,879 of property acquisition costs.
For the six months ended June 30, 1997 and 1996, L'Auberge Broadmoor had a net
income of $83,905 and $106,874, respectively.
6.. Mortgage Notes Payable:
All of the property owned by the Partnership is pledged as collateral for the
mortgage notes payable outstanding at June 30, 1997, and December 31, 1996,
which consisted of the following:
1997 1996
---------- ----------
Canyon View ........................ $5,031,708 $5,074,647
Broadmoor .......................... 3,521,010 3,540,679
---------- ----------
$8,552,718 $8,615,326
Canyon View is subject to a nonrecourse first mortgage in the original principal
amount of $5,380,000. Under the terms of the note, monthly principal and
interest payments of $45,610, based on a fixed interest rate of 9.125%, are
required over the term of the loan. The maturity of the note has been extended
from July 15, 1997, to July 15, 1998, with the same interest rate.
Broadmoor is subject to a nonrecourse first mortgage in the principal amount of
$3,650,000. Interest only at the rate of 8% was payable monthly for the first
three years of the loan term. Commencing on September 15, 1993, monthly payments
of $31,980 including principal and interest, at the rate of 9.75%, were payable.
The maturity of the note has been extended from September 15, 1997, to September
15, 1998, with the same interest rate.
Interest accrued at June 30, 1997 and 1996, consisted of $33,678 and $33,678,
respectively, relating to the Canyon View and L'Auberge Broadmoor.
The principal balance of the mortgage notes payable appearing on the
consolidated balance sheet approximates the fair value of such notes.
7. Partners' Equity:
Under the terms of the Partnership Agreement profits are generally allocated 98%
to the Limited Partners and 2% to the General Partners; losses are allocated 99%
to the Limited Partners and 1% to the General Partners.
Cash distributions to the partners are governed by the Partnership Agreement and
are made, to the extent available, 98% to the Limited Partners and 2% to the
General Partners.
The allocation of the related profits, losses, and distributions, if any, would
be different than described above in the case of certain events defined in the
Partnership Agreement, such as the sale of an investment property or an interest
in a joint venture partnership.
8. Related Party Transactions:
Due to affiliates at June 30, 1997 and December 31, 1996, consisted of $1,985
and $10,680, respectively, relating to reimbursable costs due to L'Auberge
Communities, Inc.
As of June 30, 1997 and 1996, general and administrative expenses included
$22,366 and $36,981, respectively, of salary reimbursements paid to the General
Partners for certain administrative and accounting personnel who performed
services for the Partnership.
For the six months ended June 30, 1997 and 1996, $48,464 and $59,746 of property
management fees had been paid or accrued to Residential Services-L'Auberge,
formerly Berry and Boyle Residential Services, an affiliate of the General
Partners of the Partnership.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity; Capital Resources
At the close of the offering on February 26, 1987, the Partnership had admitted
2,033 Limited Partners who contributed capital of $18,205,500 to the
Partnership. These offering proceeds, net of organizational and offering costs
of $2,730,825, provided $15,474,675 of net proceeds to be used for the purchase
of income-producing residential properties, including related fees and expenses,
and working capital reserves. The Partnership has expended $14,384,167 to (i)
acquire its joint venture interests in the Canyon View Joint Venture, Broadmoor
Pines Joint Venture and Casabella Associates, (ii) pay acquisition expenses,
including acquisition fees to one of the General Partners, and (iii) pay certain
costs associated with the refinancing of the Canyon View and Broadmoor Pines
permanent loans. The Partnership distributed $56,437 to the Limited Partners as
a return of capital resulting from excess reserves. The remaining net proceeds
of $1,034,071 were used to establish initial working capital reserves. These
reserves are used periodically to enable the Partnership to meet its various
financial obligations including contributions to the various joint ventures that
may be required. As of June 30, 1997, $605,677 cumulatively was contributed to
the joint ventures for this purpose.
The working capital reserves of the Partnership consist of cash and cash
equivalents and short-term investments. Together these amounts provide the
Partnership with the necessary liquidity to carry on its day-to-day operations
and to make necessary contributions to the various joint ventures. Thus far in
1997, the aggregate net decrease in working capital reserves has been $127,558.
This decrease resulted primarily from cash provided by operations of $152,076,
offset by purchases of fixed assets totaling $87,259, a deposit of $2,330,
distributions to partners of $127,439, and $62,607 of principal payments on
mortgage notes payable.
Canyon View
As of June 30, 1997, the property was 84% occupied, compared to 77%
approximately one year ago. At June 30, 1997 and 1996, the market rents for the
various unit types were as follows:
Unit Type .................................. 1997 1996
- -------------------------------------------------- ---- ----
One bedroom one bath ............................. 755 $725
Two bedroom two bath ............................. 815 810
Two bedroom two bath w/den ....................... 980 980
Broadmoor Pines
As of June 30, 1997, the property was 88% occupied, compared to 94%
approximately one year ago. At June 30, 1997 and 1996, the market rents for the
various unit types were as follows:
Unit Type ............................. 1997 1996
- ---------------------------------------------- ------ ------
One bedroom two bath w/den ................... $ 895 $ 864
Two bedroom two bath ......................... 995 975
Two bedroom two bath w/den ................... 1,195 1,175
Casabella
As of June 30, 1997, the property was 86% occupied, compared to 73%
approximately one year ago. At June 30, 1997 and 1996, the average monthly rents
collected for the various unit types were as follows:
Unit Type ................... 1997 1996
- ------------------------------------------------------ ------ ------
One bedroom two bath w/den ......... $ 820 $ 820
Two bedroom two bath ............... 940 940
Two bedroom two bath w/den ......... 1,160 1,160
Results of Operations
The Partnership's operating results for the three months ended June 30, 1997,
consisted of interest income, administrative expenses and the Partnership's
share of the income from Casabella Associates and the income allocated from
Canyon View and Broadmoor Pines, as follows:
<TABLE>
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $315,827 $286,301 $3,709 $605,837
Expenses:
General and administrative - - 44,807 44,807
Operations 160,493 110,658 271,151
Depreciation and amortization 62,863 48,064 110,927
Interest 115,117 85,986 201,103
Equity in (income) loss from partnership - - 1,480 1,480
------------ --------------- -------------- ---------------
338,473 244,708 46,287 629,468
------------ --------------- -------------- ---------------
Net income ($22,646) $41,593 ($42,578) ($23,631)
============ =============== ============== ===============
The Partnership's operating results for the three months ended June 30, 1996
consisted of interest income, administrative expenses, the Partnership's share
of the loss from Casabella Associates and the income allocated from Canyon View
and Broadmoor Pines, as follows:
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $306,633 $307,545 $8,447 $622,625
Expenses:
General and administrative - - 61,182 61,182
Operations 163,167 122,999 - 286,166
Depreciation and amortization 60,911 46,411 107,322
Interest 117,004 86,907 203,911
Equity in (income) loss from partnership - - (2,847) (2,847)
------------- -------------- --------------
--------------
341,082 256,317 58,335 655,734
------------- -------------- -------------- --------------
Net income ($34,449) $51,228 ($49,888) ($33,109)
============= ============== ============== ==============
The Partnership's operating results for the six months ended June 30, 1997,
consisted of interest income, administrative expenses, the Partnership's share
of the income from Casabella Associates and the income allocated from Canyon
View and Broadmoor Pines, as follows:
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $679,787 $582,590 $8,600 $1,270,977
Expenses:
General and administrative - - 80,932 80,932
Operations 332,207 230,345 562,552
Depreciation and amortization 125,726 96,128 221,854
Interest 230,722 172,212 402,934
Equity in (income) loss from partnership - - 2,933 2,933
------------ --------------- --------------
---------------
688,655 498,685 83,865 1,271,205
------------ --------------- -------------- ---------------
Net income ($8,868) $83,905 ($75,265) ($228)
============ =============== ============== ===============
The Partnership's operating results for the six months ended June 30, 1996,
consisted of interest income, administrative expenses, the Partnership's share
of the income from Casabella Associates and the income allocated from Canyon
View and Broadmoor Pines, as follows:
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $672,225 $610,273 $16,656 $1,299,154
Expenses:
General and administrative 10 - 119,438 119,448
Operations 334,821 237,433 572,254
Depreciation and amortization 119,832 91,934 211,766
Interest 234,453 174,032 408,485
Equity in (income) loss from partnership - - (5,082) (5,082)
------------- -------------- --------------
---------------
689,116 503,399 114,356 1,306,871
------------- -------------- -------------- ---------------
Net income ($16,891) $106,874 ($97,700) ($7,717)
============= ============== ============== ===============
</TABLE>
Comparison of Operating Results for the Six Months Ended June 30, 1997 and 1996:
Total revenue decreased by approximately 2% or $28,177 due primarily to lower
occupancy at L'Auberge Broadmoor. General and administrative expenses decreased
by $38,516 or 46% due to lower legal costs, as well as the re-stabilization of
costs associated with the Partnership administrative, financial and investor
services functions following the office relocation to Colorado Springs.
Operating expenses decreasing by less than 2% or $9,702.
Thus far in 1997, the Partnership has made the following cash distributions to
its Partners:
Limited Partners $ 127,439
General Partners -
$127,439
<PAGE>
PART II - OTHER INFORMATION
-----------------
ITEM 1. Legal Proceedings
Response: None
ITEM 2. Changes in Securities
Response: None
ITEM 3. Defaults Upon Senior Securities
Response: None
ITEM 4. Submission of Matters to a Vote of Security Holders
Response: None
ITEM 5. Other Information
Response: None
ITEM 6. Exhibits and Reports on Form 8-K
Response: None
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 thereunto duly authorized.
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P., a California Limited Partnership,
General Partner
By: L'Auberge Communities, Inc., its General Partner
By: ____/s/ Stephen B. Boyle________________
President
August 15, 1997
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Jun-30-1997
<CASH> 410,177
<SECURITIES> 0
<RECEIVABLES> 18,450
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 22,451,148
<DEPRECIATION> (4,950,736)
<TOTAL-ASSETS> 18,306,707
<CURRENT-LIABILITIES> 283,453
<BONDS> 8,552,718
0
0
<COMMON> 0
<OTHER-SE> 9,470,536
<TOTAL-LIABILITY-AND-EQUITY> 18,306,707
<SALES> 0
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<NET-INCOME> (228)
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</TABLE>
